Accelerating the adoption of Integrated Digital Delivery (IDD) among the SMEs

Minister of State in Prime Minister’s Office and Ministry of National Development, Tan Kiat How, believes that leveraging digital technologies is the key to safe restarts in the new normal. To support this, the BuildSG COVID-Safe Platform has been launched and paired with commercially available digital solutions. Building and Construction Authority (BCA) has also been promoting Design for Manufacture and Assembly (DfMA) to reduce the reliance on manual labour, as well as providing a sandbox for innovation to expedite progress and transformation.

Read: BCA has committed S$20 million in the built environment sector to adopt digital solutions

Read: Building a more resilient construction sector by promoting DfMA and sandboxing innovation

The question remains on how ready small and medium-sized enterprises (SMEs) are to board the digital bandwagon. Integrated Digital Delivery (IDD) has mostly been taken up by projects of more than 5,000 square metres (20 per cent of total number of projects), which are largely undertaken by bigger and more established developers. Lim Ming Yan, Chairman of Singapore Business Federation/ Workforce Singapore, confirmed during a panel discussion at International Built Environment Week (IBEW) 2020 in September 2020 that the impact of COVID-19 was harder among the SMEs.

Read: Construction sector in the new normal: How have SMEs and job market been impacted?

To draw insights on how digitalisation can benefit the wider developer community, and hence the SMEs and their value chain partners, Real Estate Developers’ Association of Singapore (REDAS) and KPMG in Singapore are working together to undertake research and analysis, whose findings will be made available by April 2021 to guide the development of a developer-centric IDD Dashboard.

The dashboard is expected to enable developers to monitor and manage projects live and more effectively. When successfully developed and piloted, it will be made available by early 2023 at a cost that is affordable enough to facilitate onboarding by the SMEs and catalyse wider adoption of collaborative IDD.

Read: REDAS and KPMG are developing an IDD dashboard to boost digitalisation among the SMEs

The MoU was signed on 16 November 2020 between REDAS and KPMG in Singapore, which was then followed by a panel discussion with the representatives of BCA, REDAS and KPMG. After the event, Construction+ interviewed Lee Chuan Seng, the Chairman of BCA IDD Steering Committee, and Satya Ramamurthy, Partner, Head of Infrastructure, Government and Healthcare, KPMG in Singapore.

In a nutshell, ready or not, transformation is underway. We need to come up with strategic solutions to make digital solutions accessible for companies of all sizes so that no one will be left behind.

IDD: A BRIEF HISTORY
Integrated Digital Delivery (IDD), which is part of the Construction Industry Transformation Map (ITM) launched in October 2017, seeks to integrate the entire building life cycle and its various parties to enable better coordination of the design, production, delivery and installation of building modules. This is to save time and reduce abortive work downstream. The COVID-19 pandemic has accentuated the importance of IDD adoption. Under the initial plan, the government targeted to implement 40 to 60 IDD projects by 2020, and thus far there are more than 150 firms involved in 48 full IDD projects.

SMEs are part of an important segment of the BE value chain, making up the majority of players in the industry. To help them build up capabilities to plug into the IDD ecosystem, in March 2020, the government launched the Construction and Facilities Management Industry Digital Plan (IDP), which was subsequently enhanced by the increased maximum funding support level from 70 to 80 per cent. This means firms would only need to fork out 20 per cent of the costs. Minister Tan Kiat How reported that per October, 121 firms have adopted solutions under the IDP scheme.

The government is also working with the industry to establish a Common Data Environment Standard to make requirements uniform across projects in order to encourage collaboration; as well to form the Committee of Digitalising Built Environment Alliance for Action under the Emerging Stronger Taskforce to accelerate adoption.

IDD AMONG SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs)
Today, more than 90 per cent of the Gross Floor Area (GFA) of new projects have gone into digitalisation, but as they are mostly larger projects of more than 5,000 square metres, these make up less than 20 per cent of the total projects. They are largely undertaken by the bigger and more established private developers and the public sector.

Lee Chuan Seng, Chairman of BCA IDD Steering Committee, mentioned that SMEs have been provided with a roadmap to assess their level of digital readiness, as well as funding for them to acquire pre-approved digital solutions through the S$19 million Productivity Solutions Grant (PSG). To prepare new digital skills, the Digital Delivery Management (DDM) Track under the Built Environment Skills Framework (SFw) has been co-developed with industry stakeholders. This provides clear competency ladders for different building professionals for upskilling, which will result in new digital specialisation and job roles such as digital lead and digital specialist in the BE sector.

While the progress is promising, according to REDAS president, Chia Ngiang Hon, there remain gaps in adoption and implementation among SMEs. Many are still not onboard the IDD bandwagon yet but they would like to, with some assistance and support. There is also much room for more collaborative and better use of IDD for more optimal outcomes; COVID-19 has made the need even more urgent and pressing.

To support SMEs and the wider community, Chia mentioned that there first has to be identification of challenges and gaps in the adoption of IDD as well as an implementation strategy to address the concerns and overcome the shortcomings. Also, there could be a tool such as a developer-centric IDD dashboard to assist them in jumpstarting their digitalisation efforts, followed by a provision of an IDD implementation guide to establish a best-practice approach.

THE SLOW ADOPTION RATE AMONG SMEs
Satya Ramamurthy, Partner at KPMG in Singapore, salutes BCA for being the torchbearer in laying out a roadmap for the digitalisation of the sector. While IDD has been adopted in varying degrees by other stakeholders in the BE sector, among SMEs and smaller players, the journey is progressing relatively slower, with some undertaking pilot projects involving the use of digital technologies.

He believes that, in most cases, the slow rate of adoption is due to a lack of awareness or intent among key decision-makers and an apprehension among their workforce vis-à-vis adoption of new ways of working. A project typically involves a wide range of stakeholders including regulators, designers, developers, main contractors, independent subcontractors and vendors, M&E consultants etc., who come together only for that project. It is understandable if they are unwilling to invest in digital technologies only for the duration of the project as it may not be relevant for the next project. However, a vast majority of these players have acknowledged that the process of digitalisation in the BE sector is irreversible and the future of the sector is digital. COVID-19 has brought this issue to the forefront of senior management and left them with little choice but to try out solutions that they otherwise would have taken much longer to explore.

THE IMMEDIATE AND THE LONG-TERM SOLUTION
For the immediate term, according to Ramamurty, awareness, education and training are key to accelerating the rate of digital adoption. Stakeholders should select specific use cases and technology solutions targeted at specific problems rather than undertake organisation-wide IT implementation programmes.

SMEs need to be made aware of the range of digital solutions available in their respective part of the value chain, the applicability of these solutions to their specific requirements, costs versus benefits, and potential pitfalls. As more and more plug-and-play digital solutions become available, even the smallest SMEs will be able to derive economic value in the short term from going digital.

In the medium term, a successful digital transformation journey will require the integration of digital solutions with organisational changes. This will ensure that solutions are implemented correctly and become a part of the organisation’s business processes. There are multiple methodologies and tools available for achieving digitalisation in different parts of the BE value chain.

As is often the case with the adoption of new and emerging technologies, Ramamurty further explained, not all of them will dovetail smoothly. More technology providers are required to supply the Application Programming Interfaces (API) needed for the industry to embrace the array of digital solutions that are available at each stage of the value chain, and between different links of the chain. The key to solving these challenges, therefore, is securing board and senior management commitment and having a digital transformation roadmap in place.

CONCLUSION
COVID-19 has exposed vulnerabilities in the BE sector and has shown that resilience is key for the entire sector to continue to grow. A clear strategy and a roadmap are imperative before anyone could go out to begin acquiring digital technologies and solutions. Clarity is key in improving performance and increasing competitive advantage that will help change mindsets and overcome resistance to change.

Support and guidance are needed to minimise companies that will be adversely affected. The IDD dashboard seeks to level the playing field and assist the SMEs and the wider developer community in the adoption of IDD. We will be looking forward to seeing this dashboard fully developed, piloted and made available for industry players of all sizes in Singapore.– Anisa Pinatih, Construction+ Online

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