President Wataru Shigemori discusses labor shortages, digital transformation and the vision of a zero-risk society through construction-focused IT solutions
Japan’s urban landscape saw a major construction boom over 50 years ago, leaving many aging structures in need of maintenance and restoration. Cracked water and sewage systems in older buildings constructed under outdated regulations now require updates, including seismic retrofitting. While the scrap-and-build approach continues to reshape cities like Tokyo and Osaka, this trend is expected to slow by 2040 due to the nation’s declining population. What is your assessment of Japan’s current architectural landscape, and what are the key challenges the industry will face in the coming years?
It is true that infrastructure has aged considerably. Hence, the refurbishment of infrastructure is necessary despite the population decline. While the emphasis has been on scrap-and-build in the past, he believes that in the future, more emphasis will be placed on properly maintaining existing infrastructure and buildings to extend their lifespan and prolong their use. As a company in the sector, it is important for us to see what the Japanese government’s direction is and follow suit.
Over the next 15 years, Japan anticipates a significant demographic, with both a declining and an aging population. This will result in a shrinking domestic market as well as labor shortages, with worker deficits expected to reach 11 million people by the year 2040, which will obviously have a huge impact on the construction industry. What are some of the challenges this will create for the construction industry, and how can your IT solutions help address some of these challenges?
Our company provides IT solutions that help to mitigate the issues that arise from the shortage of manpower. For example, in the construction industry, machinery operation has been automated by companies, which have remote-controlled shovel carts using remote software, for example. Our software provides the data necessary to control this automated operation, thereby contributing to the promotion of automation on the software side. This move has been pushed by the Japanese government, which promotes digitalization. There are systems in place to delegate documentation work to non-professionals and allocate staff members to sites according to needs.
What would this system of delegation allow site managers to do as an alternative? If they aren’t busy with documentation, are there other areas that they can contribute to that would be a better use of their time and skills?
Conventionally, a site manager would have to take care of all the documentation, which would consume a lot of time. This would also hold back actual construction work. By having other people step in and take care of the documentation, the site manager has more opportunities to work at diverse sites at the same time, increasing their capabilities in their duty of site management.
Kensetsu System was founded in 1992 with the vision of revolutionizing construction management through IT solutions. Over the years, the company has grown into a trusted technology partner for the construction industry, providing software and services to streamline operations and improve efficiency. What are your key strengths as a company that make you the ideal choice for clients and set you apart from your competitors?
Each and every system is created based on inquiries from customers, starting completely from scratch. We have to thoroughly listen to the issues of our customers and figure out what processes can be reduced or eliminated in order to expedite their operations. Based on this information, we create a system that best suits our clients.
Your company produces construction software and applications that are used by over 90% of major players in the construction industry, including 42,000 companies nationwide. Holding a leading market share in construction and civil engineering management, Kensetsu System offers solutions for document and drawing creation, construction DX, on-site 3D data creation, and smartphone apps. The company also supports industry innovation through education programs for construction management and engineers. What factors have contributed to your leadership in the construction civil engineering software market, and how do you sustain your high adoption rate?
Our strength is our system, and the reason why we’ve been able to accommodate so many companies across Japan is that we primarily target public construction work that the national government or the local government has consigned. Since these are public construction projects, they require a massive amount of documentation that needs to be kept as evidence and submitted to the municipality. There are standardized documents and rules in this case, all of which have been incorporated into our software. We have also incorporated more local requirements in addition to the standardized national government ones.
Another strength is our tie-ups with trading companies in each prefecture. Usually, each prefecture has a trading company that has strong connections with local construction firms, so through these partnerships, we are able to access potential customers. This approach also allows our company to provide after-services and software upgrades. Essentially, we are creating an environment where customers cannot leave our system.
In addition to your construction management software, you also provide a comprehensive suite of IT services to boost productivity and efficiency for the construction industry. Your offerings include everyday ICT applications construction DX, among other services. Together, these solutions drive DX through construction management processes. How does Kensetsu System stay ahead of industry demands? What role do you think ICT will play in shaping the future of construction?
The first point is to understand the needs of the Japanese national government and major general contractors. By directly listening to their needs and the direction of their work, we can provide all the possible assistance that would be required in their procedures. We present these systems to the construction company when receiving the order.
Which of the services you offer do you believe has the greatest potential for your company moving forward?
There are three main pieces of software that we think are growing and in demand. The first is a piece of software called INNOSiTE, which allows construction companies to convert 2D drawings into 3D models, a task previously handled by design companies. This enables construction management to be implemented in three dimensions. The Japanese government requires 3D data to be managed and recorded. The second is the Kaisoku-Navi Series, which integrates with surveying equipment, allowing measurement tasks that previously required multiple people on-site to be performed by a single person. Finally, we have SiteBox, a photo-sharing app that supports taking and sharing photos at construction sites. We feel that through our applications, the struggles of the construction industry can be mitigated.
INNOSiTE: solutions to realize 3D construction
Do you see any opportunities for your services or products beyond Japan?
We have challenged the overseas market, but so far, it hasn’t worked out well. We are present in Vietnam and Indonesia, but in those countries, the required documentation level is not that high. The tolerance for measurements can be quite relaxed, too, a stark contrast to Japan. For companies in those countries, it may actually be cheaper to hire more staff than to use our software due to low labor costs. We believe that, at least in those countries, the demand for our products is very limited compared to Japan.
Your latest software, PROSHARE, addresses issues by streamlining communication through an intuitive, integrated platform. How does PROSHARE achieve these results, and what feedback have you received?
We have traditionally provided products and services for managing relatively large-scale civil engineering projects such as roads and ports. However, with the introduction of PROSHARE, we hope to reach out to relatively small, highly specialized construction companies that handle detached housing and other projects. By introducing digital systems, we can expedite their processes and make their workflow more efficient. This allows the management of multiple sites with ease.
Imagine that we come back in 2032 and have this interview again. What goals or dreams do you hope to achieve by the time we come back for that new interview?
Our society faces a variety of risks, including large-scale wind and flood damage caused by global warming, earthquakes as the entire archipelago enters an active phase, and accidents resulting from aging infrastructure. However, these risks themselves cannot be eliminated. Therefore, with our vision of “Toward a Zero-risk Society,” we are working to reduce these risks to as close to zero as possible by utilizing the IT power and know-how we have cultivated, providing powerful support and further innovation to the construction industry that supports this country. Currently, our main target is customers in the construction industry. However, based on the vision mentioned earlier, we intend to grow into a company that broadly benefits society by providing products and services to customers in other industries. In terms of the other industries we want to move into, disaster prevention is one we have our eye on. We plan to offer a variety of products and services aimed at creating systems that will make society safer.
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