Construction Update

Web-based Collaboration Is Here To Stay

The construction industry has rarely been the first to implement new technologies. The lag stems in part from a healthy conservatism: It’s often a wise strategy, in business as in life, to let “early adopters” test the Next Big Thing, and then step in to profit from their experience.

Investment in IT systems is a good example. After generating considerable buzz, some supposed marvels fall flat, while others struggle for years to work out defects. Both kinds leave casualties among firms who jumped in too deep, too soon.

The Tipping Point

But other marvels, in time, prove themselves on the ground. At some point in that process, through a combination of technical advance and wider usage, there arrives a “tipping point,” a term borrowed from sociology. The moment may not be visible until after it has passed — but when it has passed, the wide adoption of a new technology is no longer in question.

For a project management system called a collaborative Web environment (CWE), the tipping point in the construction industry looks to be behind us. Going forward, contractors should expect to encounter a CWE on increasing numbers of projects of all kinds.

Construction firms that embrace, learn and use CWEs will strengthen their business. Better able to meet customers’ demands, they’ll be confident taking on more opportunities and engaging new markets. Most will also find their own processes improving, as they harness the signal power of this new technology.

What Is a CWE?

A collaborative Web environment, sometimes called a project management and collaboration system, is a way of organizing communication and cooperation among all the various entities involved in a project.

Online interactive computer games are one example. So are some Web logs, or blogs, that permit interactive exchanges among users.

A CWE in a construction project is run by project managers and suppliers are expected to plug in. From first plans to final punch lists, every issue can be posted online, flagged for the right eyes and monitored along the way.

In the design phase, that permits rapid development and flexibility. On the ground, it means repair jobs don’t rely on yellow sticky notes attached to door frames. The days of “We never got that fax” are over, and instead all relevant project information and schedules are in one place, online, available 24/7 to those responsible for action.

The system is Web-based, rather than client-server-based. That means the software and data reside on the computers of a separate entity called an ASP, or application service provider, and not on a construction firm’s own hardware. Owners, project managers, designers and contractors can access the system in real time with nothing more than a computer (or PDA or tablet), an Internet connection and a password.

Collaborative Web environments require virtually no customization of software. For most construction companies, documentation involves a few standard pieces — drawing distributions, requests for information, submittals, change orders, punch lists and so on — and most will find the shift to a CWE fairly easy.

Today CWE software is available from a raft of vendors, which package and combine their products in different ways. One new service, for example, focuses solely on an intense and collaborative approach to project closeout and turnover — a small stage, contractors know, that is often the scene of drama, delay and disruption.

A good number of these vendors are upstarts, but a handful has established solid track records over a decade or more. Price varies widely, but a construction firm can expect to license several users to perform standard CWE transactions for around $2,000 a year.

Are Contractors Ready for Collaboration?

In a 2004 survey by the Construction Financial Management Association (CFMA), most construction companies reported high-speed Internet access at their headquarters, and 40 percent said remote locations were similarly wired. When it comes to connectivity between the two, general contractors led, with 80 percent maintaining such links.

Many firms have also made the relatively easy shift to wireless Internet connections, which enhances their flexibility not only at the job site but everywhere else. More than a few construction tasks were scheduled this morning from a local coffee shop.

Now this use of the Web is expanding to provide a platform for project collaboration, and the benefits are becoming clear.

Even though owners buy most licenses today, general contractors continue to implement CWEs as well. They say the systems improve internal efficiency, reduce cost and effort, streamline workflow, facilitate process improvements and enhance their standing in the marketplace — all of which combine to provide solid competitive advantages.

Most subcontractors, unless they’re relatively large, won’t buy CWE services. Instead, they’ll encounter them on more projects, find more general contractors using them and see more competitors integrating with them. Competence in these systems is worth acquiring, for two reasons.

One is reputation — in today’s bid-driven environment, it’s best to be known as a modern-thinking, customer-driven company. The other reason is business productivity. By adapting their documentation and communications to CWE requirements, even smaller firms often find they perform these tasks faster and better.

Easy To Use

The good news is that CWEs are easier than ever to use. The leading vendors provide training as a standard service, as do a growing number of consultants. (Construction firms will get more out of CWE training if they think through their business processes first and then organize the program around them.)

Firms new to CWE systems are sometimes hesitant about the transparency they can impose. “Sure, we’re open — but not that open.” But specific decisions about what to post in a collaborative environment belong to construction companies, not software programs. If a firm agrees to integrate itself into a CWE, it should exercise the same due diligence appropriate to every other aspect of a contract.

In computer technology, the race does not always go to the swift. But sometimes it does, and companies that learn to function in collaborative Web environments will find themselves ahead of the pack.

Collaboration is one of the things that CPA firms do best; another is helping clients navigate new environments. We’ll be happy to collaborate with you in this one.

How CWEs Became Popular

Web-based project management and collaboration systems were first marketed a decade ago to general contractors. By 2001, some 40 percent had tried one version or another and many were impressed. They found that basic functions of the systems helped them simplify documentation, reduce waste and improve other internal functions.

Meanwhile, job owners were noticing that they could use these Internet-based project management systems for their own purposes. In recent years the owners have faced growing requirements by lenders and public authorities for cost savings and closer scrutiny of projects. The owners, in turn, have transmitted these demands for efficiency and transparency to their contractors in design and construction — and they’ve focused particularly on IT as a means to achieve these goals.

By managing CWE applications themselves, owners sought to exercise greater control over their projects. And that, above all, is what drove the collaborative aspect of the CWE concept to the forefront.

When construction teams raised the Four Seasons Hotel and Tower in Miami in 2003, it was the tallest residential building south of New York. The entire project was organized on a collaborative Web environment, and that put the proof on the table.

A gradual recovery in the construction industry, increased competition among suppliers, improvements in the software and a steady stream of measurable results have combined to spread the use of CWEs.

For more information about our services to the construction industry, Contact:
Mark Lund, Parter-in-Charge of Construction Services at 713.297.6907.

The articles in this newsletter are general in nature and are not a substitute for accounting, legal, or other professional services. We assume no liability for the reader's reliance on this information. Before implementing any of the ideas contained in this publication, consult a professional advisor to determine whether they apply to your unique circumstances.