By Dermot Murray, VP of Ideation at Inoapps
IN an information age where data is considered more valuable than oil, the Scottish construction industry needs to modernise. An ongoing reliance on paper-based processes, disparate data silos and offline workflows is impacting its ability to increase efficiency and lower costs.
While those businesses which have implemented enterprise resource planning (ERP) systems have seen transformational benefits, these can still present barriers to effective integration and collaboration throughout the supply chain.
With the fourth industrial revolution set to be based on the next generation of cloud platforms, the construction sector must now focus on grasping the benefits of systems that deliver secure and efficient collaboration of data across the full supply chain. But which route offers the best solution to the sector?
Blockchain is one potential option. This can provide a single, immutable solution to provide a system of record that can be used to share collaborative business processes between customers, suppliers, subcontractors, manufacturers and others within the supply chain. Strict data governance rules control access to information via Blockchain, ensuring individuals in the chain can only view the data that they are authorised to see.
One of the perceived downsides of Blockchain-based solutions is their environmental impact. It relies on encryption with complex algorithms to verify access to its users, which can require a significant level of computing power. The cryptocurrency Bitcoin, the most widely known use case for Blockchain, currently uses around 30TwH of energy annually. According to Forbes Magazine, the computing power required to run Bitcoin last year was the equivalent level of energy used by 159 nations. Therefore how can a sustainable and transformational strategy for the construction industry be based on a platform with such questionable foundations?
Distributed Ledger Technologies (DLT) seems to offer a much better solution for the construction sector. A DLT platform features a decentralised database, rather than one that is centralised and more prone to failure. This exists across several locations or among multiple participants but is restricted to only those stakeholders within the business process. With no concept of farming or mining data, the environmental footprint is small as DLTs are deployed across existing cloud-based technologies in a distributed manner.
They offer all of the benefits of a Blockchain solution – immutable sharing of data across multiple parties through a digital encrypted platform, but with the added capabilities of greater control and governance and without the environmental impact.
A research programme into the feasibility of DLTs involving Inoapps, The Scottish Futures Trust, Wallet Services and the Construction Scotland Innovation Centre identified significant benefits for the sector. Inoapps is now focused on building a powerful integration framework to allow the integration of Oracle ERP into a DLT framework to support the adoption of these next generation solutions into the construction industry.
This solution will, however, only succeed if a number of critical factors are considered, including the need for each stakeholder to be able to recognise the value of the process. While there are multiple potential benefits, such as reducing costs, increasing speed and efficiently of processes as well as security of data, every party involved in the collaboration needs to gain benefit from the solution for it to achieve success.
Business transformation, especially within a sector which has been relatively slow to adapt to new technologies, also requires a leader to disrupt the status quo and drive new behaviours. They must instil confidence amongst those utilising a new system as others will only adopt new solutions and processes if they trust them.
Getting all these elements in place has the potential to deliver huge benefits right across the Scottish construction sector, but will require strong leadership and governance to achieve this.