Contractors not rushing to the Web

While many industries have rushed to the Web for e-commerce, networking and communications utilities, the construction industry is taking a wait-and-see approach to project-specific Web sites.
In an industry that involves coordinating massive amounts of detail on a daily basis, Web-based applications help project managers, clients and subcontractors stay on the same page as a project unfolds. Change orders, plans, work orders — all pertinent documents are in a central location accessible by all at any time of the day, any day of the week.
Project-specific Web site options open to contractors include application service provider (ASP) systems that charge a fee in exchange for access to the application via the Web. Some large companies also develop and host their own project-specific Web site solutions.
But as is the case elsewhere, project-specific Web sites are being used on relatively few projects in southeastern Wisconsin. Only a handful of very large projects are hosting their project information on the Web — but industry experts think those projects will set the standard for smaller projects in the future.
“They aren’t widely used but, quite frankly, I think that as technology rolls into this industry, you will see more of it in the next five years,” Mike Fabishak, executive vice president of the Associated General Contractors (AGC) of Greater Milwaukee, said. He added that a project-specific Web site is available for the Milwaukee Art Museum addition.
“It is an application to allow project managers and safety directors to keep an eye on things without actually being at the location,” Fabishak said. “There are probably some price considerations and institutional biases that would prevent this technology from being used readily.”
Like other industry analysts, Fabishak said that large contractors and owners are leading the charge by example.
“More and more, large owners are going to say they want this stuff,” Fabishak said. “At first it will be owners such as GM. And then it will trickle down to other owners.”
System on hold at Horizon
ASP-based project management systems have their drawbacks, according to Anthony Conte, director of Information and Business Systems at Horizon Retail Construction, Inc.
Horizon maintains a field staff of between 60 and 80 field managers nationwide to service its base of national retail chains with construction management services. The firm is headquartered and employs more than 50 in Racine, and is currently sitting on a plan to put its project management information on the Web.
“With an ASP, you have to be careful with who owns the data,” Conte said. “You have to pay $1,000 to get your information back out in your own format. Contractors sometimes have to go to court — and at a time like that, you need your data regarding a project right away. For the time being, Horizon is using telephones, cell phones, e-mail and the old-fashioned overnight Fed-Ex courier,” Conte said.
An additional deterrent to using an ASP-based system was that many them — including first-in-the-market e-builder — are aimed at contractors that complete a few large projects each year rather than — as in Horizon’s case — 600 small projects in the course of the year.
Horizon looked at a number of ASP and software-based applications.
“We looked at Constructware — an outsourced (ASP) product on the market for three years,” Conte said. “They keep data in their proprietary format — and they are expensive. We don’t do large-scale projects. Our volume is 500-600 jobs per year. Constructware and e-builder are targeted toward 10-25 jobs per year. The average cost per project for Constructware services was $900-$1,200 — just for five users.”
Another option Conte considered was Primavera, which is new to the ASP project management market, but which has 18 years’ experience in construction-industry software. Conte said Horizon also considered Buzzsaw, Project Talk, Meridian Systems and Bricsnet.
Also, the marketer of Horizon’s accounting package, Timberline, is working on a Web-based project-management system that Conte saw beta tested at a recent exposition.
In planning the stalled project, he tried to look at Web-based project management from the standpoint of one of Horizon’s field staff.
“If I were a guy out in the field, I would like to see all my pertinent job paperwork, vendor info, change orders and correspondence between owner and home office pertaining to what’s going on at the job site,” Conte said. “We set about designing a local intranet interface. That is the only thing that both clients and internal people would use. It would offer access to a variety of information through a client server page by providing links to information stored in a back-end SQL database server.”
A key factor in developing Horizon’s Web strategy was integration with Timberline — the firm’s construction accounting package, which according to Conte is an industry standard.
“We broke our project into phases,” Conte said. “You don’t want to shut down your business. You want to do things in steps and ramp up to the next phase of the project. Right now, we have a database application a former employee wrote in ACCESS — but it is hitting the wall. ACCESS is great when you have fewer than 25 employees — but when you have twice that, it hits the wall.”
Conte broke the process down into six phases, the first of which is designed to make the transition from the existing ACCESS database to an SQL database seamless and painless for staff.
1. Take existing project management databases and convert them to a visual basic front end with an SQL back end. “Like in construction, you build a solid foundation,” Conte said, stressing the importance of a good, generic root data structure that allows for dynamic data exchange. The move would provide the same functionality as the existing ACCESS database — except that the database would be accessed through a Web site.
2. Build a locker room application. This is a repository for drawings and documents — somewhere to store all the correspondence and job histories — everything that is not accounting-related.
3. Once data is entered, integrate it with the Timberline accounting system.
4. Build an estimation application. Horizon currently uses spreadsheets with self-calculating modules perfected over the years for carpentry, lighting, and other phases of construction. Estimate data would be fed back into the Timberline system.
5. For strictly internal use, create an on-line invoicing and billing application that can project profits based on data provided.
6. Provide for supervisor time-entry — allowing remote employees to sign onto the Web page and enter their time for the week.
Change coming fast
Rapid industry changes and an impressive price tag for the process Conte wanted to implement caused Horizon to shelve the project-management Web site project for the time being.
But what the company does have in-hand is a detailed report from Superior Consulting of Savage, Minn.
“Superior spent a whole week at Horizon — as a fee-based service,” Conte said. “They did a business study — and interviewed our various working groups. They saw the way paper is processed and gave us a standard document outlining their recommendations.”
According to Superior’s figures, “to do all six steps would cost $650,000 for 50 employees and 600 jobs a year,” Conte said. “That’s mostly software — we’d need to buy a server, but that’s what — $10,000?”
But the primary reason for holding off is a movement in the construction industry toward an open-protocol standard for project management data.
“We decided not to go ahead because technology is changing — not hardware, but software,” Conte said, referring to the potential for a universal format called AEC XML — eXtensible Markup Language for the architecture, engineering and construction industries.
“I did a lot of research on AEC XML,” Conte said. “When that becomes standardized, I will push this initiative again. For the time being, we work a little harder at doing things — but the systems are stable and reliable enough.”
Customer side tricky
Some Horizon Retail clients maintain their own project Web sites, Conte said.
“I have looked at two of them,” Conte said. “One client uses an FTP site for drawings and documents. We are helping another client test the Microsoft Project 2000 Internet version — and developing their own system in-house. The FTP site is very crude — plain with no graphics — just a series of directories. But MS Project has some elegant scheduling features, looks a lot better, has more functionality and is maintained at the customer’s Web site. But it has limitations as well.”
One problem with Microsoft Project 2000 is the myriad of graphic formats involved, Conte said. Standardized file formats on a contractor’s project-specific sites are important, according to Conte, because various formats require various software to view them – software that customers might or might not have.
“We get PLT files– which are plots,” he said. “We get DWG, which is Autocad. Sometimes we get a TIF, or scanned blueprint. People can have trouble with those file formats. A lot of people in contractor information system departments cannot install any software on a local client — PCs are all locked down for network security and hacking protection. We couldn’t ask our clients to download a viewer or program to run on their PCs. Some just barely have Internet connections to begin with.”
Holding pattern
Horizon will revisit its Web-based project management system in another year or so when AEC XML is ready, according to Conte.
“They said they would have a working model together by the end of 2001,” he said. “In the meantime, we could take our existing application and turn it into an active server page to reduce the learning curve to a new system. The application would be the same, but would be accessed via browser page.”
Conte said a key to making XML work for a construction firm will be the use of a structured query language (SQL)-compliant database for storing various project information.
“SQL would still be accessible to AEC XML,” Conte said “SQL compliance allows you to use ODC — or open database connectivity.”
ODC is a standard for accessing different database systems. There are interfaces for Visual Basic, Visual C++, and SQL, as well as Access, Paradox, dBase, Text, Excel and Btrieve databases.
Web helps talk to public
But nuts-and-bolts project management is not the only thing a project-specific Web site can do.
Public involvement manager Roseann St. Aubin of the engineering firm HNTB in Milwaukee feels that apart from efficiencies gained in managing a project, project-specific Web sites are proving invaluable in communicating with the public about projects that might impact their neighborhoods, community or taxes.
“There is a growing awareness on the part of the client,” St. Aubin said. “The most recent figures I had seen indicated that 45% of people in Milwaukee had Web access. That might be a peak — and the number may not exceed that in the future. But when you can show a high percentage of people are plugged in, the Web becomes a very attractive way to distribute information.”
But some clients, St. Aubin said, are still unwilling to pay a premium to have a project-specific Web site.
Apart from the public involvement features of the 6th Street Viaduct project-specific Web site, a private area is available to project team members. Non-public areas of HNTB’s project sites utilize the company’s proprietary data-sharing system — Interexchange.
St. Aubin said Interexchange was an application developed by the company’s technology division in Kansas City, Mo.
“There is a passcode-protected area for site plans, project reports and other documents,” St. Aubin said. “These sites are much more common than public involvement sites.”
Proprietary problems
The programing and tools that run behind the scenes of a project-specific Web site are also a factor in the speed at which the technology is adopted. Numerous Web-based software applications are available, and some companies like HNTB have their own proprietary systems.
But currently, the different programs do not talk with each other.
Gary Kautzer, executive vice president of McCloud Construction, which has locations in Milwaukee, Brookfield and Marshfield, said that, to a large extent, the choice of which Web-based technology used on a particular project is currently made by the owner or the designer rather than the contractor. Kautzer said that’s because most of the collaboration and information-sharing takes place during design as opposed to construction. But even once a project is off the drawing board and taking place on the ground, Kautzer sees the benefits of a central digital repository for information.
“Since it is online, you don’t need to be able to contact anybody,” Kautzer said. “We are doing work all over the country. People who are traveling a lot are not always available real time. This allows the communication to be ongoing — as close to real time as we can make it. It is all about timely communication. It is such a fast-paced marketplace that you cannot even wait until the next day. There are things going on at job sites that need to be communicated — real time is really where it is at.”
Kautzer is new to McCloud, but has experience with project-specific Web sites from a previous position.
“I have been here for a few months — and just spent 17 years at GE Medical in corporate facilities and real estate,” Kautzer said. “There were some large projects we were involved in. In my experience, the architects set it up — and they subscribed to Bricsnet — a Web business that does this for customers. They set up these sites with passcodes and security.”
Even within the passcode-protected area of the site, users had varying levels of access to data.
“There may be some internal customers — higher level managers — that occasionally want to be updated on what is going on,” Kautzer said. “They have a different level of access — but do not have the ability to change things.”
Kautzer said that from his experience with collaborative project Web sites, they can be labor-intensive to operate.
“We started to have these collaborative sites,” Kautzer said. “But a lot of these projects are so fast-paced that it is hard to maintain the sites and keep them current. That alone was a problem.”
In the end, contractors will need to make educated decisions about when to put project data on the Web.
“The tried-and-true communication methods still work,” Kautzer said. “We didn’t take advantage of the capabilities of the technology for a number of reasons. If those collaborative sites got a little easier to implement and there was a more disciplined way to keep the documentation and information current, that would be great. Right now, you need a pretty sizable project to make this stuff worthwhile, given that amount of effort required to keep the information current.”
Kautzer stressed that McCloud was not completely skirting the issue of using computers to manage communication.
“McCloud has graduated into the electronic age, too,” Kautzer said. “We use e-mail extensively internally, and with subcontractors and superintendents out at our sites. Our customers expect it and demand it. It is a very effective way of communicating and sharing documents. We still rely on telephones and fax machines, but more and more the medium is digital.
E-mail is key, according to Kautzer, as the company takes on projects outside of the Milwaukee metro area.
“We are doing some retail projects in the Denver market — and in northern Illinois near Crystal Lake,” Kautzer said. “We get involved in retail — from tenant spaces to full shopping-center development including the land development. We are also doing some condo development in Florida — and have offices in Tampa and a new office in Neenah to serve the Fox River Valley. We do quite a bit of design-build work but also a lot of construction management.”
With operations this spread-out, electronic communication is very attractive, according to Kautzer. And e-mail has allowed them to share documents — although file size is more restricted than would be the case on an FTP site.
“Generally, we are not transferring full plan sets — it is single documents or pages at a time,” Kautzer said. “The files get to be very big very fast. We are constantly checking to make sure that we have enough bandwidth. Once you get on the bandwagon, you need to also make the commitment to stay current and make investments in technology to stay in front.”
Kautzer has not discounted the idea of using project-specific Web sites, but has not identified a technology that fits McCloud’s needs.
“I looked at a couple of the sites — Bricsnet and Buzzsaw,” Kautzer said. “You have to quantify the benefit — what is the benefit? It is always nice to say you have the most current, cutting-edge technology. But that is not always the best fit for your needs. At some point, our larger customers may mature to the level where they have their own approach. But when we have the right project with the specific needs, we will investigate them a little further.”
Competing programs, standards
One thing preventing contractors from making more consistent use of project-specific Web sites is the sheer number of programs and standards, according to the editor of the leading trade magazine for construction productivity software users.
“The project-specific Web site market is a young, diverse and dynamic market, according to Peggy Smedley, editorial director of Constructech, the leading publication designed to educate the construction and building owner sectors about the computer-based tools that are available in the field.
Conflicts between systems — both ASPs and proprietary systems — are confusing to contractors who may feel compelled to use only a single application on all projects — or are concerned that in many cases, technology is already identified and put in place by the owner or designer of a project.
“That’s what makes the success of project management software so significant,” Smedley said. “You don’t have to just pick one. If you have a client using Meridian, you can also be using Bricsnet. So if Hilton requires you to use their internal system and they use Bricsnet, you can easily do that. C.B. Richard Ellis — which owns and manages thousands of properties — uses both Bricsnet and Meridian — so their contractors can have project Web sites if they use those systems.”
Even small contractors with small projects can set up project-based Web sites using ASPs such as Bricsnet and Buzzsaw, according to Smedley.
Still, the various programs cannot share data, but that may be about to change.
“I think when you look at AEC XML — that’s the whole idea behind it,” Smedley said. “You will be able to collaborate seamlessly over the Internet. A lot of those companies that have proprietary technology might have a harder time going forward. Many companies are starting to branch out and do it over the Internet. You start using proprietary technology and that will make it harder to standardize later. You need to use some open standards. I think you are going to find companies looking for some form of standardization so they do not have to reinvent the wheel for their builders or contractors.”
But even once technical challenges are surmounted, contractors won’t necessarily all jump on the bandwagon, according to Smedley.
“You need to understand that the construction industry overall runs the gamut from the very educated to the novice, and the need for project-specific Web sites will differ based on who you are trying to collaborate with,” Smedley said. “Right now, larger contractors and owners are driving the process. Smaller subcontractors are being prodded by who they are working with as a general contractor on the builder’s side.”
Smedley also said that different industries adopt new technologies at different rates.
“A construction contractor might adopt new technology more slowly than a large manufacturer, which might in turn be slower than a financial services firm,” she said.
Aug. 3, 2001 Small Business Times, Milwaukee