The painters of Renaissance Italy revolutionized visual art by teaching us to see in a different way. Applying the rules of perspective, they made their work more lifelike and tangible to the human eye with depth and dimension. Everything that had gone before suddenly looked dated and even primitive. It was a step-change from which there was no going back.
Some might say we are currently in the middle of a technological renaissance. It seemed the Internet was a fully accepted part of our worldview… until COVID-19 accelerated the true possibilities of its power. The pandemic enabled an explosion of collaborative, remote working arrangements that have fundamentally changed the perspective many industries now use to define a “place of work.”
In the construction industry, a new perspective is currently being revealed on the canvas of data management and particularly its role in contracts. This new perspective is revealing that the typical databases are looking distinctly pre-renaissance in comparison with blockchain. Let us look at some of these new perspectives.
This also could be the story of today’s construction industry.
History and technology have moved on. However, some sectors of construction look around with their foot-long beards at other industries that have kept pace with the times. Sectors such as retail, automotive, and agriculture have responded to the necessities of change to improve their businesses. Can we imagine the shops, the cars, or the farming practices of the 1970s functioning today (except as curiosities)?
Transactional Trust
Databases are known and accepted. “Why change?” people ask. Well, because a database often has a single owner who is responsible for inputting and updating information. Maybe they have their own agenda. Maybe there are multiple databases for all of the different project partners, creating valuable, yet isolated and underutilized information. In other words, there is information asymmetry – some people know more about the project than others. Some have more control over it. How many versions of the truth can there be?
Blockchain democratizes information by making it available to everyone simultaneously via distributed ledger technology. If anyone makes a change to the data, everyone sees when, what, and who.
Today, it is not like there is just one copy of a contract on paper in an office – there could be 40 copies of the same contract distributed in “hard copy” throughout the project, each of which requires tracking and proper change management protocols should revisions be necessary. With the often myriad of documents and databases spread across a project’s stakeholders and contractual boundaries, getting out of sync is all-too-easy and problematic.
By contrast, blockchain provides a new level of transactional transparency that facilitates trust. All data and all changes to it are clearly and chronologically captured and openly displayed for everyone to see. There is only one version of the “truth,” not multiple.
Greater Simplicity
The problem with different or proprietary databases, apart from the lack of transparency, is the requirement for intermediaries acting between parties. It is an added layer of complication (and cost and time) that creates transactional friction.
Construction is an estimated fourteen trillion-dollar industry built on long-term relationships. Blockchain allows us to eliminate the expensive and time-consuming intermediaries so we can deal with each other directly peer-to-peer on a level, democratized field of information. Gone soon will be the days of checkers checking the checkers checking the checkers. Many of our industry’s document flow and approval processes are built upon paper-based thinking, where we need to obtain ten signatures in the approval process.
A good example of how the construction industry can transform itself is the emphasis on safety, particularly in the industrial sector. The industry knew how to be safe, yet in the late 1980s, the aggregated Total Recordable Incident Rate (TRIR) of CURT and CII members was a now almost inconceivable 7.19, and those companies were among the best. Injuries and even fatalities were far too frequent. Then owners declared enough! and began leading. Standards were set and enforced, dramatic, emulous change began, and TRIR was driven to 0.27 as of 2020. This owner-led change released the industry to innovate and unleashed a culture of safety from which we will never retreat. Even when it was literally a matter of life and death, safety improvement still required key industry commitment as a catalyst. We can make important changes, and relatively quickly when we feel it is important. People say safety is different – it can mean life or death – but so can the economic survival of our companies.
More Accurate, More Secure
It is no coincidence that blockchain already has been accepted by cryptocurrency and by the financial sector. Its security is unparalleled. A traditional database controlled by a single entity can be hacked, damaged by a virus, lost, or simply prone to fraud. Quantities or hours could be changed unilaterally, leaving practically no trace of the truth. Further, valuable data often does not make it to the parties needing it to make business decisions.
This would be an impossibility with blockchain because any change must be agreed by all stakeholders affected, is immediately and equally visible to all, and provides details regarding who made the changes and when. Even if information is entered incorrectly through human error, the complete visibility means it will inevitably be uncovered and addressed.
Certainty Through Transparency
Blockchain means we can trust in the data and its impartial automatization to drive a clearer “perspective” of the true realities present in our construction execution. There is certainty in the knowledge that a payment has been made, material delivered, engineering or field labor performed, a subcontractor paid, or any number of other common construction workflows. Everything is detailed in the electronically updated smart contract seen by all. There is a centralized tracking record of everything that has occurred for all to see.
The perspective revolution in Renaissance painting changed how we see everything. It created not only a new standard but an objective standard. The artists who understood its rules and could apply them were those who received fortune and eternal fame. It is where we are now with blockchain and its role in smart contracts, the new standard.
There will come a time – very soon – when the closed and siloed database will look primitive. At PrairieDog, we are supporting the new perspective of greater trust, simplicity, security, and transparency in our industry. Are you ready to join this renaissance built upon a new standard, a new perspective? Leave the “dark ages” and join us in this time of technological renaissance that will forever alter the perspective of the construction industry.
