Lunch with Barry

Last year, while in New York, my brother Jon and I had the pleasure of meeting with Barry LePatner, author of “Broken Buildings, Busted Budgets.” Some of you may remember his book when it was referenced in an article published by the Boston Globe, “The Industry that Time Forgot.” That article, and Barry in his book, talks about some fundamental issues facing the construction industry.

For lunch, Barry took us to a restaurant that his firm was involved in constructing. During lunch, Barry told story after story of the nightmares the owner faced with the design and construction of this facility. For example, the owners planned an investor party a couple of weeks after the place was slated to open. Construction was inevitably delayed, but the owner was not able to change the party date. So the construction crew had to ‘mock up’ portions of the space. They spent a great deal of money and delayed the schedule even more so that they could have the party and after the party, it was back to looking like a construction site. Unbelievable... but true.

We talked about the new Yankees Stadium. It was supposed to cost $480 Million when it was being discussed in 2006. It ended up costing over $1 Billion, ~$800 Million more than expected. We talked about the many issues associated with that project, the politics and the contract issues, etc. His stories seemed endless. We heard countless examples of companies that have spent hundreds of thousands and even millions just in legal fees to defend claims.

The short meeting with Barry was an important reminder for me that this stuff really happens! At e-Builder we develop software to improve the construction process, and to eliminate these kinds of issues. We talk about the issues all the time, but it’s easy to forget that all of the examples we use, the books we read, and the stories we tell are real. It’s real money that is ultimately thrown away and it affects us all.

There is no better time for owners and the companies that act on their behalf to be implementing construction management software. There is a tremendous opportunity today to leverage technology in construction and truly make a difference in our society. It may sound corny or crazy, but it’s true. There are real problems with the capital project execution process and the construction industry is finally embracing the use of technology to address these issues.

These are trying times for construction and for our country and construction project management firms like e-Builder are in a unique position to make a difference. How cool is that?

Business Processes Improvement – The Year’s Top Priority

In September, Information Week magazine published their annual list of the 500 most innovative companies. Each year they ask the companies – What’s your top innovation priority this year? 54% of the companies said, “make business process more efficient”.

This makes perfect sense – most companies reduced their work force in the recession. As business picks up, they know that they can (1) hire all of the people back and continue doing business the old fashioned way or (2) figure out how to do business more efficiently and only hire some people back. We are seeing many companies go for option 2 – I mentioned in a previous post that this is 1 reason we are seeing unprecedented growth in the use of our construction project management software, e-Builder.

Companies of all sizes can benefit from business process improvement. Here are 5 easy steps to get you started improving a process in your company or department:

1. Take Inventory – Take an inventory of the processes that are in place. Review all of the written policies and procedures, but more important, look for the unwritten processes. These are the ones that everyone follows because, “that’s how it’s always been done.”
2. Pick Low Hanging Fruit – You will find a process or two that will make you scratch your head and wonder – why in the world are we doing that? You will find processes where others feel the same way and that nobody can explain. These are the easiest to eliminate or improve.
3. Document the ‘Old Way’ – Once you identify the processes you want to improve, map the old way in a flow chart. This helps everyone visualize the opportunities for improvement. It will help your team buy in to your changes because they will look at the old way and say, “gosh – I can’t believe we are doing that now.”
4. Develop & Document the ‘New Way’ – Map out a new way to get the same process accomplished. Your team – the people that deal with the process day to day – will almost always have the answer to the question – how can we do this more efficiently. Ask them.
5. Measure – To finish the job, you have to measure results of the improvement. We’ve all heard the saying – “what get’s measured, improves” – that’s one reason to measure. The other is to communicate success to stakeholders. If your team cannot easily see the results of the change, they won’t be able to tweak it and “course correct.” Also, they won’t be so enthusiastic about other process improvements which prevents a culture of continuous improvement..

Facility owners that use our project management software have to want to improve their construction process and change the way they work. But once they decide to do that, the system has many built in measurement tools. We see measurement become part of the operating culture. Individuals monitor the “dials and gauges” like they would a high performance engine and look for ways to squeeze out a little more performance. And as a result, their construction projects outperform the average.

Happy Holidays from e-Builder

Happy Holidays, from the e-Builder Family to Your Family

Joe ‘Gets It’

Part 2 of 2.

If Joe clearly sees the value of construction management systems, one or more of these statements is true:

• Joe used a system before, perhaps at another company or in a different role in his company.
• Joe is a visionary – he never used a system like this, but he’s read or heard about it and he can see (i.e., visualize) how a system like this can improve his capital projects.
• Joe got burned recently – he paid a large claim, or had a project delayed and he recognizes clearly that a system would have prevented or minimized this problem.

In these scenarios, the risk of doing nothing or sticking with the old system is greater than any risk of implementing a system.

One great example of a visionary is Tim Woodley, Director of Operations at the West Linn-Wilsonville School District. Tim recently confided that the processes that he put in place with his CM, and helped by his construction management software, enabled him to issue a $376,000 deductive change order. Tim had a clear vision, and he was able to make this vision a reality. If you would like to hear Tim's story directly from the source, check out this webinar http://www.e-builder.net/webinars/wlwv.html.

Technology Fueling Construction Recovery

Yesterday I had the pleasure of listening to a presentation about the economy and what the future holds. It was presented by Dr. Jeff Dietrich, a senior analyst for the Institute for Trend Research (ITR). ITR provides economic data to help companies navigate business cycles. In addition to the presentation, I’ve been subscribing to the ITR reports for about 5 years and I have always found them pretty accurate.

They are expecting moderate growth for the next 3 years including construction in several areas. I was encouraged by their economic forecast, for two reasons. First, it’s not all “doom and gloom” like I hear in the media way too often. Second, he reinforced that as the economy recovers, corporations, institutions and governments are turning to technology to increase their capacity to do additional work.
Dr. Dietrich did not talk specifically about construction management software. But, his trend signals growth in healthcare, education and government construction. And technology is seen as a key component of the strategy to get the increased work done. Essentially, companies and governments are “doing more with less” or “more with the same” resources by implementing software.
Of course, that’s music to my ears. It’s also why, during one of the worst recessions in history, my company, e-Builder has seen 8 straight quarters of record growth. Our construction project management software is exactly the kind of technology that enables organizations to improve productivity. We see numerous examples within our user base to support this macroeconomic trend.
It also makes me happy to see an increase in construction productivity. Long term, we need to increase productivity and decrease the cost associated with capital project construction. If we can lower the cost of construction, even by 1%, we can free up Billions of dollars for other higher (in my opinion) priorities – like teacher salaries and healthcare research.

Why Do People Buy Construction Management Software

Have you ever wondered why a person in a facility owner organization makes a significant investment of time and money to implement construction management software? If you’re a construction professional and are not already using construction management software, my next two blog posts will provide you with a point of reference to help you determine and understand the value.

A prospective customer looking at a construction management system like e-Builder (let’s call this person Joe) falls into the category of (1) sees the value; or (2) does not see the value. We like to say Joe either ‘gets it’ or he does not.

Joe Does Not ‘Get It’

Let me be clear – when I say Joe doesn’t get it, I mean no disrespect. Joe is bright, a hard worker, and very experienced in construction. But Joe’s strength is his weakness. He’s used to doing things a certain way and is good at it – he is efficient. He follows a tried and true process and does not necessarily want to change it because any change would be risky. There may be challenges with his current process, but at least he knows what they are and he’s learned how to deal with them.

So the risk associated with a change in his process is what prevents Joe from implementing construction management software. Joe may even believe in the benefits of a system. He sees how it will improve project execution. He can see how it improves his marketability as a construction executive. So Joe actually “gets it” he just can’t quantify the perceived risks so he does not implement a system.

Most of the prospective clients we speak with prefer to stick with their current system of spreadsheets or antiquated project management tools. This can be challenging for us (no-one ever said that changing the world would be easy). Of course some people decide to give e-Builder a try. In these instances our role as consultants is magnified. We view it as part of our job to help our client identify and quantify all risks, and provide strategies to mitigate or eliminate those risks.

In my next blog post we'll talk about the other side - when Joe "gets it".