The Indian real estate industry is an appealing area for international players due to many reasons. The government allows 100% FDI in areas like infrastructure, SEZs, and industrial parks. In the last 20 or so years, over $17 billion has already been invested through these routes. This being said, global companies want to adopt a more structured and data-driven approach to working.

Internationally, new technology such as BIM enhances transparency, creates agility, and fosters innovation. Without these tools in place, international companies assume there may be a lack of predictability and order. Due to this sentiment, many of these companies would appreciate technology like BIM being used to create better plans, more visibility about the progress of projects, and optimize resource procurement and use. It could be said that a new era of structure and transparency is awaited in India’s construction sector.

It’s already widely known that technology such as Building Information Modelling (BIM) is a powerful approach that offers many benefits to construction professionals. The adoption of BIM can address the needs of greater predictability, planning, and management. The BIM framework also allows for evaluation processes to occur smoothly as well and provides insights and connectivity for sites too. There is much scope for BIM in enhancing the design, construction, and facility management processes.

Despite this, the adoption of this technology in India is still low in the AEC industry. Why is this so? There are many preconceived notions and real-world realities that are causing this slow uptake.

Let’s discuss 5 such barriers being faced by mid-sized companies in implementing this technology.

Cost of Implementation

Many contractors feel that the added cost of implementing new technology will be a burden on them. This is due to the idea that the cost of acquisition, deployment and training will be high. To overcome this mindset, companies can learn how to leverage BIM technology to remove process inefficiencies, reduce costs over time, and increase profits. While the technology will demand some upfront investment, the savings that accrue will soon offset that.

It’s important to change mindsets by creating a feeling of optimism towards the long-term goal. Historically, software has been used to streamline work, manage projects, and predict potential issues way before they occur. All this helps to create a world-class construction in the least amount of time possible. Failing to adopt these technologies can make companies fall behind their competitors – which will prove disastrous in the long run.

Interoperability

Companies feel that there will be a lack in the ability for the systems to exchange and use information cohesively with the technology and systems they have at present. It’s clear that legacy processes will have to change to allow for faster operations, greater transparency, and seamless collaboration and communication. Change always brings concerns that must be allayed. It is also true that construction companies do struggle to attract and retain technology professionals in the face of competition from more glamorous sectors like IT. These issues can be tackled by partnering with specialists to create a carefully planned roll-out of the technology, clear training procedures, and expert advice on process improvements, accompanied by handholding and support.

No Change in Mindset of Stakeholders

Institutional attitudes towards adapting to new technology, especially in a traditional sector like construction, are always a barrier to development. This includes a bias against adopting new technologies due to prior negative experiences, conservatism, lack of understanding of the tool’s potential, and a lack of commitment to proper implementation training. Added to this is a reluctance for workers to “waste” their hours being trained and change their schedule leading to lower than optimal onsite adoption of BIM.

To overcome this, all stakeholders must understand how this technology offers the potential to drive improvements in their performance and the impact their teams can deliver. The best way forward is to specifically illustrate to the end-users themselves how this technology will make their workflow easier and more convenient and involve them as they see the change setting in. Clear communication is essential to answering all their doubts and proposing effective solutions to difficult areas.

Legal Procedural Challenges 

Due to a lack of knowledge, there are concerns about the possible legal consequences of using new technology. The reality is that the Indian government is very supportive of adopting BIM. In 2019, studies have shown how this technology can optimise the cost of upcoming and ongoing housing projects in the country. This technology will also help with cutting down on the time escalation of these projects. Niti Aayog was also considering using technologies in multiple government construction projects such as national highway constructions, metro, and airport projects, revamping railways, and more. Iconic projects like the Delhi Metro Rail Corporation are turning to BIM for more efficiency and impact. It’s fair to assume that the technology is here to stay.

Issues Regarding Cyber Security

As with most software, there is always the risk of cybersecurity breaches. People worry about ransomware attacks and data breaches that include project designs, bid information, employee data, materials pricing, financial records, and more. Mitigate this by creating a plan which covers the security of project management software, online collaboration tools, mobile devices, financial apps, and more. Enhanced this by educating employees about cybersecurity measures they can implement to protect data.

Also, other strategies such as running contained pilots can help drive familiarity. Introducing BIM as a subject in the university curriculum will help overcome many of these barriers. This would help influence behavior changes and create national-level guidelines. Creating an India-specific  BIM product library is also a useful solution.

Studies suggest bringing together the Government, industry experts, and academic institutions to create ways to encourage companies to implement the technology. Academics can enhance awareness among students, who will then drive usage and innovation. Industry professionals can conduct training sessions. The Government can further encourage BIM in bids and reports. These steps will maximize the impact of this technology and help streamline many processes related to construction in India.

When we were in school and asked to attempt a complex problem, we’d use a rough paper to work out the tougher calculations. This would help us make our mistakes early and fix them. Similarly, while constructing some of the most important sites in the world – it makes complete sense to make a rough version first to ensure the final product is devoid of problems and errors.

While this metaphor may seem simplistic, it suits the relation between construction and Building Information Modelling (BIM).

BIM is now an established technology in construction globally. It enhances how data is organized, improves operational efficiency, and generates transparency. Experts project the global BIM market to reach $15,892 million by 2027 – registering a CAGR of 15.2% from 2020 to 2027. While North America dominates this market, studies show that the Asia Pacific will exhibit the highest growth rate here, due to the booming construction industry. It stands to reason that one of the key players in this market must be India. But is India ready to adopt this technology? Let’s take a look.

Overview of Indian Construction Sector

By 2025, India will be the third-largest construction market and will contribute approximately 13% to the country’s GDP. It should hit US$1 trillion by 2030. These sunny forecasts are due to the consistent growth of the sector. In 2017, it was the most employed sector in India, as it employed around 51 million people. A key part of the sector concerns urban development projects, such as highway construction, transport, healthcare infrastructure, etc.

Along with its already immense scope, there are continuing plans to include modernizing existing infrastructure, developing smart cities, improving transportation routes, and more. Additionally, there are plans to craft an ambitious National Infrastructure Pipeline – which should prove to be a real game-changer. With so many exciting events constantly happening in this sector, it’s no surprise that even in 2020, just the real estate sector itself received foreign investments of over US$5 billion.

The Indian construction industry offers several investment opportunities for foreign companies, but the question is whether this hugely lucrative sector will retain transparency, efficiency, and organization with such entrenched practices. We know that international companies entering the Indian market desire such openness and structure. From the way things are looking, the answer is a resounding yes. This is mostly thanks to government policies and the industry itself striving to follow best practices. Let’s explore a few of the reasons that should safeguard the integrity of this sector.

Attracting direct investment from foreign investors with fewer barriers.

The government allows 100% FDI in infrastructure, SEZs, and industrial parks. Already, $17 billion has been invested through these routes over the past two decades. As the country rises out of the pandemic, this number should go up. Especially since foreign investors benefit from being able to invest in construction projects without needing approval from the government.

By injecting FDI into this sector, the government is breaking domestic monopolies, creating a competitive market, and bringing international best practices into the sector. This is beneficial in many other ways as it pushes firms to strengthen their processes and improve their offerings. Businesses become exposed to the latest international tools and technologies, as well as operational practices. Over time, these influence everyone, which results in enhanced efficiency and effectiveness of the industry as a whole.

International companies focus on adopting more structured, data-driven, and transparent ways of working.

Global projects of large-scale work with a huge amount of data and resources. It’s not enough to make decisions based solely on instinct with so many factors and people involved. This is why these companies have invested in tools and skills to streamline their processes. For instance, Building Information Modelling enables information exchange and effective project lifecycle management in real estate, construction, architecture, construction, and engineering.

Apart from the operational improvements (those are well-known), the use of BIM also brings in transparency, accuracy, and estimation quality. This is why international entities have adopted such tools to streamline and optimize collaboration and planning.

These companies are conscious of the need for agility and innovation, but value predictability and order.

The power players on the global scale place great importance on stability. They believe that predictability and order are important to drive sustainable growth. Again, it’s the technology that is enhancing systematic processes and increasing the certainty of decisions. For eg., BIM delivers more efficient estimates, transparent tracking, and ongoing visibility. This provides greater cost and resource savings, greater efficiency and shorter project lifecycles, improved communications and coordination, higher quality results, and more opportunities for leveraging modern technology like prefabrication and modular construction. Using tools like this helps companies progress at an orderly pace.

Modern construction companies appreciate building methods that leverage the power of technology like BIM. They know how this will help them make better plans, achieve greater visibility into ongoing progress, and optimize resource procurement and utilization. For any Indian entity to take advantage of the government’s truly excellent policies to attract FDI or to compete with international players, they must have these technologies in place. This will show that they’re ready to go to the international stage, armed with excellent technology that’s on par with the global players. It also sends a strong message that they’re committed to transparency and efficiency. This acts as a signal that there will be ease of communication, organization, and operations. With the advent of foreign companies entering the Indian construction sector, a new era of transparency, efficiency, and organization will inevitably begin and technology and design software will power this.