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Jul 27 2010

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Panama landmark project for Aconex

Yesterday I talked to Aconex‘s Dexter Bachelder (VP Americas) and Frank Carron (VP marketing) about a major deal that, for me, is a landmark in the adoption of web-based construction collaboration technologies. Australia-based vendor Aconex announced yesterday (see news release) that it had been selected to provide collaboration support services to the US$3.2 billion Panama Canal Third Set of Locks Project.

This mega-project is the latest in a series of major international schemes upon which Aconex has been appointed; it underlines that the company is now a major player in global infrastructure projects. Perhaps most crucially of all, though, it underlines that Software-as-a-Service (SaaS)-based collaboration platforms, not internally-hosted applications, have an increasingly central role to play in promoting collaboration and information-sharing across geographically dispersed, multi-company, multi-disciplinary teams.

The project

The Panama Canal Miraflores Locks, by Scott Ableman (via Flickr) The news release explains the significance of the project:

The new set of locks, at the heart of the $5.25 billion expansion of the Panama Canal, will allow the waterway to double its shipping capacity by 2025. The project involves the construction of two new lock complexes – one on the Pacific and one on the Atlantic side of the Canal – that will be 40 percent longer and 60 percent wider than the originals. Each lock will have three chambers and each chamber will have three water recycling basins. The expansion program is scheduled for completion in 2014, 100 years after the canal first opened.

As an American, Dexter was in no doubt about the economic significance of the project: “Around five per cent of world trade is routed through the Panama Canal, and it is hugely important to the American economy,” he said. “In terms of revenues, the Canal generates about $5m a day, and so hitting that opening date in 2014 will be critical. The operator, the Panama Canal Authority, had to get government backing through a referendum for the project to proceed, and transparency and good project governance will be vital if the project is to retain public support.”

Frank pointed out that the Panama Canal Expansion project was not Aconex’s only mega-project. “We have started to work hard, sometimes for months on end, to target strategic international schemes. These also give us big reference projects for major players in the US market.” He cites recent wins to provide collaboration services for the US$6bn RTD Denver FasTracks project and Italy’s US$7.2bn Strait of Messina Bridge project (which includes some companies also involved on the Canal project) as examples of their success.

The Panama Canal team

The project is being developed by a multi-national team including contractors and consultants from across the Americas and Europe; the news release says:

“The Panama Canal Authority (ACP), which operates the Canal, appointed CH2M Hill of the United States as Program Manager. Grupo Unidos por el Canal (“Grupo”) – a joint venture consortium of Impregilo of Italy, Sacyr Vallehermoso of Spain, Jan de Nul Group of Belgium and Constructora Urbana of Panama – was awarded the design and build contract. The design consortium, CICP, is led by MWH Global and includes participants from the US, Argentina, Italy and the Netherlands.”

Aconex is not only supplying software – and the usual configuration, training, consultancy and support services – to the project; it is also supplying some manpower. Dexter told me that Aconex will be deploying two Aconex employees to work on the project’s document control. “Worldwide, we now have 35-40 people that we can bring into projects to work as document controllers, usually for the start-up phase, but we find that some customers, particularly on the bigger projects, want a permanent presence” (I may cover this service in another blog post in due course).

Integration with other software

Good collaboration between the different consortia and joint ventures designing, constructing and project managing the Canal expansion project would not be possible unless there was one application that helped draw all the project’s team together, Dexter argued. Rival bidders for the project had promoted alternative systems, often internally hosted, but the successful team had opted to use Aconex as an interface across the project team. “We will provide integration with Microsoft SharePoint and with Oracle Primavera P6,” Dexter said.

“SharePoint is an interesting case. We used to see SharePoint offered as a straight alternative to an externally-hosted SaaS application like Aconex. Today, people are  more likely to see them as complementary. We know that, for governance reasons, companies will sometimes insist on having a record that they can store locally of their inputs to a project. On the Canal project, they can continue to capture information via SharePoint, for example, but Aconex will be used as a neutral, externally-hosted platform for overall collaboration, helping them capture a comprehensive picture of the project. It hits the project’s ‘sweet spot’ – the keys have been about delivering transparency and collaboration at every level: between people, between companies and between consortia and JVs.”

Aconex’s international experience has already seen its application delivered in different languages, and the Panama project will be no different. The platform will be available in English, Spanish and other languages. Aconex’s international network of offices will also be brought into play to provide local training and support to team members based in different countries.

Not just mega-projects

I asked Frank and Dexter whether these recent mega-project wins marked a shift in Aconex’s direction. Frank was adamant that Aconex remained committed to providing collaboration services to a broad range of customers and project sizes, both regional and international:

“Although we are less reliant on the Australasian market (which now accounts for about a third of our revenues), it has proven quite resilient as a market when other countries were suffering. One reason for its resilience has been a healthy mix of larger and smaller projects – we definitely value having a strong pipeline of bread-and-butter deals, alongside some really large ones. We also learned a lot from establishing bases in south east Asia, the Middle East, Europe and north Africa, and these helped give us exposure to contractors and consultants like MWH and CH2M Hill. They have now appointed us to work on big, iconic schemes like the Panama Canal, and the visibility of these projects will, we hope, lead to further work in the US and other markets where they operate.”

My analysis

Rival collaboration vendors’ strategies have largely focused on establishing a strong presence in their domestic markets, perhaps going overseas to support domestic clients,
consultants or contractors as they expanded into neighbouring markets. For example, UK players such as BIW and Asite opened operations in the Middle East (and suffered when the Dubai market slumped). More recently, 4Projects and BIW have joined Aconex in specifically targeting the north American market (post). However, Aconex took a different tack once it moved outside Australasia in the early 2000s, starting up small, satellite operations – often little more than one or two people – in numerous countries. These ‘beach-heads’ gave the company exposure to a wider range of potential industry customers – invaluable when some of these customers have joined together to work on mega-projects such as the Panama Canal expansion.

This international expansion also, I think, informed Aconex’s software development. I debated this with Frank and Dexter, who agreed that the leading UK vendors have really pushed the boundaries of collaboration away from a focus on document collaboration towards integration with process management (workflow) and compliance. Individually, document-sharing, cost control and project management are still strengths of rival products, but few have the all-round capabilities of platforms developed and deployed in the demanding UK construction market and in overseas markets which share its complexities.

It is also significant, I think, that such mega-projects have shifted the balance away from internally-hosted collaboration platforms towards Software-as-a-Service applications. On smaller-scale projects, major contractors or consultants might be able to insist that a client stick with the platform that they already use internally, but when a client is dealing with several JVs there will be no consensus about what system to use, and companies may not want to entrust their mission-critical information to a system hosted by a third party (a point Aconex’s Rob Phillpot makes in his latest blog post). In such circumstances, therefore, they may retain an in-house system for internal governance reasons but opt to use a neutral, third-party hosted system for collaboration with the client, JV partners and other project team members. (And, who knows, once companies see what a SaaS platform can do, maybe they will consider it for their future projects too? Such ‘viral’ marketing certainly proved successful in the UK during the early 2000s.)

Update (31 August 2010) – Dexter talks in more detail about some of these issues in an AECbytes Viewpoint article.

(Panama Canal photograph by Scott Ableman, via Flickr)

Permanent link to this article: http://extranetevolution.com/2010/07/panama-landmark-project-for-aconex/

1 comment

1 ping

  1. duncan kneller

    Given the recent press releases concerning the $1.6Bn dispute on this scheme it would be interesting to have an update on what benefits the use of Aconex has bought to the project. Such complex schemes surely require adequate project controls ahead of file sharing solutions to ensure such outcomes are avoided.

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