Unlocking Profitability in Construction with Data-Driven Innovation

Last Friday, I attended a seminar in Otaniemi that shared insights from the AIXCon R&D project. This initiative aims to drive systemic change in the construction industry by developing new data-driven methods and tools.

AIXCon was a collaborative effort between Aalto University, VTT, and three companies: Trimble, Flow Technologies, and Celsa Steel, with KONE also contributing during the project.

Here are some key takeaways from the seminar presentations:

The Pursuit of Real Estate Profitability

Aalto University Professor Antti Peltokorpi emphasized the need for innovation in the construction sector and presented a straightforward formula for profitable real estate investments:

Interest Rate x Construction Costs < Rent

Since the industry has limited control over interest rates, profitability hinges on reducing construction costs or increasing rents. The latter requires delivering added value that customers are willing to pay for, which isn’t always feasible. Therefore, finding ways to lower construction costs is crucial.

AIXCon tackled this challenge by promoting data sharing throughout the project lifecycle, creating a two-way feedback process that fosters learning. The project also explored new ways to manage CO2 data and enhance user experiences, paving the way for innovative business models.

Why Are Construction Sites So Inefficient?

Tomi Pitkäranta of Flow Technologies highlighted a striking fact: the average utilization rate of Finnish construction sites ranges between just 10% and 20%. This inefficiency stems from on-site teams often lacking what they need to work effectively, whether it’s design information, materials, tools, or access to the job site.

Pitkäranta proposed a solution to break down these inefficiencies: a shift away from today’s siloed and fragmented information processes. He introduced six key processes that could be transformed by data-driven construction, as envisioned by AIXCon:

1. Building specifications
2. Procurement
3. Production planning
4. Production execution
5. Financial management
6. Learning

Flow Technologies also explored how product data can be better presented, shared, and enriched during construction. Their work led to the development of Sitedrive, an app designed to streamline scheduling on construction sites.

AI Faces a Data Dilemma

Henri Pitkänen from Trimble, who is also a doctoral researcher at Aalto University, showcased how the company prototyped AI-powered expert system functionalities. He discussed a significant challenge in AI development for the construction sector: a lack of high-quality data.

Many AI applications in construction are built around “toy problems” – limited in scope and data. One of the core issues is that construction firms are often unwilling to share their data, or the data they do share lacks critical metadata. Additionally, the chaotic and constantly changing nature of construction data adds another layer of complexity for AI developers.

During AIXCon, Trimble explored ways to rapidly retrain AI models, which is key for adapting to this ever-changing landscape.

AIXCon was funded by Business Finland. To learn more about the project, visit https://www.aalto.fi/en/aixcon.