Construction is one of the UK’s most important economic sectors, representing – according to the DTI – eight per cent of the GDP, some £104 billion in 2002 terms alone. Given that much of the Labour government’s commitment to national infrastructure renewal hinges on the private finance initiatives (PFIs), which represent nearly £40bn in projects, the pressure to deliver quality solutions is high.
Surely anything that increases the productivity and efficiency of this sector should be welcomed?
Surprisingly, so far construction leaders have not viewed IT in this way. The average IT salaries in this area, for instance, are equivalent to posts in the education area, well behind the remuneration of IT professionals in financial services and computer services – £50,000 versus £30,000. However there are finally signs that organisations in this vertical are beginning to take information technology more seriously.
IT has a real contribution to make. It may need to – one industry estimate puts 73 per cent of construction projects running over budget and 50 per cent of errors coming down to poor information.
Partly due to the fragmented nature of the industry, where teams of contractors pull together for short periods, it has been historically difficult to tie together disparate business functions. But consolidation in the field – particularly at the higher end – as well as a realisation that computers, seen previously as just for offices, can have a real contribution to make on-site, is changing the picture.A metric here is the growing number of executives, including IT professionals, who are entering construction companies from other sectors. Such new CIOs tend to be more familiar with tier one ERP providers such as SAP and Oracle and less likely to patronise the niche players that have tended to dominate the sector, such as Coins.
"“A focus of activity will be the regeneration of key sites in preparation for the 2012 Olympics, a programme that could lead to an extra 150,000 jobs in construction alone and which may well employ much more ICT in the design process”"
A factor here too was Oracle’s acquisition of Peoplesoft and JD Edwards, which has given it further ‘critical mass’ in the sector and doubled the number of Oracle construction clients in the UK Construction 100 list. Significant Oracle sites now include both Balfour Beatty and Costain. At the latter firm, Mark Bew, business systems group director says the firm is using IT to try and get away from the unpredictability of what he calls “sine curve business performance”. To achieve that, since 2001 the company has been engaged in a major technology refresh with the Oracle Enterprise 1 suite in a major migration from Coda.
Supply chain management
While ERP is gaining more acceptance as a central co-ordinating platform in the field, other business processes are also changing, with greater use of off-site fabrication in a bid to reduce on-site problems, cost and time. This is leading to greater interest in supply chain management systems, collaboration tools – especially to support the design process – more deployment of 3D and co-ordination techniques in CAD and, interestingly, more adoption of mobile applications for the collection of data on-site. One such example is McNicholas, which has given 800 of its staff mobile devices with a customised worktime management application.
Costain’s Bew cites CAD as a major factor in stopping mistakes at the design stage. He cites a real-world example of a bad line in an architect’s drawing that translated to £60,000 loss at one site as every misaligned door had to have 25mm taken off to hang properly.
In the wider business environment the construction industry’s prospects seem mixed, with a rise in house building offset by dips in civil engineering activity. A focus of activity for the UK building and architectural sectors will be the regeneration of key sites in preparation for the 2012 Olympics, a programme that could lead to an extra 150,000 jobs in construction alone and which may well employ much more ICT in the design process.
So hopefully the wry joke that the only computers you see in the building trade are the laptops nicked from the pub will very shortly no longer have any currency.