Construction 2.0: Win More Work with Virtual Reality

KHANG TRAN: My name is Khang Tran. Thank you so much for coming. It is my honor. I'm very excited to be here today. This is my fifth AU and my second time speaking. So if you're taking notes, please keep track on my ums and ahs. It will be really helpful for me to grow as a speaker.

I work for Skanska USA Building. If you've heard of the Skanska, we're a small Swedish construction company. And so, I work for Skanska USA Building in Portland, Oregon. And I aspire to drive our innovation culture by partnering with my colleagues and collaborators-- like architects and engineers-- and our clients to bring more innovative solutions to the industry by leveraging innovative technology, creative processes, by human design thinking to bring more innovative solutions. So that is my why for being in this industry and doing what I do.

OK. My goal today for you is to share our experiences from a perspective of a general contractor on our journey through adopting and implementing virtual reality-- VR. We will look into when, where, and why we're implementing VR to create value for our internal and external stakeholders. I will share lessons learned, challenges, and opportunities that we face along the way. So we will focus on the why of VR-- the human side of VR-- rather than the technical aspect of VR.

So let's go. Just to give you a quick context on how we've got to this point, as you may know, construction industry is-- we're very conservative. And the way we construct, collaborate, and communicate hasn't changed much in decades. And so, we strive to innovate our workflow and bring more innovative solutions to our clients. So this is the tool that we use in our project planning services as a way to plan, research, identify, select, and implement new tools-- processes to create a new experience for our clients.

And as you can see on here, up until late 2014, we were still using some of the traditional visualization methods. And so, as we aspire to do more-- so we started to look into tools like augmented reality, hologram, Google Cardboard, HoloLens. And up until this time last year, that's when we started to look into virtual reality tools like the VIVE and Rift.

Last year, I was fortunate enough to-- I was given the opportunity to present at AU-- it was my first AU-- to share this comprehensive research on the different hardware and software and its applicability. I am happy to share that, if you're interested, on what you buy, what to use, and how to get to VR in two clicks. So that's the technical side that we're not going to focus on today. But if you're interested, I'm happy to share that research and that PDF-- that presentation.

So that's how our journey started. So since the beginning of this year, we've been taking our VR equipment on the road to share, teach, and collaborate with our colleagues, collaborators, and clients. So you can see on here, someone like Kelly [? Roth, ?] our project executive-- someone I would have never thought that would ever put on a VR headset-- or working with some existing clients-- oh, sorry-- existing clients to solve-- help them speed up the design selection process. Or working with kids, teaching kids VR-- I think that's the-- I enjoy that process the most. Once you immerse them, you don't know what will come out of their mouths, so it's really great.

I learned a lot through this experience. And this is a testament to a movement that I notice in my office on-- they are becoming more curious and willing to explore new tools. And so, while these experiences are great, we-- you know, we create a great awareness internally and externally, I found that the adoption rates were still low. People were not truly embracing this tool and integrating this tool into their workflow like we wanted to. Our goal is to motivate them to adopt this tool to help them to think, work, and build differently.

So we start to ask ourselves a lot of questions on how to help motivate people and why are not-- they are not seeing the value. So this is the problem statement that we came up with. So how might we motivate internal stakeholders to adopt and implement VR as a tool to attract customers? So this-- to address this question, we developed this tool. It is our roadmap to help us to win more work with VR.

So as you can see, we did our R&D. We went out and bought new hardware and software. We created an awareness. And, of course, our goal-- ultimately, we would like to integrate it as a tool into the way we collaborate and communicate with internal and external clients as part of the project delivery process. But, of course, you know, there are challenges that we have to overcome. And that's-- we recognize that there are challenges that are demotivating people from embracing this tool.

So lets go look at what are some of these challenges that people are having. So at an industry level-- at a macro level-- we noticed that the construction industry is project-based driven, meaning project teams are moving from one project to another at a very fast pace. So they do not have the time, resources to adopt new ideas. And it's something that they are not willing to do, because their goal is to deliver that project on time and on budget.

Our industry is risk averse, and are our profit margin is very low. So if you're asking people to-- if you mention innovation, they'll tell you we're not Apple or IBM. Right? So that's-- and that's very typical, and you guys have heard of that. And, you know, we're a fragmented, multi-generational industry, where it takes longer to adopt new ideas.

I think the key problem is that there is no demand for innovation from our clients. And I think it's down to supply and demand about-- our clients are not asking for innovative ideas. Project teams will not deliver it. Because they perceive that as a-- at a work for them, right? And that's not part of the project planning-- project delivering process.

And so raise your hands if you're a change agent for your organization, if you want to bring new ideas and workflows. So you understand the challenges that we face when you discuss innovation with your internal stakeholders.

So now, let's go into a micro level to really understand what our people are thinking about this tool. I know, I know-- I re-edited some of the words, so-- so Jim [? Little, ?] our estimator, he bought this-- you know, this tool is-- it was not useful. I mean, I can do my work without putting on a headset. You know, I've been doing this for 30 years. I can use construction-- 2D construction documents and OST On-Screen Takeoff and I can still deliver my estimate, right? So to him, going through this extra step of putting on this VR headset is not useful for him.

And someone like Narciso, our Project Analytics Director, [INAUDIBLE] was-- you know, this tool is for visualization and it's kind of gimmicky, right? It's not-- so it's not useful. And someone like Phil Carter, our VP of Operations, might ask, well, what's the return on investment? You guys get that a lot too? With the ROI, yes. And how is it going to help me manage the construction schedule and budget better? And how is it going to help my clients? Right?

Because, at the end of the day, again, we're trying to cater to our clients. And that's the goal of project team, so-- so this is really a question, a challenge, of perception of value. What people are not perceiving this tool as an added value for them or their clients.

So let's go and address this problem. So how do we at Skanska, or in our office-- Portland office-- define value? And to us, we want to be perceived, not as a commodity, but a partner in creating solution for our clients-- so by being recognized as a preferred partner when it comes to creating solutions that meet customers' need. And that-- this is really critical for us to identify and address, that way, moving forward, we can align the language of innovation and technology to our internal stakeholders to motivate them to partner with us.

So to help address some of these issues, let's now walk through some case studies that we tested out with some of our colleagues and existing clients to address these issues. So Jim [? Little ?] asked-- said that was not useful for estimators, so we wanted to test this with our product planning services. And, you know, we have all kind of 2D, 3D tools and third-party software to enable our estimator to analyze and perform BIM estimating, right?

But, in this scenario, we are planning for the expansion of the Portland International Airport. And even with the Revit model, there are still some critical spaces within the design that was really complicated for our estimators to analyze with this 3D software-- or even exporting it to third-party software.

So we took the model-- we saw this opportunity, and took the model and set up in virtual reality, allowing them to go into these critical spaces, analyze the space. And with the materials embedded-- already embedded in Revit-- to analyze that, to help them to be more confident in producing the deliverables and when they go back and communicate with the design team and our client. So there is a place for VR within product planning services for estimators.

So next, to demonstrate this tool is not gimmicky and visual-- so we tested it out on a project pursuit. So, typically, doing the pursuit process, we're preparing for the requests for proposal and an in-person interview. And for our superintendent to put forth-- to analyze the project site and plan for site logistics. What we typically do is, we would print out a 2D Google Earth map, and he would mark on it. So it's a dead, static 2D map, and he would plan where he would put fencing, a tower crane. So its very conceptual, it's not accurate.

But using VR-- we used Google Earth VR-- allow him to go in. So we saved time-- him time for traveling to the project site. And analyzed the context in more realistic and accurate level, by looking top down-- going down to the street and really engaging with the site. On top of that, we used a 3D model of the proposed building and the context model to compare.

So this way, he can now feel more confident in knowing where to place that tower crane and how to mitigate impacts on, for example, the streets-- given this is an urban downtown project site. So in the interview, we can show our clients the level of sophisticatedness that we're going, pushing our site analysis and logistics planning.

So Phil [? Carter ?] asked about ROI and how is it useful for his client, so we decided to test it out with some of our existing clients on existing projects. So, first client, this was during the design development phase. And they were having a problem with the design. So the design team designed it in Revit, but-- so the challenge was that they have to design a cafeteria that could accommodate six lunches throughout the day.

So the width of the lunch line is very critical for them to maintain that flow. And because our client wasn't able to perceive that, we weren't able to get their buy-in. So, inherently, it will impact the design schedule, construction schedule, and budget. And, you know, down the road, we could run the risk of rebuilding this thing. But-- so we took that opportunity and took the Revit model and create that VR experience, where we used a little kid avatar and let the client walk through it as a kid. And to really help them see the design in a new way and gain their buy-in early on. So, as a team, they were collaboratively make that design decision, and gain their buy-in and speed up that decision-making process.

With another client, we wanted to see if it's effective for the value engineering process. So, as you may know, the VE process is very arduous and time-consuming when stakeholders come together with different lists of VEs and they don't see eye to eye on these VE items. So, of course, it's going to delay that decision-making process. So we invited the project team in with the architect and the client to-- we'll go down each VE item. And, as a result, they requested VR to be used on all future VE meetings.

So this is a tool that we use to capture all of our VR meetings, demos. And we call it our open innovation briefing. So, for example, we-- you know, we identify the date, time, location, clients, target audience, some key attendees, number of participants, and objectives. It's really important to set your objectives early on, so usually we would do-- fill this out before the actual meeting through research or talking to project team to understand what our clients are looking for. So that when we go in, we're not just saying, here you go, VR-- but we're really facilitating that experience for our clients.

So some outcomes, activities, cost-- and ROI, this is really important, because this-- now we can take this tool back and communicate to upper management on-- I think that technology's cool, innovation is cool, but deep down, we're running a business. And you guys know too with your organization, you-- at the end of the day, they need to see the value of what we do.

And lessons learned-- this is really important for us too, as we-- it will help us learn from the experiences and improve and facilitate a better experience next time. So, remember, Phil Carter? He was skeptical at first and he questioned about ROI and how it was useful for him and his clients. And I'm really happy to say that he-- we were able to win him over and he is now our primary advocate.

He's now selling this to his peers-- project executives, account managers-- and to his clients. We are now implementing this VR on three of his projects. So through this process, we were able to engage a lot of our colleagues from different business units and departments, and really initiated a kind of an innovative culture within our office. And so, moving forward, you know, we already got these advocates-- partners-- to help us to think, well, how can we use VR for EHS, safety, or risk management?

So focusing on building a good foundation within your office first. So it would be easier to-- for them to go out now, they could sell this to their external clients. And, you know, externally, through this process, we were able to reach out to other Skanska offices, business units-- offices across the-- in Europe, like Poland, Sweden, Norway-- as part of knowledge sharing.

And, you know, I feel very fortunate to have these-- to be able to connect and collaborate with these-- some of these partners to help us be better together. So, as you know, we're a construction management company. So we will have to focus on our core business model to sell project management. So it's really important to maintain an external relationship with these partners to help you grow your innovative culture.

OK. So now that we have built a good foundation internally, we've tried out with some colleagues and different processes and some internal client-- some existing clients. Let's go look at how we can apply this to some new clients-- some potential clients.

So, for this client, they were interested in producing contents with VR for their next project. So what we did was, after the interview, we took the-- we brought them into our D lab, and shared with them-- as part of a demo, we shared with them all of the tools, lessons learned. And so, this is-- again, like I said, you know, we want to be seen as a partner to our clients. So through this experience, we are able to share knowledge and strengthen our relationship with them.

So, recently, it was just last week, this architect reached out to us and asked if we could partner with them on this new project that we're working with them to set up VR to allow the client to view their problematic design and the design impact. I think this is a small win for us and it is worth celebrating, because now people are reaching out to us seeing the value. And we could help the design team to communicate to our clients the design intent.

And I think collaboration-- that's something that we are striving for in our industry. And if we can leverage these tools to help us to work more collaboratively, I think that's great. So this is work in progress. So maybe I can come back next year and report this out back to you guys, you know.

So with this client, we reached out to them and the architect before they even issued the RFP. So to set up another-- a demo to show them the different tools, and brainstorm with them on ideas, we could use VR. So as a result, we won this job. We're now building a new school for this client.

And, to be honest, I would be naive to tell you that I think VR won this job, because there are many components going into winning a project-- it could be cost, it could be relationship, it could be a lot of different elements. But we-- with VR, we were able to reach out to this and create an awareness early on before they were-- they issued the RFP.

And they-- so-- and that is part-- that is a strategy for business development is that you want to get in front of your client before they meet you. Otherwise, when they issue that RFP, it will be too late because they already have five other [INAUDIBLE] to choose from.

OK. So let's-- where do we go from here? So we were able to identify some challenges, define the perception of value-- tested it out on some existing projects, clients-- did some early gain pre-sale, kind of integrated into the project delivery process. But I still feel like we're not completely there yet. We still have to continue to work hard to sell internally to maintain-- to engage people and maintain this engagement, in order to increase adoption rates. And not with just VR but, as you guys probably know, there are more technologies that are coming to disrupt our industry.

And how do you create a culture and prepare your people for that so it doesn't take a whole year? I mean, it was-- we started this around this time last year. So it took a year to-- now we're starting to use this thing. So how can we prepare our people for that? If you consider yourself a change agent.

So this is an exciting time for our industry and, you know, given the amount of creative processes and tools that we have available to us. But the challenge is, how do you motivate people to adopt these tools, and to integrate them, and to take actions into using these tools? And I think that's a problem with-- I think it's the problem with change management. It's changing people's mindset. And so, the emphasis is less on the technology and the tools, but preparing their mindset to think, work, and build differently.

And I have some takeaways I would like to share with you. So change occurs one person, one project, one client at a time-- so you have to be patient and be persistent. Find an advocate to help you sell, because it would be a lot more effective than you trying to sell by yourself. Understand your client's core need, so that way you're focusing on the business problem and not the tool. And so, you can align your language with your client's to make it more effective and engage them.

And, you know, I encourage you to challenge your clients-- your internal or external clients-- to demand more innovative solutions. That's how we can all be innovative together. And I hope to inspire you to be innovative and take this back and-- to come up with some new ideas to innovate your organization. Thank you.

[APPLAUSE]