E Construction:

The Web and E-Commerce in Architecture, Engineering and Construction

Daniel R. Rehak
rehak@cmu.edu

Outline

A/E/C Industry

  • Architecture, Engineering, Construction (A/E/C)
  • Engineering, Construction, Operations (E/O/C)
  • Creating the "built environment" and "infrastructure"
  • Plan, design, construct, operate, maintain, decommission life cycle

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Construction Process

  • Construction is a team process
  • Each project is one-of-a-kind
  • The manufacturing unit is 1
  • Costs and timeframes can be large ($US 10B+, 10 year+)
  • Each project is a unique combination of team players
  • Same team never comes together again
  • Communications and collaboration play a major role in projects
  • Team relationships are adversarial

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Construction Team

  • Owners: client
  • Architects: designers
  • Project Managers: construction supervisors
  • Contractors: builders responsible to management
  • Subcontractors: builders responsible to other builders
  • Suppliers: construction materials and facilities equipment
  • Resource Suppliers: labor and construction equipment and tools
  • Municipalities: legal authorities (approval, codes)
  • Financiers: money
  • Insurers: risk management

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Construction Business Models

  • Design, Bid, Build
  • Design, Build
  • Build, Operate, Transfer
  • Public versus Private

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Construction Business

  • Large business sector
    • $US 3.2+ Trillion Worldwide
    • $US 700+ Billion US
  • Fragmented
    • 1 Million US Participants (suppliers, purchasers)
    • Range from very large to very small (individuals) companies
    • Top 8 companies control less than 20% of market
    • Top US company controls less than 5% of market
  • Field process
  • Inefficient
    • A $100 Million project generates 150,000 documents
    • $500 Million of FedEx annual revenue is shipping drawings for construction

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Business Case for E-Construction

  • 5-10% of project management costs
  • $US 400 Billion by 2004 (est.)
  • 20-30% of business online
  • Construction businesses are not "e-smart"
  • No recognized e-construction market leader

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Potential Role of E-Construction

  • Address inefficiencies in process (e.g., document management)
  • Team coordination, collaboration
  • Process management
  • Information management
  • Remote site access and control (role of wireless)
  • Procurement, supply chain management, market exchanges, auctions
  • Approvals

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Drawbacks for E-Construction

  • Fragmentation of players and process
  • Traditional industry conservatism
  • Lack of computing infrastructure
  • Field connectivity and access

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Current E-Construction Business

  • Fragmentation
  • 100+ major e-commerce companies (500+?)
  • Prediction: majority will be gone in 6-9 months
  • Little market or service differentiation
  • Is the industry ready (only 20% online)?

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E-Construction Sample

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E-Construction Services

  • Project web sites
  • Project extranets
  • Document management
    • Document sharing
    • Document distribution
    • Version control
    • Drawing redlining
    • Drawing printing, reprographics
  • Process management
    • Project calendars
    • Event tracking
  • Online collaboration
    • Meetings
    • Messaging
    • Chat
    • E-mail
    • Message integration
  • Financing
    • Credit reporting
    • Insurance, locator services
    • Financing, construction loan locators
    • Electronic payment services
  • Field site connectivity
  • Web-cams
  • Remote sensing
  • Directories
    • Material, supplier directories
    • Job listings
    • Employment listings
  • Construction news
  • Construction training
  • Bidding
    • Invitation to bid
    • RFQ
    • Bid submit
    • e-bid day management
    • Payment
  • Procurement
    • Supplier-to-contractor
    • Supplier market aggregation
  • Infrastructure
    • ASP
    • ISP

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E-Construction Focus

  • Project Management Portals

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E-Construction Project Management

  • Document exchange and management
  • Collaborative computing
  • Information repositories
  • Workflow management

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General Construction Portal Characteristics

  • Starting point for web access
  • Information focus on domain
  • Personalized (e.g., my yahoo)
  • No automated controls or workflow management
  • Few real applications

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E-Construction Project Portal Features

  • Project e-commerce functions
  • Document and collaboration center
  • Access customized by role
  • Integration of workflow
  • Links to collaborators and resources

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E-Construction Project Management Portal Tools

  • Document exchange
  • Document change management, audit trails and version control
  • Team collaboration
    • Chat
    • IM
    • Shared whiteboards
    • Shared applications
    • Conferencing (audio, video)
  • Redline drawings
  • Directory services
  • Events and calendars
  • Project News
  • Notification services
  • Project search
  • Weather reports (traffic?)
  • Data catalogs
  • Project archives
  • Online permitting
  • Equipment tracking
  • RFI/RFP
  • Bidding
  • Procurement
  • Billing
  • Punchlists
  • Scheduling

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Desirable E-Construction Project Management Portal Capabilities

  • Team and individual access rights/roles (RBAC)
  • Role-based customization
  • Personalization
  • Security
  • Scalability
  • ASP (Application Service Provider)
  • Client independence (PDA)

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Building An E-Construction Project Portal

  • How To
    • Do it yourself from basic tools on a project basis
    • Create a portals framework for your project teams
    • Outsource to a portal builder who will "brand"
    • Use to a generic portal
  • Choices
    • Cost versus customization
    • Market size versus business control
    • E.g., GM versus Freemarkets versus Construction Portals

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Characteristics of Current E-Construction Project Management Portals

  • Custom built versus collection of outsourced services
  • Market a general service to anyone versus providing outsource for private extranet
  • Current focus is service integrator for any customer

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E-Construction Portal Marketing Benefits

  • Reduce cost via market pressures, bulk purchases
  • Reduce time --> Reduce overall project cost
  • Improve cash flow
  • Increase accuracy, audit trail
  • Disintermediation

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E-Construction Portal Drawbacks

  • Not everyone is online
  • Computing on site, lack of access
  • Conservatism
  • Security concerns
  • Who establishes or owns the portal
  • Project size scalability ($1M to $10B projects)
  • Information rollups
  • Fragmentation in portals
    • Too many vendors
    • Any team member might be fragmented across multiple project portals
  • Links to back-office systems
  • New intermediaries
  • Legal issues of "signed" drawings

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Issues in Selecting an E-Construction Portal

  • License terms
  • Privacy
  • Cost
  • Functions
  • Security
  • Infrastructure (servers, ISPs)

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Directions in E-Construction and Project Management Portals

  • Better calendar integration (with project schedule, event notification)
  • Construction specific tools and workflow
  • Wireless access
  • Meta portals
  • Market changes
  • Market shakeout

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©Copyright 2000, Daniel R. Rehak, All Rights Reserved.