Management of digital transformation projects in the AEC industry

The rise of digitalization over the last couple of decades has opened new avenues for the Architecture, Engineering, and Construction (AEC) industry in terms of value creation. This immense potential of digitalization has motivated numerous AEC companies to invest in developing and adapting their digital capabilities. However, despite this enthusiasm, 85% of current big data and digitalization projects fail to deliver the anticipated value and many AEC companies are becoming increasingly anxious about their technology investments. They are struggling to reconcile their traditional and digital perspectives and are uncertain about prioritizing technology investments or selecting from competing technologies when developing digital strategies. Based on our interactions with over 200 practitioners, we observed that a part of this problem arises from two primary factors: (1) Inability to define (and therefore select) what "digitalization" means in a specific use case, given that there is little that cannot be digitalized, and (2) A lack of understanding of how to strategically implement the chosen form of "digitalization" and which stakeholders to involve in the process. To address this gap, this research makes four contributions. These findings are based on the data collected over five years (2018 -- 2023) from three primary sources: (1) Sixteen real-world longitudinal cases spanning between three to eighteen months, (2) Workshops with 173 executives involved in 53 digitalization projects across 42 companies, and (3) Interviews with over 30 experts, involving more than 70 hours of interaction. First, this research proposes a two-dimensional Levels of Digital Twin framework. This framework organizes the types and levels of digitalization according to their unique features and advantages. Furthermore, it highlights the efforts required to build these digitalization levels. Second, this work contributes the Digitalization framework. This framework helps practitioners select the suitable level of digitalization for their specific use case, thus building on the previously defined Levels of Digital Twin. Third, this study proposes a taxonomy for the common starting points for digitalization efforts in the AEC industry. This taxonomy helps practitioners assess their starting point before implementing the selected level of digitalization and determine the most appropriate implementation strategy. Fourth, this research contributes a 3-by-3 digitalization management framework. This framework outlines the strategic processes to follow and the stakeholders to involve in digitalization projects for a successful implementation. The validation of the frameworks revealed that practitioners found them useful in practice to better plan and develop digital strategies. However, the generalizability of the frameworks is limited, given that the case studies are only from the engineering and construction industry. Future research could focus on comparing the findings and their implications with the challenges facing manufacturing, software, and service companies.

Keywords: Engineering.
Advisor: Fischer Martin
Burgelman Robert
SinghVishal