Mapping the Digital Transformation Maturity of the Building Construction Industry Using Structural Equation Modeling

Abstract

Construction projects play a vital role in the global economy. However, the construction industry still lags in the adoption of digital technologies which have the potential to alleviate inefficiencies. There is also a lack of construction professionals with skills to implement digital technologies, and the industry is plagued by inadequate research and development (R&D) and low productivity. This paper applies the Digital Transformation Readiness Level Index in Building Construction (DTRLIIBC) to investigate digital transformation in the construction industry, and specifically in the construction phase, by identifying technologies, alternatives, policy incentives to ensure best practices, and infrastructure needed to smoothly implement digital technologies. A survey was distributed to executive managers, department managers, project managers, senior engineers, and supervisors in the construction industry. Interviews were also conducted with 13 experts with more than 20 years of experience, using the Delphi method to ensure the validity and reliability of the factors identified as significant based on their experience and perspectives. This study thus assessed potential factors related to digital transformation, along with identifying factors enabling the use of the DTRLIIBC itself. Structural Equation Modeling (SEM) was employed to identify causal relationships among the variables while minimizing measurement errors, as SEM was considered a multiple regression analysis to improve the efficiency of the model. To ascertain the model’s robustness and stability, a comprehensive evaluation was conducted that included tests for multivariate normality conformance, validity and reliability assessments, and accuracy evaluations to improve overall performance in the construction industry. The benefit of implementing SEM is its ability to provide a clear decision-making alternative as well as a potential vision for construction industry firms to improve efficiency and productivity in construction projects.