Ask Your Software Vendor to Prove How They Add to Project Productivity

Whenever you are making any desicion to change or add anything that incfluences your construction project, you should always keep in mind who it effects the whole project. A very important question to ask is “How this will improve my whole project organisation?”

Let’s take software as an example. If you are getting a new design software to be used in the projects, you will evaluate it according to how the users will benefit from it. Maybe you will consider how good it is for designing and how compatible it is with other design software. It is certain that the software vendor will give you all the answers for these questions.

But do you ask them to prove how they add to the productivity of your entire project? Do you ask them what information it provides to the project and how much advantage it can take from the project?

As important as understanding the local benefits is to understand how the software fits into your whole construction organization. Almost every type of software should be able to provide information to the other parties and take advantage from them. This is vital in order to make your project working.

Example: You choose to use “the best” and “the coolest” architectural design software there is. It makes the architectural design easy, fast and reliable. You can make the nicest visualizations in the world, and the design team thinks it’s great.

But, you also better check how it works with the rest of the world. Is it compatible with structural and HVAC design software? Can you create a combined model? How you share the designs for quantity surveying and their technologies? How fast the variations can be communicated throughout the process? How the site management can take benefit of the results?

This is something very difficult to evaluate. One way to do it is to go to the vendor and ask them to prove how their solution add to the whole project’s productivity.

If they have no idea, they propably never thought about it.

If the answer is too complicated, and you want be sure, go get an independent consultant, who evaluates the software, the information process and skills requirements. That’s the only way to be sure.

Here’s a link to an article from www.softwareadvice.com . They provide feature comparisons between different software solutions. They recently attended PCBC show, where they asked software vendors to explain how they support Lean Construction methodology. Very important video, indeed.

Personally, I would like to see more and understand more than what many people are saying on the video. Hopefully we can ask the those questions together?

(the video courtesy of http://www.softwareadvise.com)

Process, Technology and People

Attending the Global Institute of Lean Construction 16th annual meeting (IGLC16) in Manchester on July 15th to 18th, the most interesting topic for me was a paper presented by Research Fellow Bhargav Dave of Salford University. The title of the paper was “A critical look at integrating people, process and information systems within the construction sector”. The paper was prepared by, in association with Bhargav Dave, Professor Lauri Koskela and Professor Mike Kagioglou from the School of the Built Environment at Salford University and MsC / Consulting Engineer / External Lecturer of Danish Technical University ,Sven Bertelsen.An interesting conclusion in the paper was a reference to findings of the London School of Economics and McKinsey regarding the percentage increase in total factor productivity for implementation of IT technology and management practices. Implementation of IT systems alone increased total productivity by a mere 2%, whereas the implementation of management practices contributed to an increase of 8%. Better still a combined implementation of IT technology coupled with improved processes and better people management such as performance management increased total productivity by 20%.

This brings us to a question of companies investing in new ICT in construction, but at the same time not investing in the training of their organization (=people) and implementation of new processes and better practices. The benefits remain minimal. In some cases introduction of new IT systems and spending large sums of money investing in them has resulted in decreased productivity. There should be a better understanding of the interconnection between processes, organization and technology in order to receive full benefits of advanced methods. Companies are willing to invest huge amounts of capital in new IT systems which in reality provide very little value. A closer look should be made regarding the investments and especially the ROI (return on investment). A better overall picture of construction process integration is required when IT investment decisions are made: knowing what IT systems are practicable, how they are to be used to gain full benefit and what it is used for in relation to the overall process of the company.

Building information modeling (BIM) technology has been widely implemented in recent years. BIM has the potential to revolutionize the AEC industry as it provides an advanced tool for project management, data management and information integration. However, the same pitfall exists as in implementation of other IT technology. The full benefits of BIM are not realized unless its implementation is integrated with business process reengineering, compatible project management processes such as lean construction and Last Planner System (LPS), quantity information management (QIM) and training of people and organizations. BIM has tremendous potential, but this potential can be wasted if it is considered that the technology on its own will provide the answers.

SAFETY = LESS WASTE = LOWER COST

Fortunately, the importance of safety has been understood in the construction industry in general, although safety procedures are still lacking in some projects and especially in some countries.

Good safety on site is not only an issue of keeping accidents to a minimum, but it is also a cost saving to the project.

Consider the consequences of inadequate safety measures and not keeping the site clean.

First and foremost there is the risk of accidents and injury to people, but there are also major cost consequences: increased insurance costs due to high level of accidents, wages paid to workers on sick leave due to injuries, etc. How much consideration has been given to the loss of productivity and efficiency of a messy and unsafe building site? It is only logical that if the site is in disarray it will have a negative effect on the productivity level. Thus, safety prevents accidents but also produces cost savings.

In the same way as safety measures provide cost savings on a building project, effective project management combined with good quantity and cost management can produce major cost savings.

Since the building industry has made good advances and produced good results through safety measures, would it not be a good time to take steps to improve project management to achieve better results through efficiency and productivity?

Better safety = less accidents and less waste (loss of manpower) = lower cost

Better project management = better productivity = more efficiency = less waste = lower cost

Quantity and Cost Control

How well are quantities and costs actually monitored and controlled on a construction project? How transparent is the information produced and how it can be verified with ease and accuracy? There are very elaborate project control systems in use, but do they really produce accurate, undisputable information and reports to top management?

A potential client of mine once showed me their project control system which they had worked on for a few months to produce. It looked quite impressive, but looking at it from quantity and cost control point of view, I asked a question: “How can you verify that the quantity information put in to the system is correct?”. The response was complete silence.

This brings us to the root of the problem of quantity and cost management.

Let’s consider quantity information, as this is the basis for cost management. If we don’t control quantities, how can we control costs? This is applicable especially in unit price contracts. Research into cost control comes to the conclusion that cost overflows are not reported until very late in the project.

The accuracy of quantity control and reporting is dependent on the information produced. But how can top management check that the information is correct? Is the information transparent and foolproof? Apparently not, as so often the budget overflows are not realized until it is too late to react to them.

With the development of 3D building information modeling (BIM) combined with quantity information management (QIM), quantity and cost progress can be monitored and controlled in real-time, with accuracy and with transparency. Discrepancies, cost overflows and problems are seen earlier and steps can be taken to rectify them or at least minimize the consequences.

The key issue is that quantity and cost information is monitored on as-it-happens basis and as-built quantity surveying is done in line with progress on site. Accurate quantity control can provide numerous benefits to the project as it is the basis for cost management, schedule management, procurement, logistics and resourcing. The more accuracy used and more importance given to it, the better the results: a better managed project.

The Architect – Artist, Designer or Team Player?

I know quite many architects. Some professionally, some personally. There are even some in my family.

Many times I’ve been wondering what are the best qualities for a modern successful architect. Here are some of my thoughts. You tell me how it’s really is?

Artist. Is is vital to be creative and individual? Yes, I believe so. Unique creations that satisfy the aesthetic eye and make our visual environment more enjoyable are a must. The Frank Gehrys of the world are important.

Designer. Do we need architects that can design objects from various aspects? Usability, sustainability, fit into the environment, safe, following regulations…yes, all that in a complex package.

Technical. Knowing the tools and taking advantage of the latest technology? Definately. Drawing on paper, modeling in 2D and leaving it there is a weakness. Sketch away on a sandy beach, but communicate the creations in latest 3D tools.

Team Player. Today’s construction business requires lot of communication, compromise and team work. I believe an architect who does not play for the team is creating problems for the team and for the project he is working on.

Anything else? Engineer-minded? Holistic? Business-minded?

Architect and those working with architects – let me know what is missing!

Heavy Industry Construction Projects

The age old problem of managing the civil works on industrial projects became apparent yet again at the recent PowerGen Europe 2008 exhibition in Milan on June 3-5th, 2008.
The usual comment received from process automation people regarding civil works is that it always goes over budget and causes problems. Civil works seem to be regarded as the necessary evil in industrial power plant projects. The same applies to other industries, such as paper manufacturing industry: Construction of paper mills and pulp mills.

From my experience in being closely involved in industrial projects, not enough regard (read resources and planning) is given to information and cost management of civil works. Better results can be achieved by giving more consideration to increased productivity through efficiency, planning and control.
Because the civil works only plays a relatively small part in the overall cost of the investment of a new plant, and the project is managed by process automation people, the civil works is not considered as an important factor. A good example of this attitude and thinking is a comment I received a few years ago when I was promoting cost control services for civil works to an industrial developer. The reply was that because the civil works only contributes 5% of the total investment we don’t need cost control.

Fine, but consider the following equation:

  • The civil works contribute 5-20% of the total project costs on a new industrial plant.
  • If the civil works contributes 20% of the total project cost, and the civil works budget is doubled (and I’ve seen this happen), it will have a profound influence on the project as a whole.
  • Even if the civil works amounts to 5% of the total project cost, if the total project investment is, say 300 million euro’s, the total value of civil works is 15 million euro’s.
  • Even a 10% saving on civil works costs will save 1,5 million euro’s on the above calculation.
  • If 300,000 euro’s is spent on cost and construction information management and control to produce a saving of 1,5 million euro’s, I would consider it a good return on investment.
  • What if the equation is 20% of a total project cost of 500 million euro’s and the savings produced on civil works is 20% – the saving is 20 million euro’s – you can have quite a number of people looking after information and cost management for that amount of money.

From my experience, I calculate that for every euro spent on good information and cost management of civil works, 5-10 euro’s can be saved. The benefit is five- to ten-fold.

Is this not good value for money? Why not invest in it?

Taking this further, good information management can produce added benefits by also improving time and quality management of civil works.

Member of THTH

Riqq Innovation was accepted to become a member of THTH this week. THTH (THTH Association of Decentralized Information Management for Industry) is an organisation where the Finnish companies and academia try to solve the problems of projectwide information management in industrial projects.

I participated in the annual meeting where I briefly presented our company. I was warmly greeted, since most of the interest and knowledge has been on the process automation side, and we were seen as bringing in new scope from construction and whole project perspective. I was even invited to give a lecture on BIM in the industrial projects later this year.

THTH is commited in organising a major research and development project called SEFRAM. This project seems very interesting, hopefully we can find a way to participate somehow.

This is yet another interesting and useful connection for Riqq and our cause of making the construction project work. And I just love it!