CC Jul-Aug 2021

INDUSTRY focus
Cloud control
David Chadwick talks to Kenny Ingram, Vice President of IFS, about the way companies are
adapting to the difficulties and opportunities of a very challenging year
Irecently sat down for a long
conversation on Teams with IFS's
Kenny Ingram, where we discussed
the numerous and ever more urgent
challenges facing the world and the
construction industry in particular. Brexit
was somewhat down the list and even
the pandemic had to take second billing
as we delayed focusing on the primary
purpose of our talk and jumped straight
into the crisis in the housebuilding
market, with house prices rising beyond
the reach of the young and affordable
homes becoming a sad myth.
I suggested that prefabricated or
modular construction methods would
bring the cost of construction down, but
Kenny countered, saying that the
principal cost lay in the land, which is
purely a speculative item for landowners
who buy land at low interest rates and
use it as an asset. They either hang on
to it, sell off a chunk, or develop a bit
here and there for commercial or
residential projects.
"If they want to develop the land,"
Kenny said, "they provide the working
capital and don't get paid back until the
job is done - and they catch a bit of a
cold if the market crashes but make
handsome profits as its value rises."
Cash management and planning are
therefore critical, as are project cost
management.
Building Contractors, on the other
hand, usually have a single client and
don't speculate on land acquisition and
development. Most of them are using
traditional construction methods, but
some are using modular and off-site
techniques, where they bring factorybuilt
components on-site and bolt them
together. As such, they are primarily
concerned with project costs - materials,
labour, plant, subcontractors and other
professional services, both committed
and projected - and their job is to keep
on top of all of this and handle forecasts
and variations, and provide complete
visibility in how the project is
developing. All of this comprises the
basic elements required of a decent
construction-centric ERP system.
Before we doubled down on this we
ranged further, discussing issues
surrounding infrastructure development,
sustainability, material and skill
shortages (both of which have been
blamed on Brexit and the pandemic,
although the latter has been endemic in
the industry for quite some time) and
the numerous technical innovations that
will change the way we work
significantly over the next two decades,
and which are encouraging the
evolution of some forward-thinking
companies in the industry.
ACHIEVING CONTROL
It was time to come down to earth
though. As fascinating as it is to
extrapolate futures, I was more
concerned with the solutions that IFS
provided for their clients that enable
them to handle the immediate
challenges within the industry.
Kenny explained that the absolute
starting point for this is helping them
achieve control of their current
operations. At one level that means
putting a system in place that can
handle all of the changes and issues
that affect every project - delivery
shortfalls, the lack of qualified labour,
quality issues, engineering and design
changes, and so on. But it also needs to
tackle the bigger problems caused
when you try to assimilate the working
practices of numerous subcontractors,
integrated companies and assorted
suppliers who are all used to working on
different applications and are often
determined to hang on to outdated
paper while generating hundreds of
individual Excel spreadsheets.
To illustrate this point, Kenny described
an organisation in the Middle East that
had 12 different business units, 75,000
different spreadsheets and were using
over 30 different business systems. In
brief, as useful as Excel is, the data is
not going anywhere, it can't handle
variations and can't be used as a
contract management system.
The only way forward was to simplify
and have a digital ERP backbone that is
integrated with best-of-breed solutions
such as BIM. This approach provides a
master asset data source which will
allow the realisation of an integrated
digital twin. With this is place everyone
involved in a project is able to access
and utilise a common set of accurate,
timely information.
How do you do that? Kenny described
the three key steps that need to be
taken by every company. The first step is
to be emphasised once more. Take
control, don't run before you can walk.
Ensure that your work processes are up
to scratch and able to provide an
accurate overview of a company's day
to day status.
The second step is to take advantage
of new technology. That includes BIM
and Robotics, and both virtual and
smart construction technologies - but
without step one, control, you won't be
able to exploit them effectively.
Step three is to widen or change your
methods of construction. Dispense with
old working practices and inefficiencies,
move some of the construction off-site
and increase the use of prefabricated
components - or change the way you
handle work packages.
Kenny compares the latter to the
manufacturing industry. In a factory,
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July/August 2021