Why The Construction Industry Needs More Data Standards

Going Beyond Mixed Fleet Telematics

The recent adoption of the Mixed Fleet Telematics data standard is a big win for the construction industry. With four major manufacturers already on board, the initiative is off to a good start. But the telematics standards only addresses one of the many data needs of the industry.

The construction industry faces a number of daunting challenges including new regulations, a decline in skilled labor and sustainability. However, the elephant in the room is still construction’s lack of productivity gains. Numerous studies show that the construction industry is severely lagging behind many other industries in productivity gains. Another study has shown that productivity is essentially unchanged since 1993. Either way, with the construction industry’s low margins, something has to change. The industry needs some quick wins to jump start productivity and profitability.

One of the easiest wins is to efficiently leverage the vast amounts of data that is generated within the entire construction industry. Data is now the driving force behind the transformations taking place in retail, banking, insurance, automotive and many other industries. Unfortunately, the construction industry is one of the least digitized industries. The silver lining to this low rate of digitization is that there is a tremendous amount of potential upside, which could translate into a great opportunity for productivity and profit  growth.


A Data Deluge

Everyday, the construction industry generates more and more data via new sensors and telematics. And business processes are becoming increasingly complex, with the trend towards greater utilization of equipment rental/sharing, increased demand for faster replacement parts delivery, and the growth of online equipment sales and auctions.

In fact, data is now coming from many different sources including:

  • Equipment
  • Equipment Users
  • Manufacturers
  • Dealers/Distributors
  • Rental Companies

The question for the industry is how do you collect, integrate, and seamlessly exchange data from so many different types of users?  Many industries, faced with similar issues, have adopted data standards as a means to facilitate data exchange across different platforms and different business models.


What Are Data Standards

Data standards can be thought of as an agreed upon structure for data. An analogy would be a blueprint. Even though the construction of a home, a large building and a bridge have very different requirements, a blueprint uses common terms, principles and units of measure that allow it to be read by anyone with the required technical knowledge.

In the same way, data standards offer an efficient structure to build data interchange frameworks. Data standards can take many forms and can range from a basic set of guidelines to a comprehensive set of formats and definitions that are regularly maintained and updated by a standards body.

Most commonly, data standards are developed and maintained by a specific standards body, which has been chartered with the sole intent of developing and maintaining standards. This standards body is comprised of members of the industry that they serve and ensure that the data standards are providing maximum benefit to their industry.

In other instances, an existing industry organization may “extend its scope”  by creating and maintaining a set of data standards. This is what AEM/AEMP have done with the telematics standards and this is a very sensible approach. Existing organizations contain SMEs (subject matter experts), have members that have a stake in seeing the successful implementation of the standards, and can contribute resources (financial or technical) to the cause.


What Standards Have To Offer

1) Interoperability

Because a typical construction company will operate equipment from multiple manufacturers, easy data exchange is critical. The telematics standard is the first step towards addressing the mixed-fleet data needs, but the standards will need to be extended to increase their usefulness.

The rental industry also need a more data friendly environment due to the numerous brands that they offer and their diverse customer base. As renting/sharing becomes more widely utilized, standards that support greater interoperability will be very beneficial.

2) Security

Lack of standards invariably leads to a much less secure exchange of information. As data breaches become increasingly common and costly, the construction equipment industry must take steps to lock down their data. Every customer has an expectation that their personal and company information is being secured and treated with care. Not developing a means for moving data securely can leave the industry open to potential liabilities as well as a PR black eye.

3) Efficiency

It’s a curious contradiction that even as the construction industry moves forward with greater job site automation, many data tasks remain manual, repetitive and error prone. Utilizing multiple file formats, performing manual data entry and even duplicative data entry are still commonplace at job sites, dealerships and rental companies. Data standards would greatly reduce and even eliminate much of these inefficiencies and greatly improve the industry’s bottom line.

4) New Opportunities

In the past, handling data was considered a cost of doing business. As an expense, it made sense to do everything possible to minimize it. But today, data is a new form of currency, and invested properly, can deliver outstanding returns. Data can be packaged and resold to various users, it can also drive real time business processes and provide deep insights into the mind of your customer.

What We’ve Learned From Other Industries

Motive Retail has nearly a decade of experience working with data integration strategies and standards in multiple industries. That experience has taught us that a lack of data standards can ultimately hurt the growth of an entire industry. The increased costs due to inefficiencies, lack of business process integration and poor data security ultimately become the bottleneck that chokes off innovation and growth. The upside is that when industries develop and implement data standards, there is much greater productivity.


What’s Next

In the next  post, we’ll take a look at Business Process Integration (BPI) and how it can boost productivity and profits for all segments of the industry. Following posts will look at the do’s and don’ts of data standards, and how data has become the new currency.

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