After a year of upheaval, engineering and construction companies hope to significantly reduce project failures by transforming the way they manage their portfolio risks. The global research “KPMG 2021 Global Construction Survey” for the construction industry entitled “No turning back, An industry ready to transcend”, highlights an industry on the brink of fundamental change, notes the APE-MPE. The survey presents an optimistic outlook, with two-thirds of project owners predicting an expansion of their investment plans and half of those surveyed being “very” or “somewhat” optimistic about the future direction of the construction market.
Commenting on the results of the research, Sofia Grigoriadou, Managing Partner Papakostopoulos – Grigoriadou and Associates Law Firm (CPA Law), an independent member of the international legal and tax services network of KPMG states: “The biggest risk that the construction industry will face next time, having already managed the effects of the pandemic, it will be the increased cost. The optimal use of artificial intelligence, the use of innovative materials for the purpose of investment sustainability, but also the attraction of a significant workforce, seem to be the factors that will determine the adaptability and resilience of companies. “This risk will intensify competition between companies in the industry.”
In addition, Alexandros Veldekis, General Manager, Auditing Services, KPMG in Greece notes: “The future of the construction market looks optimistic. This optimism stems from the successful undertaking of projects by construction companies due to the better management of their business risks and project risks and on the other hand from the enhancement of the efficiency of their projects as a result of investments in new technologies and digital tools. At the same time, it seems that the construction industry is gradually attracting the most capable labor market as construction companies expand their diversity, in terms of their internal structure and supply chain, and begin to cultivate a climate of equal treatment of their workers”.
Risk management is at the core of the effort to improve organizational resilience. At 60%, respondents say they want to get a more complete picture of risk, increasing integration and visibility between business risk management, portfolio risk and project risk. Two-thirds plan a moderate or high level of investment in risk management. Having made leaps and bounds in remote work and digital collaboration, 43% of respondents plan to take advantage of this event through significant investments in technology to enhance the performance of their investment programs. “Technology adoption” was also ranked as the second most important factor in the ability of engineering and construction companies to manage subversive events.
However, faced with a range of geographies, fragmented supply chains, and a steady stream of new software, companies may find it difficult to integrate risk management and project management effectively. Only 16% of executives surveyed said companies have fully integrated systems and tools. Efforts by the global construction industry to adopt greater diversity, equality and inclusion still seem to be in their infancy – although owners have made more progress than contractors. Only 46% of respondents said that their company has a formal program for creating teams with diversity and without exclusions, while only 26% have a formal diversity program for their suppliers. Finally, in more and more sectors, project owners are demanding greater diversity both in their direct contractors and in the wider supply chain.