Like it or not, contractors need to prepare for new business processes brought on by Internet-based project collaboration software
Internet-based collaboration tools aren't a new concept in construction. At the height of the dot-com boom, the construction industry buzzed with talk of collaborative project management tools, from real-time document sharing to electronic drawing review and online project meetings. These tools promised big efficiencies throughout the construction process and were heralded as a major technological breakthrough by dot-com providers, but they seemed a far stretch for many in the subcontracting and general contracting communities, some of whom were still using paper-based systems or an array of disconnected in-house systems.
During the past few years, though, these systems have gained credibility in the construction industry and are now earning the endorsement of general contractors and owners on projects like universities and major school systems. Private owners and agencies like the U.S. General Services Administration are even taking advantage of the technology. General contractors and construction managers are also mandating specific systems in their contracts with subcontractors, particularly for the key electrical and mechanical trades.
What then should a specialty contractor do? The plain truth is you and your project teams will have to learn how to deal with a handful of Internet-based project management systems that will be thrust upon you by construction managers and owners. A number of electrical contractors have decided to buy and implement the systems themselves to improve internal communications and for automated workflow with materials suppliers and other external business partners.
As these systems gain acceptance, the divide between the technology “haves” and “have nots” will widen. A preferred status will emerge for specialty contractors that can handle the new communications and business process demands.
A long-term trend. The biggest factor in preparing for the advance of Internet-based project management systems is acknowledging that this is a long-term trend and will require a strategy change within your organization. “Do not treat this as an isolated situation,” says Sally Love, CEO of Paragon Worldwide, a construction industry change management consultant company based in Greenville, S.C. “The industry truly is at a major point of change. We are moving toward a more integrated type of project team, driven by these new communications and project management tools.”
The next step is understanding the following possibilities that Internet-based project management systems can offer.
Standardization. With all parties working through the same system, standardized document templates can speed up communications. Project teams create form letters for certain activities like notices, request for change cover letters, and award and subcontract cover letters. This flexibility and functionality improves efficiencies in the generation of day-to-day documents, freeing up personnel to focus on management rather than paperwork.
Universal access. Anyone with an authorized log-in and password can access the application with just a Web browser. Everyone on a project team, from owner representative to subcontractors and vendors, has immediate access to up-to-the-minute project information. The effect of a centralized project record has an immediate streamlining effect on project communications and efficiency.
Automated workflows across parties. After establishing universal access and document standardization, the project team is positioned to move documents back and forth rapidly. A request for information (RFI) from the electrical contractor can go to the general contractor and on to the design team's engineer in minutes. The process depends on each person in the chain reviewing the RFI and forwarding it along. And because the process is visible to everyone in the chain, it creates accountability among team members. The designer's engineer will likely get copied on the initial RFI and knows it's coming. By the time it arrives, he or she probably already has a solution in mind. If someone doesn't act on the RFI, everyone else knows where it's being held up.
These systems come in two basic types — those hosted by an application service provider (ASP), which is oftentimes the software vendor, and those hosted by the contractor or owner (Sidebar on page C20). There are significant differences to the buyer company in terms of cost structure and implementation of the two models, but they have little effect on subcontractors.
The Clark Construction Group, Inc., Bethesda, Md., a national contractor with revenues of $2.6-billion in 2003, adopted a hosted Internet-based project management system company-wide in 2001 and introduced it to subcontractors in small steps. The company first started using its system simply to allow subcontractors to review the status of RFIs, says Eric Uram, senior operations support specialist. Then Clark took advantage of functionality for reviewing and routing drawings online, which established a centralized, online history of changes to drawings, as well as letters, change orders, and other project-specific information.
Clark is now mandating its subcontractors use the application. Each project team decides which features of the system to use for specific projects. Clark provides monthly training for external users, as well as training at project jobsites.
Faster pay for subcontractors. Clark is also using a pay module that allows subs to enter pay information electronically on standardized forms, reducing the time from submittal to receipt of actual payment. “Three years ago, subs were kicking and screaming about having to use [Internet-based project management systems],” Uram says. “Now the tide has turned, and subs who have used our system successfully on one job are asking for features when they move to the next job.”
Dennis DiPalma, MIS project leader for P.J. Dick, a Pittsburgh-based general contractor, sees the same turnaround in the subcontractor community. An Internet-based collaboration software user since 1998, the company received mixed reactions from subcontractors. After it completed a project at Carnegie Mellon University that used an Internet-based project management tool, though, things changed. In fact, subcontractor acceptance has spread enough that the company is evaluating whether to mandate use of collaboration software in its subcontracts. “Major subcontractors on the Carnegie Mellon job are now asking for access to the [collaboration software] on other jobs,” DiPalma says. “Highly specialized trades like electrical and mechanical subcontractors are already sophisticated firms, and buy-in to an Internet-based collaboration system is no big deal. For smaller subs, it is.”
Providers of Internet-based tools have improved functionality. The second major factor driving more widespread implementation of collaborative project management systems in the past year or two is that major providers have dramatically improved the functionality of these systems. Rogers Electrical, a Dallas-based subcontractor, has watched with interest to see whether ASPs would get over the hurdle of being able to do data exchange with different accounting systems. “No one has to re-key project cost information,” says Cathy Allred, the company's office manager. “That development made a huge difference in the functionality of ASPs for the subcontracting community.”
Uram agrees. “Initially, ASPs were very contractor-oriented,” he says. “Now, providers have developed new tools specifically for the subcontractor community. Functionality has improved, now matching and exceeding Excel spreadsheets, which many subcontractors and general contractors once used.”
Getting electrical contractors on board. General contractors and construction managers that have successfully implemented Internet-based project management systems note that it's critical for highly specialized trades, like electrical and mechanical, to buy in to using collaborative project management tools.
Brasfield & Gorrie/Gaston, Birmingham, Ala., is completing an 885,000-square foot hospital for the University of Alabama. Designed on the cutting edge of technology, the hospital's electrical and mechanical systems have required intense coordination. Mike Thomas, MEP field inspector for the project, is using his company's ASP in the field to streamline the inspection process for MEP trades. Using a laptop computer equipped with a wireless modem, Thomas makes daily inspections of electrical and mechanical systems, keying in items for correction as he goes. The directives are then sent to electrical and mechanical subs before he even gets back to the jobsite trailer.
“When I first started the inspections, I listed all items for correction by hand, then keyed them in when I got back to the trailer, creating a lapse between the time I noted an item and the time the electrical subcontractor could correct it,” Thomas says. “Now, many items are corrected before I even finish a day's inspections.”
Electrical and mechanical contractors were initially hesitant about the process but quickly saw the advantage of having a comprehensive list, by room, of items that needed corrective action. “Now they love it,” Thomas says. “It's a huge advantage to them to have an itemized list that they can easily print and distribute to foremen on each floor. Because of the positive experience in this area, they're now looking for other ways to utilize our system to get the job done more efficiently.”
Tom Garrett, chief information officer for Brasfield & Gorrie, points out that the more complex a project is, the more successful a company can be at getting subcontractor buy-in for Internet-based collaboration features. “On complex projects with high-end electrical and mechanical designs, the benefit of an electronic collaboration tool is immediately obvious to everyone on the project team,” he says. “On our larger, more complicated projects, subcontractors now welcome Internet-based collaboration because it's so much more efficient for everyone on the project team.”
Getting ahead of the curve. Many electrical subcontractors aren't waiting for general contractors or owners to mandate the use of Internet-based collaborative software and ASPs. In fact, a number of electrical contractors have adopted Internet-based systems for their own in-house use. Rogers Electrical made a full-scale commitment to an ASP in 2002, after trying to work with a self-made system. Implementation of an automated system met several company goals. “Initially, some of our employees resisted change,” Allred says. “But the company was committed to streamlining in-house processes and creating a paperless environment. The first year was implementation year. We held regular in-house training sessions. By the second year, we had buy-in among employees. Now, I can't imagine not using an ASP.”
For other firms considering an in-house ASP, Allred recommends careful planning. “It's important to have your in-house processes well documented before you move to an electronic management system,” she says. “That way, nothing falls through the cracks in the implementation process.”
Colette Nelson, executive vice president of the American Subcontractors Association, Alexandria, Va., has found that many subcontractors and specialty contractors are more technologically savvy than their customers, so making the transition to Internet-based collaboration tools shouldn't be as scary as it might seem. “This is not a leap, it's an evolution,” she says. “Just as subcontracting firms have adopted technology to process payroll, pay taxes, and purchase materials, collaboration is just one more task that's being enhanced by technology, one that has been slower in coming than others.”
As far as the frustration of dealing with various Internet-based tools used by different general contractors is concerned, Nelson reports ASA member firms see it as an annoyance more than a barrier. “While there is a demand for commonality of platform, our members indicate that once you've used one, it's not that difficult to adapt to others,” she says.
Internet-based collaboration tools are here to stay in the construction industry. Electrical contracting firms that haven't yet used them need to be proactive in order to stay competitive. Ask your owner or general contractor representatives about using Internet-based tools on specific projects. And consider implementing an in-house system. The sooner you get on board, the easier it will be to meet the industry's new standard.
Setzer is marketing communications director for Constructware in Alpharetta, Ga., and Bonafair is a business writer specializing in construction based in Batesville, Ind.
Sidebar: Application Service Providers
An application service provider (ASP) is software hosted on a Web site instead of installed on a PC. Firms that use ASPs must rent access to the software and the hardware that runs it. Any user with an approved user name and password can access project information from any computer with Internet access at any time. The following list highlights some of the benefits of the project management alternative:
- All project information is maintained in one central, secure location.
- Software testing, upgrades, and new feature additions are performed by the “host,” resulting in lower overhead costs for the user.
- No need to invest in or maintain expensive hardware and software applications.
- Centralized data storage prevents duplication of effort among project team members.