The dot-com nuttiness is over. Were there doubt about that, it was confirmed at the A/E/C Systems 2002 show in June in Anaheim, Calif. There were a few dot-coms, but for the most part, exhibitors--and speakers at construction industry sessions--were moving on.
That leaves an interesting question: Where to? If construction subcontractors are not going to buy materials online, and if project collaboration software will take some time to mature and be adopted--well, what's next?
Based on this reporter's wandering around and listening during the show, here are a few stabs at the answer. The problem: There's no simple, single trend.
John Voeller, chief technology officer for engineering firm Black & Veatch, made a stirring, information-packed speech. Engineering, he said, is going to move overseas.
Voeller, a construction IT visionary, told his audience that engineering firms would soon have to move 70 percent or more of their work overseas within 18 months. Why? To continue to compete. The cost of getting engineering done in China, he noted, was one-tenth that in the United States--with the same quality. He repeated: We're not talking about shaving costs by 10 percent; we're talking about Chinese engineers costing 10 and U.S. engineers costing 100 for the same job with no quality difference.
One statistic: The United States graduates about 60,000 engineers a year, of which 40,000 actually go into construction engineering. According to Voeller, the figure in China is four times ours (and three times in Russia) each year.
One engineer talked about Voeller's warning that overseas engineers would swamp U.S. companies and that our engineering firms had to use engineers in other countries or else. "It's fine, except he said the same thing about (project collaboration and IT) two years ago," the engineer said.
What's the relevance to computer software? It is the use of computer collaboration that enables around-the-world engineering of a given project to be built here.
Intuit is into us
Intuit is the independent software company famed for its Quicken software, as well as QuickBooks and TurboTax. A while ago, the company profiled its 3.3 million Quicken users and found the single largest group own companies in the construction industry. As a result, more than a year ago, Intuit examined more than 50 construction software companies and bought Omware, the source of MasterBuilder software.
Dan Smith, formerly of that company, now heads Intuit's construction operation. He is spearheading the company's drive into the construction market, a new focus that will include other acquisitions.
Here's the key: Intuit's construction users, the company thinks, "abandon" Quicken when they reach $2 million in sales. The company wants to keep those users--including electrical contractors--in the fold.
Two important speakers at the AEC event provided a head-scratching perspective on the relative costs to building owners of up-front design-and-construction costs.
Phil Bernstein, vice president of Autodesk's building industry division, noted that the cost of construction for a building owner and operator is relatively low. According to Bernstein, if it takes $1 million to construct a building, design costs are $100,000, a mere 10 percent of that figure. But the actual facility occupancy and operations costs, in his formula, would be $4 million to $10 million--or possibly 100 times the original design cost.
Arto Kiviniemi, who heads a massive construction research effort in Finland, took a similar approach. The size of his consortium seems small, at $40 million in funding; but Finland has only 5 million citizens. A similar construction research effort in the United States would top $2 billion.
According to Kiviniemi, if you see the design and construction operation of a typical building costs a company 1, the cost of facility manager is 5 and the cost of the business processes that go on in the building over its lifetime are 200 or more.
What's the point of this? It shows the relative value that the construction industry could potentially provide by making an impact on the "down-the-line" costs of a building owner, including doing so via technology.
However, one could excuse construction veterans in the audience for wondering why building owners and developers push so hard to cut construction costs--seeming to care so little for life-cycle concerns.
One undercurrent of this year's AEC event was talk about creating a "digital asset" alongside the physical asset (i.e., the building). That would give architects, engineers and contractors a digital model of the building that could be used throughout the facility's life. "To this day, no one (among the vendors) has that," said Judy Schreiner, editor of Construction.com, in one session.
There is a movement to create building life cycle interoperable software. For more information, see www.blis-project.org. EC
SALIMANDO is a Vienna, Va.-based freelance writer and frequent contributor to ELECTRICAL CONTRACTOR. He can be reached at firstname.lastname@example.org.