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IDC: A/NZ needs to implement more digital transformation tools

Data security, risk management and outdated technologies are the top three digital transformation challenges facing construction businesses across Australia and New Zealand, according to a new survey from IDC. 

The global research revealed Japan is the farthest along the digital transformation journey in APAC, followed by Australia and New Zealand. The survey of 835 construction professionals from large construction companies in countries across Asia Pacific (including Australia and New Zealand), Europe, and the Americas assessed the construction industry's digital transformation (DX) maturity and challenges.

It revealed the A/NZ construction industry should implement more digital transformation tools, IDC says.

According to the findings, most respondents worldwide (58%) are in the earliest stages of their DX journey, and only 13% are in the most mature stages.

While digital transformation has been identified as a priority across Australia and New Zealand, there are key roadblocks and challenges that must be addressed first, before its full potential can be unlocked, according to IDC.

Similar to other countries globally, the top digital deadlocks in A/NZ construction firms include data security and risk management. A/NZ also faces the challenge of a lack of effective technologies, which are often outdated, the analyst firm says.

While digital construction solutions are available, over 95% of organisations worldwide use these solutions for less than half of their projects, and mainly for planning and briefing (56%), design development (54%) and site execution (42%) purposes. In comparison, A/NZ companies prefer digital construction solutions that aid with handover/turnover (63.6%) and bidding (52%), with one-third of the industry spending up to 15% on this handover/turnover technology.

Compared to feedback from other regions, IDC reports that A/NZ is investing more on digital construction solutions that aid in project documentation and stakeholder engagement. This is indicative of the Australian construction sector while the industry generates over $350 billion in revenue, making up 8% of the country's overall GDP, 90% of the sector is made up of small businesses with teams of around 20. Smaller teams often believe they have less of a need for project management tools, preferring to invest in areas like customer engagement.

According to IDC, a holistic approach to DX is necessary for A/NZ construction companies to successfully advance to the next stage. While 38% of those surveyed in A/NZ state they have plans to establish a digital transformation roadmap in the next 12 months, more must be done to encourage the wider industry to do the same.

"While many organisations worldwide have embraced digital transformation and are bringing new innovations into their businesses, the construction industry has yet to fully reap the benefits of digitalisation due to the unique challenges it faces," explains Daniel-Zoe Jimenez, AVP and APAC head of digital transformation at IDC. 

"However, our research indicates that digital construction solutions (such as BIM workflows, bid management, project management and insights) can help improve construction projects, and construction companies are looking into new, innovative technologies to accelerate their digital transformation," he says.

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