Author: Liu Munan, Deputy General Manager, Enterprise CIO, and General Legal Advisor of Beijing Third Construction Engineering Co., Ltd.
After years of persistent effort, the domestic construction industry has made remarkable progress in information technology development. The promotion of digitalization within the sector has significantly contributed to the overall growth of the industry. However, it is important to recognize that China’s economy has shifted from rapid growth to high-quality development and is currently in a critical phase of transforming its development model, optimizing its economic structure, and driving innovation. The economic outlook for 2019 emphasizes “stability amid change,” signaling rising risks and challenges alongside new opportunities. External pressures will push for deeper reforms and expanded openness.
For the construction industry, rapid scale expansion is becoming a thing of the past. The traditional construction sector now faces unprecedented challenges and opportunities, demanding new requirements for enterprise transformation and upgrading.
The 19th National Congress of the Communist Party of China clearly stated the need to support the optimization and upgrading of traditional industries, accelerate the development of modern service industries, and aim to meet international standards to elevate industry levels. In recent years, the growth of the information industry and the continuous emergence and application of new technologies have fundamentally changed many sectors, especially manufacturing. This transformation highlights the vast potential for the construction industry to modernize production methods through technological advancement. The industry must embrace technological innovation to promote modernization.
In other words, effectively leveraging information technology to support the overall transformation and upgrading of prefabricated assembly construction is a pressing challenge that construction IT professionals must address seriously today.
Main Challenges in the Construction Industry’s Transformation and Upgrading
1. Shift from Project General Contracting to Engineering General Contracting
Historically, the construction industry has operated under a fragmented and decentralized management system, with slow adoption of engineering general contracting. Most construction enterprises remain positioned at the lower end of the value chain, lagging behind developed countries in high-value activities such as financing construction, general contracting, and comprehensive engineering consulting.
In 2017, the General Office of the State Council issued the “Opinions on Promoting the Sustainable and Healthy Development of the Construction Industry,” urging accelerated implementation of engineering general contracting. Prefabricated buildings are recommended to adopt this model, with government-funded projects leading the way. This requires optimizing organizational models to boost productivity and drive Chinese construction enterprises toward higher-end markets, enhancing competitiveness.
Key measures include establishing a tripartite organizational model clarifying rights and responsibilities, strengthening construction unit accountability, accelerating engineering general contracting, fostering integration between design and construction, and cultivating whole-process engineering consulting to replace fragmented approaches.
This business model transformation will strengthen general contracting enterprises domestically and internationally, while supporting specialized small and micro enterprises to enhance their capabilities, promote specialization, and foster collaborative industry ecosystems.
2. Transition from Extensive, Inefficient Production to Environmentally Friendly and Energy-Efficient Practices
Traditional construction methods suffer from significant drawbacks: excessive use of steel and cement, high water consumption, disorganized and polluted sites contributing to urban particulate pollution, and serious quality issues like cracking and leakage. These shortcomings underscore the need for technological improvements and a shift toward green development emphasizing energy conservation and emission reduction.
The industry must accelerate the adoption of green building practices, including prefabricated buildings and ultra-low energy passive structures, to meet these environmental goals.
3. Labor Market Shift from a “Buyer’s Market” to a “Seller’s Market” for Skilled Workers
The construction industry has long depended on labor-intensive methods. With the end of China’s demographic dividend, labor shortages and recruitment difficulties have intensified. The reliance on rapid, large-scale production methods has resulted in a scarcity of high-quality, versatile talent.
Many frontline workers remain fragmented and informal, with low professional skills. Addressing these challenges requires reforming production methods to industrialize construction and improve worker productivity. Equally important is reforming employment systems to transition migrant workers into industrialized roles, leveraging the improved skills of younger generations and optimizing employment structures to cultivate high-quality construction talent.
4. Rising Requirements from the Digital Construction Industry
Digital construction represents a practical technological advancement. Recently, many enterprises have prioritized innovation, widely adopting BIM, cloud computing, big data, IoT, mobile internet, AI, 3D printing, VR/AR, digital twins, blockchain, and other digital technologies in project management, prefabrication, and enterprise operations.
These emerging technologies enhance quality and efficiency but also raise higher expectations for the overall skill levels of industry practitioners.
Reflections on the Development Model of Information Technology in Construction
Looking back at the development of IT in Chinese construction enterprises, the progress can be broadly divided into three stages based on content, common traits, and logical relationships:
1. Professional Software Tool Application Stage
This initial phase involved limited use of specialized software tools to address specific tasks such as document processing, budgeting, and engineering calculations. These tools improved efficiency and reduced repetitive work, laying the foundation for further digital development.
2. The “Information Island” Stage
At this stage, IT began integrating with enterprise business management, forming localized departmental subsystems like material management, human resources, and technical data management. While these improved management levels, they remained fragmented and vertically siloed, with limited cross-departmental integration.
3. Enterprise Information System Integration and Management Stage
In this phase, driven by qualification evaluations, enterprises consolidated previous IT experiences, optimized core business systems, and standardized management. This resolved the disconnect between IT systems and actual management, improving alignment and effectiveness.
Two notable characteristics emerge from these stages:
- Shift from addressing specific business needs to enhancing management: Industry stakeholders, especially construction enterprises, have increasingly recognized that IT’s fundamental purpose is to improve management. Standardizing construction, integrating business processes, and unifying enterprise information systems enable effective control over contracts, finances, personnel, materials, quality, safety, and environmental protection. This integration boosts efficiency and enhances core competitiveness.
- Dependence on manual data entry: Most information systems rely heavily on manual input from frontline personnel, increasing their workload and causing resistance. Limited human resources, lack of experience, and unfamiliarity with digital tools on project sites also hinder IT adoption.
Suggestions for Information Technology Development in Construction under New Technological Conditions
1. Basic Principles for IT Development in Construction
Experience from the past decade highlights that IT initiatives must aim to enhance core competitiveness and management capabilities. This focus should guide the adoption of new technologies and products within enterprises.
Additionally, adherence to the principles of intensification, systematization, and standardization is essential. New technologies must facilitate cross-departmental and cross-system business communication, supporting decision-making from the project level up to enterprise leadership, thus improving overall operational control.
Finally, IT development should follow a strategy of overall planning, stepwise implementation, and emphasis on effectiveness. IT is a continuous process that must align with enterprise maturity and development. Planning should reflect the enterprise’s actual situation, with staged implementation that prioritizes practical results and avoids increasing redundant workloads, balancing management goals with operational value.
2. Recommendations for Information Technology Construction in the Era of New Technologies
As traditional enterprises evolve into smart building construction companies, the Internet’s role extends beyond business support to driving transformation. By establishing an Internet strategy centered on business value, construction enterprises can integrate control mechanisms, enterprise architecture, and IT capabilities, achieving seamless alignment among business, IT, and Internet technologies to drive growth.
Key technologies such as BIM, IoT, cloud computing, and big data are instrumental in building smart enterprises. IoT enables connectivity, cloud computing provides the platform and support, and big data serves as the foundation for intelligent operations.
It is important to remember that the adoption of new technologies must fundamentally improve management. For example, BIM should extend beyond design and marketing to encompass production planning, resource allocation, process layout, cost control, and big data analysis. Its application should span the entire project lifecycle—planning, design, production, delivery, and operation—facilitating collaboration among owners, designers, builders, subcontractors, suppliers, and operators under unified data standards. This integration fosters industrial synergy and elevates overall management and efficiency.
Moreover, emerging technologies impose higher skill requirements on construction professionals. Tasks such as data entry and analysis, traditionally performed by management, may increasingly involve frontline workers who must now possess both production skills and digital literacy. The widespread use of mobile devices has aided digital adoption, but structural labor challenges remain. Addressing the need for skilled personnel to support new technologies is critical, and industry stakeholders must proactively develop solutions.
Ultimately, solving the human resource challenge is key to ensuring the successful digital transformation of the construction industry.
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