Phil Russo, special correspondent at Commercial Observer sat down with René Morkos, founder and CEO of ALICE Technologies, which is billed as the world’s first AI-powered construction optimization platform. Founded in 2015, the framework has already been used on more than $115 billion in global construction to improve outcomes and simulate sequencing scenarios.
René Morkos, founder and CEO at ALICE Technologies, which is billed as the world's first artificial intelligence-powered construction optimization platform, is no stranger to AI, contech or proptech.
However, he is catching up to the benefits of his company's new alliance with McKinsey & Company, which was announced in April.
A Stanford-trained engineer with a doctorate in artificial intelligence for construction, Morkos is a lecturer at his alma mater. Before founding ALICE, he spent over a decade managing construction projects in more than 20 countries - from rebuilding infrastructure in Afghanistan to automating a $350 million refinery expansion in Abu Dhabi. These experiences revealed to him a core industry flaw: project controls that are rigid, reactive and blind to uncertainty.
Under Morkos's leadership, ALICE (the name is an abbreviation of Artificial Intelligence Construction Engineering) has focused on AI in project planning and scheduling. It's been used on over $115 billion in global construction to simulate millions of sequencing scenarios, recover from delays, and optimize outcomes.
Morkos spoke with Commercial Observer earlier in June about ALICE's alliance with McKinsey, what it means for both companies and for the construction industry in general, and why he thinks AI is "the bee's knees."
Commercial Observer: ALICE Technologies recently formed an alliance with McKinsey & Company, which usually doesn't announce such associations. What does this alliance mean, exactly?
René Morkos: It means we work together because we have complementary skill sets to push the mission of generative scheduling and construction.
We started working with McKinsey more than four years ago. We have slowly gotten closer, and, I think, better, at each other's respective strengths. I think it's just been long enough where both parties are comfortable with the other's skill sets, and, from
their side, they're comfortable that we're not going anywhere. They're one of the world's best consulting companies, and we're definitely one of the world's best construction tech companies.
You have a deep background in technology and engineering. What is the big differentiator for ALICE compared to other contech or proptech companies in construction. What is its focus?
I'd say that there's two things. One is that we focus on scheduling. More importantly, we focus on generative scheduling - aka, operation optimization scheduling. We focus on taking a construction project and fundamentally simulating that project in
the computer. To do that, we had to invent the world of construction inside a computer. That's what I've had to do over the course of my years: step by step, teaching a computer what construction means - what a crane is, how cranes behave - labor, equipment, material and resources.
It's a unique approach. One of the reasons no one has really done it, is that it's very hard to do - an all-or-nothing problem. You either have the whole thing, or, even if you have 90 percent, it's useless.
What we've done is born out of a research lab. In my mind, it represents in this specific area the peak of what Stanford University's construction management department has been able to research over the past three or four decades. There's six other Ph.D.s that came before me that were researching various bits and pieces of
this, and we sort of stitched that together, then developed it. I'd say that's pretty rare in our industry.
What is the goal of coming together with McKinsey? Is it to bring ALICE in as the specific construction consultant for their industry clients?
I think the alliance is so powerful because we both bring something very different. You could ask why does McKinsey need us and why do we need them? From our perspective, we are the best in the world in developing technology for construction operation optimization.
But implementing that software tool isn't just about opening the box and typing in the URL or whatever and learning how to use it. There's a lot that goes into the change management at the company that's implementing it. A lot goes into analyzing the results of what it's doing, and then implementing that across the organization.
We go in there, we train them on how to use the software, they run it on a project, and reduce duration by 17 percent. Awesome.
But how do I then implement or absorb that capability into my organization? How do I develop a muscle that enables me to use artificial intelligence on a regular basis? How do I get the people of my organization to start asking the kinds of questions that will lead them to start using this technology to answer questions? It's not a question that people typically ask, but it's a question you can definitely answer with this
So what McKinsey does is help companies implement change management across the organization, enabling them to squeeze out the efficiency of artificial intelligence across multiple projects.
Are McKinsey and your clients able to understand and implement what you're offering?
Something that makes me very happy is that when I started this dream in 2015 I would walk into construction companies and they would not know how to place me. They'd be like, "So you work for Oracle?" And I'd say, "No, we develop our own software." Literally, back then, I'd say with 70 percent of our clients, we would not only have to sell them the software, but we would have to explain to them how to evaluate and implement it.
Around 2018, there was a big shift, where suddenly people were talking about digitization and innovation. Today, almost no construction company we talk to doesn't have someone whose title is head of innovation, head of digitization, or someone who's responsible for bringing in new technologies. Almost all construction
companies have some process by which they evaluate these things.
We have encountered several construction companies, believe it or not, that have a few Ph.D.s and data scientists at the organization who are developing their own in-house vision software to analyze excavation operations. I almost have this vision of people in construction in lab coats, where they're managing robots and are just data driven, sitting in a comfortable environment that's not dangerous. That's the direction that I want to see the industry heading in, and it's happening.
How is ALICE using AI now, and what will be its role in construction going forward?
I love AI. I think it's a bee's knees. Since 2009, I've spent 100-plus hours a week working on it. I've read 3,000 publications on construction optimization AI.
Let's be clear: What's happening today is a revolution by any stretch of management definition. The latest versions of the neural network algorithms - whether large language models, machine learning or vision - are able to solve problems that have been unsolvable in computer science for the last seven decades. The computers have
done a few things, which I think are remarkable. They're able to interact with mediums that were historically limited to humans: pictures, images, videos, language. And they're able to output into those formats as well. That's a huge leap forward. They're able to do pattern recognition, which has always been incredibly difficult for
classic old-school algorithms.
That said, I don't think that AI is at a point where it can replace a human or it can somehow now start to understand the world the way we understand it. AI makes mistakes, it hallucinates, and, while humans do too, a human realizes they made a mistake and learns from it. These algorithms can't do that yet. I think we are in the
middle of a revolution. It's absolutely amazing what's happening, but there's still some ways to go.
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