Wednesday, December 3, 2008

Direction of the Industry: Part 1

Unfortunately, the real estate markets that I've been working in with my investors for Asgard Associates are very difficult to do business in at the moment. In response to the current liquidity issues, I've been talking to several companies lately about relocating to the UAE to work on big projects again. This has prompted me to put a lot of the things I've been thinking about the direction of the industry in writing (finally). So over the next week or so, I'll be blogging on my top four emerging trends in construction, design and development.

1) Information Systems - While I was working at the CTA, I was blessed with the opportunity to use a state of the art program/project management system. The centerpiece of the system was a customized version of Citadon's ProjectNet software. I didn't realize what a gem they had created until I came to Bovis and used their uninspiring system based on Meridian Systems' Prolog. I truly believe that much of the project management process could be simply and easily improved by using more intelligently conceived documentation software. This change has to be lead from the top. The CTA used its $5.1 billion charter to force its general contractors and subcontractors to make the necessary changes in each of their organizations.

More information on the project can be found in the whitepaper published on KFA's website, but a few of the concluding points are telling of the problems with implementing new changes to the construction industry:
  • For many of the parties to a construction project, productivity is not a clearly defined concept. To put it bluntly, if one is being paid by the hour, reducing the number of hours required to get the job done is not an attractive proposition - unless there are balancing considerations, shuch as competitive pressures. Only the owner is clearly motivated to do more with less. And only a fraction of Web-based project-management systems are bought by owners.
  • Most Web-based project-management vendors underestimate the extent of computer-illiteracy in the construction community, and thus underestimate the amount of training required for successful project implementation.
  • Construction projects are not highly disciplined affairs. Unless the use of a new tool can be tied to payment, subcontractors will tend to do things "the old familiar way," despite any benefits they might gain from the new tool.
Probably the most important point here is the first one. Best practices, including new technological solutions in construction management can only come with the support of owners, because they are most incentivized to realize the gains.

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