Once the domain of architects and engineers, an exciting new era in online project management is now moving into the electrical contracting trade.
An electrical superintendent starts his workweek with the usual busy Monday. After getting his morning coffee, he hops in his truck, plugs a laptop into his Nextel phone, and dials into his firm's network to check e-mail. On the way to the jobsite, he calls in for voice mail messages and checks the status of various crews in the area via local dispatch. Once he arrives at the first jobsite, he connects to the Internet from the general contractor's trailer via two-way satellite, because there are no DSL or T1 lines available. He logs onto a Web-based project management software system by entering his name and password to check a couple of things before making a site inspection. He quickly gains access to the electronic files of six projects his firm and the general contractor are completing for two different owners in four different states. He immediately receives notification that someone has made modifications. After reviewing two RFIs and a waiver, approving four pay requests, and checking the status of a few changeorders, he sends a reply back to the owner to adjust the schedule.
Next, he decides to check on the installation of several junction boxes via the construction cam set up on another jobsite six states away. The installation is complete, but there seems to be a problem. He notices there are several comments posted on this issue. Thanks to the Web cam, which enables all parties to view the construction site over the Internet and capture snapshots of desired images, everyone is able to view the installation. So far, there are comments from the owner and consulting engineer. The superintendent identifies a potential solution, makes some notes on the electronic image, and shoots it back for comment. All parties agree to get back on the Internet at 3 p.m. CST to discuss the issue in real time.
The superintendent logs off the Internet, but before leaving the site, he approves timecards for his crew, sending the information directly back to his company's accounting program via wireless modem.
Although this scenario may seem like science fiction, it's not all that farfetched for some electrical contractors today. For the past few years, many contractors have begun harnessing the power of application service providers (ASPs) to help make technology work for them. That means streamlining company forms and procedures, expediting payment, and increasing efficiency and productivity by collaborating on projects via the Internet.
What exactly is an ASP? Unlike the traditional client-based server products, the ASP model does not require users to install software in-house on their local server. Instead, an ASP hosts all project information off site, allowing users to access details through any Web browser from anywhere at anytime.
Considering the massive consolidation the dotcom industry has experienced in the past few years, the question most users want to know is, “How can I be sure my ASP will survive?” Giving up control of traditional business practices is a scary thing even in a good situation. Nevertheless, several Web-based project management vendors have emerged as stable players in the market, including Bentley, Bricsnet, Buzzsaw, Citadon, Constructware, e-Builder, Meridian, and Primavera.
According to ASP expert John Jurewicz, AIA, publisher, director of e-procurement at McClier Corp., a division of AECom based in Chicago, it's up to users to do their homework before taking the plunge. “If contractors do not check out the financials on an ASP, shame on them,” he says. “I see many of the ASPs being swallowed by the big boys or going belly up in the future. But the strong ones that survive will thrive five years from now. I think the ASPs that have the best survival rate are those sites that offer the best value (dollar for dollar) and have gold-plated client lists that actively use the product.”
Jurewicz supports three ASPs (Meridian, Constructware, and Citadon) at his firm, trains teams on how to use them, and sets up champions on pilot teams. Jurewicz got heavily involved with construction ASPs about two years ago when a general contractor asked him to do some research. After experimenting with online bidding and collaboration tools, coworkers encouraged him to share his findings and post the research online. That's when he started www.asptip.com.
The evolution of collaborative Web sites is really being driven by construction managers encouraging partners to use it, says Jurewicz. However, this hasn't really taken hold in the electrical industry yet. After attending the NECA show a year ago, Jurewicz says he talked to numerous electrical contractors but only a handful were starting to use TradePower, which is an e-commerce tool, not a collaboration medium. To put this trend into perspective for the electrical trade, Jurewicz cites a quick history lesson. He says architects and their consultants were first on the Web collaboration scene back in 1996, using the tool to transmit drawings back and forth in complex ways. But on the construction side, it's only just starting to pick up.Early electrical Web pioneers. One of the first customers to start using e-Builder in 1996, Marc Walch, vice president of PBS&J, a full-service engineering firm with 2,500 employees and 50 offices across the country, says it only takes a few job-saving experiences to quickly justify the investment of an ASP. Citing a recent example, he explains, “I was in a discussion with a regulatory agency, and I needed to pull up a consent decree in a formal document to get the exact language. I knew it was in a physical file in my office, but I also knew it was up on our e-Builder project site. I went in there, pulled it up, and printed it out. If I had to pay somebody to go fly down there and get it, I would have done it. It was that important. It was after-hours, no one was at work, and I had to get this thing.”
Although electrical contractors who use this technology are the exception rather than the rule at this stage, many have quickly reaped the benefits from Web-based project management systems.
From a specialty contractor standpoint, the GC or the owner drives this trend, says Jim Berard, vice president, design-build, Capital Electric, Kansas City, Mo. To make sure Capital was ahead of the curve, Berard started looking at Internet- and server-based software products several years ago to help his firm manage projects more effectively. Capital has used Constructware for the past three years, running it on the firm's network for internal project management.
“I think this industry is still new enough that it's in a state of flux. The deciding factor for a collaborative Web site will not be driven by a sub,” says Berard. “It's important to be knowledgeable, and exercise influence, but the owners and GCs drive the decision.”
Although he says Capital is in the early stages with the tool, Berard sees opportunity for collaboration in the future. Right now, it's a document control issue. “I've seen instances when the general contractor is working off of one revision, electrical off another, and mechanical off another,” he says. “They could literally be building three different buildings. This technology helps eliminate this problem.”
Sensing some reluctance from the architectural community, Berard says there has to be a greater willingness among project participants to share information for this technology to take off — especially if the construction industry is expected to continue delivering fast-track projects at warp speed. “It's no longer design/build, now it's wave and build or yell and build,” says Berard.
Jeff Perry, chief operations officer for family-owned Briggs Electric, an Irvine, Calif.-based commercial electrical contractor, says a GC turned him onto ASPs about three years ago. At first, Perry just purchased a single Constructware license for experimentation purposes.
His first goal was to standardize document management. “Everyone has their own forms and changeorder logs. We've tried to keep everything in binders, but when someone is gone and you've got to find his files you can get into trouble. Fortunately, we've never had a problem, but the possibility is definitely there,” says Perry. “I also thought it would be nice to be able to share files with our new Carson City office and have access to everything from anywhere. That's when we started looking at the Internet options.”
Briggs has used the Internet product for the past year and a half mainly for internal project management, but plans to take advantage of the collaboration features soon.
Like Berard and Perry, Ken Webb, chief financial officer for Rogers Electric, headquartered in Alpharetta, Ga., says his firm uses an ASP primarily for internal collaboration. “We feel effective internal communication is the highest priority. Rogers Electric thinks digital project management applications are more important for a subcontractor than a general contractor because many subs manage significantly more paperwork, whether it is in the form of purchase orders or other documents,” says Webb. “We wanted every piece of paper, whether it's an architectural drawing, changeorder, or contract, to be captured in their [ASP] database so anyone with authority on the project can access it. Unlike a GC, who has one single set of form templates for changeorders, waivers, etc., a subcontractor maintains a library of templates that cover all GCs.”
Currently in the process of converting to an Internet product, Rogers Electric adopted a simple approach. “We are moving away from paper as much as we can and want everyone in our organization handling things exactly the same way.”
An ASP gave the firm a chance to set up a disciplined process across the country that uses best practices. “We found offices that had these unbelievable worksheets or foreman's manuals, but guess what, the other offices didn't know about them,” says Webb. “So we've gone on a mission to implement all of these best practices into electronic format so we can share this knowledge across the corporation.”
Why was the Internet product so important when the company's prime objective was standardizing internal project management? The main reason stemmed from the firm's strategic growth plan, says Webb. After starting with one truck in 1983, the founder grew the company into a large commercial electrical contracting business with five offices in Atlanta, Charlotte, Dallas, Denver, and Tampa.
“We needed a product that would support all offices equally and personnel that travel from site to site. We needed access from any location that has an Internet connection as we continue to grow. We also needed a powerful system that really provided a high level of quality and minimal downtime,” says Webb. “We found that if we used a LAN version we could easily get behind in the evolution process.”
Another big issue was cost. Besides the obvious upfront discount, Webb says LAN-based software often holds hidden expenses. For example, hiring someone to manage an internal system is expensive when you're talking about having an administrator onsite, says Webb. You also have to consider the lifecycle of hardware. “By using an ASP, you move past the hardware issue whether you're talking about servers or workstations,” he says. “With an Internet product, you're also able to slip down the chain and use a workstation that has much less capability than what you'd need to have running off of a LAN. That way, you could use older hardware and keep it in the system longer.”
Software is another potential cost saver — users who choose the LAN version are constantly faced with upgrades, says Webb. “If you think about a company that has multiple offices, you eliminate hardware and software redundancy with an ASP. In addition, each office will have the same high level of service.”Incompatibility issues. What happens when a contractor invests in an Internet product and then an owner or GC comes along and requires him to use another system? According to Perry, that can be a problem, but it's really out of the subcontractors' hands. “If that's the case, you're going to have to learn all of the different systems anyway,” says Perry. “It's not really driven by the subcontractors.”
He cites a personal example. The construction manager on one of his projects uses Prolog from Meridian and wants them to submit documents on these forms. Perry took the form (a Word template) and set it up as a template in Constructware. “I can set up my RFI in Constructware and have it fill in and populate their form. When I print it out, it looks like their form, but it was generated with my software,” he says. That works on the paper side of the issue.
“What are we going to do if they insist I use e-Builder and I have Constructware? That's probably quite a ways away,” says Perry.
Will there ever come a day when e-Builder could talk to Constructware? “I don't know if that will ever happen,” says Perry. “But if it did, that would be huge.”
Walch agrees it can get tricky when different parties use multiple products. His company has a construction services group that manages all aspects of a project for clients. He says consulting electrical engineers are more likely to be using this technology right now. “But electrical contractors are going to have to adopt these products because the owner, architect, or engineer tells them ‘we're using this to manage the project, and we're going to give you a site license, user name, and password,’” says Walch. “Sometimes they ask them to pay for it, other times it's already paid for. That's how the subs get involved.”
Jurewicz says the key to the incompatibility issue is getting islands of data to interact. “That's what everybody holds hope for in the new age of interoperability, but that's about three years away,” he says.Market predictions. What does the future hold with Web-based project management on the horizon for the construction industry? For now, it will be interesting to see how quickly the electrical trade embraces this technology. Until then, learning from early adopters will provide valuable insight.
Berard thinks several factors will help make online project collaboration the norm by 2005: the availability of affordable bandwidth, the decline in PC prices, the growing number of contractors investing in notebook computers for their foremen, and PDAs pushing technology out onto the jobsite.
Although he admits it's mostly general contractors and owners using these programs on very large projects right now because they're more inclined to have the resources, Perry believes this will change. “I think it's slowly going to trickle down to smaller and smaller jobs. When that comes down, the subcontractors are going to have to start using it more,” he says.
According to Jurewicz, when it comes to subs, the bottom line is money. “The first Web site to expedite payment and monitor progress in the field — that's what's really going to make inroads with the subs and get them participating,” says Jurewicz. “If you know the system works, you like it, and you get paid faster, wouldn't you offer a discount when you bid?”
He admits the last few years have been barnburner years for the construction industry, but work's getting harder. “If the sub and general have a strong relationship using this tool, and the sub knows he's getting paid faster, he's going to bid things cheaper. That's going to make a GC more competitive,” he says. “A few people are really starting to catch onto that. Forget pushing drawings online on sophisticated technology, we're just interested in tools that help us become leaner meaner GCs and make our relationships with subs stronger.”
Sidebar: ASP Insurance
Outsourcing can make even the most trusting executives nervous — many wonder if their provider will survive.
An ASP's job is to make sure its service and applications are available — otherwise it will lose customers. Relinquishing control of important business processes can be frightening.
To make the transition process less scary, the ASP Industry Consortium (ASPIC) is establishing an insurance program. ASPIC, in conjunction with the AIG Group, developed a policy for ASPs that protects them from liability. The insurance policy gives customers a guarantee that their ASPs won't fail because of legal actions. As a supplement to a service level agreement (SLA), this insurance demonstrates an ASP is serious about making sure its customers' needs are covered. It's one way of demonstrating ASPs are real businesses that aren't going to fail tomorrow.
Footnote: ASPIC benefits from the policies as it receives 2% of the revenue for the policies it sells. Communication Director Jim O'Reilly says the consortium's main concern is attracting more ASPs. Membership has dropped in ASPIC from 650 to 500 companies recently.