Building on IT

Latest from Constructive

20 June 2007

Peter Keenan, managing director of Group Five, Middle East. One of the most visible manifestations of economic growth in the UAE is the proliferation of commercial property development. Last year, overall GCC spend on construction topped a whopping US$44 billion.

In Dubai particularly, the building upsurge is in full bloom and the emirate is pioneering some of the worlds most expensive and unusual construction projects, including an underwater hotel and the world’s largest collection of man-made islands.

However, only 50% of Dubai’s 100-plus construction firms have deployed software to help manage their projects, according to PeopleSoft (now owned by Oracle). This is unusual considering the building sector, like many other verticals, has to deal with the management of projects, suppliers, partners, HR, finance and assets. In fact, owing to the sheer size of many local projects, the need for management software is paramount.

Group Five is a South African construction company that set up a new branch in Dubai nine months ago. It employs over 11,500 people and is one of the top three construction and materials manufacturing companies in South Africa — with holdings in the Middle East and worldwide. Currently involved in a project for Dubai International Airport, the group believes software adoption in the construction industry has been so slow due to a lack of specialist applications.

“The big challenge is getting stand alone site information — none of the enterprise resource planning (ERP) vendors really specialise in construction. PeopleSoft claims it does, 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,” laments Martin Janse Van Rensburg, financial manager at Group Five, Dubai.

However, Fayez El-Khoury, channel manager for PeopleSoft Middle East, disagrees with Rensburg’s statement and argues that the vendor has in fact invested significant R&D time and resources to create a package tailored to the construction industry’s needs. “Our main solution for the industry is for project management and maintenance management — it is specifically for construction,” he says.

Whether or not the package is tailored for construction does not appear to have impacted the solution’s sales — the software vendor currently boasts Group Five, Maged Al Futtain and Al Jaber, Abu Dhabi’s largest construction firm, among its clients. This is because there’s nothing on the market even close to what the industry 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.

Ayman Abouseif, senior marketing director at Oracle Middle East & 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 those responsible for delivering them are not careful, they could well spiral out of control, according to Andrew Woolnough, managing director of Constructive , which provides electronic detailing and software technologies for the steel reinforcement process.

“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.

Constructive ’ Steelpac offering aims to address the need for transparent data sharing in an industry where each project usually includes multiple parties. In many projects, it’s simply not viable to use traditional methods of communication for the delivery of revisions and specification changes between parties. Steelpac works to enable all the parties to transparently view the project status in realtime and current users include Arabtec at Jumeirah Beach Residence (JBR) and Belhasa Six at the Al Safouh Interchange. Ayman Abouseif, senior marketing director at Oracle Middle East & Africa. “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 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. There is no need for manual checking or for calculations and no risk of error,” claims 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’s giving the users the piece of mind... 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 is right to stress the importance of implementing changes quickly. Timeliness is one of the major benchmarks of a successful construction project. A project that is late is not only a blackmark on a company’s reputation — it’s also a money-drain.

For example, Dubai’s Burjaman Shopping Mall extension was several months late. This would have meant huge costs in interest and lost rent from shopkeepers. Another benefit of software tools is that they can help the construction industry transparently 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 to be able to transparently measure costs, budget and resources. The group created its own piece of software, 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 them to the task they’re 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. Last year, the company was even 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 software from JD Edwards, now owned by PeopleSoft (acquired by Oracle recently), was rolled out throughout the group, worldwide. Together with this roll out, it also standardised its infrastructure on kit from HP, Cisco and Microsoft. Each site, however remote, can now be connected to the central Group Five system. Fayez El-Khoury, channel manager for PeopleSoft Middle East Janse Van Rensburg maintains that the success of the IT project was due to an understanding that operations should be organised in terms of the business services Group Five provides. For example, payroll and sales support take precedent over IT components such as routers and servers.
With this in mind, Van Rensburg has taken steps to make the company’s technology set up intuitive, so that the average construction worker can use it. This is particularly important, as IT literacy among construction workers 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, which provides solutions to Meridian Systems, 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. “In the region you have a lot of small architectural companies that can’t afford, or don’t want to invest heavily in software. At the moment, the market is very dominated by Emaar- plus the international companies that are going to come here. Slowly they are pushing the IT ahead. 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 parties, owners, contractors and suppliers to communicate electronically.

Local online marketplace Tejari, for example, is also promoting construction collaboration tools. Its solution allows them to work together online during the lifecycle of a construction project 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. 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. Online collaboration plays a key role in creating properties that local buyers want in a safe and timely way,” he claims.

One local company that has embraced online collaboration tools is Wafi Group, which signed up for an offsite file transfer protocol (FTP) server from Comtrust earlier in the year. Located at Comtrust’s Dubai-based hosting centre, the outsourced solution facilitates collaboration between architects and engineers working on its Wafi City expansion plans. Rather than burn blue prints onto CDs and ship them around the world, third party providers working on the group’s expansion projects can now access centrally held plans via a secure virtual private network (VPN).

“The group is working on a number of building projects in Dubai. One of the biggest projects is to build a hotel on the Wafi City site. As such, we have a lot of architects and business partners from around the world working on plans,” explains David Watt, group IT director at MKM Commercial Holdings, which manages the Wafi City complex.

“With different time zones and the amount of travelling people do it made sense to create something that people could access whenever they needed to. This is why we set up an FTP server through which we can share plans with various architects and business partners around the world,” he says.

While organisations such as Group Five and Wafi have embraced IT, and are using it to ensure their construction projects succeed, those that have yet to utilise technology would appear to be in danger of falling behind. While there are those in the market that suggest the construction industry’s slow adoption of IT to date means those that have yet to invest in IT will always lag, others believe the situation will change as the sheer number of ongoing and new projects springing up in the region make it unavoidable. “A lot of people say you can’t change the system,” says Group Five’s Keenan. “But we think you can.“

Article from Construction Week

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