Out-Law Analysis | 19 Nov 2021 | 11:06 am | 5 min. read
Transformation of the construction sector requires changes in data management culture and for the industry to prepare and plan for an industrialised approach to the sharing of data across stakeholders to emerge.
Failing to plan properly can lead to risks and issues including reputational, compliance and commercial problems.
Good data management forms the cornerstone of any data strategy. Poor data management practice will undermine your data vision. Conversely, improving organisational data culture and understanding is likely to have a transformational impact across all projects.
Data management is an evolving area for most organisations, outside of certain data driven industries. The modern business needs a good understanding of what data it generates, collects and uses and an understanding of the processes and technology that are likely to generate data. Increasingly. companies require dedicated specialist data expertise and support.
The establishment of common data standards is an important step in enabling widespread good data management culture
Some organisations are starting to employ people into ‘head of data’ roles. However, other project partners or stakeholders often do not have this level of expertise and rely on people who are not used to handling data as part of their role. Those individuals may struggle to “speak the same language”. A good data culture takes time and sustained effort to embed, a failure to invest in data capability now at a corporate level will likely lead to increased struggles to progress a data driven agenda and deliver successful data driven projects over the medium to long term.
The establishment of common data standards is another important step in enabling widespread good data management culture. This need for standardisation is becoming apparent when we look at some of the big issues currently being grappled with in the built environment such as decarbonisation and building safety. Industry bodies play a big part in helping to drive collaboration around common standards. The establishment of a new data sharing solution and standardised pre-qualification (PQ) system by Build UK to simplify the tendering process for construction contracts in the UK is a positive example.
Culture is vital to success. Data needs to be seen as an asset with value in a similar manner that the physical infrastructure asset is viewed as an asset. Supply chains need to be required to provide structured asset information in relation to the components they provide – until now, this has not been necessary. A cultural shift is needed to accelerate this way of working.
A data strategy should be devised at the start of every project and form a blueprint for all data-related decisions and planning across the life of the project. The three most important legal and commercial considerations for any data strategy are compliance, contracts and collaboration. We look at the first two of these considerations below and collaboration in a separate article
Data can attract a range of regulatory compliance obligations. These will have an impact on the way that data can be processed. For each project, the specific obligations applying to use of data need to be clearly understood and accommodated. All data use cases will need to be compliant by design. Depending on the region, the areas of regulation that may apply or may need to be considered will include:
Public opinion and ethics are also increasingly important, given the need to do business responsibly. Data ethics is a growing influence and will need to be considered carefully to avoid negative publicity and reputational harm. In many organisations, establishing data ethics principles to be followed is a board level issue.
A data strategy should be devised at the start of every project and form a blueprint for all data-related decisions and planning across the life of the project
Compliance issues will differ depending on the countries in which businesses are operating and where there is movement of data across borders.
Data is not really "owned", but, rather, there are “ownership-like” rights over data. There is no specific legislation that regulates ownership of data and no real consensus on how to regulate it. Different industry sectors will have different views how to do this. The risk is that without understanding the legal right and basis for access and use of a particular data set, there is a risk that data cannot be used without consent and permission. Conversely, competitors may be unintentionally granted wider rights to use a data set than was intended.
Construction companies should establish contractual data rights to counteract the lack of legal certainty. Parties should build and maintain data ‘ownership’ and quality into their agreements.
To do this effectively, construction companies must understand what data stakeholders need to access and restrain access as appropriate, including by the use of confidentiality obligations to protect valuable datasets. Although data can, on occasion, be protected by intellectual property (IP) rights – such as copyright, database rights in the UK and EU, or trade secrets – often this is not the case.
Each type of intellectual property right requires a separate analysis of its own rules which may vary between jurisdictions. It is often more likely that the technology infrastructure and systems used to collect or generate data attracts IP protection than the data itself. Data is often not unique because it could just as easily be collected by another system operating on site or generated via another process. Because of the limitations of IP rights in respect of data, construction companies are advised to provide for protection of data via contractual rights instead.
Contracts govern commercial relationships, set arrangements and allocate risks. These concepts are all relevant to the treatment of data. It is advantageous to specify contractual terms which explicitly state the intentions of the parties in relation to the data from the outset.
The contract can describe the categories of data 'generated in the performance of the contract' which has a potential value and clarify who can use the data, including third parties, and how it can be used. This can address the risk of disputes arising later and encourage greater data sharing, which in turn creates more valuable combined datasets.
These discussions can be complicated and difficult, particularly in relation to commercially sensitive data or data which is to be shared between competitors. It requires careful thought and handling, particularly across multiple stakeholders. Consideration should also be given to the potential requirement to disclose data in the event of a dispute or in connection with any regulatory requirements.
A standardised approach to addressing data sharing has yet to emerge in construction sector contracts. However, lessons may be learned by the approaches adopted in other sectors such as manufacturing.
A culture shift is needed to achieve more widespread data sharing in construction. Changes required include greater: