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Diffusion Barriers of IT Technologies in the Construction Industry: A Comparative Analysis Between Manufacturing and Construction Industries

The rapid developments in information technologies during the last two decades had little impact on how construction projects are designed, planned and managed. Despite the widespread diffusion of integrated CADCAM technologies in the manufacturing industry, widespread use of computer integrated design, planning and construction technologies in the construction industry is yet to be seen. Although, the potential benefits of this integration for the construction industry have been demonstrated, this delay in diffusion of computer based integration technologies suggests existence of some barriers for the vast majority of construction companies to adopt these technologies. This study makes an attempt to investigate these possible barriers that may be preventing diffusion of IT Technologies in the construction industry with an emphasis on a promising new tool: 4D CAD. Because little research has been conducted to date on diffusion of information technologies in the construction industry, manufacturing industry is chosen for comparison because of the similar, product development oriented natures of manufacturing and construction industries. The manufacturing industry literature is first investigated to understand the drivers of diffusion of CADCAM technologies in that industry. A literature survey on the manufacturing industry and the theory of innovation diffusion suggests that diffusion of information technologies, such as CADCAM and 4D CAD is not only determined solely by the pure economic benefits but by the firmís strategic, industrial and organizational environments as well. This conclusion is along the lines of the Winstonian model of diffusion, when the social context under this model is replaced with the industrial and organizational contexts as the major determinants of innovation diffusion at the firm level.





B. Kagan Ceylan


(The original of this article was published in Performance Journal, Ernst & Young's Global Think Tank, in March 2010 - Issue 2.4)



Emergence of computer integrated information technologies (ITs) in 1970s and their rapid development henceforth created new opportunities in all aspects of engineering product development. The most immediate and profound impact of information technologies on product development has been in the manufacturing industry. The manufacturing industry quickly adopted these technologies towards integration of computer aided design (CAD) and computer aided manufacturing (CAM) systems during 1980s and 1990s. With Japanese firms successfully using these technologies during 1980s as early adopters to gain competitive advantage over US and European firms, advanced computer-integrated manufacturing (CIM) technologies were soon regarded as an essential strategic strength by the US firms to remain competitive in the face of increasing international competition (Bessant and Lamming, 1985).   

Similar to the manufacturing industry, in the construction industry IT based CITs have the potential to improve project performance in several ways.  They can assist in “bringing large amounts of data to users at appropriate times through database enquiries, understanding building construction and performance through visualization and different forms of representation, reasoning about problems in design and engineering, and/or offering possible solutions to such problems through the use of built-in rules and management of communications between different participants in construction activities and providing better integration of decision making within distributed teams” (Hansen et al., 1998). Indeed, recent years have seen increasing use of internet-based database and project management tools for information sharing in the construction industry. However, based on an investigation of US and UK construction industries, Hansen et. al. (1998) report that “except a few “islands of automation” such as in the use of CAD by design firms or cost-estimating systems by contractors, the potential benefits flowing from the use of CITs are as yet largely imagined rather than realized”.

One promising but underutilized IT based CIT is four-dimensional computer aided design (4D CAD) developed for the construction industry. While manufacturing industry saw rapid and widespread development of CIM in 1980s and 1990s, diffusion of 4D CAD and other innovative technologies has been slow in the construction industry (Hansen et al., 1998; Mitropoulos and Tatum, 1999; Taylor and Levitt, 2004). What are the potential barriers that may be preventing diffusion of 4D CAD in the construction industry?

A number of models have been proposed in the communication science to explain diffusion of new technologies. According to macro-diffusion theory proposed by Rogers (1983), diffusion of a new technology follows an S-curve. While a new technology is adopted early on by a few firms only, its diffusion increases rapidly as the investment required to adopt a technology decreases (Attewell, 1992). The increased diffusion is often due to a substantial drop in the price of the new technology (Attewell, 1992) and the decreased know-how requirements in organizations to use the new technology (Bessant et al. 1985). Another diffusion model proposed by Winston (1998) suggests that diffusion of a new communication technology is often facilitated by a supervening social necessity driven in a social context. According to Winston, supervening social necessities, as the accelerators of innovation, are counterbalanced by suppression factors, as the brakes of innovation, governing the pace of the diffusion of the technology. Winston (1998) defines suppression factors (i.e. barriers) as anything that hinders a new technology from passage or causes absence or non-development of a new technology. Supression factors and barriers are used interchangably for the remainder of this study. 

Research Method

The objective of this study is to investigate the possible barriers to diffusion of 4D CAD in the construction industry. Because the research to date on theoretical aspects of innovation diffusion in the construction literature is rather scarce, manufacturing industry is selected as a comparative industry due to the similarities between manufacturing and construction industries. The innovation diffusion theory is supported by the organizational theory to explain the possible barriers to innovation diffusion in the construction industry based on the manufacturing industry analysis.    

The Need for and Evolution of 4D CAD Technology in the Construction Industry

The need for IT based CITs in construction projects is mainly due to the number of stakeholders involved and concurrence in construction projects. Operations in a construction project involve large numbers of interrelated parties, such as designers, inspectors, general contractor, subcontractors and vendors, each providing a distinct but essential service to realize the project. These stakeholders are often forced to communicate on a continuous basis with each other. The need for effective communication in construction projects is further exacerbated due to concurrent engineering that gained momentum in the 1980s (Rimoldi, 2002). The concurrency of design, planning, management and construction activities requires project stakeholders to react quickly and collaboratively to unfolding project events during a project, such as a design change, an unforeseen event or a discovered error, which increases the need for effective communication and information sharing in construction projects.

Visual aids have been particularly important in engineering, as they help designers, engineers and others to communicate their ideas, come to a common understanding of problems and coordinate their efforts based on this common understanding. At a minimum, engineers communicate with two-dimensional (2D) visual aids what is needed (e.g. design drawings), when it is needed (e.g. project schedules) and how it is to be done (e.g. specifications or logical sequences of production activities). Because most engineering problems are complex in nature, effective communication among engineers as well as between engineers and other project stakeholders (e.g. vendors, clients, regulators, etc.) plays a vital role to bring a project to a successful completion. 

Effectiveness of visual aids particularly improves when they express realism, such as realistic materials or visualized products, compared to just geometric models, text and symbols that are traditionally expressed in 2D engineering documents.Based on experimental studies, Johnson-Laird et al. (1972) report that “the individual may find many realistic objects easier to visualize, to remember, and to manipulate mentally”. In engineering, using mock-ups, prototypes and models has been a common practice to take advantage of three-dimensional (3D) realistic materials for communication and information sharing. With the increasing processing power of computers, 3D visualization of construction design has become increasingly widespread and proved to be more cost-effective, flexible and practical than mock-ups.

An early attempt to use computer based visualization to improve communication and reduce errors in construction projects was introduction of virtual reality (VR) in construction design and planning. Virtual reality has been proposed as a tool to help investigate proposed building designs by giving an observer three dimensional spatial information at any viewpoint. Important design considerations such as whether the proposed design satisfies the client’s requirements, provides an ergonomic layout of rooms with respect to their perceived functions or ensures safety aspects (e.g. fire escapes) and access routes (e.g. stairway accesses) can be addressed more effectively using VR (Griffin, 1993). However, while VR provides a useful tool as an extension of 3D CAD, its inability to assist construction operations remains to be a setback.

In response to VR technology’s inability to assist construction operations, research has intensified in the late 1990s and early 2000s to integrate construction design and operations, which resulted in the introduction of 4D CAD. In 4D CAD, structural components are defined in a 3D CAD with relevant information (e.g. dimensions, spatial information, cost, labor, process requirements, etc.). These components are then manually linked to activities of the project schedule to create an integrated, visual schedule that conveys spatio-temporal information. This integration provides 3D visualization of a product with a schedule that shows the sequence of activities that have to take place for the physical development of the product. Three-dimensional visualization of how the product (i.e. the project) is developed with each activity in the project schedule provides a powerful simulation tool, as different development strategies can be tested by changing the sequence of construction activities in the schedule .

Four dimensional CAD promises several new opportunities for project designers, planners and managers. By using 4D CAD, project designers can check constructability of their designs at the outset. Project planners can check their schedules visually to detect any logical errors in their schedules and simulate alternative strategies to build the structure with the help of visualization (Retik, 1993; Xu, 2003). By using visual schedules, project managers can analyze possible conflicts due to space limitations, safety risks, and constructability of the projects (Koo and Fischer, 2000; Akinci et al., 2002), which are hard to detect on 2D project schedules that often comprise hundreds or thousands of activities with complex interactions. Necessary measures can be taken at the outset to prevent safety hazards, design changes and delays, which can be very costly at later stages of a project. However, on the downside in projects with frequent schedule and design revisions, 4D CAD may slow down the process and cause confusions unless the visualization of the project can be updated fast, preferably in an automated manner and real time.     

In spite of the demonstrated benefits and applicability of 4D CAD for construction projects, widespread use of this technology remains to be seen. Before the possible reasons for this observation are investigated, a review of the literature on the theory of innovation diffusion and integration of CADCAM, which is the counterpart of 4D CAD in the manufacturing industry, is presented next.

Drivers of Innovation Diffusion

Early studies on diffusion of innovations suggest that drivers of early adoption of a new technology by single firms are firm size, profitability, presence of innovation champions inside the adopting firm and organizational and environmental attributes of the firm (Attewell, 1992; Bessant, 1994).Attewell argues that large and profitable firms with innovation supporters inside the firm are often early adopters. Organization and environmental attributes such as intensity of competition, firm size, mass versus batch production, degree of centralization, organizational slack, proportion of specialists, and functional differentiation, which generally define a firm’s internal and external environments, may also be important drivers. Furthermore, Attawell (1992) argues that diffusion of advanced production technologies requires considerable organizational learning, which “may constitute an important reason for the private firms to postpone the adoption of an innovation”. In addition to firm’s internal and external environments, this study contends that technological determinism aggressively adopted in the US manufacturing industry during the early 20th century may be another reason for the widespread use of integrated CADCAM technologies in the US. The above listed perceived drivers of diffusion of innovation in the manufacturing industry are further elaborated below.

Technological Determinism

The competition between machine-centered and human-centered approaches in production technologies may provide an explanation for rapid development of CAD based technologies in the manufacturing industry. “The emergence of mass production in the first quarter of the 20th century represented a potent combination of organizational change which transformed manufacturing across the board” (Bessard, 1994). Frederick Winslow Taylor’s “Scientific Management” approach for the manufacturing industry, that underlies the machine-centered movement, aims to eliminate skill and responsibility in the worker (Rosenbrock, 1989). This, in turn, paves the way to more automated and integrated decision making tools and production systems in manufacturing. Advances in advanced manufacturing and Artificial Intelligence technologies coupled with increasingly powerful computing capacity available undoubtedly serve the objective of eliminating or reducing the required skill and responsibility of the workforce involved in manufacturing process. 

Adaptation of Integrated CAD/CAM as a Business Strategy

From a strategic standpoint, adoption of an integrated CADCAM technology is determined by the company’s business strategy and a company’s business strategy is in turn determined by its external industry environment (Aaker, 1998).The emergence of information technologies during the 1970s and its potential to provide widespread automation in the manufacturing industry created new opportunities to improve productivity and competitiveness in the face of increasing international competition (Bessant and Lamming, 1985) and globalization of manufacturing (Bessant, 1994).  As a result, in the manufacturing industry investment and research on manufacturing technologies, particularly CADCAM integration, continued under the competitive market pressures even during a recession (Bessant and Lamming, 1985; Gerwin, 1993). In the absence of competitive pressures in the firm’s external environment, a firm may strategically opt for rejecting or delaying an advanced manufacturing technology, which can be costly to acquire for the firm. Attewell (1992) reports that intensity of competition, among others, is one of the major drivers of technology diffusion in the manufacturing industry.

Integration of CAD/CAM Technologies as an Organizational Decision

Similar to the external dynamics in a firm’s external environment, internal dynamics in organizations may determine whether new technologies are adopted by organizations. In a case study, Tantoush and Clegg (2001) report how reorganization efforts in a UK manufacturing firm to adopt CADCAM integration changed the existing organizational structure and culture, old demarcation lines were gradually phased out and a more transparent kind of corporate culture was created, even before the economic outcomes of the integration were realized. Their case study describes how executive power shifts from traditional bureaucratic, less technically knowledgeable managers and workforce to those with technical knowledge who can control the CADCAM integration. Therefore, it should not come as a surprise that any technological change proposed in an organization would be met with resistance as well as support given the different impacts of proposed changes on individuals. Indeed, Tantoush and Clegg (2001) also report that in another UK manufacturing firm, the proposed CADCAM integration was met with strong resistance at different levels of the organization, including the top management, and was eventually killed by those who felt threatened and insecure by the proposed integration. These examples illustrate that technological integration requires critical organizational resources such as skilled personnel or capability of organizational learning (Attewell, 1992), top management support, politically powerful key managers in favor of the innovation (Tantoush and Clegg, 2001), as well as the promised economical benefits. Attawell (1992) also reports that firm size, profitability, degree of centralization, organizational slack and functional differentiation are also linked to adoption of innovation. 

4D CAD in the Construction Industry

Perception of Technological Determinism

The literature survey on 4D CAD suggests that while this technology provides a significant potential to improve construction project performance, there is still room for improvements. Reducing the amount of labor needed to link 3D CAD components to construction schedule activities and making 4D CAD tools more flexible for frequent schedule and design changes by automation would certainly improve its diffusion in the construction industry. Research is currently underway to improve 4D CAD in this direction (Kang, 2001; Akinci et al., 2002; Haymaker et al., 2003).

In construction industry where automation plays little role in the production process, human involvement is essential at every phase, from design to management and to actual construction. Therefore, computer integrated applications in the construction industry to date appear to be limited to purposes like time saving (e.g. CAD) and communication/collaboration (e.g. 4D CAD) that are essentially human-centered operations. This human-centered nature of the construction industry may have hampered the development and diffusion of advanced, computer-based integrated production technologies in the construction industry unlike in the manufacturing industry.

From the macro-diffusion theory perspective, it is possible that the vast majority of construction firms may be waiting the early adopters to embrace 4D CAD first, before they go ahead and adopt it. This wait-and-see approach may save them from possible failures in adopting 4D CAD technology. Therefore, its diffusion can be facilitated with more success stories and reduced cost of acquiring the technology and the required know-how. 

Adaptation of Integrated 4D CAD Technologies as a Business Strategy

Despite several similarities between the manufacturing and construction industries, industry environments for these industries differ significantly. Manufacturing industry is characterized by mass production and faces an increasingly competitive environment. A competitive environment is characterized by threat of new entrants, bargaining power of buyers, threat of substitute products and bargaining power of suppliers, as well as rivalry among existing firms (Porter, 1980). Unlike the manufacturing industry, the construction industry feels these competitive pressures to a lesser degree.  

In comparison to the manufacturing industry, construction industry is relatively protected from the international competitive pressures. For example, while the US companies in several industries (e.g. car manufacturing, electronics, steel, textile, etc.) have been facing fierce competition from overseas and have been losing their market shares, the US construction industry is relatively localized and protected from international competition. Furthermore, government support for the US contractors in large engineering projects overseas under the US legislation or inter-governmental agreements further protect the US construction firms from international competition. Russian chemical weapons destruction project undertaken by Parsons Inc., Russian Fissile Materials Storage Facility project undertaken by Bechtel Inc., reconstruction projects undertaken by Halliburton in Iraq and superhighway projects undertaken by Bechtel and Dillingham in Turkey under bi-lateral governmental agreements are a few examples for the large engineering projects undertaken by the US construction firms overseas under special provisions. While Hansen et al. (1998) report that a number of large US construction companies such as Bechtel, Parsons, etc. still stand out in the global construction market as the first adopters of innovative ITs, which confirms Attawell’s suggestion that firm size facilitates adoption of innovation, lack of international competition is believed to be a more dominant factor in the suppression of innovative technologies at the industry level.

Integration of 4D CAD Technologies as an Organizational Decision

Like in the manufacturing industry, organizational barriers are likely to play an important role in preventing diffusion of 4D CAD in the construction firms. Based on an analysis of eight US construction firms, Mitropoulos and Tatum (1999) report that technology adaptation decisions in those organizations were made with a behavioral process as well as an economic evaluation of potential benefits of the innovation. Their findings also suggest that company culture, particularly the top management’s attitude towards innovation, can be another important factor affecting the decision-making approach to new technologies, as is the case for manufacturing companies.

Organizational structure appears to be another major driver in diffusion of innovative technologies. Taylor and Levitt (2004) report that decentralized, fragmented construction industry structure makes it difficult for innovations to diffuse across the industry. Taylor and Levitt (2004) also report that similar difficulties were observed in other project based industries, such as pharmaceutical, biotechnology, and healthcare industries. In centralized, hierarchical organizations, decisions are typically made by the top management and these decisions propagate from top to bottom in a controlled manner. In project based industries, such as the construction industry, usually significant autonomy is given to project organizations where decisions have to be made on the job site and fast. In return for this autonomy, project organizations are required to meet budget and schedule targets as the performance measures set by the top management. This project based, decentralized nature of the construction industry leaves the decision to adopt an innovative technology at the project level to the project manager at his own risk. While this autonomy of project managers may facilitate innovation at the project level, adaptation of costly and relatively uncertain innovative technologies, such as 4D CAD, may also be avoided by risk-averse project managers who primarily focus on short term project objectives such as meeting the target budget and schedule by well established methods. Indeed, the literature on bounded rationality reports that decision-makers in organizations search for new alternatives until a satisfactory alternative is discovered or created and they stop seeking alternatives that with the highest possible expected value (Mitropoulos and Tatum, 1999).

Because diffusion of advanced technologies also requires transfer of know-how and organizational learning, organizations may avoid adopting innovation, including 4D CAD, unless they have the in-house capability to use the innovation.Mitropoulos and Tatum (1999) report that at the project level innovations are typically adopted by project managers only when there are available site engineers who are familiar with the new technology to reduce the cost of innovation adoption.

Summary and Conclusions

This research addresses diffusion of 4D CAD technology in the construction industry. Winston’s diffusion model is taken as the reference. Innovation diffusion with a focus on CADCAM and 4D CAD technologies in the manufacturing and construction industries is investigated in the framework of Winston’s model. It reviews the literature on diffusion of CADCAM integration in the manufacturing industry, which provides insight on possible barriers to innovation diffusion at the firm level. In light of the findings on manufacturing industry, the limited literature on innovation diffusion in the construction industry is reviewed and possible barriers to innovation diffusion and 4D CAD in the construction industry are investigated.

Winston (1998, p.13) argues that “it is the law of suppression that ensures any new communications technology takes decades to be diffused”. Given the fact that 4D CAD was developed in late 1980s and more or less matured in early 2000s, Winston’s law of suppression appears to hold for the diffusion of 4D CAD in the construction industry. The brief investigation of the literature on the manufacturing industry suggests that a number of potential barriers to diffusion of 4D CAD technology in the construction industry may be at play. These are the need for further improvements in 4D CAD, the human-centered nature of the construction industry, and industrial and organizational environments at the firm level.  

In spite of its demonstrated potential, the current state of 4D CAD requires further improvements before it can be applied to construction projects with greater ease. Its effectiveness needs to be proven in more real life projects with more success stories. From the macro-diffusion theory perspective, the vast majority of the construction companies may be waiting for more early adopters to test 4D CAD. Also, lowering costs of acquisition and utilization of 4D CAD may help the diffusion of 4D CAD. 

The machine-centered approach that has driven technology development in the manufacturing industry significantly contributed to the development and diffusion of innovative technologies such as those to achieve full automation through CADCAM integration. The human-centered nature of the construction industry may be reducing the pace of innovation in the construction industry. 

While the economic benefits promised by 4D CAD are clear from a rational perspective, industrial, strategic and organizational contexts, in which construction firms operate, are  possibly the biggest determinants in the diffusion of innovative technologies. In comparison with the manufacturing industry, the relatively weak international competition can be seen as a lack of supervening necessity for the diffusion of innovative technologies in the construction industry. The project based, fragmented organizational structures in the construction industry also makes adoption of innovative technologies difficult. Organizational learning can be a barrier to diffusion in the construction industry, although there is limited research in the construction literature on the relationship between organizational learning and diffusion.

These conclusions of this research are along the lines of Winston’s diffusion model (Winston, 1998), which suggests that the social context is the determinant in diffusion of communication technologies. This research concludes that at the firm level, industrial and organizational contexts, rather than the social context, determine the diffusion of advanced computer based technologies. Further research on the role of other organizational dynamics, such as internal politics, firm size, profitability, degree of centralization, organizational slack and functional differentiation, on innovation diffusion in the construction industry would enhance our understanding of the diffusion process of innovation in the construction industry.


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