Q: Steve, how did you become a research expert in construction for Dodge Data & Analytics?

A: I have 20 years of experience in architecture and engineering, beginning as a principal with a firm in the Northeast that became the main part of Stantec in the US. I earned my MBA at Wharton, where I studied how to analyse companies, beginning with the architectural industry, where I was working during that time. From there, Primavera tapped me to join them as they moved their scheduling and project management technologies into the emerging Internet space.

Through that experience, I quickly became part of the global construction industry because nobody, anywhere, was doing any major project without Primavera. Later, 21 years ago, McGraw Hill Construction tapped me to start a research group for this, the biggest industry on Earth.

Q: For Dodge Data & Analytics – what does your day-to-day look like?

A: At Dodge Data & Analytics, we conduct research studies of the global construction industry for companies that want to understand where construction is or where specific industry participants are regarding various trends, whether they be sustainability, project delivery, risk management, safety management, or the use of every kind of technology under the sun. We look at what people are doing and where it’s making a difference. What we do all day is this research funded by people who want that research.

We publish these as free cobranded studies because we want the world to know these resources aren’t our ideas—these are their peers. Occasionally, we’ll do strictly confidential things for a company’s marketing intelligence, but most of what we do is intended to be shared with the world.

Q: Through these studies, what are the major trends you’re seeing around adopting new technologies in the construction industry, and how are these expected to evolve?

A: This is 10% technology and 90% sociology. There are too many point solutions on the market, and they have created silos of excellence. Meaning, “I’m doing my job better than I ever did.” But when you ask, “Can you exchange data?” The answer is “no.” There are still large internal process flow breakdowns, and the bigger the company, the worse the breakdown.

There is a move toward pre-integrated solutions we all know as platforms. But the platform itself has become a vastly overused phrase. Many are just point solutions with API. Solutions organised as platforms are painfully gaining traction by displacing beloved embedded point solutions, which dial down the functionality in one silo to be efficient across the organisation. In this way, it’s not running in one silo but provides the ability to collect consistent data across multiple silos to do something like predictive analytics, which it cannot do today.

To correct course on this, senior management must realise they haven’t completely checked the digital box. They automated it, but they don’t want to make any new changes. Realising they need to stay on the digital journey helps the whole industry and the entire project team perform better rather than staying down in the siloed world.

Q: How do you assess the economic impact of emerging construction technologies on traditional business models within the industry?

A: We do a study every year for the Lean Construction Institute. When we routinely ask people about performance, two-thirds of projects are over the planned schedule, and almost half are over budget. This is almost accepted because “that’s the construction industry,” which is a fragmented industry.

You hear things like, “It’s going to take another month, and it’s going to cost you another $10,000.” No industry does that except construction. Imagine if construction ran like every other big industry does with reliability and no uncertainty. You know when it will be done on the 18th of May. It’s done on the 18th of May and will cost $18 million. It’s finished on time for $18 million.

We need this kind of reliability, and because we need buildings and infrastructure, we need these standards. It must be good, but it must be done reliably. Part of the problem is the entrenched certainty of the business model. In this design-bid-build business model, there’s still this pervasive thinking that, well, I have to bid it out there and get the lowest bid.

You’ve got organisations like the Design-Build Institute of America that have been advocating for decades to do things differently. You’ve got the DLC and others trying to promote these integrated forms of delivery that have transparent collaborative approaches.

What will have an economic impact is when we as an industry can reliably deliver on budget and time while doing it safely and with less waste generated than we have been. Because, as I said before, it’s the biggest industry on the planet.

So, imagine spending those trillions of dollars more efficiently. You could probably reduce 20% of the overall spending and reduce the time it takes to do things enormously. That would have a big economic impact.

Q: Much of that’s preconstruction, right? Where does software technology come in to help?

A: Preconstruction is the least appreciated and the most prominent place where risk can be reduced. Indisputably. Many contractors overlook preconstruction as an overhead cost and do as little as possible.

Unfortunately, there’s no data out there. That’s going to be a theme. People don’t spend enough time trying to figure out what went wrong. They’re on to the next job. It’s nobody’s job to analyse and do quality control over the process in many companies.

Most companies aren’t capturing data in a standardised way they can use when getting ready to bid on the next job. If they did, they could examine 16 different jobs and be smarter about how to plan. How do I do work breakdown structures for it? How do I work packaging for it? How much of this stuff is prefab versus how much will I do on-site? Companies should be able to consider these things if they have good historical data.

Q: Can you discuss the role of forecasting and predictive analytics in construction technology? How are tools helping owners and managers make better decisions?

A: That’s the goal. Unfortunately, it’s still more of an aspiration than a reality. The tools are getting there with AI, where an AI engine is ready to help you be smarter about your next job.

To predict where you’re likely to encounter issues, you need a large data set in a machine-readable format, and nobody’s been keeping those. How can you do that painlessly without asking people to start doing extra work?

There are interesting tools out there, like Versatile. They have a camera and sensor that hangs on the tower crane and watches everything that happens on that job site all day long for hundreds of job sites. They can tell you things like, if XYZ doesn’t happen by 9:00 o’clock that morning, you will have unplanned overtime 90% guaranteed. Because they’re collecting that data set right now, eventually, every company will have enough standardised digital data about their own projects.

AI can optimise processes for you based on big data sets. But how do you get those data sets?

Q: How do digital workflows contribute to financial transparency in construction projects? What specific technologies are making the biggest difference?

A: I would say that’s still more aspirational. Everybody sees it as possible, but the business model needs to evolve. The model absolutely does not foster transparency.

But I think, ultimately, the combination of lean practises and some of these new forms of integrated delivery that are beginning to emerge and become more available all the time will create an environment in which you can have an enormous amount of financial transparency. However, you can’t just go into a design-bid-build environment, and simply ask for financial transparency because it’s antithetical to everything about that model.

Q: What new technologies are emerging to help construction project owners better manage risks?

A: There isn’t so much a tool as there is more of a mindset because risk management used to be our, ‘here’s the insurance we’re going to get.’ And then they’re just going to push hard at the job site because they don’t realise preconstruction is where you can do the most impactful risk management. These owner-based platforms are now Project Management Information Systems.

Using these systems, they’re now getting consistent, accurate, timely, and complete data where they weren’t before, and that is a huge way to control and manage risk and be more predictive about future projects in terms of a reasonable timeline and cost.

These two things are coming together: better data capture and a bigger focus on what you can do before breaking ground. That’s probably the combination that will have the biggest impact on risk management.

Q: From an economic standpoint, what are the cost-benefit considerations construction companies should consider when integrating new technologies?

A: Where I start here is most people focus on cost reduction, not cost avoidance. Most of the benefit of these tools is avoiding the little administrative tasks that cost a lot of money. This means it’s not just because you can take two administrative FTEs off the payroll but rather, you won’t have 30% of your budget for unplanned rework.

The problem is that until we research them, most people don’t realise they’re spending 30% on unplanned rework because they’re just not taking the time to capture the ugly stuff that happens at their jobs. The job is finished, and you’re out. But how do you get across understanding the impact of cost avoidance if you don’t know what all those ugly costs are?

And so, it’s a matter of determining what good looks like for your company. First, you must understand where you’re failing and where it is you’re bleeding. Then, you must decide how much better you can realistically make that by applying some technology and how to achieve it within a reasonable time. Because buying a piece of software is only the first step. You must implement it. You probably must change some workflows. You probably must change some other things and how you do stuff to get its value right. But each company needs to understand what good looks like for them, right?

Q: How is integrating AI and automation transforming economic practises in construction?

A: I see an increased amount of offsite construction, prefabrication, and modularisation here. Because we have fewer skilled resources who can show up and work on a job site, we’ll see a continual move away from construction into assembly. Job sites will start to look like assembly plants. They’re getting large assemblies and components from other places, and that lends itself very well to automation.

Q: As digital workflows become more common, what are the economic implications of data security and privacy concerns in construction?

A: We did an interesting study for a company called Ignite last year, and many GCs have been hit with ransomware attacks. A startling number considering a contractor can’t survive a week without access to their documents. When we asked how many are putting requirements on your software vendors that they are compliant with, the study came back that they are asking for more protection and resilient software from their vendors. Keeping in mind unfortunately, user behaviours are still the biggest weakness.

So, it’s a huge risk. But not many people are taking advantage of the things they can do, at least preventatively and those cyber insurance policies are out there and available.

Q: What are your projections about the construction industry over the next decade with technology?

A: I don’t like leading with technology because technology is just a tool, an enabler, and this is a people business. At the end of the day all we can do is enable processes more effectively and efficiently with technology. But I think if you could look back 10 years from now and you wanted one word that described that 10-year period, it’s industrialisation.

Every other capital-intensive manufacturing industry has gone through this. They went from designing products on paper to designing digital models.

The industrialisation that has swept through every other capital-intensive industry is poised now because we finally have enough people doing digital design to push that into a much more industrialised form called Design for Manufacture and Assembly (DFMA).

You can go online right now and make your own BMW and have it show up in a month. That’s where we’re heading, and I think owners will do much more design of their own buildings because AI will help them determine that. Basic components of buildings that get made in factories and simply ordered. It’ll be like taking the idaea of building products and just wrapping that all up into chunks of buildings. Or buy a core.

We’re doing some work with a big construction company now. They have an entire process they want us to study and help promote. They go to a site, put up two great, big, strong structural spines, and they build a floor at ground level. Then they just lift it up and click it into place, and they build.

Barton Mallow did it in Detroit, and they want to socialise it everywhere. This industrialisation will be the biggest thing in the next 10 years. It’s going to change everybody’s business model.

Some people are going to be winners, and some people will be losers, but major projects in the industry will not look the same 10 years from now. For a guy doing 2 houses a month in the suburbs’ life will be about the same, but the big stuff will be highly industrialised.

That’s just one example of industrialisation. We’re doing a study right now for the Department of Energy about the trade-off between on-site construction and modular construction, where the labour dollars are being spent, and all the attendant aspects of that, right, how much safer it is, how much less waste there is, all those kinds of things.
The Department of Energy has the leverage to say this is why we’re investing here. Yes, we’re taking jobs off your job site. But it’s for a good reason. The jobs are happening here, and the entire system works better.

Another tech consideration is a study on owners specifying the PMS that their GCs use. Half of the 100M companies in the study said they’re putting digital requirements into their contracts with the GC and then cascading down to their trades. And when we asked how often you require them to use your PMS system if you own one, the answer was about 1/4 of them. This has increased rapidly over the past 15 years and will impact projects going forward.

Q: What economic benefits do sustainable and green technologies bring to construction projects? How do they alter risk profiles?

A: We do a big study in 63 countries every three years. World Green building trends: We can prove yearly that green buildings are more valuable for developers to resell.

Almost everybody agrees that it’s the right thing to do, and we’ve watched this evolve over the years from just being all about energy savings to now being about the health of the occupants and resilience to climate change.

The risk profile is really for the planet now, not so much for the project. But yes, I think the degree to which owners and their own organisations all have environmentally sustainable goals in place now is rippling out into their building programmes. They’re beginning to ask harder questions and demand more sustainable performance from their built assets than they ever did before.

If you don’t have a good storey about your company and your ability to support sustainable goals and design construction, you won’t get the work.

THESIS Statement: “Help move the industry to be less costly, safer, more reliable, highly industrialised, and wasteless.”

Q: Where can readers find your free studies?

A: They are on www.construction.com available for download and use. Why do the companies that hire us want us to share? So everybody can get better at these things.

Q: Hi Mark, tell us about yourself and how you became a Director of Sales at SIS UK in the construction solution industry.

A: I’ve worked in sales for 25 years. I started in FMCG and commercial sales for several years before moving into sales manager roles selling construction products in 2007 including lighting, HVAC, and fixings products. In doing this, I met contractors on five building sites daily for site surveys, which gave me an understanding of construction processes. More importantly, this work educated me about the pain’s contractors face. In 2015, I moved into construction ERP software to help solve those on-site and back-office inefficiencies. Here, I was uniquely able to translate what I’ve learnt and solve problems with modern software.

I joined SIS to expand Dynamics 365 and SIS Construct 365, to the UK and Europe. It is based on time spent at my previous employer, 4PS, utilising my expertise and understanding of construction processes, along with my Microsoft experience and knowledge. I also joined SIS because there is a unique opportunity for construction ERP solutions like SIS Construct 365 in Tier 1 businesses with the Microsoft Dynamics 365 platform. Options are limited today for companies of that size in the UK, with no other Microsoft options. Here I can leverage my combined expertise in this market, understanding, and promoting increased visibility, thus higher profits, and efficiency for the industry I have so long enjoyed and had so much success serving.

Q: When you say visibility in construction, what is your meaning, and why is it important?

A: Visibility can have various meanings in construction, such as a Project Manager having visibility on a site or a CFO having the information and data to make critical strategic decisions at the right time. Here are examples of visibility in construction:

• Information is shared across and between multiple departments such as H&S, Preconstruction, Contracts, and Finance.
• Site visibility in the literal sense of being able to see which employees such as subcontractors are on site, and what are the site conditions.
• Project programme and progress visibility.
• Resource visibility and availability.
• Material visibility could mean not ordering more items or plant and equipment if you have data on what is available at other sites, warehouses, and yards.

Overall, construction struggles the most with financial visibility at both a project level and at head office level.

Q: What does visibility mean to senior leaders?

A: From my meetings with construction business leaders over the years, most say they want to improve visibility and control but struggle to achieve them. With better visibility, they then have more control. That could be control over the project programme, project budgets, and ultimately, project and company profitability.

Q: Why is it important to improve visibility?

A: It has never been so important as this moment in this UK construction market, where many contractors are having financial difficulties. In a presentation I saw recently at a summit for construction leaders – it said that 18% of all businesses in the UK that had become insolvent in 2023 were from the construction sector. Almost one-fifth from construction. That is not sustainable, and that is why visibility is so important. That is not just small businesses either. Three high-profile cases of companies with more than £400m in turnover were affected. This is when banks and credit insurers are nervous about the industry, which means contractors must improve finances and give confidence back around the sector.

Q: Why is complete visibility so challenging to achieve?

A: Fast-paced projects make it difficult to track costs and spending, especially when unplanned. Rising material and labour costs affect this, including dispersed stakeholders on various sites and offices.

This is because construction has historically been poor at adopting digital methods; therefore, little data is collected. Most information was collected in paper records or spreadsheets, which is then difficult to compare or benefit from, especially as it’s predicted that 90% of spreadsheets have errors.

From a software perspective, disparate systems need to integrate so data does not become lost and siloed between departments.

Q: What benefits can businesses realise from better visibility?

A: Here is a comprehensive list of benefits businesses can realise:

• Better Collaboration – information such as spend, or accrued costs can be shared between departments to avoid errors or miscommunication.
• Better Predictability – having complete visibility of costs means the financial outcome of a project is more predictable earlier in the programme.
• Efficient Workflows – improved flow of data and approvals will lead to better efficiency and less errors, which could be costly.
• Ability to Pivot and Make Changes Quickly – with better visibility of costs, if there is an overspend in one area that is spotted sooner, a commercial manager can take decisive action to realign and maintain budgeted spend and margin.
• Real-time Information – More often than not, if data exists in construction, it becomes delayed, meaning decisions are based on information that may not be valid or correct.
• Improved Communication – Both internally and with clients and the supply chain – If information is visible and shared quickly between stakeholders, relationships can be improved, which usually reduces delays that occur during disputes.
• Remove Silos Between Departments – Very often, information is contained within a department, and work needs to be duplicated. For example, a user can spend hours estimating the stage, which repeats when a contract is won. Continuous data flow saves re-calculations.
• Avoid Costly Delays – Work on site can halt when disputes occur between the main contractor and subcontractors. Variation orders can often cause this due to confusion over agreeing to additional If variation orders are tracked and communicated effectively, disputes can be reduced.
• Single Source of Truth– Contractor departments often work from various documents or systems, so it isn’t easy to see which information is correct. Integrating this information into simple but effective BI visualisations means decisions are made based on the proper data.
• Avoid Project Overrun and Over Budget – The last reported figure in Arcadia’s global construction dispute report was almost £30m in average dispute value, and the average project overrun was nearly 12 months. That is low compared to other parts of the world.
• Reduce Waste to Improve Environmental Credentials – Avoid overordering of materials, which, in addition to extra costs, usually go to waste rather than being used on other sites.
• See trends and improve predictability – by trade, by subcontractor history, to judge the performance of subcontractors, or to see payment history to decide whether it is worth pursuing a project with a particular client. Further than that, see a complete history of projects you have bid and tendered for so you can see trends and the percentage chance of winning a project based on suitability of work, vertical market success, location, etc.

Q: What advantages would this give to contractors over their competitors?

A: Improved efficiency allows a contractor to be more competitive whilst still achieving higher margins.

Better predictability means they can give confidence to potential clients, as historical data from earlier projects can prove their capabilities and strengths when bidding on new work.

Greater visibility allows colleagues to make the right decisions quickly, which reduces stress and could help them attract and, more importantly, keep staff. The labour shortage is high in the UK construction market, so the ability to keep good people in the business provides stability and a distinct advantage over competitors to retain clients for future projects.

Q: What are the consequences of not improving visibility?

A: There are many potential consequences with varying degrees of severity: financial losses, H&S accidents, and client dissatisfaction, but the reality could be even worse. Mark Farmer published a groundbreaking UK construction review in 2015. The book is titled Modernise or Die. That is the sad truth of the matter.

Several companies are experiencing financial difficulty, and many companies of all sizes have folded in recent years. Larger companies are harnessing the power of data to varying levels. Still, the companies further down the supply chain are suffering the most and aren’t investing in technology as much as they could or should.

If we compare construction to other industries, many cases of traditionally strong businesses have disappeared because they allowed tech-driven new players to overtake them. This has affected many high-street retailers in the UK, which have fallen to online shopping giants. Those traditional retailers already had the customer base – they just needed to modernise to appeal to the modern buyer to keep that customer base, but didn’t, and died.

Then, look at companies like Nokia and, later, Blackberry. They had the mobile phone hardware market sewn up, but from nowhere, the likes of Apple and Samsung produced smartphones, and almost overnight, the others lost the market.

That will continue to happen in construction for those who do not modernise.

Q: How can Tier 1 construction businesses improve visibility?

A: If we refer to the examples of construction visibility above, these solutions below can help.

• Physical visibility can be improved using remote, live site camera providers like Evercam.
• Detailed information on resource competencies can improve resource visibility. Ensure the correctly qualified and competent individuals, teams, or subcontractors are mobilised on the right project. This is based on their experience and qualifications and can be specific to a particular type of project. This will lead to improved on-site efficiency, better work quality, and improved client satisfaction. Holding that accurate data centrally helps enormously.
• Material and equipment visibility can be improved by having accurate purchase history and inventory records visible to all. Often, procurement is done centrally through buyers who do not have visibility of what has already been ordered or delivered to the site. With real-time data recorded on-site that remote buyers can see, it ensures no duplication of orders and costs.
• Improvements in financial visibility require better and deeper data. More historical data gives multiple reference points and leads to improved decisions based on something other than guesswork or isolated information.
• Data collection happens via various software tools. Do they all talk? An integrated software solution on a modern platform can bring all that together. Our Microsoft Dynamics 365 with SIS Construct 365 solution allows Tier 1 contractors to do just that and fully end-to-end in the Cloud to improve security and integrations with other third-party software tools. At SIS, we want our clients to have the best overall solution and keep using the tools in the field they are happy with, but by bringing the data from that into the core finance system and keeping everyone at the regional or head office up to date with real-time data.

Q: What does visibility look like in the future of construction?

A: In fact, the future is now if you work with the right partners using AI—automated risk assessments, accurate project progress reports, AI-powered tenders based on historical data, and successful bids are available. In these examples, AI improves H&S by spotting potential risks early, provides instant progress reports for clients, and can win you more work with far fewer person-hours manually compiling bids and tenders.

Automation will mean using digital tools that provide data at all process stages. For example, robotic brick layers have been trialled.

Modern Methods of Construction (MMC) allows for visibility into progress at various project stages. For example, when a unit/object is completed at the manufactured stage, it is easier to quantify and see the progress of the installation on site.

THESIS Statement: “The future is now, and you get there by trusting partners who are the right fit for your organisation and provide the visibility solutions you need in modern ERP solutions.”

Q: Steven, tell us how you became interested in technology?

A:
I’m a mechanical engineer by degree. In 1981, I was pursuing my engineering degree at Michigan Technological University, where I started working on computers, specifically the IBM 5150 PC – the first personal computer by IBM. I still remember it had a single floppy drive that you had to switch in and out between programmes and the operating system. From that point on I was hooked.

Q: How did you become a partner of SIS?

A:
In the 90’s I had a company focused on infrastructure and hardware, where I met Mark Kershteyn and Ravi Kannan, my current partners here at SIS. Ravi was my customer, and Mark was also working with me at that time as a subcontractor. Early on, I understood that companies purchase hardware to support business systems, and the future of technology was in software solutions, not infrastructure and hardware. Subsequently, SIS was formed to focus on business applications and solving business problems for our customers.

With the shift away from hardware, I had much more interaction with the user community that uses the software and whose daily life is directly impacted of the software solutions. I gained a deep appreciation for the end users who are working with software day to day do their job and the fact that software should be an enabler, not a hinderance. Personally, the most satisfying thing at the end of the day is watching of evolution of how software solutions can improve the daily lives of our customer’s employees.

Q: And this is probably where you learnt that if users aren’t using the solution or part of the solution, the probability of success is lower.

A:
Correct. I’ve encountered situations where business owners or decision-makers attempt to impose change or introduce applications into an organisation without the proper buy-in from the users that will be directly impacted by the software. To get high user adoption of any new software solution, the users must take ownership in the solution and embrace change. The more the users are involved in decisions, configuration and training the more they drive the solution and overall success of a project.

For instance, if we begin at the initial stages of a typical software purchase, there is an initiative to solve a business problem or improve a business process. The common approach is, “Let’s purchase a software application.” IT then searches for the application and presents what they consider the best solutions available. In many cases the purchasing and decision-making process is not driven by the owners of the business processes. And in the worst case, the evaluation and decision-making process is outsourced to an outside company.

Secondarily, during the implementation, key end users should be intimately involved in the project to direct and guide the solution. You want to cultivate and grow the user community during the implementation process so you have developed strong internal champions and knowledgeable users that can support the larger user community after go live.

Q: How important is user adoption to enterprise ROI and future growth?

A:
User adoption is the most significant measure of success and often overlooked as a metric. For instance, at the commencement of an implementation, we typically initiate with a smaller team representing the organisation and its users. The broader user community in many cases is not involved until the go live. The first time many end users are involved is typically right before go live, during end user training. You can tell by their expressions, that they wrestle with how they are going to perform their jobs using this new software. Get the core team started and expand the team as quickly as possible to the end users so they have ownership in the process and solution. End User adoption and satisfaction will increase many times over when employees are asked to be part of the solution and not just presented with this is how it works.

Q: At the start of a new implementation, how does a business process owner ensure they have a voice in the success and are involved?

A:
Love that question. Implementation teams are always looking for enthusiast and willing participants. Get involved with a positive attitude and be willing to roll up your sleeves and get dirty. Implementing new software is not an easy task. Those that are genuinely willing to be part of the solution and not the problem, will be welcomed into any project team. Embrace the change and look for all the areas that a business process can and will be improved. Reinforce the positive impact with the team and others and you are well on your way to being a champion of the solution.

At the start of any new software system implementation, it’s crucial for many affected employees and resources to contribute to defining the requirements. Identify the following drivers for a business process and then you have a clear road map how to get to your end destination. This involves determining:

1. What is our input for a particular process?
2. What is our output and desired results?
3. How do we define success?
4. How do we measure if we have been successful in improving a process?

It is always easier to achieve success if you know what success looks like. A well-defined business process with clear input-output and desired improvements will result in most cases with true business improvements. Since the impact extends to numerous individuals, it’s not solely one person’s responsibility to navigate through the entire process from start to finish. Get others involved and seek input and buy in early in the process across all the players.

Q: What percentage of user adoption is needed for a successful implementation?

A:
The ideal goal would be 100%, but that’s not realistic. There will always be employees that will always resist change, and deciding whether they’re on board or need to step aside is crucial. I will categorise users into the following groups:

• The Embracers: Those actively participating in the implementation due to specific skills or volunteering. (These are your champions and key success factors in any implementation)
• The Plodders: Users completing the necessary tasks without fully embracing the change but understanding its inevitability. (Find ways to move The Plodders to Embracers) Sometimes it is as simple as getting them more involved.
• The Nay Sayers: Individuals resisting the change, potentially sabotaging the implementation, and in extreme cases, requiring removal from the project or even the company. (Identify and develop an action plan quickly as they can wreak havoc quickly)
• The End Users: The larger user community involved typically towards the end of the implementation, often leading to user frustration and low adoption rates. Get End Users involved early on so they may become Embracers and even Evangelists.
• The Evangelists: These are the champions of the change, aiming to work with both the Embracers and the Plodders, bridging the enthusiasm gap and creating a more extensive, trained user community.

Q: What is an easy way to get the End User community involved and excited for change.

A:
Communicate early and often. As discussed earlier, identify where a change in the Organisation and processes will improve how things are done. Communicate those as wins to the Organisation. Create excitement and momentum. Methods include regular presentations, like Friday sessions, and sending out the evangelists into the Organisation to present the “New and Improved” state of the union. Keep that excitement moving by recruiting other end users to the team to help test and train others both short-term and long-term.

Q: What background should the evangelists have, the Friday trainers?

A:
The best trainers are peers who understand the day-to-day business processes and have been involved in the setup and testing of the solution. For example, a field service dispatch person running test cases on dispatching technicians and billing could conduct overview sessions with the Dispatchers in the company. During these sessions they should listen closely to the feedback and look for new recruits to the team. Very few individuals grow up wanting to be an evangelist, but anybody who is passionate and wants to be involved, can be an evangelist or trainer.

Q: Why do companies typically not get end users involved early in the process?

A:
In some cases, time constraints hinder getting the end users involved early, but in other cases it is not always realistic given the fact that an organisation still must conduct day to day business. The ideal scenario involves workstream leads dedicated to implementation, but this isn’t always feasible. Where possible get as many users involved when practical and that helps spread the load across the organisation and reduces the shock factor during go live.

Q: What happens to companies who don’t invest the time into user adoption?

A:
Failed implementations often result from a lack of user adoption. Even if people use the system, the true benefits are not realised. Low user adoption correlates with failure or increased chances of failure. Many companies after go live breathe a sigh of relief and then move on to the next project forgoing the real chance to realise huge gains in business process improvements. The real opportunity starts after go live where you want to impower the user community to make suggestions and take ownership of the new processes and solutions. Those same Friday sessions should naturally transform into mini user group meetings where the team discusses and shares ideas on improvements and better ways to use the system. This collaboration when supported properly can dramatically improve user adoption and ownership to the level where true efficiency gains can be felt across the organisation.

Q: Is user adoption built into the project plan or the implementation plan?

A:
User adoption is integral from day one. Understanding the user’s role in business processes, daily training, and collaboration with workstream leads are ongoing activities to ensure familiarity with the solution early in real-life testing. And as discussed, a few minutes ago, User Adoption does not end with go live, it should continue as a key business objective through at least the first year. As a goal, see if you can embed this continuous improvement process as part of the culture within your employee’s day to day functions.

Q: As we end here, you talk about the storms of change referring to user adoption. What is the storm of change?

A:
The storm of change in software implementation affects every user and process in the organisation. It’s a transformative period, marked by uncertainty and resistance. Anticipating the storm, preparing the organisation, and ensuring awareness and smart strategies are in place is essential for navigating these challenges successfully.

THESIS Statement: “At the end of the day, achieving a successful ROI is about getting users involved in continuous improvement.”

Q: Ajoy, how did you get into construction technology?

A:
My background in technology is managing infrastructure, security and operations teams with a background in Six Sigma process efficiency. I began at Suffolk Construction in 2014 as Director of IT and then Senior Director of Innovation New Technology. Suffolk asked me to look at the technology landscape and build something scalable for the future that would allow Suffolk to build quickly, be dynamic, be elastic, and be able to scale across all job sites.

It was there I got into partnership with Microsoft to essentially host Suffolk’s data centre in the Azure cloud to move away from the operational overhead of maintaining a data centre.

I was then promoted into an Innovation role as Sr. Director of Innovation and New Technology. Since I managed the IT field staff, I was familiar with operations on a jobsite. I always look for what we can do better for improved outcomes. I was able to quickly capture what needed to be improved and in my role at Microsoft I am able to bring those insights to the broader industry.

Q: What is your role at Microsoft?

A:
I’m a Director, Account Technology Strategist. For my clients, I roadmap and strategize what technology to apply, what technology needs implementing, and ways we make that happen based on the client’s requirements. I take part in strategizing and help advise executives through this process. I also co-host an AEC community at Microsoft focused on construction industry and related technology education. I also advise on the use AI and Fabric and ERP in AEC.

Q: Before we go into the use cases and tools, can you explain the different types of AI you’ll be talking about?

A: Yes. There are two elements here. One is the broader AI (including Machine Learning and Deep Learning), and the other is a subset of AI: Generative AI. It’s important to understand the difference between the two. I’m going to start with Generative AI because it’s really the hot topic right now. Generative AI, at a high level, allows you to be more efficient.

A construction use case are documents you need to read and analyse And here are terms and conditions you need to understand as part of the construction document sets. When you have reams of documents you need to go through, the answer is Generative AI. It’s a more efficient way to read those documents and get a summary which makes you more efficient and compliant.

Q: So that’s Generative AI. What do you say about AI proper?

A:
AI has been around for decades. An example of AI use in construction are sensors at a site to detect water leakage or humidity or decibel metres that can alert you. There are tools that look at pictures ad videos and try and tell you if somebody is missing a hard hat on the job or general conditions are at risk. I think over time these tools can get better and be more predictive. And predictability is the key to minimising risk in the field and in the back office.

AI helps reduce those safety issues. This can potentially lead to ensuring higher safety and possibly lowering insurance. Another example of AI is what Boston Dynamics is doing with the robotic dog taking pictures and updating a plan based on what it’s capturing. That’s AI making the process more efficient.

Q: What about AI for ERP? And are we talking about Generative AI or AI proper for these applications?

A:
When I think of ERP and of what’s going on in the world today, the cost of construction, the cost of materials, the cost of labour are all rising. We need to find ways to make it more efficient to get these costs down otherwise the costs to the consumer, whether it be a company or retail or even a home buyer, is skyrocketing. It’s not affordable and it won’t be affordable to even develop.

We must find ways to create efficiencies and bring those costs down. And I think AI will play a huge part in that. I believe you will see a race to build AI models specific to construction and design. Businesses will need to innovate to stay ahead of the cost of construction. This can have huge implications to the supply demand equilibrium and have long term effects on real estate.

Q: Can you give examples of how and AI and ERP can help with this problem?

A:
A simple example is where I can see a supplier of materials on a job collaborating with the general contractor ensuring they understand the project plan and the timing of delivery or possible delays. With AI the general contractor can understand the delay sooner and they can work around the project plan to see what else they could do while potentially waiting for materials. That’s a use case where AI could help.

I think Generative AI and AI tools are out there to help architects in building plans faster and working with the general contractors to implement them on a job site. Currently it takes 9 to 12 months to design a building. I believe AI, specifically Gen AI, can make that process go faster and create more predictable plans today and dae-risk building plans based on historical data.

Q: What about within the process flow of a project life cycle?

A:
If you look at the construction process when we break ground, we have a certain Level of Design. These design documents get more specific as the building process continues and the project plan becomes more specific. During the construction phase there often are external forces like weather, materials, and labour force, which affect a plan. AI can help by aggregating the data and provide a better understanding of that data mathematically by looking at correlations and regressions models to see what is the confidence level of meeting a particular task?

Q: The project phases, starting with bid, what do you see for AI?

A:
When you think about the process of construction and the bid phase, I’m seeing a lot of use cases around creating bids. I like to framework Gen AI into 4 categories: read, write, analyse, and design. Read, write, and analyse are probably the more mature areas right now.

In the bid phase, I’m seeing a lot of companies try to create bids based on bids they’ve used before and were created in Word or as a .PDF document.

Another area I’m seeing is a resource subcategory. Wanting to know how we can pull the right resources from different parts of the country. If you’re building a particular type of building, say a hospital in California, you want resources that have built hospitals in that region. You’re probably do not want to pull somebody from a far off region unless you have to.

The use case is where we are looking for certain types of resources like a supervisor, foreman, project manager, whatever role you may have. You want to be able to look through people’s profiles and build the right team to present to that bid. What is important here is the relevance of the data. You don’t want to necessarily go back to an old bid because some of these people may not be around or are in higher roles in their careers. You want to be more exact, and I’m seeing that as a use case across many general contractors.

Q: What about other phases?

A:
Another use case I’m seeing is where we take data from the contracts and from any terms and conditions or the schedule and turn it into a database to track everything that we need to do. So essentially, can we put that into the project plan.

Q: What about project profitability. How can AI affect project profitability.

A:
That’s a tough one because project profitability is about being efficient. And here you have to use the word quality. Is it being built correctly the first time? When mistakes happen in construction you have to pay the worker for the work, they did regardless of the errors then you determine something has been done in error and then tear down and repeat.

The other side of profitability is if I say a wall needs 10 hours to build. But did it actually take 10 hours to build? Could it have been done faster? I do think there’s AI that can help with this. For example, people have tried using cameras on a job site to see if a task is being done efficiently.

However, there are challenges with these technologies. I think these areas of technology are maturing. I do see AI help with improving these technologies over time.

Q: This makes a Project Manager’s job tough. They have that tear down information immediately to make decisions with their forecast.

A:
Yes, they have to track those as changes in the ERP tool as they happen. And track material loss for having to tear something down and the hours lost. Our solutions today do a good job of that and those areas where AI can help.

An example where AI can help with quality (i.e. building correctly the first time) are tools like a Hololens or an Oculus that let you see what you’re building before you build it. You can have AI give you instructions along the way to reduce the potential of a mistake.

Q: Tell us about the Microsoft AI tools that bring these use cases to life.

A:
At Microsoft, part of my role is to help educate the industry about what Microsoft brings to this industry. A lot of people don’t realise that Microsoft is one of the world’s largest developers and owners of real estate, and we do a lot of construction ourselves. We are essentially an owner that works with general contractors.

On the other side, the question comes up, what is Microsoft doing in AEC? I position it a few ways. One, we have the tools to essentially bring all your digital assets together. We are that “connective tissue”. If you think about this industry, technology adoption is ongoing problem, and we make it worse by introducing more niche solution that are not integrated. Each time we introduce a new solution we need to think about the change management associated with that. On a job site, we have many different technology tools and people on a job site are overwhelmed with learning yet another tool. If we keep adding more tools that people must learn, it comes to a point where its too overwhelming for the people who need to focus on building buildings.

So how do we keep it simple? Back in 2014 I realised that Microsoft has an ecosystem of tools where your data centre can be in Azure. And you can take all your data from your applications and bring it into a Data Lake. You can now use Fabric for all your data processing your data analysis, and Power BI to do your data visualisation.

But to add to that, we have tools like Dynamics and to help bring that extended enterprise together along with Dynamics 365 Field Services and CRM.

And we also have devices like the HoloLens to allow you to help workers visualise what they have to do on a job site on a daily basis. We have tools like Power Apps and Power Platforms apps that tie into ERP. I have found PowerApps as a tool that helps drive adoption by keeping the data entry process easy and fast. For example, a Power App that allows you to track who’s on the job and everything that they’re doing. It would track if they were certified to be on a crane and that the certificate is valid. I think it is critical to build a frictionless cohesive end to end workflows and tools so that people on the job, no matter who it is, need to be easily able to digitally access these tools. And once they are digitally logged in, present them with exactly what they need to do so that they don’t get overwhelmed. This is a proven method that’s led to adoption of tools on a job site in this industry.

Companies have to remember, that when you ask a construction worker to go into an application and present them with 25 fields, when not all of those fields have to be completed, it’s very overwhelming for them. It’s better to build a Power App where they fill out the few fields that they need and let that Power App write that data to the application. That’s one way Power Apps can help.

Q: So how does AI and Generative AI help in this journey?

A:
It becomes all about collaboration between IT resources and business resources. I firmly believe “The business does not know what IT has, and IT does not know what the business wants.” The question becomes how can we help?

In the early 2000’s we used to see people taking data from systems like financial systems and putting it in Access Databases to run the workflows they needed. IT had not idaea that this was going on (what we used to call part of shadow IT). I see a synonymous working style with Power BI where you can still take sets of data and use PowerBI to run reports. However, now IT can have governance, oversight and security on the process. So, business can still take curated sets of data from a Data Lake or Data Warehouse and run dashboards based on the business requirements. Generative AI and CoPilot is going to allow business users who may not know programming languages build the exact report they need without necessarily asking the IT/Data department and be more self-served. They will do this by asking prompts in English. English is the language of AI and the new programming language.

THESIS Statement: The business doesn’t know what IT has to offer, and IT doesn’t know what the business really wants or needs. AI can bridge that gap because the programming language of AI is English.

Q: Charles, who is IRONPROS and IRONMARKETS and what are their key objectives?

A:
IRONPROS is a web presence started by a large business to business trade publisher. We rebranded it to IRONMARKETS in 2023. IRONPROS is designed to support buyers evaluating technology products and I am involved in the technology side. The overall company has several media titles in construction and equipment on the heavy and civil side of construction looking at interoperability and partnering.

Q: How did you become a media representative for construction solutions?

A:
I began in traditional marketing and business strategy and met with many construction companies, debriefing their management teams and discovering underlying issues to define growth. It was early on the agency side when I moved into engineered products and construction equipment and sold civil engineering services for a while.

Once I was on the ERP side with project-based solutions, construction and field services became my main disciplines. From there, I started a catalogue of what is happening in the solution industry to help people understand their real options as they move into a given sector and begin to evaluate solutions.

Q: With your bird’s eye view across the technology market for construction, what trends do you see beyond the “always there” topics like AI, safety, and labour. What else do you see?

A:
What we saw as unique for 2023 and now 2024 is the industry moving towards more of a composable solution. In the past, ERP vendors wanted to sell you all their functionality and you would run everything on their solution. Now APIs, restful APIs, standard integrations, low code, and no code integration platforms, are becoming much more attractive. Entrepreneurial product niches have more leverage than they ever did.

CFOs are admitting that one financial application is not going to have the ideal solution for every part of their business. That is a departure from the past.

We see this happening at a more rapid pace among companies performing projects of any significance with the demands for accountability and measurement, visibility and interoperability. The solutions being used by project partners is really pushing that.

Q: You said people are looking at apps, integrations, and APIs more than ever. Do you feel that makes interoperability decisions easier?

A:
Companies used to feel pressured to standardise across their business on one vendor’s functionality. Someone would implement the finance package and add on supply chain management and maybe a CRM module. And they would build out more predictably within that same vendor family. Now you see more people who will have that ERP but will have other integrated solutions running in the field or different parts of the business that are not ideally supported by that ERP. We are seeing a lot more availability of application programming interfaces.

Now we have entrepreneurial activity that can stand up very advanced functionality and make it available. Microsoft has always been an example of that strategy even before it was cool due to the use of various independent software vendors who could take a broad solution and drive it deeper into a vertical. That is the ability to meet vertical or micro vertical needs.

Q: There is a ‘strange bedfellows’ concept here. Products that were previously competitors are integrating, like here at SIS LLC with Procore through our SIS Construct 365 Connector for Procore releasing at the end of February.

A:
Yes, Procore became successful as the first multi-tenant software as a service construction programme and project management application because of cloud computing and mobile devices. Maybe your ERP vendor does not have everything you need, and you want to extend deeper into business practises.

A specific ERP and Procore may have a little overlap in a Venn diagram, but Procore does not have a general ledger. And you may have a more robust financial team using it who are going to need the right ERP.

Q: AI is all the buzz. How do you see that changing ERP? Are buyers making decisions based on AI potential?

A:
For ERP itself, there have been elements making some use of AI for a long time. Matching invoices to purchase orders for example. I think coming into the project management side, from a predictive analytics side, to identify risk, we are seeing AI come into preconstruction for planning and scheduling to create optimised plans and identify risks in plans.

We are also seeing AI on the on the field technology side as we have more autonomous equipment and a machine vision that can scan a site, or a facility using LIDAR and begin to match that against the plan to see where you have deviations. That is called machine vision.

I do not think AI is something that is going to come into the traditional ERP because it is more about the analytic tools around the ERP. There might be analytics and alerts and guides on the side functionality in some narrow parts of the business, but I think we are going to see a lot more application of AI to lower skilled areas where you can enable a less skilled person as more of an expert in areas where you can run a piece of equipment without an operator. Or you need one person to supervise several and instruct them in a more granular way with ERP. It is something we are hearing about from an enterprise search interface standpoint primarily to help find documents. Like Microsoft Copilot.

Q: From your point of view, what percentage of enterprise construction companies are in the Cloud at this point. And for those who are not, what barriers are keeping them from moving forward?

A:
I would have a hard time putting a percentage on it because we still have a lot of legacy applications out there that are on-premise. Right now, in terms of products that are coming to market, most of them are at least selling on subscription. Even if it is an old legacy version of code running in essentially a hosted environment and then they are charging by subscription for that.

We have companies who are on single tenants. And we have multi-tenant software as a service. There are still software companies selling on-premise. I think most deals on-premise are on a perpetual licence. There are still some holdouts to people who will want to do things on-premise. Some of those companies have the physical plant and do not want to walk away from that investment. They are operating in areas plagued with very poor connectivity. Today there are companies who will come in and build your connectivity for that project or for your headquarters.

The technology that is going to get the most research and development attention and resources, the one they will make more money with, and then the idaea of being responsible for updating themselves, is what makes the impact. Knowing every time there is new functionality they must go through a mini reimplementation and regression test. They must decide if they want to keep reimplementing.

It comes down to a cost benefit analysis. There are costs having software on-premise that you might not be thinking about. Once you catalogue those and see this recurring charge every month as a step ahead or a step back you know those results are going to drive your decision.

I also think we are past the era where people are afraid of the cloud or think that it is less secure. It is time to move past that reasoning because there are companies who still feel safter on-premise. But I am seeing that thinking going by the wayside.

On-premise users must think from an accounting standpoint, how do you value having a solution that eliminates nonvalue added work, eliminates administrative processes involved in database administration, or managing the computer resource. All of these might save you a good deal of resources.

The bottom line is everything is going to get old. But there are companies who are still selling that on-premise solution of the cloud option for the folks who want it.

Q: How do you see enterprises making their ERP digital transformation decisions these days? Tactical? Strategic? Budget? ROI? Or true functionality?

A:
The decision to move in this direction seems to come from pressure from trading partners, from owners, and from general contractors. According to research, general contractors were pushing the envelope on technology. But now the owners are beginning to specify the capability they want their contractors to have.

Knowing the stakes and having an ERP solution do what you need for your company, including interoperating with your trading partners, is a move you need to make in today’s modern world.

I know companies like SIS LLC match client functional needs to the way the product enables users. What we are seeing in the industry are contractors who have not really evaluated digital modern day ERP solutions. They must first understand their own needs and decide which products are going to help them on their journey with the least degree of risk and cost.

Q: What impact can the right ERP make on a project’s success?

A:
Right away with the go no go decision. If you have the data to help you understand if this is going to be a good deal for us or not? The ability to plan the project based on actuals or past projects. The ability to schedule based on what you are looking to accomplish, and schedule collaboratively with other people, vendors, and partners in preconstruction.

To investigate the work in progress phase and be able to capture progress and make that available to owners, general contractors, and trading partners immediately. With all of this, you know everything that is going to help you use fewer resources and undertaking the project is going to eliminate misunderstandings and miscommunications.

Q: You mentioned interoperability. What is ERP construction technology doing in this area?

A:
Construction has been very resistant to this. There are multiple bodies and committees looking at construction interoperability, but what they are really doing is enabling different vendors to understand what each other are doing to facilitate interoperability. We have the EMP standard for equipment data which is like telematics data coming off equipment. We see some standards coming out for exchanging topographic data with great control.

But as far as data transactions between companies, that is not somewhere we are seeing much traction. What we are seeing that will help with interoperability is software that can clean, scrub and harmonise data from various nonrelated sources to populate either analytics or transactional system. We also see a lot of low code, no code integration platforms where you can, as a citizen developer, stand up integrations.

To joke, I could take a shoe off and pound it on the table saying, “There is a simple solution to things like a change order for an RFI for a nonconformance for any of these different events.” And demand standards to move across these different products, but I do not think the construction technology industry is quite there yet!

Q: I am really surprised to see that construction companies do not automatically know Microsoft has a construction solution. How do you see Microsoft doing in the construction market?

A:
This lack of visibility is a victim of Microsoft’s other successes because people think Microsoft and then think Outlook, Word, etc. But Microsoft Dynamics 365 for Finance & Supply Chain should be considered by contractors, particularly once they get up to that enterprise size to benefit from a very large software vendor providing your enterprise backbone of you know might set you up for the next decades because you know it will stay current.

A smaller company may not be able to keep up with the pace of advancing technology. You know who Microsoft is. One reason I have enjoyed paying a lot of attention to SIS LLC is because Microsoft needs to be in here – in the construction. Let us see if we can help folks understand that!

THESIS Statement: Ask yourself, what role is technology going to play in our business? What do we like to work with? How can we take technology and make it something that helps us scale our business?

Attracting and retaining more women in the workforce has significant economic benefits. A survey from Credit Suisse reported that construction companies produced 10% high cash flow returns when women make up half of their senior management. It is agreed that women bring increased creativity and improved communication and collaboration skills to the construction industry.

One unique way we look at it here at SIS, where 42% of our employees are women, is that the soft skills needed for Enterprise Resource Planning (ERP) implementation in the construction industry, impacts the success of construction projects. Women looking to get into the construction industry do not necessarily have to wield power tools, they can use software tools to join the construction workforce.

Q: Laurie, tell us about how women in construction became an important topic to you and how you came to be at SIS LLC.

A:
In 2003, I joined the Houston chapter of the National Association for Women in Construction (NAWIC) and was a member for 15 years where I became a Regional Director.

One thing I noticed right away was I needed to educate every time someone asked me what I do in the construction industry – explaining that I worked for the software implementation providers, whether it was Timberline or Microsoft Dynamics 365 – and not a contractor. Meaning, one of the qualifiers for this organisation is that you must be employed with a general contractor or a subcontractor or a trade vendor supplier or a in a support type of role insurance banking rep or financing or construction industries. It was then I had to explain the software I implemented supports the construction industry. So even though everything we do is related to construction, there were no categories for software. It was then I learnt that there was an expanded opportunity for women in software. Without ERP software in construction, buildings and roads would not be built. ERP software is just as much a tool as a backhoe or excavator for the construction industry.

When it comes to SIS LLC, and joining the company, I was at a NAWIC conference in Atlanta where SIS is based and was brought in to meet the team. I like to say it all came together here at SIS because of NAWIC.

Q: What can you tell us about NAWIC and what they bring to the table supporting women in construction?

A:
It is about sharing what NAWIC brings to the table bringing women and supporting women in construction. The narrative is always that construction is a man’s world. And yes, there were times gender restrictions were a huge problem. Depending on what part of the US you are in, there are safety constraints not being addressed like PPE and safety. NAWIC addresses and educates about those issues and more.

In my mind, as women supporting women in the industry, it is important to have strong networking connections. For example, to help someone find a job in trades, in management, and the upper echelons, we would teach women business owners how important it is to be a WBE contractor. And if you are a veteran or a minority and woman that made it even easier to help with opportunities for business expansion or even job searches.

As a NAWIC leader at the time, I spoke at chapter meetings in Houston or other parts of the country from a leadership perspective about considerations on many topics, one being vendor compliance – how you can manage that through improving the ERP software process – what are the implications if you do not implement those in your process. Another aspect of leadership was encouraging the networking and connecting of people through chapter meetings – General Contractors to Subcontractors or Suppliers, or to other resources.

Q: How do you see men and women working together to bring more women into the construction industry?

A:
It is a collaboration, men helping women, women helping men. We are all helping each other. We would be building something in common.

Q: You have mentioned women in the construction workforce and our history. Can you elaborate on that?

A:
In our history, there was a time when everything was cooperative. If someone had a challenge everyone stepped in to solve the problem. For example, women started working outside of the home in the industrial age and Rosey the Riveter became the symbol of women working in the trades during WW2. But that experience and education was lost when soldiers came home and took back their jobs. Now we have massive labour shortages in the trades, and women can help fulfil those shortages. They just need to recognise the possibilities.

Q: There is a lot of focus on women in construction. Many times, it is a labour force topic and others it is an equality issue. Why do you yourself think it matters?

A:
Women see the world differently than men. This is a shared experience as men see it differently than women. So why not complement each other and benefit from the efficiencies. There are efficiencies whether it is in the trades or in the board room.

It matters because there are so many opportunities and there are so many able women with skill sets up and down the construction spectrum. There is a need in the workplace in every role. It matters to have those roles filled by skilled workers.

As I mention the separate roles, I encourage women to get into software consulting in the construction industry. For example, here at SIS in our product management group, there are quite a few enhancements with our product, that I can claim I started this one or helped with that one. There are so few women in construction at that level.

Q: What would you say is the biggest take away from your work that you have learnt about helping women get into construction?

A:
Leadership skills. My own participation in organisations that promote the development of leadership skills has been invaluable. NAWIC is invaluable as was Toastmasters, another organisation I recommend to women as they strengthen their skills, along with the Project Management Institute (PMI) for aspiring and current Project managers. When I was first getting started as a Solution Architect with Microsoft Dynamics, and I will admit, it was daunting walking into a PMI meeting room of engineers and architects from Mobil and Exxon. Through those organisations, and the support of my peers, I overcame those concerns and became a confident and well-spoken leader.

Q: What do we at SIS do to empower and attract top talent in construction software?

A:
What I am so proud of here is we recruit regardless of gender – there is no bias here. If you have a skill set and you can prove it, you get the opportunity. The training related to our product SIS Construct 365 for Microsoft Dynamics 365 goes deep. Our consultants receive guidance when they are assigned to a project. For example, they need to understand the client background and rules of engagement. This type of preparation for client work helps everyone be better – mentorship for everyone – not just women.

Q: What is your ultimate THESIS Statement about the importance of women in construction and why it matters to everyone?

A:
The value of women in construction is important for everyone and there are many roles. I believe that ERP software is as much a tool as a backhoe or excavator for the construction industry and the implementation process provides a strong construction career opportunity for women.

Q: Dave, what is Consultancy as a Solution?

A:
Consultancy as a solution is the concept that our SIS LLC consultants have had so much experience within disparate construction organisations that they are well prepared to ask and answer common questions and deal with pain points coming from all angles. We know the fears and concerns of the user community, and we can leverage our industry expertise as well as our software knowledge. We can put them at ease. We have decades of experience, and we hear their concerns.

Q: Tell us about your background – how did you get into technology?

A: A friend of mine worked for COINS as an ERP Implementation Project Manager and thought I might be a good fit. I was hired as a consultant and project manager and had to learn a lot quickly. I was there for about six and a half years with over fifteen implementations under my belt. I learnt about Construction ERP and I worked with CFOs and Operations Managers all over the country. Here at SIS LLC, I have been extremely impressed with the structured IP training and the incredibly supportive staff of construction industry experts. While I had to learn on the fly at COINS, the SIS LLC immersive modular training goes step-by-step into the industry sectors, processes, and products.

Q: Talk about the 5 common pain points across construction industry sectors.

A:
I noticed that CFOs and Operations Managers had the same process issues, concerns, and questions no matter the kind of construction their businesses performed. Whether they are Speciality, Electrical, or General Contractors, they have the same functional problems and the same process complaints. This applied to small Mechanical Contractors or Enterprise companies with multiple locations around the globe; they were saying the same things.

These are the five common pain points I’ve come across:

1. Too many, too few, or inaccurate task codes.

Task codes, also called cost codes, are the way to rake up the bits and pieces of labour performed, material purchased, subcontract work contracted, and various other costs in a way that makes it possible to compare budgeted costs from the onset of the project to the actual costs incurred, and to easily see overruns or unexpected costs. If the list of codes is too big, too small, or too complicated, contractors can face user-driven issues.

First, task codes allow for forecasting costs into the future. This is extremely important because forecasting allows Project Managers to say more accurately what the final cost will be at the end of the project, ECAC (Estimated Cost at Completion), compared to what their current costs are. This much means they can determine how far through the project they really are. It allows for the recognition of the revenue as a percentage of the total Contract Amount.

Second, these construction projects can last multiple years. If companies waited for completed projects to recognise their revenue, it would impact their predictions for cash flow and make it hard to determine the company’s current and future financial position. They may not know if they’ll have the capital to start new projects, and planning for future financing would be difficult. This makes project forecasting very important and means that the selection of the task codes by the users when they are coding invoices, logging their time, and creating POs has to be correct.

It is important to note that if the task code list is too big or complicated, users will not take the time to choose the right one; they will pick the easiest or first code on the list, and that will cause inaccurate costing, forecasting, and revenue recognition.

Finally, during the ERP implementation, this conversation comes up about what do they want to do with their cost codes? Do they want to recreate what they are doing today, completely revolutionise the current list and change everything, or somewhere in the middle?

This is where the consultancy experience comes in. We understand what users need and our conversations with them empower these clients to think about what a better solution, instead of “We’ve always done it like that.” We point out that we’re not trying to replicate what they did in their legacy system. We are trying to create the best possible solution for the future.

2. No more spreadsheets.

Quite often, the new C-Suite customers want to use every bell and whistle and all the charts and futuristic capabilities of the new ERP; they think it’s amazing! But a Project Manager who has been very happy using his spreadsheets on the side and has been asked to stop and start something new is unhappy. He believes we are not valuing what he produced with those spreadsheets. He doesn’t understand we are improving processes and efficiencies. And unfortunately, it’s not a spreadsheet that is going to make this easier. It’s an integrated system where he will see data in real time and in context.

Perhaps those project managers don’t think about the value of looking at a whole division’s projects or looking at a department’s costs spread over past and future months. They’re not appreciating that they’ll be able to collaborate with their team, so they can give their Admins and Coordinators access to all of this data to manage projects more easily. Or they can interact with their supervisors or managers to easily show off what they are working on, and not need share spreadsheets back and forth in emails but keep assets in the system.

A shared system makes it a lot less lonely than managing a project on their own. It’s much more of a team effort. A colleague of mine said, “[An ERP solution] has to be simple enough for non-technologists but still provide the information needed by accounting.”

3. Manual or dual entry.

Often, I hear, “Purchasing entered this data already on a PO. Now when the invoice comes in, Accounting has to add the lines again. I have to add it both on a change order and a on budget and that’s needless dual entry.” Our solution, SIS Construct 365, helps that along because users are entering data once. We have the ability to bring that data into the other modules to be seen and used by another functions. Document Control team members and Project Managers can work collaboratively and keep that busy work away.

4. Unifying process standardisation for an enterprise or multi-division client.

A contractor that has multiple divisions separated by different managers, or an Enterprise client who has multiple businesses under the same umbrella, will say, “I don’t want to do it differently between the two companies anymore.” They want the same project numbering process and the same style of forecasting. When they see output where they’re comparing apples to apples, they can understand more easily what they’re actually looking at.

For instance, they make a particular kind of labor cost code “100” the same across all divisions. That allows for standard processing where they might write a task guide for their employees. This makes training and onboarding much easier. If they’ve acquired a company that needs to come onto the new software, it’s easier if they have these standard sets. They can provide the list of task codes they want used, and it’s already decided. This way no one is working in a silo, and it’s so much more collaborate within their business.

5. Lack of reporting options.

The complaint I hear often is, “We enter all this data in the system, and we have a hard time getting it out. We spent 15 years creating the master report spreadsheet in our old system and now that we are in an ERP, we don’t want to change.” These users end up wanting to replicate the functionality of this master report which is likely an Excel spreadsheet on everyone’s computers with complex macros and manual entry. The problem is if they are expecting to recreate that in an ERP, it is going to difficult. New ERP users need to be open to having these other reporting options. There are so many great reports that we have out of the box, perhaps displayed differently or perhaps called something else. But this gives them an opportunity to see what we have to offer.

When you add SIS Construct 365 Project Cost Management (PCM) on top of the native project reports, the options for useful reporting are multiplied by five. They are very industry-specific and can help Project Managers to successfully manage their projects.

Our enquiry options are also very flexible. We can take many possible project data columns and arrange them however it’s needed. If new users aren’t ready yet to give up the spreadsheet report because they have been doing it that one way for years, I think our flexibility can help.

THESIS Statement: We all share the same pains. Working together we share the same gains.

Q: Matt, how did you get into Dynamics Project Management?

A:
I started my career in Project Management as I exited my position in the United States Army. I originally interviewed for a Sales job at a Fortune 300 company in Oil and Gas (O&G) and was offered a Project Management job because “your resume and personality scream that you’re a person who can get from A to Z while making sure B through Y are taken care of.”

While working at the O&G company I established a reputation for not only surviving, but reviving disaster projects. My military background and combat experience supplied the experience to cut to the basic requirements of a project and the drive to move a team to completion of the mission (project), especially ones that are already in trouble.

As my career progressed in Project Management, I moved into an Oracle R12 implementation for the company before returning to the design and construction of oil rigs. Several years later when the price of oil dropped, I found myself enlisted into an AX2012 Dynamics 2012 Project as a Project Manager. I’ve been in ERP implementations for nearly a decade now, working with a variety of clients across a range of industries, including Oil and Gas, Alcohol Manufacturing, Clean Energy, and Design and Construction.

Q: How did the Hotshot Project Manager Programme Develop?

A:
After I established a reputation for project recovery, the Houston Project Management Institute (PMI) chapter approached me to develop a programme based on the steps I use to recover projects that are burning down. As I explored the approach and how to convey the process I used, I was stuck for how to make it interesting. Fortunately, I had a friend with a story.

One of the soldiers I deployed with became a firefighting hotshot. This is group of firefighters who are called when the massive wildfires burn out of control in the Rockies, California, and basically the entire Western United States lately. Their job is to hike into the raging inferno of these out-of-control wildfires and start the dangerous process of containing them and brining them under control.

After sharing a few stories with my friend, I realised that the approach the hotshot firefighters use can equate to the process I use when approaching a new project that is already engulfed in flames and burning down. Thus, was born the Hotshot Project Manager.

Q: What are the steps for a Hotshot Project Manager (PM)?

A:
At the highest level the Hotshot PM starts with Recon:

• A Map Recon = Review of the project plan and/or business case to determine initial success criteria and the “lay of the land”
• An Arial Recon = Interviewing the main players of the project to learn what is really going on and see which way the fire is really burning

Once those steps are complete, the project manager will work through additional steps to ensure the right people and equipment are available to combat the fire, trekking to the outskirts, setting rally points, establishing firebreaks, dousing, setting counter-burns and dealing with or maybe celebrating the aftermath of the project. Each of these steps equate to key activities the Hotshot Project Manager will work through to contain and control the raging inferno of an out-of-control project.

As you progress through these steps, it’s important for the Hotshot PM to operate “in the black.” To hotshot fire fighters this means staying where the fire has already burned, so that you don’t get caught by changes in the weather conditions and get into trouble. To the Hotshot PM this means operating in the planning and definition of the project rather than jumping into solutioning. If the replacement PM gets involved in solutioning too early, before completing the appropriate steps, it is too easy for that PM to be burned by the project they are trying to control.

Q: Does the current Project Manager stay in place through this turnaround process?

A:
In most cases no. The current PM is usually already singed if not outright burned by the project. He/she will not be a benefit to the turnaround process but instead be a hinderance, or worse, a Firestarter in the background.

In an ideal situation, the current PM will be in place for the “Aerial Recon” portion of the recovery process, providing some control (hopefully). As the initial Recons are taking place, I highly recommend that you are not recognised as the new PM. If at all possible, you want to be performing a Project Audit until the Recon steps are complete. The driving factor for this is that people will share more and better information to someone performing an audit then they will to the new boss. This approach also makes it a lot easier to stay “in the black.”

In nearly 15 years of Hotshot PMing, I’ve only ever had 1 project where the existing PM stayed on the project. He changed positions to assistant PM and Lead Engineer on the project, and he is still a friend today. This is definitely the exception rather than the rule.

Q: How useful is the existing implementation plan if a project is engulfed in flame?

A:
The current project plan is one of the last things a Hotshot would look at, along with the most recent status reporting. The reason is that if either were useful and not already burned to charcoal by the project then a new project manager wouldn’t be necessary. There may still be salvageable pieces to the plan and reports, but it shouldn’t influence your initial recons/reviews.

Q: What does a project on fire look like?

A:
Most times the project goes from green status report to red with no yellow between updates. In many cases this becomes apparent after the project has spent 2/3rds the original budget and a testing cycle results in a 70% or less pass rate. One clear indicator of a project engulfed in flames is if the project team is spending more time in meetings to determine why the project is in trouble than actually working on the project! This happens typically when upper managers realise that the project is falling behind and decide to get more involved. Then all the focus moves from completing milestones to reporting why milestones are becoming embers and ash. Sadly, in many cases, the very effort by upper management to salvage the project pours lighter fluid onto the fire, causing it to burn all the faster.

Q: Do you have a good problem/solution story?

A:
The most dramatic example of a problem/solution story is from the O&G days. I’ll change the names to protect the innocent:

Brad and James worked on several projects before and established a “good working relationship.” On this particular project Brad works on the project design team and James works for the client. James has a lunch with Brad and comments “can we change the piping size from 10 inches to 12 inches?”

Brad is a piping engineer and knows the project is still in design phase. The AutoCAD drawings are still being refined and the steel structure space allows for the piping size increase. He goes into the associated drawings and makes the change. 20 minutes later the updates are done. No problem.

EXCEPT… the piping size change means that the pumps moving liquid through the pipes needs to increase in size. The increase in size means the motors for the pumps needs to be bigger. The motors draw more power, which means that circuit breaker panels need to expand. The larger draw also means that the generators need to grow to meet the power needs. All of these items happened because Brad decided to help James without telling anyone.

What if I told you that the circuit breaker panels and the generators had a 2 -3 year long lead time and had already been ordered based on the existing parameters? That no problem update caused a potential $1.6 million dollar impact to the project. Talk about burning down the budget!

In an ERP project, this can look like the addition of a table embedded in a module that could impact project categories for purchasing and project accounting that impacts how the costs are represented in ledger entries. A “small tweak” can dramatically impact the ability for the business to run month end close!

Q: I can see how your eye is keen to find these discrepancies in construction.

A:
There are a lot of similarities between building an ERP like Dynamics and a construction project. Dynamics consists of separate specialities (Accounting, Procurement, Projects, HR, etc.) that all have to play nice within the same structure, similar to how construction requires separate specialities to play well within the same construct. Piping, electrical, HVAC, steel support, concrete, finishing, all need to come together to create the finished product. Understanding the interplay and relationships between the different specialities is a must for a Hotshot PM, regardless of the type of projects he/she is working in.

Q: What if a project isn’t on fire yet? What are you doing to project the zone?

A:
The first step is your key deliverables. What are the “must haves” for a successful project, usually identified in the Scope of Work, Work Order, or Business Case. Knowing what these are (the lay of the land from the Map Recon) means you understand the terrain and what you need to deliver. You can’t navigate, woods or project, until you know the lay of the land. And having a previous project to build from can be helpful, but it isn’t enough. A map of New York while in Boston will only get you lost faster!

Second, create good communications both to your project team (the fellow firefighters) and to your upper management and client. Upper Management so you can call in air support and perform Dousing (another step in the Hotshot programme), and the client to be aware of the challenges and changes that occur within the project. The more open the communication the less likely the project will catch fire and the quicker everyone can respond to sparks that could cause problems!

Third, do you have the right people and tools (Gather The Tools)? D365 can incorporate Independent Software Vendors (ISVs) solutions, which provide specialised solutions. If there’s a gap in D365, is there an ISV that can be used to close the gap? Do you have the right number of environments for the plan you are executing? Do you have the right people with the right knowledge for the modules/areas of the project? Having the wrong people or tools can be like throwing water on a grease fire… you burn your kitchen down!

Other steps involve setting Firebreaks (proper scope definition) and Counter-Burns (removing scope creep items) to better contain the parameters of the project. These activities help to control the chaos and prevent the spread of fire.

One final thought around protecting the project. Keep an eye out for your pyros. These are the people adverse to change or trying to influence the project to jump the Firebreaks and overrun the Counter-Burns. These people can be the biggest headache for the Hotshot, because they can go behind and relight fires that were already extinguished, or fan flames to spread faster.

Once you have these people identified the primary step is to identify their interests and work to remove the flammable objects around them. Sometimes that means upper management performs a Dousing, sometimes that means reinforcing the Firebreaks and Counter-Burns with written agreements or strategically defined milestones. The situation will dictate the approach.

In a best-case scenario, the pyro will work with you to set the Firebreaks and Counter-burns and may even help contain other pyros. That’s fighting fire with fire!

Unfortunately, in the harder scenarios the Hotshot PM will need remove the pyro from the team or work with upper management to remove the person.

Worst-case, unfortunately, means that the politics, knowledge, or some other factor is preventing the previous scenarios. This result means more Firebreaks, more Counter-Burns, and constant vigilance to quickly extinguish the sparks this person creates.

Q: What you describe is a beautiful scenario to stop or even prevent fires. But aren’t people angry this happened? Or angry about the approach? Where does this factor?

A:
Of course people are angry or frustrated (or both) about the situation and what is happening. In many cases when a Hotshot PM joins a team he or she will cause a few sparks themselves. They will be setting new standards and expectations that will not be well received by everyone.

The project team may not like the new standards. The client may not like that you are extracting the tinder of scope creep or trying to better control it by creating new change orders. Upper management is already frustrated because the project isn’t delivering on the desired results.

There are opportunities for a wise Hotshot PM in those areas. The project team may be worried about the project stopping or losing their jobs, so setting new standards may be difficult but welcome. The client may have a timeline or budget constraint, so removing the scope creep will make the project leaner and timelier. Upper management will become more comfortable as they see a plan (or a plan to get to a plan) being defined and executed well.

These factors will become apparent during the Aerial Recon, and be incorporated into the other Hotshot steps like Treking to the Outskirts and Setting the Rally Point (among others).

The amazing thing about all of this? The first 2-3, maybe even 6 months will be difficult, depending on the size of the project. Once that is done, though, the project recovery will become apparent, like fresh growth in a burned area. It can even look picturesque if everyone can move together for the right result. And in the end you will be the Project Manager that all future Project Mangers for your team are compared to.

THESIS Statement: The goal of a Hotshot Project Manager is to jump into the chaos and control the fire. If you jump into the fire everything burns.

Q: Before we get started, Chelsey, I understand you have quite an origin story getting into construction finance consulting?

A: Yes, I do have a unique story compared to most software finance consultants! I received my BA in Finance from Hawai’i Pacific University where I enrolled with a scholarship as a competitive cheerleader, after achieving five national titles and earning a spot on Team USA’s competitive cheer team for three years. When it comes to finance, I come from a family of engineers with construction backgrounds – I love math. After college, I faced the 2008 recession which bled into 2011 and no one was retiring. For my generation you had to compete to get a job, so I continued my education and went to graduate school. I earned an MBA at Georgia State University in Corporate Finance and a Master of Science and Investments. To pay for school I was the Assistant Cheerleading Coach and a graduate teaching assistant for 1^st and 2^nd year business courses at Georgia State University. These experiences are the reason I love to teach, and these moments have carried over into my work today as a consultant encouraging success at every step of the process.

My first job out of graduate school was a Finance Leadership Associate with The Coca Cola Company, where I completed projects for specific finance groups, and performed the job as a financial manager, then rotated to a new finance group every six months. I gained experiences in financial forecasting and budgeting, financial auditing, supply chain finance, capital planning, mergers and acquisitions, financial business analysis, managing shared services, business process leadership (BPL), and other areas of finance, at a fast pace. I graduated from the programme and became a Senior Finance Manager at Coca Cola.

After having multiple experiences at Coke, I wanted to go into a role that not only enhanced my finance skill set, but also complemented my teaching abilities as well as data management. After learning about SIS and their niche in construction, I interviewed and landed a role in 2020. When I joined SIS, I became the senior Microsoft Dynamics 365 Finance Consultant, and later working my way through the company also become knowledgeable in Equipment Asset Management and Construction Operations.

Q: Getting into the heart of the discussion, what are key differences between standard finance and construction finance in general?

A:
With standard finance, these universal financial processes are essential for any company to maximise shareholder value. They are executed for any company, in any industry. They include:

• Posting transactions to the general ledger
• Identifying and analysing business transactions
• Recording adjusting entries
• Preparing the trial balance
• Preparing financial statements
• Closing the financial books for the year

These are processes that all financial accountants must learn and perform, from a US GAAP perspective, must be followed and reviewed by auditors. I say all this to point out that these standard financial processes can be carried over from one business to another. The entry itself might drive different balances to your financial statements, but the actual process steps are no different than how they would be performed at another company.

With construction finance, you are executing daily financial processes (as listed above), but now you are focused more on the project level. Construction finance accounts are now posting costs directly to a project, generating bills that can either be directly posted as revenue or deferred till the project is at a certain percentage of completion, tracking actuals to budgets at the job level, and analysing costs based on tasks performed. Financial statements are a bit more detailed versus at the general ledger level, and how each project is managed, financially, can be different, project to project.

Q: In the construction ERP software industry, do users generally understand there is a difference between standard finance and construction finance?

A: Many people in construction companies are told by software vendors that their product can be used out of the box or with minimal customisations to meet their project needs. But construction projects are complex and taking that out of the box approach causes more customisations to meet the needs of construction projects, and we find some of our clients also need partners that can offer more education around project management best practises. We often help clients learn this after the fact.

For example, say we have a company that is on a very basic finance system, which means they can’t pull a profit or loss report by job or project. They can’t analyse their cost and see which materials or products they are spending money on and can’t track if they are spending more on one job against their budget. Say, they can’t analyse their cost, can’t do job costing by task or by task codes, and can’t do an analysis by project or compare two jobs to see which is more profitable than the other. They can’t easily apply a change order to a project budget, so they can’t see what drove a change to the project budget. Let’s say in that company half do project accounting and half do not. It would be very eye opening to see how much a true construction solution can help jobs and projects than their basic system.

Q: Do construction speciality contractors understand Microsoft Dynamics 365 out of the box doesn’t solve their project financial needs?

A:
I’ve seen software companies or Microsoft partners sell D365 to construction companies thinking that a few customisations are all they need. If they stick with that partner, then they find their way to us for our integrated SIS Construct Project Cost Management (PCM).

I have also seen people even try to form fit us but when we demonstrate the true process flow including change management, they really understand how it impacts their project profitability.

As an example, there may be a company who has never performed job costing. We would work with them and teach them how all their data can be managed in the system. I’ve seen their excitement when they realise they don’t have to spend a month piecing reports together or working “blindly” because they don’t have a way to manage profitability for each project – that this system can pull the reports for them and have visibility to the details, by project, that they have been looking for.

What we are doing is helping these clients with resource constraints. For example, with our PCM solution we help with labour cost savings and structured best practises with project management. For speciality contractors, we are a one-stop-shop rather than the multiple excel spreadsheets we see many clients try to report within. We help them get in line with industry best practises and accounting controls.

A lot of companies are used to taking short cuts in their current financial systems – but they have auditors. We help them understand those SOX controls, making sure they are followed so that they’re getting the best practises from the industry and can help grow their bottom line and their business. Now that we are in this remote working world, these companies don’t have to hire directly in that area, they can go international, if they have the budget, and they can go remote with more talent. And use of a project-based ERP system helps them not have to be tied to travel. They can manage their projects remotely.

I’ve had a client who showed a large increase in cost and found they had duplicate entries. The had no financial controls or a way to track project entries. They needed more visibility to their job cost – putting it in categories – showing what they have already paid and what they have not recorded. With our Project 360, we gave them the ability to see what has been paid and what has not. This helps them optimise profitability and visibility into their project and determine the margin.

Q: What are key differences between out of the box finance in Microsoft Dynamics 365 and our SIS Construct 365 PCM?

A:
From a project manager standpoint, with out of the box Dynamics 365, users are not getting access to construction project-based solutions and accounting controls that can maximise shareholder profitability for these construction companies.

For companies who do have D365 project accounting, our IP solution handles all financial processes, including complex rate structures, related to project and field service operations as well as procurement which is critical to customers who drive fixed fee projects. SIS Construct 365 handles complex billing and follows Construction Standards Institute (CSI) guidelines for standard code setup.

In one instance a client who turned on standard Dynamics 365 Finance and came back to us because our PCM solution met their business needs and they needed more guidance around construction financial management and accounting. Part of our success comes from hiring employees who know construction and who came from construction companies.

Q: What challenges do finance managers in construction face that others do not?

A:
The challenges they face are being able to manage the financials for the jobs, including:

• Visibility to what details make up profitability, overall and by project
• Reporting for project managers
• Understanding project financial status
• Understanding what invoices are open for which projects
• Tracking the profitability for each project
• Being able to manage the financials for all projects at one time (which is quite a lot in the construction industry)
• The accounting treatment for fixed price projects vs time and material projects

This is where SIS Project Cost Management gives construction users a way to manage that one stop shop – everything is where they need it to be. There is now one place to pull reports, and this reduces the stress of trying to build a manual P&L which gives them a better environment to manage projects. PCM for construction gives them a way to manage cost and jobs and ageing based on a project – more visibility.

Ultimately, when it comes to Microsoft Dynamics 365, users can learn D365 from any financial system they are on today. They would be teaching themselves new steps even though like we said earlier, “every journal entry has a debit and a credit.”

THESIS Statement: Construction finance involves the use of solutions designed for commercial construction enterprises that support management of the projects, interactions with the field, and support of complex accounting and billing processes for these projects.

Construction finance accountants must have a financial system that supports not only their standard financial processes, but also their project financial processes, which is why SIS Construct 365 is essential for any construction company.