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November 18, 2009

Construction Corner | Korky Koroluk

BIM sure to bring creative disruption

Once in a generation, perhaps, a new technology comes along that enables rapid innovation and change. Sometimes, too, such change leads to a whole new batch of companies that pursue the changes aggressively, while their older, larger competitors are still trying to figure out what happened.

I’ve a hunch that Building Information Modeling—BIM—is one such technology. And I suspect that it is going to cause problems for some firms that have, perhaps, become too comfortable in their own markets.

Transformative technology has led to major disruption in the past, and there may still be a few construction veterans around who remember at least the tail end of one big one: the evolution of mechanical excavators.

Construction Corner

Korky Koroluk

Clay Christensen, a professor at the Harvard Business School, wrote an influential book in 1997 called The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Although it was not about the construction industry specifically, one important chapter dealt with the mechanical excavation sector, and what happened when the big players in the days of steam shovels using cables, pulleys and drums were faced with upstart companies exploiting the (then) newfangled idea of hydraulically actuated backhoes.

In the early 1920s, there were more than 32 U.S.-based makers of steam shovels. Some fell by the wayside when gasoline power arrived, and a few more were lost in the conversion to diesel power.

But the killer technology was the development, in 1947, of hydraulically actuated shovels.

Only four of the companies that had used cable systems had made the switch to hydraulic systems by the 1950s. Most of the others failed, although a few stayed in business by concentrating on larger machines for the mining industry.

The upstarts who over-ran the excavator sector all entered the industry with hydraulic technology — firms like John Deere, J.I. Case, Poclain, Caterpillar, Komatsu, Hitachi and others. Old, established companies now, it was they who were the aggressive newcomers in the ’50s, exploiting hydraulic technology to their advantage and the advantage of those customers who were just as aggressive in looking for an edge.

The early hydraulic excavators — the machines we now know as backhoes — had small buckets and a short reach, which gave them early popularity with sewer and watermain contractors.

Until then, these firms had used cable-activated machines to dig their main trenches, while the laterals were dug by hand. Small backhoes, mounted either on the backs of tractors or trucks, had the agility to dig those laterals.

These small machines provided a lead for the early adopters of the technology that some later adopters were never able to overcome.

As the technology evolved, backhoes became larger and larger, with an ever-widening choice of features. Again, the early adopters thrived at the expense of older companies.

If Christensen’s observations about disruptive technologies can be condensed into a sentence, it would be: Disruptive technologies have forced the failure of many organizations because they either failed to see the disruption coming, or didn’t act until it was too late.

I’m not saying that’s going to be the case with BIM, and there are many firms in the industry for which BIM will never be a concern. But the first Bridge Information Modeling (BrIM) systems are probably only five or six years away, which will introduce the management concepts to a whole different class of contractors.

BIM is disruptive. But the advantages it brings to the jobsite are too important to be ignored, even at a time when many are spooked by an uncertain economy.

Korky Koroluk is an Ottawa-based freelance writer. Send comments to editor@dailycommercialnews.com

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