Have you ever wondered why the construction industry in the MENA and GCC regions seems to lag behind in terms of digital transformation? Despite the existence of a few multinational multimillion-dollar companies providing custom solutions for custom projects, most construction companies still struggle with long and costly developments that often fall short of their expectations. This is because the end-users, who are usually large-scale multimillion-dollar contractors, must define the scope of work to the tech provider due to budget and time constraints, there is a clear lack of qualified advisory in this field. Moreover, the fragmentation of defining the problem and solutions across different functional departments and projects further exacerbates the issue. With the lack of an intersection between digital transformation and construction, the adoption of digital systems remains cost-prohibitive for many construction companies. But is there a solution to this problem?
Before we answer this important question, it is important to note that most of construction companies have not experienced the power of technology disruption in construction. Here is where startups can fill a huge gap, innovating solutions for various fields and verticals where technology is still lagging. Construction industry professionals can draw from their experience to come up with the right solutions to build the future of the Contech industry. There are more than 2000 Contech startups globally, and very few of them have originated from the MENA region. There is a gap that needs to be filled, especially as end-users become hyper-sensitive to cost in a post-COVID environment. Commercially affordable Contech solutions are being overlooked, and the right mix of construction and digital solution professionals can augment this gap and save hundreds of companies’ R&D costs, creating scalable win-win solutions.
Digital Transformation in the Construction Industry: MENA’s Untapped Potential
The digitization of the construction industry needs to be approached with enthusiasm and realism. Saying no to unrealistic functionalities is also important to set the right expectations, as the construction industry is vast and contains many moving parts. Sometimes, trying to simplify a well-developed construction management process by embarking on various functionalities under a single digital umbrella may not be an attainable task, resulting in spending millions of dollars on superfluous projects. Creating startups in critical construction areas would help prevent that and entice further R&D funding into the field.
The past few years have been very difficult for construction contractors and developers in the MENA and GCC regions. The digital awakening that overwhelmed the region during the last decade came to an abrupt stop due to the pandemic. While COVID accelerated the digital transformation for many other industries, construction contractors and developers scrambled to cut costs to protect their margins. There were many layoffs from the construction tech sector as well as the suspension of R&D budgets for digitalization departments. However, this now offers a huge opportunity for entrepreneurs as they can fill this gap with scalable and efficient digital construction solutions.
Post covid construction boom in the GCC
Another reason for the lag in Contech is benchmarking. It is not easy to quantify the savings or gains from digital solutions when it comes to a project or construction company’s performance or to calculate the ROI from digital investment. The cost breakdown of a process is often complex, making it difficult to measure the savings or gains from efficiencies resulting from digitalizing a process or adopting technology. The savings in the procurement and construction phases can be much more impactful on an overall project’s financial performance, and the savings are much more visible. So far, Contech innovation has focused more on the part with the least cost element of the project lifecycle, i.e., the design phase. There is still a lot of value to be realized in innovation in procurement and construction efficiencies.
As the construction industry faces increasing pressure to adapt and innovate in a rapidly changing world, it is up to construction industry leaders to plant the seeds for the industry’s own “tech founders” and take bold risks on them, be ready to embrace new technologies that have the potential to revolutionize the way we build. While the road ahead may be challenging, the rewards of a more efficient, sustainable, and cost-effective construction industry are worth pursuing, and those who seize the opportunity to lead the way will undoubtedly reap the benefits.
