Making IT a good practice

In banking or telecomms, the use of information technology is a core element of the institution’s service offering, the manipulation of data to improve customer service is a key competitive differentiator.

  • E-Mail
By  Eudore Chand Published  December 13, 2003

|~|paul_mciver_200w.jpg|~|Although more construction companies are investing in IT, few businesses are willing to pay for the necessary level of training, says Paul McIver, regional manager, Tekla.|~|In banking or telecomms, the use of information technology is a core element of the institution’s service offering. Whether it is credit cards or broadband the company is selling, the manipulation of data to improve customer service is a key competitive differentiator.

In sharp contrast, the construction industry has not progressed much beyond simple accounting packages and isolated workstations running computer aided design (CAD) packages.

Only the largest contractors, project consultants and development firms have grasped the potential ‘value add’ that IT can bring to the core business. “[On the whole,] the construction industry, looks at the IT manager and the IT department as a cost centre,” says Andy Kyte, research director, Gartner Group.

“You couldn’t run a bank without IT — it is an integral part of the value proposition and it makes a huge difference in what you can offer to customers. However, in construction and civil engineering, IT is a trivial part of the operating expense and it doesn’t make a huge amount of difference to the competitive offering,” he adds.

The explosive growth in the Middle East construction industry has accelerated the adoption of information technology, as local companies have found themselves competing head to head with international players. Shrinking margins, tight deadlines and growing demand for quality work are driving companies towards the inevitable conclusion — the deployment of IT systems is an operational necessity if they are to survive.||**||Competition|~|al_samman_200w.jpg|~|In contrast to the US or European construction markets, it is the large clients that are pushing local contractors to invest in IT, comments Bassam Al Samman, (top right), president, Projacs, regional distributor for Primavera.|~|“Competitiveness is driving [the need] for IT — lower costs, shorter project times and better quality, are all driving [companies] towards the use of IT,” explains Dheya Alumair, sales in Saudi Arabia, Autodesk. “Through IT [companies will] have a better product, a better work environment [and] better delivery systems,” he adds.

Despite the cutthroat reality of today’s market, some local companies are struggling to reinvent themselves for an information-centric construction industry. According to Bassam Al Samman, president, Projacs, the regional distributor for project management software vendor, Primavera, it is a ‘tough sell’ to convince traditional ‘bricks and mortar’ management to change existing business practices and automate operations.

“Any deployment requires a change to the existing systems [and processes,] and for some companies that can be hard,” he adds.

One 20 year industry veteran that wished to remain anonymous adds, “there are a lot of old dinosaurs in the industry, that are very competent and have great experience. But they are not familiar the latest technology.”

One of the most promising technology trends to emerge in the last two years are next generation design tools. 3D, parametric modelling applications enable designers to develop plans in the context of a larger design by tracking and amending all changes to architectural plans automatically throughout all drawings. Such tools can theoretically save huge amounts for construction companies by ensuring consistency and enhancing collaboration.||**|||~|alumair_200w.jpg|~|Autodesk’s Dheya Alumair, believes that shrinking margins, tight deadlines and an increased focus on quality are driving companies to deploy IT.|~|Improving use

“Parametric tools [improve] the utilisation of the manpower for contractors and project consultants. [Companies] are able to harness more productivity out of [their] staff, the accuracy [of drafting] is higher and the management of changes easier,” says Alumair.

But many companies are resisting the migration to parametric modelling platforms, largely because of the cost and the disruptive nature of change. “It is quite a mental twist to get them to change they way they work, [and] build the project model first [with xSteel],” comments Paul McIver, general manager, Tekla, a vendor 3D modelling software. “Then they produce the drawings by hitting a button once [they] have done the modelling,” he adds.

The project-centric nature of the industry isn’t helping companies to plan change. The contract-by-contract nature of the work makes many companies are nervous of implementing new systems, which could jeopardise the existing operation.

Project centric

“For a construction company to adopt IT to its fullest extent means making a drastic change to the way they are work,” says Alumair. “Some pick smaller projects to start implementing new [management] platforms. They test it, see how well it [runs], and then [develop] a bigger plan for implementation across the board,” he adds.

The hesitant approach to IT investment is reflected in many companies attitude to training. Despite being prepared to pay for software licenses, many companies are reluctant to fork out for the necessary training, even though failure to do so will limit the productivity gains they likely to achieve.

Projacs faced similar challenges when it started its Primavera operation in the local market. Initially, it met stiff resistance to training, however, once local certified partners were established and more companies become aware of the need for project management skills, businesses begun to realise the need for extensive training programmes.

The accelerated pace of IT deployment in the local industry is due largely to the bigger development firms and contractors. In contrast to European and US markets, where contractors have lead the adoption of IT, in the Middle East it is the clients that are pushing suppliers and contractors to standardise on certain IT platforms.

“The rate of IT adoption is accelerating [because] the client has started taking an interest,” says Al Samman.

“Before [it] had been left to local contractors, but they have avoided it. But clients [are] taking the initiative and imposing this system on them. [For example,] with projects like Jumeirah Beach Residence, the client is buying the software for the contractor and pushing the software forward,” he adds.

Clients are also pushing local contractors to go online. Dubai-based Nakheel, the development company behind projects such as the two Palm Islands and the World, is conducting all its procurement through online marketplace, Tejari. Nakheel uses the web site to produce RFQs and to manage the bids from the supplier community.

From Tejari’s perspective, the presence of large developers has helped it drive traffic and build a healthy community of approximately 500 construction suppliers.

Tejari is currently looking to build its contractor community with the addition of several of collaboration tools. According to Matthew Hibberd, account manager, project collaboration, Tejari, the application enables buyers and sellers to share information across the supply chain. “The collaboration tool allows communication across [the supply chain], helping to massively reduce waste by improvingd knowledge management. The effectiveness of knowledge management cuts the cost of construction,” he adds.

Once again Tejari is approaching the leading developers in the local market to champion the use of its tools. “We are focusing on the main developers and companies involved in construction, because these [companies] have the most influence,” explains Hibberd.

But just how ready many local suppliers are to ‘collaborate’ online is open for debate. Many local suppliers, particularly the smaller operations, have not installed back office systems, meaning that work conducted on the internet often has to be taken off-line and done by hand.

However, Hibbard does not see the lack of back office systems as a hindrance to signing up for Tejari as users just need a browser to take advantage to its services. Although back office systems are preferable, the collaboration tool can operate independently of in-house applications. “Back office [applications] aren’t affected. This reduces the culture change, because [contractors] don’t have to integrate back office systems,” he adds.

Although local contractors have begun to slowly shake off their lethargic approach to information technology investment, they must accelerate their efforts if they are to remain competitive alongside international players. As local developers push contractors and suppliers to upgrade their systems, IT systems will evolve into a competitive necessity for the local industry if they are to match new project requirements. “[Previously] in many organisations didn’t think that [project management] tools could help. But the new requirements, such as the need to manipulate data efficiently for decision making, being able to present it and act proactively with it means companies have to implement [IT solutions,]” explains Al Samman.

Overtime, the IT investment made by the local construction industry will evolve to a stage where it delivers a competitive difference between companies in the industry. Although the Middle East is still a long way from the time when contractors wonder about about a site carrying a PDAs, remotely accessing architectural drawings, the intensifying competitive environment is guaranteed to drive investment forward at pace.||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code