Hint: It's Not the Technology!
Construction is one of the oldest and most enduring industries. Presently, the commercial industry is filled with general and specialty subcontractors that have been in existence for over 100 years. It is an industry known for its reluctance to change its practices, even as other industries have embraced and taken advantage of efficiencies offered by technology innovation and automation.
The consequence of sticking with "the traditional" was pervasive during the economic recession. Nonresidential construction spending had a 14.2% drop in 2009 and a 23.1% drop in 2010 and many contractors resorted to cutting bid price down to get the few projects available. With margins already slim and no attention to building efficiencies, many general and specialty subcontractors bid themselves right out of business.
The industry is now slowly rebounding, but not forecasted to hit 2007 numbers until 2018. However, the dramatic impact of the recession has forced some to look at how to intelligently cut costs within their organization. And for a few innovative companies, the recession and simultaneous advent of new technology had enabled them to gain a real advantage over competitors. Most might say they have gone "cloud" in order to save cost and gain the advantage, but upon closer inspection, it's the process of getting to the cloud and using intelligently using the cloud tools that really make a difference.
Case 1- Migration to Cloud environment forces companies to re-engineer business processes
For Company A, part of the process of building a custom cloud based purchasing system to automate their project material purchases was mapping existing business processes. As a manufacturer and installer of door assemblies, effective materials management is a key component of project success.
Best practices in moving to cloud meant finding and building a system around an efficient process. It was during the evaluation stage of the existing processes that inefficiencies were discovered in the way materials were specified, purchased and delivered. Key employees collaborated to retool the purchasing process and make it more efficient.
The reengineered process moved their preplanning steps further up and outlined the data points that must be communicated in each step of the process to improve ordering accuracy.
These changes led to big gains in efficiency and circumventing potential problems further down the process where mistakes caused greater losses. More work is also being managed with the
same staff. In fact, the process used for purchasing is so effective, it is is considered a significant competitive advantage and the documentation that shows the process is confidential and tightly guarded.
The re-tooling of the business process rather than the cloud based platform is what lead the team to be able to manage greater, more complex projects with the same staff as before.
Case 2- Cloud based reporting allows quicker accessibility to key reporting and knowledge from anywhere
After making the decision to implement a cloud based project management system, the executive team at Company B was eager to provide the tools that would allow project teams to have immediate access to job information. They wanted to also make use of the report dashboards offered by the system.
Adopting the Albert Einstein's adage "Information is not Knowledge," Company B engaged Skydea to build meaningful reporting that enabled project teams view critical project information instantly. Moreover, construction drawings were now loaded into the system where field could view the latest changes digitally via iPads.
The positive results were almost instantaneous. Having project information consolidated into one system meant that the executive team could view information in several different ways. At the company level, performance could be evaluated by project manager, by superintendent, by foreman, by division, by project type and more. These new views allowed management to align individual strengths of their employees to the right project. Project managers could also view their performance anywhere.
Viewing changes out on the field also meant that potential issues were discovered and quickly addressed. Company B was able to deliver a better product to the customers and their reputation for quality and excellence was solidified in the industry.
Case 3- The "Coolness" factor- Customers are impressed by smart usage of the handheld devices.
South Bay based HVAC Installation Company, Company C decided to deploy tablets to their employees and use a cloud based storage system to store project drawings. Time and effort were spent on determining organizational structure and business process around file storage and on potential issue recognition.
Foremen were all trained on how to access the latest drawings and use their tablets to highlight areas were potential project issues were found.
One day, the general contractor saw using a Company C foreman using a company-issued tablet to mark up a drawing with areas of concern. He stopped the foreman and asked for a demonstration of how Company C was using tablets out on the project site.
The general contractor was so impressed he invited Company C to be a subcontractor on another project. The successful use of tablets differentiated Company C from their competitors.
Learning Lessons
The commercial contracting companies that have survived devastating recession will be meeting new challenges as construction expenditures continue to improve while demands of customers still keep bid prices low. Several contractors are learning lessons from businesses in other industries adopting automation and technology in order to build efficiencies in process, build tools to allow their employees to think strategically and differentiate themselves in the industry.
The industry is now slowly rebounding, but not forecasted to hit 2007 numbers until 2018. However, the dramatic impact of the recession has forced some to look at how to intelligently cut costs within their organization. And for a few innovative companies, the recession and simultaneous advent of new technology had enabled them to gain a real advantage over competitors. Most might say they have gone "cloud" in order to save cost and gain the advantage, but upon closer inspection, it's the process of getting to the cloud and using intelligently using the cloud tools that really make a difference.
Case 1- Migration to Cloud environment forces companies to re-engineer business processes
For Company A, part of the process of building a custom cloud based purchasing system to automate their project material purchases was mapping existing business processes. As a manufacturer and installer of door assemblies, effective materials management is a key component of project success.
Best practices in moving to cloud meant finding and building a system around an efficient process. It was during the evaluation stage of the existing processes that inefficiencies were discovered in the way materials were specified, purchased and delivered. Key employees collaborated to retool the purchasing process and make it more efficient.
The reengineered process moved their preplanning steps further up and outlined the data points that must be communicated in each step of the process to improve ordering accuracy.
These changes led to big gains in efficiency and circumventing potential problems further down the process where mistakes caused greater losses. More work is also being managed with the
same staff. In fact, the process used for purchasing is so effective, it is is considered a significant competitive advantage and the documentation that shows the process is confidential and tightly guarded.
The re-tooling of the business process rather than the cloud based platform is what lead the team to be able to manage greater, more complex projects with the same staff as before.
Case 2- Cloud based reporting allows quicker accessibility to key reporting and knowledge from anywhere
After making the decision to implement a cloud based project management system, the executive team at Company B was eager to provide the tools that would allow project teams to have immediate access to job information. They wanted to also make use of the report dashboards offered by the system.
Adopting the Albert Einstein's adage "Information is not Knowledge," Company B engaged Skydea to build meaningful reporting that enabled project teams view critical project information instantly. Moreover, construction drawings were now loaded into the system where field could view the latest changes digitally via iPads.
The positive results were almost instantaneous. Having project information consolidated into one system meant that the executive team could view information in several different ways. At the company level, performance could be evaluated by project manager, by superintendent, by foreman, by division, by project type and more. These new views allowed management to align individual strengths of their employees to the right project. Project managers could also view their performance anywhere.
Viewing changes out on the field also meant that potential issues were discovered and quickly addressed. Company B was able to deliver a better product to the customers and their reputation for quality and excellence was solidified in the industry.
Case 3- The "Coolness" factor- Customers are impressed by smart usage of the handheld devices.
South Bay based HVAC Installation Company, Company C decided to deploy tablets to their employees and use a cloud based storage system to store project drawings. Time and effort were spent on determining organizational structure and business process around file storage and on potential issue recognition.
Foremen were all trained on how to access the latest drawings and use their tablets to highlight areas were potential project issues were found.
One day, the general contractor saw using a Company C foreman using a company-issued tablet to mark up a drawing with areas of concern. He stopped the foreman and asked for a demonstration of how Company C was using tablets out on the project site.
The general contractor was so impressed he invited Company C to be a subcontractor on another project. The successful use of tablets differentiated Company C from their competitors.
Learning Lessons
The commercial contracting companies that have survived devastating recession will be meeting new challenges as construction expenditures continue to improve while demands of customers still keep bid prices low. Several contractors are learning lessons from businesses in other industries adopting automation and technology in order to build efficiencies in process, build tools to allow their employees to think strategically and differentiate themselves in the industry.