Latest from Constructive
20 June 2007
There is no question that construction is now one of the major contributors to Gulf GDP. The evidence is all around you in every major city in the Gulf. However, even in Dubai, only around 50% of its 100-plus construction companies have employed software to help them manage their projects, according to US business software provider, Peoplesoft.
This is unusual considering that the building sector, like any other business, has to deal with the management of projects, suppliers, partners, HR, finances and assets. In fact, owing to the sheer size of many local construction projects, the need for management software must be even more paramount than in some other industries.
According to one industry expert, this could be the fault of the software itself. “The big challenge is getting standalone site information — none of the ERP vendors really specialise in construction,” says Martin Janse Van Rensburg, financial manager, Group Five, Dubai. “PeopleSoft say they do, but it’s not really tailored for construction — it is just for pure back office and financial tasks. There isn’t any specific construction software anywhere.”
But ERP giant PeopleSoft disagrees with Rensburg. “Our main solution for the industry is for project management and maintenance management — it is specifically for construction,” claims Fayez El-Khoury, channel manager for PeopleSoft Middle East.
Whether or not the package is tailored enough for construction does not appear to have halted the solution’s sales — the software vendor currently boasts Group Five, Majid Al Futtaim and Al Jaber, Abu Dhabi’s largest construction firm, among its clients. Perhaps this is because there is a lack of solutions that give the industry what it really needs: an end-to-end solution that manages the project from pre-building to finish. An ideal construction solution would incorporate facilities for linking architectural design, materials purchase, HR and payroll, subcontractors and maintenance of assets — in addition to management of the facility when the project is finished. At the moment, however, construction companies are being forced to mix and match software, while also developing their own complementary programs.
However, Ayman Abouseif, senior marketing director at Oracle Middle East and Africa, is convinced that it is not the software vendors who are to blame. “[The slow take up of software] is the case internationally, not just in the Middle East. In part, this is because the industry has never had standardised processes and best practices — this has made it difficult for software vendors to build solutions that can be sold and implemented repetitively. We feel that this is changing and we are seeing more and more standardised processes in this industry,” he says.
Now is a crucial time for the construction sector to optimise and cement its processes, while streamlining its costs. In the last eighteen months, the size of individual projects has mushroomed; and if they’re not careful, they could well spiral out of control. Andrew Woolnough is the managing director of Constructive , which provides electronic detailing technologies for the steel reinforcement process — from estimation to optimisation. The supply chain management software enables suppliers, steel modifiers and contractors to communicate in realtime.
“There’s been a huge change in the size of the projects here — they’ve gone from being 2000 tonnes of steel each to up to 200 000 tonnes each in the last 18 months. Dubai uses five million tones of reinforced steel a year, while the whole of UK only consumes one million tonnes a year. It’s prolific,” he says. “In the past there may not really have been a need for technology. But now they are not just constructing individual buildings, they are constructing whole cities. If they carry on with the traditional pen and paper method of management, they’re going to lose complete control,” Woolnough warns.
The company’s Steelpac offering aims to address the need for transparent information sharing in an industry where each project usually includes multiple parties. With many large construction projects it is simply not viable to use traditional methods of communication, such as faxes, couriers and letters, for delivery revisions and specification changes between parties. Steelpac works to enable all the parties to transparently view the project status in realtime — current users include Arabtec at Jumeirah Beach Residence, Belhasa Six at the Al Safouh Interchange and ALEC at the Emirates Hotel Mall.
“Each detailing practice, wherever it is located, simply e-mails the electronic schedules to our Steelpac Site tool in SDI format at the project location. As the schedules are imported into a Steelpac Site they are automatically screened for errors. Weights and lengths are then calculated and, moments later, the construction teams onsite can be placing orders from these schedules. Details are then sent directly into the rebar suppliers production system, it’s as simple as that. There is no need for manual checking or for calculations and no risk of error,” says Woolnough.
Another major benefit of the solution is that it can intelligently adjust steel quantities based on changes to the building spec — this function reduces mistakes, and wasted metal. “Any changes are incorporated immediately and automatically. The system is also intuitive in that it makes any changes sensitive to the orders you may have already placed. Not only is it saving lots of time but it is also giving the users the piece of mind that they’re working from the latest information and that it is 100% accurate. It is simply not possible to double-order or over-order with this system. It is all about implementing any changes quickly and cost-effectively. Our experience is that this alone can bring cost savings to the project of up to 5%,” he explains.
Woolnough stresses the importance of making changes quickly. Timeliness is one of the major benchmarks of a successful construction project. A project that is late is not only a black mark on a company’s reputation — it’s also a money-drain. For example, Dubai’s Burjuman Shopping Mall extension was several months late. This would have meant huge costs in interest and lost rent from shopkeepers. “The key [to success] is that the project should be profitable, on time and on budget. Timeliness is directly related to profit,” says PeopleSoft’s El-Khoury.
Another benefit of software tools is that they can help the construction industry see how much a project is costing them per day, particularly if it over-runs. One of the main reasons Group Five fully integrated IT into its business was so it could transparently measure costs, budget and resources. The group created its own software, called Time and Data system, which it now finds invaluable.
“[Time and Data] is an IT system that captures all labour timekeeping, as well as allocating it to the task its working on and providing us with daily costings. It’s also our wage system — it helps us to stringently manage overtime. It can measure, on average, how many bricks a person has laid in a day. We like to be fully aware of how much things cost us,” says Peter Keenan, managing director of Group Five, Middle East.
“We have clearly seen a reduction in wage slips and understanding what our costs are and getting results faster. It saves on staff costs for admin too — now it’s just a question of pressing a button and it’s all totted up,” he adds.
Group Five has been at the vanguard of using technology in the construction industry — it was a guest speaker at Gartner’s annual conference for the construction industry in the USA. Up until 2002, the group was totally decentralised with each business unit having full control over its IT spend and software solutions — then a decision was made to turn the situation around to improve efficiency and costs. As a first step JD Edwards’ ERP software (now owned by PeopleSoft) was rolled out throughout the group, worldwide. Together with this implementation, it also standardised its infrastructure with HP, Cisco hardware and Microsoft technology. Each site, however remote, can now be connected to the central Group Five system via satellite.
Van Rensburg maintains that the success of the IT project was due to an understanding that operations are organised in terms of the business services they provide, for example, payroll and sales support, and not around IT components — such as routers and servers. “Technology is also very much about people and processes,” he says.
With this in mind, Van Rensburg has taken steps to make the software intuitive, so that the average construction worker can use it. IT literacy among the construction sector can sometimes be an issue.
“There’s a resource shortage in terms of labour because the sector has grown so fast — so people are struggling to get staff to work on the sites. So they’re not being as fussy in certain areas as they might usually be. The IT literacy base, therefore, can be quite low — sometimes the training we provide literally starts with ‘Here’s a mouse…’” says Woolnough.
Even though the industry is clearly making headway as far as technology is concerned, there is still a long way to go. Around 50% of the industry is still pushing around pen and paper; hence, a lot of projects in the region are notoriously late. Stefan Kempf, managing director of Technoserve, believes companies are taking a top-down approach to targeting the industry and that, eventually, IT will filter through the sector.
“The small businesses would quite happily carry on as they are, but eventually the bigger companies, who have to see the bigger picture, will force them into being compliant with their systems,” says Kempf. “When the big parties go for it, they push their subcontractors and partners into it,” he adds.
Online collaboration tools are also helping to push technology into the construction sphere by encouraging all involved parties to communicate electronically. “Online collaboration is one of the most important tools in construction. Projects are not usually done by one company — there are often ten or twenty involved. In addition, there’s so much paperwork to be continually exchanged: drawings, specifications and orders. It’s so important to keep everyone in the loop,” says Kempf. “With online collaboration architects can upload their drawings in realtime, and the owner can immediately go through a revision process. As soon as there’s a change, you can see who changed and why,” he adds.
Local online marketplace Tejari has also jumped onto the collaboration tools bandwagon. Its new solution is designed to enable the parties involved in a project to work online to ensure that properties are built to a high standard and within the agreed delivery times.
“The real estate market is changing. People in the Middle East are now moving away from leasing properties to buying their own homes, villas and apartments. This shift creates new challenges for the construction industry, as someone buying their own property has higher expectations than someone leasing,” says Matthew Hibberd, deployment manager for Tejari Project Collaboration.
“The industry has to meet these expectations and change the way they present, sell, design and build properties, and ensure customer satisfaction as well as timeliness of delivery. Online collaboration plays a key role in creating properties that buyers want in a safe and timely way,” he claims.
All the signs suggest that the 50% of the construction sector that is not yet networked is at a disadvantage. Even though the industry has been sluggish in deploying IT, there is no longer an excuse for delayed projects or materials orders that aren’t 100% accurate. “A lot of people say you can’t change the system,” says Keenan. “But we think you can.”
Article from Construction Week