Take IT to another level
The Information Technology (IT) has today become an indispensable tool for any construction company who aspires to become big and take up mega infrastructure projects. Though the level of IT penetration has improved over the period of last 5-7 years, the industry is still at the nascent stage when it comes to using advanced IT solution for infrastructure projects. The reasons for low penetration could be attributed to a number of factors including demographic profile of construction professionals in India who are normally in their mid 40s and 50s with extensive domain experience in construction but have very limited exposure to the computing world, mostly CAD, Windows, Microsoft Office Excel and may be MS Project or Primavera. For such companies the adaptability and training is a big issue. Some of the other critical factors for these companies are that they fell it will be an additional cost to the company, the process is going to be complex and time consuming, and they might not need it right now since their size isn’t big enough. But even if those companies realise the importance of IT, many a time, they ended up investing in wrong technology or solution.
For starter, the best of way of approaching the whole issue would be to look at IT as an investment and not cost. The company first needs to analyze its own size, IT budget, type and scale of projects it’s going to execute and its future target. The Industry experts suggest that even if a company wants to start with ERP (Enterprise Resource Planning) solution, it should never compromise on the platform. One should go for world-class solution such as SAP, Microsoft, Oracle or IBM. Most of the higher level solutions [which the company might need to implement once its business grows] can easily blend with such ERP platforms. They can also take services of System Integrators who would develop a customised solution that blends well with the functioning of the company. It can also outsource the work to implementing firms who would collect the real time data to manage its project.
Presently, majority of the construction companies in India go for implementing generic IT solutions, such as, ERP. Though ERP can help automate their horizontal functions such as HR, Payroll, Finance, etc., it is not meant to automate construction projects entirely. “There is a general misconception [only in India] among infrastructure and construction stakeholders that “ERP” is a magic wand that will automate all aspects of their businesses, including project cost estimation and contract management,” says Balaji Sreenivasan, CEO and Founder, Aurigo Software Technologies (P) Ltd who is an ISV (Independent Software Vendors), focussed on construction industry.
For this, he says, they require specialized construction management and capital project management systems in addition to their ERP platform.
“The construction industry needs an IT solution, which caters to the company’s unique requirements. The chosen solution should have document templates that are free of jargons; easily understood; language has to be synonymous with the construction jargon and should understand and solve the problems of different stakeholders. Consequently, an industry specific and tailor-made solution for the construction industry should be selected,” adds Sreenivasan.
His company offers CPMS (Capital Program Management System) which helps automate the entire construction project lifecycle from the stage of bidding to completion. “Aurigo CPMS can completely automate the different facets of project management including, estimation, planning and construction management; and integrate this data into the company’s corporate IT infrastructure including ERP, Document Management Systems and Legacy applications, enabling enterprise wide IT adoption. This helps companies streamline their processes, control costs and reduce delays,” he adds.
Aurigo CPMS can work as a standalone or as a tightly integrated solution with any ERP system, using a connector.
However, small and emerging companies who are not into big ticket projects may not like to invest in CPMS at the initial stage, mainly due to cost factor, though this will pay back in long run. Such companies prefer to work on locally-developed solutions. There are many software companies who offer customised solutions based on client’s inputs. This helps companies to adapt to the solution much faster.
Pune-based SoftTech Engineers Pvt Ltd says they offer products which are built around the objective to address the issues specific to AEC industry. The company gives solution for Construction Management, e-governance, Structural Engineering and e-Learning. Its Construction Management Solution, Opticon is a web-based ERP system exclusively for construction enterprises whereas QE-Pro is a Quantity Estimation and Project Planning Software.
“The USP of these products is the strong project management engine which is specifically developed for construction businesses and addresses to the engineering functions like tendering, estimation, subcontracting, project scheduling and monitoring. These along with robust modules on materials, sales and finance make it a complete automation in construction lifecycle,” says Vijay Gupta, Chairman & CEO, SoftTech Engineers Pvt. Ltd.
Delhi-based real estate firm Chintels India who have recently started developing their fist project says they have gone for customised system which has been economically implemented. The company uses MS Project integrated with ERP system for their project financial and physical monitoring. They also use Central Management software – 8.264 Digital Video recorder software (developed by Tab Technologies) for live transmission of video of works at site into their laptops and desktops. The software runs on Windows.
“Implementation of IT brings accuracy, speed and easy accessibility to all concerned. It allows us to provide accurate and timely follow-up to our customers, to monitor effectiveness of our business process, streamlines our procurement process and standardise financial systems,” says Prashant Solomon, Joint Managing Director, Chintels India.
At a time when business is growing at much faster pace due to boom in construction space in India, industry experts say that companies should also always go for world class solution. “Many times organisations opt for local solutions, because of the cost benefits. However, these solutions will have major limitations in managing business growth and adapting to technological advances in future. It is going to be difficult to changeover to world-class solution later. In long-term this turns out to be an expensive proposition and hence it is always advisable to go for a world-class solution in first place and gearing for the future growth,” says Satish Pendse, President, Highbar Technologies (An HCC Group Company), who helps implement IT solution along with its partners such as SAP.
Pendse says that many large and medium organisations are increasingly investing in world-class solutions like SAP which is almost becoming a norm now. “Even smaller organisations are willing to invest in SAP with only time being a factor before they go for it. Highbar has developed industry templates on SAP platform which address about 90% of industry requirements,” he says. For SMEs, he adds, world-class solutions on new technology called cloud computing can be a good option where it will be available on pay-per-use basis without initial capital investment. This will also provide a level-playing field for SMEs vis-a-vis large organisations.
But for companies who are doing into multi-billion dollar capital programs that involve building hundreds of miles of highway, entire airports, shipping ports and even large SEZs, CPMS is a must. “With dozens of contractors and subcontractors, hundreds of vendors and thousands of workers spread across miles of project site, they present a unique set of challenges that more often than not lead to severe delays and serious cost overruns. Most of the bids are won on thin margins; so cost overruns and delays have a catastrophic effect. IT becomes the essential tool at the disposal of the owner and contractor to effectively deliver on the projects,” says Sreenivasan of Aurigo.
He says that a study amongst Aurigo’s customers conducted by a third party research agency has revealed that CPMS investments can help infrastructure stakeholders compress time schedules by up to 12% and cost reductions by up to 7%. The costs of such IT investments are typically between 2- 3% of their revenues.
Another IT major, Autodesk, who has invested significantly in creating the Building Information Modeling (BIM) platform, says that they have seen a significant increase in the interest levels amongst customers in India as they realize the benefits and ROI. “BIM is an integrated process that allows architects, engineers, contractors, and owners to explore a project’s key physical and functional characteristics digitally—before it’s built. On a project that takes advantage of BIM, information is coordinated and consistent, spurring efficiencies throughout the project lifecycle,” says Manideep Saha, Head AEC, Autodesk, India & SAARC.
According to him, BIM holds promise for all construction companies—from a small firm with design-bid-build projects to a larger company specializing in design-build projects. The tangible benefits of BIM include everything from fewer RFIs and change orders and lower costs to faster schedules and well-orchestrated field work.
Autodesk has recently launched its 2012 portfolio of software for the AEC industry. The company says the portfolio supports BIM process by offering comprehensive software solutions to help architects, engineers, contractors, facility managers and owners meet today’s business challenges. It also announced two new design suites for building design, construction and infrastructure professionals.
“The new Autodesk Building Design Suite and Autodesk Infrastructure Design Suite provide a comprehensive set of tools to help users address a variety of workflow needs, from project design, visualization and simulation to documentation and construction. The visualization technology offered by the suites helps improve efficiency by making visualization and integral part of the entire design process. Each suite offers a cost-effective way to respond to changing business requirements, providing access to the latest design and visualization tools through a single, economical and convenient purchase,” adds Saha.
Moving forward, as internet usage increases, there is going to be demand for web-based platform which gives clients freedom to access any date from anywhere. Also, at a time, when big construction companies have project sites spread across different parts of the country or sometime in the world, web-based solution becomes a necessity. Most IT companies are coming up with such platform or solution. “We are in the final stages of launching a project collaboration and document management solution entirely on the cloud (web) that will help project managers, construction managers, facility managers and their teams respectively compile information and access this from any place. The goal is to eliminate the chaos and confusion associated with large projects and help them complete their projects faster,” says Sreenivasan.
Supreme Infra who has implemented Aurigo CPMS to manage all its construction projects says that entire lifecycle of a construction project starting from estimation, tendering, contract management and field inspections is now handled entirely over the cloud. “The system allows us to use mobile computers like Laptops and iPADs to collect data from project sites. Data collection is accurate and reporting is instant, anytime and anywhere. This software integrates seamlessly with our ERP Platform and Project Scheduling application (Microsoft Project),” says Vikas Sharma, whole time Director, Supreme Infra.
UK-based Aconex who provides online collaboration platform for managing the large volume of information generated and exchanged during projects, says their system enables all the parties involved in a project to access, distribute and track their documents in real time from any location. “This reduces the time and cost of information management, while reducing the risk of disputes and delays. We currently service US$260 billion worth of projects in 70 countries and are still seeing strong growth in India and worldwide,” says Andy Lake, GM Aconex Asia.
Lake sees considerable potential in the Indian market, particularly across large and complex real estate, infrastructure and power projects. “Major players such as L&T, Tata Power and Reliance are using our system, as are many mid-sized construction firms, and we are only just scratching the surface. Currently less than 10% of all construction projects in India use an online collaboration platform to manage their project information; whereas in countries such as North America, the UK and Australia, this figure can exceed 50%. Uptake of our solution in India has doubled over the past 12 months and we expect to see similar growth in the year ahead,” he adds.
As India passing through a very exciting phase, the fast growing construction companies have to foresee the opportunities in the awaiting and keep themselves ready for the future challenges. “The competition is so hot at the global level that companies should either adapt to the situation or quit. Some of the large and visionary GCs, Owners and Infrastructure firms in India that are forward thinking are investing in technology and processes to improve the way they work. The smaller businesses are still uncertain. Those organizations that get their act together and adopt IT will prosper to become world-class players while the rest will perish or at best remain small players,” concludes Sreenivasan of Aurigo.