Integration – the essence of every industry

— With specific reference to the construction industry

A while ago I was leading an internal discussion on why companies have systems and eventually why they have computerised systems. One of the main points was that computerised systems enables vertical integration of processes, thus, in well known terms, the buyer can interact with the supplier in a two way communication stream. Data is thus used not only to assist the internal process, but the upstream and downstream processes as well. In short, internal business data can successfully be converted in transactional data and this is not limited to financial transactions.

To put this in perspective, companies have systems (computerised or not) mostly to exercise some form of control and delegation. Since the business processes are standardised and predictable, the process is independent of the person executing a specific piece of work and since the output and process is consistent quality control is not a problem. In essence, horizontal integration has been achieved. Not only is this good for governance and business, it also creates a certain internal culture allowing the team to develop a sense of belonging.

Computerised systems all creates the possibility of interchanging data to upstream and downstream processes since the physical boundaries of non-computerised systems does not exist. Teams in different locations and even different companies can interact – vertical integration. This does increase the level of transparency and thus requires a very different view of for instance customer and supplier and the whole concept of confidentiality between the different parties.

It is very common for companies in the same industry to try and compete on every level, thus from the basic skills required, administration, their templates, the way data is handled up to the professional input required. What should happen is that a common understanding should be reached on the areas where there should not and cannot be any competitive advantage and then compete in the areas where the competitive advantage lies. To a certain extend this happens in most industries, but mostly only on a philosophical level and nearly never on a practical level. Thus, there is some common ground where even sworn enemies can get together and contribute to the common understanding without impacting on their own competitiveness. Everybody understands this from an academic perspective, yet, on a practical level this becomes difficult.

Speaking of the buyer and supplier relationship: The vertical integration between the different parties in the supply chain makes the purchasing industry probably the most advanced in terms of integration philosophy and practice. In most instances companies are so well integrated that they have become mutually dependent on the other and thus always keeps a keen eye on the diligence of the other party. They have achieved this by agreeing on, for instance, the data making up an order and the interpretation thereof, whether it be a Purchase Order, a Sales Order or any other type of order while focusing on their internal process instead of the exact format of the “piece of paper”. In fact, by removing the format from the equation and looking purely at the data required to make the process work, a lot of anxiousness and downright paranoia has to a large extent disappeared from these companies.

The construction industry probably ranks as one of the poorest when it comes to vertical integration: Anecdotal evidence suggest that almost every company at every level of the value chain have their own interpretation of the same data and the level of data integrity management varies from one instance to the other. Integral business data is thus prepared, manipulated and published according to the experience and gut feel of the individual preparing the document with scant regard to the needs and requirements of the downstream user. Of course, the fact that the data is contained in a document is a whole other discussion that will be explored at a later date. In short, very few artifacts actually requires a document while data contained in documents (even when linked to an Excel-sheet in the background) makes the data inaccessible by nature. The single most important paradigm shift required is not to look at everything from a paper perspective, even when working on screen, but as a process of creating business data for use in downstream processes which may include the creation of paper documents.

As it should, the industry is lead by engineers (and the case of buildings, architects) who are all very smart and excel in their different disciplines. Engineers, however, comes from a world where it is quite conceivable, and happens in many cases, that the complete engineering cycle can be completed by one person and one person only: Concepts are documented, drawings issued and project plans managed by the same person. Thus, the finalisation of the expected deliverable requires no transaction. This is not the case for the quantity surveyor, buyers, contractors and other parties downstream from the engineer.

Let’s look at a very different scenario: The tool the engineer uses to create and manage his drawings actually stores the data in an accessible data format such as XML. Web services are configured between the engineer’s and the downstream parties’ systems to accept any new drawing, update existing drawings and change the status of these drawings. Suddenly a few impossible scenarios becomes viable:

1. The QS can be presented with the data from the drawings already extracted in a measured format for further transformation and analysis instead of first printing, measuring, capturing the measured data etc before any other work in terms of the QS value adding process can begin,

2. This enriched QS data is now available for downstream processes such as procurement, cost and financial management where once again, this data can be enriched,

3. One artificact per drawing can be stored and the differences to be tracked via version management making document management much easier than what is currently experienced,

4. Differences between versions can be highlighted on one screen in different colours to highlight, for instance, the difference between the Issued for Construction and As Built drawings,

5. All parties can work from the same base since the systems does not rely on a paper based, managed by humans and thus prone to error interface to keep the versions organised and accessible.

Sounds impossible? Well, this has been achieved by Microsoft with the infinitely more complex, yet well known tool called Word without the user actually noticing. Engineers will however have to accept a few things such as that the drawing printed by a downstream partner may look the same in essence, but the meta data, i.e. date of issue, document number and version can be printed in different ways representing the needs and views of the partner – which may be very different from his own! Off course, since all parties are working from the same underlying base, this should never be a problem.

Where is the problem though? As previously stated, the construction industry developed without the input from a CIO (Chief Information Officer) rendering the process paper based, difficult to integrate and cumbersome to collaborate. All of this in an industry that is heavily fragmented and in dire need of collaborative processing of business and transactional data. The challenge for the CIO and his team is not to upset the apple cart, but to integrate the new style processes with the current way of working and the realities of day to day work.

The time has come for the different parties to come together and make this work.

Pieter van der Dussen

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VDDB provides project structuring, execution and control services that makes projects predictable and controllable. Some clients prefer the full project office function, including procedures, procurement, contract administration, policies and general project execution and co-ordination, and use selected services.

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The concept of analytical quantity surveying is one of numerous enhanced services where traditional skills are merged with information management tooling to provide strongly enhanced project services in a fast world which is keen for optimisation.

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