Jan 02 2008

Reviewing 2007

Last year, I made five ‘Extranet Evolution’ 2007 predictions. Were they correct?

1. Growing acceptance and use of web-based collaboration tools within the UK construction industry

It was something of a no-brainer. The continued revenue growth trends of the leading UK-based vendors shows there is a strong appetite for the applications. I was also encouraged by the receptiveness of Constructing Excellence to an approach from the collaboration vendors’ organisation, the NCCTP, to become a new forum within the pan-industry membership body (see post) – I have since heard chief executive Don Ward talk enthusiastically about the need for project teams to demonstrate their commitment to collaborative working at a technology level (also see post).

2. Growing AEC industry acceptance and use of software-as-a-service (SaaS) will increase demand for integration with back-office business systems.

Progress was a little slower than I anticipated, and much of the industry attention seemed to focus on email integration and management rather than delivering better construction project  and company processes. Nonetheless, there is at least an appetite for managing AEC contract processes using web-based tools (I mentioned how MPS‘s CCM tool was used to manage NEC processes in January; and highlighted [my employer] BIW’s own efforts in this field in September), and I remain confident that some SaaS solution vendors will begin to extend the reach of their technologies to deliver richer business information to hard-pressed company executives and AEC project managers in 2008.

3. Further rationalisation and polarisation of the UK construction collaboration marketplace.

Like in 2006, the most significant change came right at the end of the year, this time Sword Group acquired CTSpace, perhaps throwing the ailing AEC collaboration vendor a much-need lifeline. Otherwise, the other major change was 4Projects’ MBO during the summer (see posts) – significant for its indication that there is a real appetite among private equity firms for SaaS companies. With some firms still to report more recent figures, we must wait to confirm if the sector is becoming more polarised.

4. Increased interest in online BIM-based collaboration.

I have written more about building information modelling (BIM) this year than ever before, and there certainly appears to be growing interest in the technologies’ potential on both sides of the Atlantic – albeit mingled with concerns about the people and process issues. My contacts at Asite say there is growing interest in their online collaborative BIM application, but we are still some way from seeing widespread adoption.

5. Growing demand for (and provision of) mobile collaborative applications

BIW’s sales and marketing team were all issued with new ‘smart-phones’ just before Christmas (my Palm Treo device gives access to email, Outlook contacts and calendar, a web browser, a camera, Office applications, music and video, etc), and with all these tools now incorporated on one pocket-sized device it is easy to imagine how certain collaborative processes might be facilitated by such tools. Connectivity – particularly on construction sites – remains something of an issue, but, as this BBC article suggests, there are combinations of technologies (mobile web applications, ultra-mobile PCs and Wimax, for example) that are blurring the distinction between the online and offline worlds.

I have now started thinking about some predictions for 2008.

Permanent link to this article: http://extranetevolution.com/2008/01/reviewing-2007/

Jan 02 2008

More on Sword

After a blogging break over Christmas and New Year, I have started 2008 with another quick look at the Sword Group – which announced it had acquired construction collaboration technology vendor CTSpace on 21 December (see previous post).

Reviewing the Sword Group’s offerings, it seems CTSpace will augment the parent’s existing enterprise content management (ECM) or document management products for the AEC sector, which include software products from C2Share (essentially an integration with Microsoft SharePoint) and Cimage (Fusion PDC), and its integrations with EMC Documentum. The CTSpace acquisition therefore adds some Software-as-a-Service capability to Sword’s existing portfolio of AEC-oriented but predominantly internally-hosted client/server products.

It is also Sword’s second SaaS buy in six months, following its acquisition of APAK (financial services specialists) in July 2007.

Permanent link to this article: http://extranetevolution.com/2008/01/more-on-sword/

Dec 23 2007

CTSpace put to the Sword

Just 53 weeks after its last major ownership change, SaaS construction collabaration technology vendor CTSpace (the result of a merger between UK-based BuildOnline and US-based Citadon) has been acquired by the international Sword group of IT companies (as far as I can tell, no value for the transaction has been given). The news came in a low-key announcement made late on the last Friday before the Christmas holidays. CTSpace CEO Howard Koenig is quoted:

“We anticipate that this move will underpin the future growth of CTSpace and build upon our success over the past few years. CTSpace will be able to utilize the Group’s resources to accelerate its product roadmap and maximize its geographic reach through the Group’s vast international experience and track record of technical expertise in ‘best of breed’ IT solutions. … Aligning ourselves with SWORD will give us the opportunity to leverage the Group’s presence into new geographical markets and support our clients’ multi-national interests.”

The release continues to explain how the acquistion will boost Sword’s SaaS interests:

“… the acquisition will enhance SWORD’s range of offerings to the Group’s existing markets and clients. As a leader in this field, we will also provide SWORD with the opportunity to review its hosted and licensed software offerings to see where else within the Group a SaaS delivery model may be applicable.”

A Sword news release summarising several transactions says CTSpace’s software is “dedicated to large scale projects for the Oil, Gas and Engineering markets and inter-related sectors. Its backlog [order book, I think] comes to €21m [£15m]. This acquisition increases our yearly pro-forma revenue by €11m [£8m] and will consolidate our local operations.”

The £8m figure has some significance as it was figure that Koenig gave a year ago (see post) for combined revenue to year-end June 2006 – so there has apparently been no growth since then.

Sword group

The Lyon, France-based Sword group is an international IT products and services company founded by Jacques Mottard in 2000, which has grown rapidly through a series of acquisitions, mainly but not exclusivly focused on electronic content management (ECM) solutions, including:

  • Fircosoft – a US automated payments vendor; Decan and IDL, both UK-based EDMS vendors, plus GIS specialist IDP (all in December 2000)
  • UK change management consultancy DDS UK and French funds transfer specialist Profiler (April 2001)
  • UK-based Text Solutions, another EDMS vendor (April 2002)
  • Benelux-based data management business Cronos Technologies (December 2002)
  • US financial services solutions vendors Zen and Art, and Belgian web content management business FI System (December 2003)
  • Global, an India-based offshore business based in Chennai (May 2004)
  • UK-based EDMS vendor Cimage (July 2004) – a business I got to know well during the late 1990s when I managed PR for the Tarmac Professional Services division (see below)
  • Stellon and Real Time Engineering (2006)

Alongside Mottard, Sword joint CEO from 1 January 2008 is Welshman Heath Davies, who joined the company following the acquisition of Text solutions in 2002, having previously been with Cimage. However, I know Heath from earlier times.

I first met him in the mid-1990s when he was a project manager with Schal, then part of Tarmac Professional Services (TPS) – today, part of Carillion. Heath’s responsibilities included development of a rudimentary electronic document management system, PIMS (project information management system), employed on the London Royal Opera House redevelopment, among other projects (see 1995 Contract Journal article). He didn’t stay with Schal, however, moving within the TPS empire to Cimage – at the time one of several TPS division IT companies (another was CAFM vendor, MASS Systems) prior to a series of management buy-outs. Having a British joint CEO indicates the importance of the UK market to Sword – approximately half its revenues come from the UK.

At the end of July 2007, Sword employed 1,700 staff across 14 countries, with a 2006 consolidated turnover of €142m (£103m) and a forecasted 2007 consolidated turnover of €180m+ (£131m).

Analysis

In my dissection of the BO/Citadon merger last year, I pointed out how distressed BO’s UK operation had been, having also absorbed millions of pounds-worth of investments to lag behind UK competitors such as BIW Technologies [my employer] and 4Projects. Indeed, in bringing together nearly a dozen previous enterprises, the two merged businesses had burnt their way through a combined total of over £50 million, and before December 2006 was out, CTSpace was already making people redundant. Earlier this year, I was also very dismissive of some ambitious-sounding CTSpace ‘spin’ in a UK trade magazine article (see post).

CTSpace is headquartered in San Francisco, with offices in the UK, France, Germany, Austria and Dubai. In October, CTSpace disposed of its Pune, India-based captive research and development centre and staff, acquired by product development firm Symphony Services. Given the Sword group’s European base, I expect one strategic argument for the acquisition will be to strengthen the group’s representation in the USA.

Building Sword’s SaaS position is another justification for the acquisition. Sword previously acquired Dubai and London-based financial systems specialist Apak, whose portfolio features some SaaS-delivered applications.

With other industry watchers, I have been sceptical about the repeated efforts of BuildOnline/Citadon aka CTspace to prove that it is a global business capable of growing and then generating a sustained level of profits. Perhaps becoming part of a much bigger IT organisation is just what it needs.

Will the CTSpace brand disappear? Probably. CTSpace didn’t rebrand its merged product portfolio and continues to manage two product sets (the current CTSpace website, for example, still gives contact details for BuildOnline and Citadon CW product support – a new website is promised for January 2008, by the way) and many of Sword’s previous acquisiti
ons were quickly renamed and rebranded. So, I wouldn’t be surprised if the CTSpace name disappeared. (Update (28 December 2007): I have just seen a French website report on the acquisition that suggests – if my translation is correct – that the new Sword SaaS business will be called Sword Soft.)

Permanent link to this article: http://extranetevolution.com/2007/12/ctspace-put-to/

Dec 20 2007

Web conferencing, ICT and paper savings?

Earlier this week, I wrote about web conferencing and its potential contribution to reducing carbon footprints by eliminating some travel. In a comment, Cece Salomon-Lee of ON24 noted that such online sessions also reduce the need to print out copies of presentations, etc (assuming, of course, that participants don’t later download the presentations and print them out locally).

Paper savings are something that I have written about at some length over the past few years – it was (and to some extent still is) one of the major benefits claimed by vendors for construction collaboration technologies. But only recently have I begun to think about my own use of paper at meetings.

For example, I recently represented the collaboration vendors group, the NCCTP, at two meetings of the Council of Constructing Excellence (Sanjeev Shah, MD of Business Collaborator will be taking over in 2008). Reviewing the papers sent with the agenda, I realised that I would have to print out dozens of sheets if I wanted to refer to hard copies, most of which would be discarded after the meeting. I quickly decided instead to review the documents on-screen and to then take my laptop to the meeting, using mark-up to make notes. This works fine for me, but does result in one or two quizzical looks from other delegates.

I think this is because opening a laptop in a meeting can make it appear that one may not be paying attention to the discussions. Of course, if the laptop is linked to the web or a network, there would be a danger that one could be diverted by incoming emails or messages, but with a bit of self-discipline and by only opening the applications needed to view meeting documents, it is easy to focus. Nonetheless, it does help put other people’s minds at rest if you explain that you are simply opening the agenda and other papers on-screen; in time, perhaps this behaviour will become more standard practice.

Permanent link to this article: http://extranetevolution.com/2007/12/web-conferenc-1/

Dec 20 2007

At first I was afraid, I was petrified …

 

I have just read Mel Starr ‘s blog and followed the link to Rob Annable’s no2self blog to see the full lyrics for …

THE ARCHITECT SONG

(to the tune of I Will Survive)

At first I was afraid, I was petrified
thinking I could not design what you had specified
But then I spent too many years redrawing what you just built wrong
and I grew strong
and I learned how to get along
And now you’re back
With more floor space
I just walked in to find you here
with that QS look upon your face
I should have changed that stupid plan
I should have made you pay that fee
If I had known for just one second
you’d be back to bother me
Oh go now go,
delete that door
move the wall around now
you don’t wanna pay for it anymore
Were you the one who tried to break me with your RFIs
you think I’d crumble you think I’d lay down and die?
Oh no not I
I will survive….

Permanent link to this article: http://extranetevolution.com/2007/12/at-first-i-was/

Dec 18 2007

Broken Buildings, Busted Budgets

I wrote earlier this week about online meetings, of which one kind is the webinar. Thanks to Sergio Aranda of e-Builder for sending me a link to a recording of an e-Builder webinar featuring Barry LePatner, a US lawyer and author of Broken Buildings, Busted Budgets. LePatner shares his experiences and insights into what is wrong with North America’s construction industry.

It is an hour-long webinar, but it is packed with information, particularly for readers unfamiliar with the US market. For those short on time, LePatner shows the US AEC sector shares many characteristics with that in the UK:

  • a large number of SMEs
  • a low-bid mentality and associated low profitability
  • low AEC industry productivity (“half of labor costs are wasted due to contractor inefficiencies”)
  • construction industry IT spending lowest of all sectors
  • construction cost overruns plague the industry
  • global pressures on construction resources and costs
  • construction processes largely unchanged since the early 20th century, where each building is treated as a ‘one-off’ product
  • “High levels of asymmetric information” – very few owners know what it costs to design and build a project, and are often left in the dark by their project team as to the likely outcome
  • poor standard contracts (see Contract conflict post)
  • potential for building informaton modelling (BIM) to help overcome some issues

Update (25 January 2007): Daniel Castro sent me another link to a Barry LePatner event, with the Information Technology & Innovation Foundation in Washington, DC. See “How IT Can Help Fix America’s Ailing Construction Industry.”

 

Permanent link to this article: http://extranetevolution.com/2007/12/broken-building/

Dec 18 2007

Asite directors invest

A Stock Exchange announcement says Asite CEO Tony Ryan, COO Nathan Doughty and non-executive director (and former CEO) Gordon Ashworth have increased their stakes in the UK construction collaboration technology vendor.

Ryan bought 186,577 shares at an average price of 2.38 pence apiece, lifting his stake in the company to 442,156 shares (c 0.43%). Doughty acquired 73,108 shares at an average price of 4.75 pence each, taking his shareholding to 446,162 shares (also c 0.43%), while Ashworth’s purchase of 250,555 shares at 2.87 pence each takes his holding to 285,555 shares (c 0.28%).

The trades resulted in Asite shares climbing from under 2p to 3.625p, their highest value since June 2006 – when they briefly reached 4p following Doughty’s initial £10k investment in the firm. However, at 0940am this morning they were drifting back down, 3.125p (Update (1655pm GMT): Asite shares closed at 2.75p).

Related posts: Nathan ups his Asite stake (18 January 2007); Now Tony invests in Asite (15 January 2007); Nathan invests in Asite (05 June 2006)

Permanent link to this article: http://extranetevolution.com/2007/12/asite-directors-2/

Dec 17 2007

Web conferencing and sustainability

Two-and-a-half years ago, when I was putting the finishing touches to the final chapter of my book manuscript, I sketched out ideas of how web-based conferencing solutions might be used to replace some face-to-face meetings in construction projects. At the time, I focused on the convenience aspect of such ‘net meetings’ and their value alongside construction collaboration applications, rather than how they might help reduce a project team’s carbon footprint.

In the past three months, I have used various tools to participate in meetings and seminars delivered over the web, including Glance, Live Meeting and WebEx. I mentioned this to Building magazine journalist and blogger Phil Clark when I met him recently and he suggested I write about the sustainability dimension as part of a review article for the recently launched Building Sustainability website. The article Virtual conferences analysed was published last week.

Phil also kindly forwarded a news release discussing research conducted for another conferencing vendor, Netviewer. Based on responses from 332 enterprise IT managers, the research found time and cost savings were regarded as the major benefits, with the ability to reduce travel requirements thereby cutting carbon emissions largely overlooked. Gary Taylor, managing director of sustainworld.com, is quoted:

“… over just the last three months we have saved a huge amount of otherwise unproductive travel time. In addition to that direct benefit, Netviewer helps us ‘walk the talk’ from an environmental point of view – we advise on sustainable construction and being able to minimise our own carbon footprint in such a cost effective way is a strong plus. Web conferencing and remote meetings are a simple way in which most businesses can improve their environmental performance.”

Permanent link to this article: http://extranetevolution.com/2007/12/web-conferencin/

Dec 14 2007

Hawthorn Glen v Aconex – latest

Just two days ago, in the context of collaboration vendor Aconex‘s 2007 financial results (post updated today to include some additional information from Aconex), I said there had been some court activity in mid-November relating to the Hawthorn Glen Pty Ltd v. Aconex Pty Ltd shares dispute. I now know that these hearings, on 15 and 16 November, related to an ultimately unsuccessful Aconex attempt to re-open proceedings in order to introduce fresh evidence to support their case.

An order published on the Federal Court of Australia website, and a judgment (published by the Australasian Legal Information Institute – warning: it contains a lot of dry, convoluted legal discussion, but there are some interesting snippets relating to the key people and issues in the case) were published earlier today. Justice Goldberg dismissed the motion (on behalf of defendants Aconex, Robert Phillpot and Leigh Jasper) and awarded costs against Aconex.

Given that this order and judgment was delivered almost a month after a two-day hearing, this may indicate that the final judgment on the full court case may still be some weeks or even months away.

Permanent link to this article: http://extranetevolution.com/2007/12/hawthorn-glen-v/

Dec 13 2007

Collaboration: standards, viewing, plus industry education

Lachmi Khemlani, founder and editor of AECbytes, recently attended an AIA conference in the US, and her latest AECbytes newsletter describes some interesting sessions, including ones on business processes, automated code checking, digital project workflows and cooperative design. To give you a flavour, I’ve picked out a couple of items.

Business processes

The business process session featured presentations from 700-strong Cannon Design and US retailer Crate & Barrel.

Cannon Design made a concerted effort to move all its data to a web-based document management system, looking at both self-hosted solutions (Primavera and Meridian) and ASP (ie: SaaS) solutions (Constructware and eBuilder) before selecting Primavera. I was interested in the “critical problem” identified by Cannon’s Gustavo Lima:

Imagine an architect and a contractor working on a project. Both would like to use their own project management solution for collaboration on the project, so that they can also look at this data when mining information across all their projects. If they agree to use one solution, say the architect’s, the contractor would then have to re-enter all the project data in their system as well, so that they have a record of it. What is needed is for project management data to be easily shared across systems, but no such interoperability is even on the horizon yet. In that respect, project management lags far behind BIM (building information modeling), which at least has the IFC and the start of the National BIM Standards.

(From my perspective, the interoperability that Lima/Lachmi wants is on the horizon – at least as far as the UK vendors’ group, the NCCTP, is concerned. The long-term ambition for its data-exchange standard is the ability to share information across systems, as well as managing more short-term bale-out/bale-in import/export scenarios.)

Crate & Barrel mandated use of Adobe Acrobat for all its deliverables as well as reviews in the last seven years. The implementation resulted in a 70% reduction in shipping costs, decrease in clerical work, and dramatic reduction in review cycles. This presentation also highlighted the double-entry quandary, and added another issue: the non-intuitive nature of electronic markups, given the industry’s reliance on marking up hard copies of drawings. Crate & Barrel’s John Moebes acknowledged that this was a problem, and suggested large or dual monitors to make electronic markups easier. Lachmi adds:

“The ideal, of course, would be to not have to mark up drawings at all, which is possible with BIM, but only when we have the ability to convert BIM models to formats such as PDF and tag RFIs to the objects in the model. Unfortunately, we’re not quite there yet.”

Dilemmas of cooperation

Lachmi’s analysis of a discussion about collaboration and BIM rightly focused on some people and process issues, rather than technology:

“there are still some additional technological challenges to collaboration such as large file sizes, secure access to the model, an effective way for multiple team members to work on the same model, better interoperability between different tools, better integration of the modeling process with other workflows such as project management, and so on. But all of these are far from insurmountable and should eventually be resolved. What we really need to work on is better education on collaboration, which is missing in most schools teaching architecture, engineering, and construction. Integrated design and construction courses are rarely taught, and this is a huge challenge. If collaborative practice is the envisioned future of the AEC industry, that future is not going to be realized unless collaborative and integrated design become an integral part of AEC education.

To illustrate the challenges, the conference included a case study where the owner wanted an integrated project delivery approach (see my recent post: Integrated Project Delivery – US guide). The scenario included:

  • design and construction fees based on an open book reimbursement verified by an independent auditor
  • additional compensation for the team based on the building’s energy performance measured after 2 years
  • project based on an aggregated BIM model jointly shared and owned by all the participants
  • owner would not pay for any change orders related to coordination (BIM was expected to eliminate all coordination issues)
  • single insurance policy for the project
  • dispute resolution would be handled by a single Board comprised of one representative each from the owner, architect, and general contractor.

It seems that this was too radical an approach for many session participants. Most felt the financial benefits were not very compelling (“firms are looking for profits upfront and the idea of delayed compensation does not work well for them, especially when it is tied to the performance of the building”). The change order clause raised issues about who’s in control and who owns the IP (intellectual property) related to the project. Owner representatives liked the integrated project delivery idea as the building performance basis should guarantee a better building for them. But other attendees, most of them architects, were resistant, showing that

“we still have to find good business models for cooperation and integrated practice. The technological solutions are available—what we need is to come up with agreements that are not only fair to all the players, but are also highly incentivizing to them.”

Permanent link to this article: http://extranetevolution.com/2007/12/collaboration-s/

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