AI and digital transformation for AEC executives: A more practical view

This guest post is the next in our “Exploring AI” series, which delves into how – with the right resources and planning – you can use AI to give your architecture, engineering, and construction (AEC) business a competitive edge.   

Technology as a disruptor is not new in our modern business environment; business leaders have faced and adapted to such shifts throughout history. Rather than beginning with an introduction to AI, this article highlights a 19th century technological disruption. Given the scope of opportunity and disruption that AI could present, reviewing historical events can help us prepare for the future by providing context and perspective.  

Lessons from the Bessemer process 

The Bessemer Process was a new technology or method developed in the mid-19th century for the mass production of steel. Before the introduction of the Bessemer Process, steel was expensive and labor-intensive to produce. U.S. production was less than three million tons a year and the quality of the product varied greatly.  The process, named after its inventor Sir Henry Bessemer, revolutionized the production of steel, making it more efficient and cost-effective. 

The Bessemer process purified molten pig iron by blowing air through it in in a large pear-shaped container, called a Bessemer converter, to oxidize and remove impurities. Once the impurities were removed, the purified iron could then be converted into steel. The approach is widely accepted as enabling the first bulk steel production process. 

The Bessemer process and the evolution of mass-produced steel that followed was disruptive. This advancement led to the creation of new products and industries. It led to a notable expansion of our economy, improved travel, supported the development of our modern urban environment and accelerated globalization.  

• Expansion of steel production. The process enabled the steel industry to expand rapidly, as it allowed for the mass production of steel at a much lower cost and in a shorter time frame than traditional methods. Steel production facilities were opened and staffed by thousands of employees. The U.S. produced five million tons of steel and iron in 1885, 15 million tons in 1890, and over 30 million tons by 1900. The technology helped the steel industry expand and become one of the most dominant at the time.  

• Accessibility. By making steel more affordable and widely accessible, the Bessemer process opened new markets and applications for steel. One of the primary consumers of steel was the railroad industry. Prices for steel rail dropped by more than 80% between 1867 and 1884. Railroads were essential to connect distant locations, facilitating trade and opening previously inaccessible markets. The technology lowered the cost of railway construction and opened a new era of rail transportation for goods and passengers. This technology forged new industries and contributed to the growth of others, such as large-scale construction, transportation, and manufacturing. The technology made steel more accessible to more industries. 
• Technological advancements. The growing steel industry attracted considerable capital investment. This investment incentivized further technological innovations in steelmaking and metallurgy. It laid the foundation for the development of more advanced steel production methods, such as the open-hearth process and later, the basic oxygen furnace (BOF) and electric arc furnace (EAF). The technology spurred additional technological advances at a stunning rate within the steel industry and created new applications. 
• Infrastructure development. The availability of inexpensive and high-quality steel played a critical role in the development of infrastructure projects like factories, bridges, skyscrapers, and railways, shaping the modern urban landscape. Prior to the Bessemer process, steel was widely unproven as a structural element. The first skyscrapers were made possible by high-quality steel. It accelerated bridge design and construction, while reducing costs. The technology birthed many of the sectors that drive our modern AEC industry. 
• Economic growth. The steel industry became a major driver of economic growth, creating jobs and fostering industrial development in regions where steel production was established. The steel industry’s growth boosted production in other areas of the value chain. Coal and other materials mining, for example, were essential for steel production. Rail transportation and other types of construction were required to move the raw materials and finished product. The technology unlocked extraordinary economic growth. 
• Global trade. The ability to produce large quantities of steel quickly and inexpensively allowed steel-producing countries to become major players in global trade, exporting steel products to various parts of the world. Increased exports drove innovation in modern shipbuilding, which leveraged inexpensive steel. The capital-intensive endeavors also reshaped and expanded financial markets and helped the American economy become the largest in the world. The technology had a global impact. 

The Bessemer process was a new technology or method for producing steel at scale. It was not a “tool” in the sense of a physical object, but rather a technological advancement. Similarly, AI is not just a tool. It is a technological advancement that, as part of a digital transformation, can be applied to our work and industry. 

• AI can expand our industry. 
• AI can make our offerings more accessible to other industries. 
• AI can birth other applications for our industry. 
• AI can improve productivity. 
• AI can disrupt our current value propositions and pricing strategies. 
• AI can accelerate innovative advances within our industry. 
• AI can unlock significant economic growth. 
• AI can have a global impact. 

Observing the moment 

Digital transformation is rapidly reshaping industries across the globe. For sectors with intricate processes and multidisciplinary operations, such as the AEC sector, the promise of digital transformation is not merely about introducing new tools; it’s about revolutionizing the way work is done. In the past, the mention of AI might have evoked visions of robots replacing humans. Today, we have an opportunity to create a vastly different narrative. AI can be seen as a collaborator, not a competitor. It can augment human abilities, streamline processes, and bring forth efficiencies that were once science fiction. 

The AEC sector, historically seen as traditional and resistant to rapid change, is now on the cusp of a memorable shift. This produces both opportunities and challenges for industry leaders. Imagine a world where designs are optimized in real-time based on environmental data, where predictive maintenance can preemptively identify and resolve issues before they escalate, and where resources – both human and material – are aligned with impressive precision. These are the realities being shaped today through digital transformation, supported in part by AI. 

However, like all transformative journeys, the digital transformation path is non-linear and fraught with challenges. Identifying the right strategies, driving top-line revenue growth, attracting top talent, ensuring alignment between resource availability and workloads, delivering improved training, and adapting to new modes of work, especially in a hybrid environment, are all hurdles that businesses grapple with.  

But herein lies the opportunity. AI, and a broader digital transformation, offers solutions to these very challenges. By automating repetitive tasks, it can free up limited human capital to focus on clients, project work and innovation. By identifying, capturing, and leveraging the expansive amounts of data we collect, it can provide insights and originate new applications that drive revenue growth.  

Approaching practically 

There's a misconception that a digital transformation requires significant, specialty resources. While big tech companies with unlimited research and development budgets might make headlines with their AI and technology exploits, it's important to understand that the benefits aren't reserved solely for them. Firms in our industry with limited budgets and little prior understanding of technology can benefit.  

There are practical steps you can take to embark on a digital transformation journey:  

Education and awareness 
Invest time in educating leadership and staff about the basics of digital transformation and AI. Online courses, podcasts, webinars, and workshops can be invaluable and many of them are available for free or inexpensive. 

Create working groups 
Identify and enable the individuals inside your organization that are excited and passionate about these topics. Seek out those employees experimenting with AI and other technologies in their own time, regardless of their title, seniority, or degree. SUnderstand their knowledge and encourage them to explore opportunities for your firm. Provide them with a framework for experimentation and invest in their education. These early adopters are invaluable in helping your organization understand what’s possible. 

Leverage existing tools 
Most firms are not leveraging the full capabilities of their existing applications. CRM tools include workflows and proposal automation functions. Microsoft offers a variety of no-code automation tools to improve efficiency. Exploring the functionality of existing applications is a cost-effective means to improve productivity and develops an organizational mindset that harnesses technology.  

Start small 
Begin with one process or a small project that could benefit from automation or optimization. This allows your firm to gauge the benefits and potential challenges without overwhelming the organization or depleting limited resources. 

Leverage existing partnerships 
Our software providers are exploring ways to improve their offering through the introduction of AI. Many of these firms are providing educational opportunities for users and seeking input from customers to establish their own development path. 

Outsource strategically 
If your firm lacks in-house expertise, consider hiring freelancers or consulting firms on a project basis. They can provide insights, set up initial processes, and train your team.. 

Prioritize cybersecurity 
With the adoption of digital tools comes the risk of cybersecurity threats. Even on a tight budget, prioritize basic cybersecurity measures to protect your firm's data. 

Develop a plan 
When your organization is ready, develop your own plan for digital transformation. Project-based firms tend to excel at delivering projects. Take a project approach to the development and action of your own digital transformation. Initially focus on a few projects and a shorter horizon. As your knowledge and understanding expands, plan for more complex projects.  

Stay updated 
Things are evolving rapidly. Dedicate time periodically to catch up on the latest trends, tools, and best practices. This ensures that you’re not missing out on affordable and effective solutions that could benefit your business. 

Embarking on a digital transformation journey doesn't require a hefty budget. With strategic planning, a commitment to learning, and a step-by-step project-based approach, even firms with constrained resources can harness the benefits. 

Doing nothing has a cost 

Delaying exploration and adoption of new technologies might seem safe, but inaction has its own costs. The Bessemer Process reduced production time by over 90% and costs by over 80%, while improving steel quality. When this method for producing steel was introduced in the 19th century, many firms were hesitant to adopt the new technology, comfortable with their existing methods. 

Homework 

Ask your favorite AI chatbot the following questions: 

• What impact did the Bessemer Process have on the steel industry? 
• What happened to steel producers that did not adopt the Bessemer process?  

Looking forward 

I asked ChatGPT to describe the personality traits of those equipped to best leverage AI. It replied innovative, creative, analytical, curious, problem-solvers, tech savvy, ethical, responsible, collaborative, persistent and resilient. That sounds like our people. Let’s embrace disruption as an opportunity. 

Scott Steiding is a seasoned executive with nearly 30 years of experience in the AEC industry, having held pivotal roles in sales, marketing, operations, and corporate communications for firms in Europe and North America. His expertise in implementing and managing scalable technology driven systems for business development and operational success uniquely positions him to help firms understand, adapt, and thrive in this exciting period. Scott is the President of Productive Pursuits, a consultancy focused on developing people, processes, and technologies to achieve impressive results.