INNOVATION & MANAGEMENT OF IT IN THE CONSTRUCTION INDUSTRY

Khairul Firdaus bin Anuar

2009730137

Msc. In Integrated Construction Project Management

Innovation is a process where knowledgeable and creative people and organizations frame problems and select, integrate, and augment information to create understandings and answers (Teece, 2001). Hamel emphasizes the role of information technology as an enabler not only of product or process innovation, but also of what he calls business concept innovation (Hamel, 2002).

Information Technology in construction industry has become a key issue in the last two decades, gaining broad acceptance and is being implemented in the construction research domains as a tool to assist decision makers. Furthermore, emerging technologies offer new solutions to the construction industry, improving processes, enabling automation and effectual decision-making mechanisms and changing current ways of work.  However, the future of construction will be influenced not only by the developments in the information technology (IT) industry, but also by other technological changes. Societal, economic, environmental and political factors will shape the future, together with emerging technologies. Information Technology (IT) is the sine qua non of all businesses today, including the construction industry, so understanding its roles and functions in construction firms is a requisite in assessing their performance. However, little work in this has been done on Malaysian firms. Commonly, Information Technology (IT) plays a vital role in the sustained growth of a business. IT is defined broadly as “technologies dedicated to information storage, processing, and communications” Ang et al. (1997), that is, a combination of hardware, software, telecommunications and office equipment to transform raw data into useful information for speedy retrieval.

ICT innovation refers to the introduction of new ICT initiatives to an organization. The organizational process of introducing ICT initiatives for adoption by expected users is defined as ICT diffusion with an ICT diffusion limitation being defined as confrontation to change drivers occurring during ICT adoption and implementation. Resistance may occur at the organizational, group and personal level. Understanding diffusion constraints could help construction firms manage improve their ICT diffusion processes by focusing on possible ICT implementation diffusion barriers and finding ways to mitigate them. Stewart et al. (2004) offered coping strategies to mitigate identified barriers. 

IT innovation may be adopted by specific groups of users within an organization. For example, use of computer aided design (autoCAD) by architects or Master Bill’s or estimating software used by engineers or quantity surveyors is often implemented as a stand-alone non-system integrated initiative where only a small group of expert users participate in the initiative. A firm may independently operate small-group IT innovation such as planning and scheduling applications whereas a groupware ICT innovation needs cooperation both within a group to share and exchange data and information as well as with external project team and supply chain members. Successful company-wide construction firm ICT initiatives, such as introducing groupware applications, needs team adoption by project managers, engineers and foremen etc. There may also be need to include organization-external project participants such as designers, consultants and owners.

Innovation diffusion can be described in either technology transfer or intra-organizational innovation adoption terms. The technology transfer perspective can involve transferring innovation information from a research and development (R&D) unit to a targeted consumer unit – individual or organizational (Scheirer, 1983). Thus, innovation diffusion usually begins before any adoption decision is made. It requires delivering positive information about an innovation to expected adopters to hasten their innovation adoption. The more persuasive the information delivered to expected adopters, the higher will be the adoption rate. “Innovation diffusion” from the intra-organizational innovation adoption perspective usually occurs when top management and/or a champion (top-down approach) or expert groups within the organization (bottom-up approach) decide to adopt an innovation and encourage other users to adopt the innovation (Yetton et al., 1994). As diffusion of innovation deals with numerous variables, both of a technological and social nature, it is essential that organizations should provide adequate management support and monitoring of diffusion innovation (Livari, 1993; Rogers, 2003). Songer et al. (2001) argue that corporate culture is mainly responsible for poor implementation of information technology (IT) systems rather than technology issues. Implementation needs to be managed and structured because it is a critical process in successful ICT innovation diffusion (Griffith et al., 1999). 

Nevertheless, the building construction industry invests little in ICTs compared with the other sectors such as financial services and manufacturing (Construction Industry Board, 1998: 27–8). Furthermore, the current use of ICTs in construction firms continues to be ‘piecemeal’ (Mak, 2001: 258): few contractors are fully able to integrate ICTs with their business processes. Book-keeping and invoicing are the most common ICT applications even in the construction industries of relatively advanced countries (Samuelson, 2002). Except for a limited number of well-entrenched software packages, few computerized innovative solutions are easily welcomed by the majority. Most computer applications still consist of word processors, spreadsheets, accounts and administrative software (Samuelson, 2002: 23), and the usage is limited to the production of traditional documents (e.g. specification documents, detailed drawings or bar charts) that still require human interpretation (Luiten and Tolman, 1997: 114).

Besides that, IT is already widely used in construction organizations and much more dramatic effects are anticipated for the years to come. (Betts, 1999) reported that the construction industry in many countries is starting to consider seriously the strategic use of IT. The use of IT in construction is extending further than the stage of piecemeal application for improving the efficiency of discrete operations by individual organizations to an advanced stage where IT is applied strategically in commercial enterprise, government agencies and professional institution. From strategic point of view, IT has the potential to change the landscape of the construction industry.

As conclusion, since the level of IT use is prevailing at lower level, top management of construction organizations should have well-built commitment to expand the innovation strategic management of IT in their business processes. The hardware, software and their applications should be utilized to enhance both core and supporting activities to gain competitive advantage in today highly global business environment. Moreover, the firm's management should give greater attention to IT support and training, by making sure that there is sufficient trained staff for the implementation of IT, and making greater effort in training staff on the correct and efficient use of IT in the organization. Lastly, Government and public agencies should consider policies that encourage the use of IT in the construction industry thus making this industry sector more competitive, and encourage industry to make greater use of information system.