Engineering, procurement and construction firms are doing all they can to rebound rapidly amid the uncertainty created by the coronavirus pandemic. But while many EPCs view cost savings as an effective short-term response, longer-term adverse trends demand a more strategic view and the acceleration of digitalisation. Even before Covid-19 emerged, companies faced the commoditisation of their services, regular cost and schedule overruns, risk-laden lump-sum projects and net margins of less than two per cent on average.
Digitalisation can not only help EPCs overcome these long-term challenges, but can also lay the groundwork for improved profitability and new sources of revenue. Fortunately, there are already signs that digitalisation will pick up speed. Two-thirds of construction industry respondents to a recent survey from McKinsey, ‘The Next Normal in Construction’ [PDF], believe that the Covid-19 crisis will accelerate industry transformation, and half...