3 Ways to Address Current Construction Industry Challenges with Operating System 2.0
We have identified three ways to address our current industry challenges and to create a much more efficient and profitable business model for the construction industry. Here is our Operating System 2.0 approach:
1. Different Arrangement of Stakeholders
More companies than ever are involved in capital projects. Increased industry specialization and project complexity means more interfaces and greater exposure to risk (and potential opportunity). “Flattening” the capital project supply chain in a similar manner to industries
such as shipbuilding and aerospace will enable different risk pooling and monetization solutions
for the stakeholders. Key to this transition will be the concept of disaggregating contractual responsibilities and achieving a high degree of collaboration underpinned by risk transparency
and trusting relationships.
2. Enabling Technologies
From design and “big data” applications to digitization and blockchain, improved transparency and collaboration is imperative. Enabling technologies will drive positive change across the capital projects landscape.
Streamlining data flow and business transactions eliminates significant waste in project execution processes. Transparent real-time project and portfolio status provides a rapid, shared, single source of truth for all stakeholders. These technologies will unlock full digital twin capability, increase the velocity of cash flow throughout the project, and reduce overhead costs and contract leakage.
3. Improved Commercial Environment
Reducing transactional waste improves the returns for investors, owners, contractors and other stakeholders involved in a project. This has multiple positive aspects. First, both the initial and operating expense of a facility may be substantially lower. Second, the margins for those who create the asset (for example, planning, design, and fabrication) may be substantially increased. Third, new and revitalized capital assets will drive value creation.
About Operating System 2.0
The Operating System 2.0 Industrial Affiliates Program (OS2 IAP) conducts research aimed at defining new ways of doing business in the capital projects industry. The goal is to unlock value blocked by today’s engineering and construction practices.
While the systems and work processes that manage capital projects have improved steadily in recent decades, the underlying business model binding investors with construction industry product and service providers is still characterized by a lack of trust, excessive friction in transactions, and burdensome financial waste — preventing real progress. We are taking a different approach. You need to be involved. To learn more about the OS2 IAP and download the brochure, click here.