In the mid-90’s I had the opportunity to run the European operations for a large and fast growing CAD/CAM software business. The most difficult country to gain and grow market share in EMEA at the time was France so I located myself in the Velizy Villacoublay office south of Paris. As we worked to improve the operation where we had 75 employees and 4 offices, I often heard the term, “But in France, it is different!” It turned out that there was truth in this statement; in fact there were differences in each of the countries that I managed during that time.
This is true for construction as well. Perhaps we should tell productivity experts and economists, “But in construction, it is different!” Construction is often targeted by tech companies for improvement as the productivity of construction projects is not growing like many other sectors of the economy. There are four key differences that should be considered when working with construction companies:
- Contract structure - How many different contracts are there? In general the prevalent contract is Design, Bid, Build or “Hard Bid” followed by Design Build, Integrated Project Delivery, and finally Cost Plus with Guaranteed Maximum Price. There are more types as well as variations on each of these. These assorted types of contracts incent different behavior from each member of the team and thus impact the project in various ways.
- Supply Chain - Who picks a supply chain that is different for each project? The manufacturing industry has a stable supply chain with contracts that extend to include technology, formats for data, quality guarantees, and many other beneficial clauses. The construction industry will typically pick the supply chain during the buyout process focusing on price, availability, and performance track record.
- The Weather - Who else manufactures their products outside? A large part of each project is done outdoors or in a structural shell that is exposed to extreme environmental conditions. All of this increases the complexity of using concrete, steel, wood, drywall, and many other common materials in a construction project.
- Safety - What is one of the most dangerous occupations? The answer is construction. Safety is critically important on sites as construction sites are inherently dangerous due to the interaction of environment, people, machinery, materials, and scale of project activities. These deeply combined safety factors can result in the Swiss cheese model where each slice is a factor. If the factor levels are aligned the combined result of the levels can cause an accident. Safety and legal issues also drive the ability to generate or lose money on a project. When discussions cannot be managed quickly and easily they often escalate into a legal battle that no one wins.
Go slow to go faster? Many executives and industry pundits expect construction users to evolve rapidly using many of the powerful technologies available to them. But in any construction project today, there are easily 20 or more software applications used to collect, manage, and transmit data which adds to the complexity. Changing technology while working on a project is fraught with additional complications and risk.
The following 4 steps applied carefully can help make construction transformation more manageable.
Step 1 - Investigate solutions using this process: pilot, justify, and rollout. Favor applications that have good integrations with your existing solutions.
Step 2 - Promote and publicize what you are automating, and why it is important. This is essential so that team members and partners can support the initiative.
Step 3 - Start small and grow. Go for simple, achievable wins with your new technology or process, then build on them through a formal review process. Don’t ignore problems or challenges; tackle them in the review and remediation stage.
Step 4 - Recognize the people who step up and help; these are leaders who others will follow. Promote your successes and acknowledge your problems including the plan to fix them.
In summary, construction projects really are different and more complex to bring technological change to. In scale, these projects create more landfill than any other sector of the economy. They are notorious for being over budget, behind schedule, and slowing traffic in congested cities. There are many estimates of the total waste: if we estimate that the global construction industry is $12 trillion dollars annually and experts say 30% of that is waste and inefficiency then there is a huge multi-trillion dollar opportunity for productivity from improved technology and process. Implementing innovative technology using each of the steps above helps each general contractor pursue an improvement in efficiency. This efficiency would release large amounts of dollars back into the world’s economies to be invested in solving other problems. This would indeed be a win for construction and the entire planet.
Don Henrich is an accomplished technology entrepreneur in both the MCAD and the AEC industries. His entrepreneurial endeavors in the AEC industry have included driving 3D/4D/5D into the commercial market with Graphisoft Constructor Pro. Being a co-founder of Vico Software, and subsequently after the sale of Vico Software to Trimble the CEO of Assemble Systems. Vico Software is widely credited for building the first connected 3D/4D/5D solution for the construction industry. At Assemble, Don led the expansion of the company to become a dominant application for BIM in construction leading to a sale of the company to Autodesk, Inc. Post acquisition, he is is now tasked with a successful transition for customers and employees. Don is now working with a group of Autodesk AEC executives to formulate and drive strategy for the global construction market. Don and his wife Noel have three children, reside in Marblehead, MA and spend as much time as possible sailing on Massachusetts Bay.