Most industries are undergoing rapid transformation, driven by the accelerating adoption of technologies like Industrial AI, automation, and connected data. But the construction and engineering industry is unique, and this sector is standing on the brink of a once-in-a-generation innovation shift.
In 2025, the sector saw a fundamental reshaping of how companies address long-standing challenges around profitability, productivity, and sustainability – how they respond to global economic pressures, redefine their value propositions, and deliver increasingly complex projects.
One of the biggest trends we saw was the rapid adoption of modern Enterprise Resource Planning (ERP) platforms that serve as digital backbones across organisations. In fact, IFS’ 2024 industry research study found that 63 per cent of construction and engineering companies planned to adopt a new ERP system in the next one to two years, a foundational move meant to enable the scaling of AI across their enterprises.
Ingram, Vice President, C&E
In terms of how many companies are embarking on digital transformation projects, this modernisation statistic has proven to be underestimated. A year after making these predictions, we realise that the optimism around the role of AI being able to reshape workflows, project management, and intelligent decision-making, is fuelling a greater desire to adopt a future-proof ERP platform as the springboard for scalable, trusted AI deployments.
In fact, the IFS research study “The Invisible Revolution”, which surveyed more than 300 senior executives from leading construction and engineering firms in May and June 2025, found that this sector is expected to become one of the most AI-first industries this year. Momentum is clearly building, with 91 per cent of firms expecting to increase AI investment in 2026.
Since IFS counts some of the world’s largest and most innovative companies in this space as customers, the organisation not only educates them on the possibilities of AI transformation but also gets their insights on real-world AI applications within their unique operations.
One of the greatest benefits of AI is its ability to analyse and collate data in a much faster way. This gives all their employees – from workers on the construction site to senior management in the back office – more accurate, predictable and reliable information.
The most practical example of how this enhanced and automated information gathering and analysis can benefit construction industry customers is related to the enormous amount of time it takes to prepare their regular board presentations on project performance.
Most companies host interdepartmental meetings monthly with all the senior leaders from each of their divisions. Typically, each team of people takes days if not weeks to prepare their data by gathering information across multiple software solutions.
Industrial AI gives construction and engineering organisations more trusted control of their business by removing the unreliability and inconsistency of human guesswork, making it faster and easier to gather, analyse, and report on every dimension of project performance, including profitability, timeline delays, budget overruns, cost forecasting, safety incidents, quality, and more. Ultimately, leveraging Industrial AI to enhance reporting and data sharing across the organisation reduces business risk and delivers greater control over project results.
These benefits are clearly resonating across the industry. The latest IFS research study found that the biggest applications of current AI deployments across construction and engineering firms were project delivery (62 per cent) and business intelligence (59 per cent). Out of these early adopters who are currently deploying AI, companies are already seeing these benefits: 89 per cent report profitability gains, and 44 per cent outperform the cross-sector average in operational efficiency, 42 per cent in supply cost reduction, and 36 per cent in lowering project expenditures.
With the growing economic uncertainty across the globe, the most impactful benefit of Industrial AI for this industry is giving companies greater control over project management. Out of all other industries, the project-centric nature of construction and engineering businesses makes them most at risk of diminishing and/or unpredictable profit margins in volatile and disruptive markets.
Perhaps this is why the latest AI research shows that construction and engineering firms anticipate AI’s greatest benefits in: project delivery (41 per cent) and increased profitability (36 per cent).
Reflecting on a year where AI adoption and digital transformation outpaced all expectations, the construction and engineering sector is at a tipping point. To harness the potential of Industrial AI and achieve superior project control, most organisations are now moving to modernise legacy ERP systems. This shift is set to deliver a smarter, more resilient industry capable of redefining global design and construction. n
* Kenny Ingram is Vice-President and Chris Knight is Global Industry Director of Construction and Engineering (C&E), IFS (Industrial and Financial Systems), a global enterprise software company that provides cloud-based business applications.