Leverage Technology Projectwide
Technology has evolved around a multi-party, cross organizational project team.
Recently, Laura Black, editor, Constructech magazine, sat down with Chris Dobbyn, general manager corporate development, Aconex, to discuss the industry’s transition toward project-based collaboration solutions.
One of the big trends that needs to be addressed is the evolution from on-premise enterprise applications to project-based collaboration solutions. Can you talk a little bit about the evolution of this trend and the importance of looking at technology on a projectwide level? In the past, on-premise solutions seemed to be more secure, more capable of being controlled by an individual organization or an IT department. Around the time Aconex was founded in 2000, managing large transactions over the Internet was difficult. Since then, the performance of the Internet has improved. The larger, successful SaaS (software-as-a-service) and cloud providers have invested heavily to tackle the security issues and improve the performance. So I think we are seeing those issues less and less as a barrier. That is one factor.
The other factor at play is the cost of enterprise on-premise solutions. When you consider the total cost of ownership for enterprise solutions, the comparison is pretty stark. You are talking about an upfront acquisition of perpetual licenses, ongoing maintenance, hardware, professional services for the initial integration, installation, and then any ongoing professional services for any changes on top of those platforms. I think what is attracting the market to software-as-a-service and cloud is the ability to better manage your IT team, and ultimately a lower and predictable total cost of ownership.
Beyond that, typically in the construction industry, most of the latest technology has been focused on the needs of single organizations, which is not very suitable when it comes to supporting multiparty, cross-organizational workflow and processes. One of the biggest differentiators for me is project-focused solutions that are able to manage those operations and business processes across multiple organizations. Construction is a fragmented industry. A project is delivered by hundreds of organizations, if not thousands. Technology created for one organization on a project is just not going to be effective across the ecosystem. So SaaS, Web-based with mobile access enables you to achieve that.
Let me clarify the term enterprise versus project. The solution needs to be one that the enterprise wants to deploy across all of their projects, to manage processes projectwide. So the general contractor or the owner deploys the same technology with standard processes driving all the benefits that come from that standardization. But by then deploying the technology projectwide down through the supply chain delivers not only the internal process benefit, but also the external benefit.
So it is more of the evolution, the next being this projectwide collaboration and being able to collaborate down through the supply chain and with other project participants? The process, and engineering and construction as a discipline, has always involved multiple organizations. The process is still the same. It is just the technology can remove the challenges of fragmentation, driving productivity and streamlining processes across organizational boundaries. That is what has really been the difference. The process hasn’t changed how you deliver a project. Rather, the technology has evolved around that cross organizational multi-party workflow.
What advice might you offer to construction companies that may be trying to wade through this new trend? I think you have to be really clear on the problems you are trying to solve and your processes, and make sure that your vendor selection process takes that into account. It’s also important that the software selection process the construction companies use to evaluate technology seeks out a broad range of advice from organizations like Aconex and others in the industry who have worked on multiple projects in different regions and different project types. There is a wealth of intelligence out there in the community. For open-minded construction firms that are willing to partake in the discussion, a lot can be learned.
My advice would be to have an open discussion and really think about the processes, not so much about functionality. Consider what you are trying to achieve, what your business process is. Make sure you are using this opportunity to achieve process improvement as well. Don’t just configure your existing processes onto a platform, but try to drive improvement at the same time. Look at the TCO (total cost of ownership) and make sure you clearly understand what the hidden costs might be for the particular solution that you are looking at. Insist on full transparency around what happens when you are growing the usage of the platform, entering new markets, or delivering a high-cost project. That is one of the benefits of the SaaS model and one of the hidden costs of the traditional on-premise models. Make sure all of that is clearly spelled out.
What is coming next? What do construction companies really need to keep in mind when it comes to collaboration in construction? I think BIM (building information modeling) is one of the disruptors in the industry. Gone are the days where projects are just 2D flat file drawings. 3D modeling tools like Revit are being used on projects today. It is definitely here. I think the technologies will evolve more around the ability to collaborate using the data within the model. It is the same principle of driving process across multiple parties, but now doing that with the context of the model at an object level and driving a process with that context. The industry needs help to shrink design coordination times, shorten cycle times during construction, and to provide rich tagging of information inside of the models to hand them over to operations. It is not completely there yet, but we think that is evolving.
Not only that, but also the ability to do all of what I described on mobile devices. We are seeing mobile exploding in our business and the use of it throughout the field-based activities. We are seeing a huge demand in the mobile applications that we have released. Having the 3D model and the object-level data for field-based activities will be a huge time-saver for construction folks. Historically, it has been hard to view large model datasets on mobile devices, especially if you want to do that live and you can’t get through to the Internet. So that is improving and will continue to improve. I think that will be a huge benefit to construction companies. I would make sure that any vendor they are working with has a mobile strategy because that is really where the productivity gains can be realized.
The other challenge with mobile is making sure those devices and the information on them can be secured. There is a huge amount of information captured on those devices that can be taken out of the work environment. Strong security capabilities and an internal protocol around how to manage those issues should come with the vendor solution.
Moving from project to operations, we talked about attaching information to 3D models. I think there is huge value in the rich set of information that comes through during a construction project. When tagged effectively, the information passes through to operations and drives benefits and efficiency in the management of the asset through its lifecycle. We think BIM is enabling that and is an important consideration for general contractors who are trying to provide a good experience at the end of a project.
We have seen many within the contracting community starting to move and evolve the business models from pure general contracting into providing services through the operations phase on the asset that they helped build. That is the extension of the business model: The ability to bridge that experience from the project and the information back out into the operations phase. That really helps them provide a strong value proposition and opportunity to service the assets throughout the lifecycle.
We have covered a lot of ground here, but is there anything else you would like to add that you think would be important to note for our readers? We’ve talked about on-premise being the proxy for internal and SaaS being the proxy for external. Can internal enterprise systems and project-level collaboration systems coexist? The answer is yes. But I also don’t think internal necessarily equals on-premise. The larger construction companies may have an ERP (enterprise resource planning) system and/or an HR (human resource) system, which are mainly internally focused solutions. They may not necessarily be on-premise.
Continuing that point, construction companies are looking at their internal systems they are using for internally focused functions such as HR and accounting. There is information, datasets, and processes that make sense to connect from the project world to those functions. One important consideration is whether or not the systems are capable of being integrated. The other is, do you really need to integrate them? A lot of companies spend a lot of time thinking about integration and, on first blush, they might think integration was important. But I would suggest caution. There is a lot of effort involved in integrating and you have to consider the ROI (return on investment). Sometimes there is a low volume of information that needs to be transferred. You can often have an integrated business process with reporting that enables what you are trying to achieve, probably more cost effectively than software development to create the technical integration. With all that said, make sure the vendors can integrate so you have the option.