The pursuit of clarity - digital transformation of cost management

According to McKinsey & Company, Australia has been a global innovation leader in infrastructure planning, financing, and delivery for 30 years. The construction sector is the largest non-services sector in the Australian economy, contributing 10% to the economy each year and employing 7% of the workforce.

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The industry is lucrative, and while this has seen massive benefits across the economy, it has also slowed innovation and digitisation within this space. For years, we have been building projects with roughly the same formula and approach. There has been little disruption and digitisation is occurring at a significantly slower pace when compared to other industries.

The situation is similar within my own profession of quantity surveying. As a group, we are ultra-competitive and sometimes this prevents us from collectively driving forward for the good of the industry. This is not to say that there has been no digitisation within the QS profession. The potential of digital innovation has been well recognised, and organisations have created roadmaps for their own digital transformations. However, these are often filled with buzz words and reactive innovations such as “5DBIM”, “dashboards”, “Tableau”, and ‘PowerBI”. 

For us to truly drive digitisation and innovation across the industry, we need to relook at our strategies and understand how it can benefit the client and end user. 

The truth is that we are not that digitally advanced as a profession. The reasons for this are:

» Time
Digital transformation needs an investment – either time or monetary – and most QS businesses have precious little of the former and are reluctant to spend the latter.

» Cost
Typically, the costs associated with true digital transformation can be substantial – and prohibitively so when the value outcome and/or return are difficult to ascertain and quantify.

» Existing solutions
Most QS firms have already invested heavily in developing standard and consistent reporting templates that, for the most part, meet client requirements and expectations. So, if it is not broken, why fix it? 

» Previous failures
Where QS firms have tried to innovate and streamline their services through digital solutions, they have failed to deliver the outcomes and value that may have been originally perceived or anticipated.

Reframing the question

Many organisations have been trying to understand and define what digital transformations means for them. The problem that many organisations have is that they look to the benefits for  themselves first. Executives and managers both want and need to understand the value that will be brought to their business from the outset: 

» Will the investment increase performance and operational efficiencies?

» Will we be able to charge our clients more for this product/service?

» Will we be able to improve or increase our margin?

From a business and operational perspective, these are all perfectly valid questions. Except – they are not the questions you should be asking. 

Most businesses are preoccupied with looking for answers, without realising that they might be asking the wrong questions in the first place. You do not get answers to questions you do not ask and you get ineffective answers when you ask the wrong questions.

That is why, when it came to our own digital transformation, we re-framed the question:

What do our clients need and want?

Sounds simple, right? This extremely simple question allowed us to re-frame the purpose of our digital transformation and create a response that was built around a structure of value and client experience.  Whilst this shift may not sound especially innovative or monumental, it allowed us to fully understand the problems that we were trying to address and solve.

This was the moment of clarity for driving our digital transformation. It enabled us to build a business case that addressed, not only the improved customer experience and additional value that would benefit our clients, but also the operational efficiencies that would benefit us.

By changing our viewpoint to focus on our clients’ needs and problems, we were also able to identify performance and value improvements for our own business.  This demonstrates that by focusing almost selflessly on your client’s goals and improving the overall customer journey you can also derive lasting value to your business.

Now, after 12 months of workshops, ideation, iteration after iteration, prototyping, testing, and engagement, we are now at the point of launching our new platform – Cost Clarity. 

Our digital journey has allowed us to continuously test our assumptions, evaluate the ‘cost management’ journey of our clients, and understand far more about ourselves as a team and how we operate. It has been an eye-opening and extremely rewarding learning experience.

The lessons learnt summarised

» Ask the right questions.
It is easy to orientate questions in such a way that the answers frame the impact on ourselves from an individual or business perspective. Widen the scope of inquiry. Get as much input and discussion as possible and keep reframing the questions you have set. You will develop more comprehensive solutions based upon the number of viewpoints you bring onboard.

Albert Einstein once said “When I have one week to solve a seemingly impossible problem, I spend six days defining the problem. Then, the solution becomes obvious.”

» Focus relentlessly on the customer journey and client experience.
Digital transformation is not just about focusing on your internal capabilities.  It is also about improving client experience.  To achieve this, you need to fully understand your client’s challenges. Speak to your clients continuously to better understand their pain points and make their problems your problems.

» Gear up your entire team for change.
I have seen several new systems, processes, or products implemented into businesses. Some have succeeded, but almost all have struggled to gain traction and be accepted by the wider business. Installing a system or software is only the first step. You will need to foster a culture of collaboration with your team and the business. 

Digital transformation is a journey for everyone – so ensure that you bring everyone along for the ride.

» Fail early and often.
Failure is where all the lessons are. The digital transformation process, which is often built around Design Thinking, is biased towards action.  The goal is to prototype fast, often, and test it on real users. This must be embraced as a means of learning – learning about the shortcomings of your product or solution and make changes to resolve and improve. 

Get comfortable with failure. You will fail more than you succeed – but when you do succeed, you will succeed big.

So, what’s next for Cost Clarity?  

Whilst our new platform is a huge step forward in how we will deliver our services, we haven’t yet scratched the surface of its capability. We will continue to develop new features and look to deploy the platform across multiple regions.  We will develop new, as well as refine existing, “use cases” to ensure that Cost Clarity remains current, adaptable and, above all, relevant to our clients.

It is critical to understand that digital transformation requires ongoing effort and commitment. This is where we must deviate from traditional thinking and understand that a defined ‘project completion date’ does not necessarily exist.