Manufacturing
Commentary:
The cost of collaboration
11 July 2008
Numbers paint the clearest picture. With numbers we can get right to the issues at hand, the challenge clearly laid out. Get it right, and we will save time and money
Malcolm Walter, President and COO at BWSC Malcolm Walter of BWSC explains the numbers involved in enabling better collaboration for engineering teams to speed production and improve quality.
I am a numbers guy. I love numbers. Almost as much as I love infrastructure. So imagine my delight in 2004 when the US National Institute of Science and Technology – or NIST to those of us who are more economically minded – published a report about infrastructure that contained lots of big numbers and claimed that 40 per cent of engineering time is spent locating and validating engineering information. And furthermore, that 30 per cent of project costs are wasted due to poor communication between systems. The industry cost? US$15.8 billion annually. That is one big, bad, number.
But good or bad, you can see why I love numbers; they paint the clearest picture. With numbers we can get right to the issues at hand, the challenge clearly laid out: increase productivity, drive innovation, and reduce waste. Get it right, and we will save time and money. The NIST report even identified areas where savings can be made. Reusing information speeds project delivery times by up to 50 per cent, while improving operations and maintenance management can save up to 14 per cent.
These are great numbers, and better still they are achievable. By making incremental changes, for incremental gain, we can shrink the big number. A claim that is reinforced by many of our users. And so in 2005 at our annual BE Conference we started to look closely at a selection of projects completed by our users to measure and report on their return on innovation, interoperability, and investment. I like to call this ROI cubed, or ROI to the power 3 (ROI3). But then I would, wouldn’t I – I am a numbers guy.
We first looked at a project completed in North America by SSOE, a full service architectural and engineering (AE) firm, on behalf of its client Toyota. By reducing time to market Toyota gained US$200 million in additional revenues. In 2006, we worked with Scott Wilson Rail in the UK. By improving information management processes Scott Wilson gained €500,000 annually in found productivity. The same year we also looked at a project completed in Australia for Alcan, the world’s second largest producer of primary aluminium. By reducing its time to market, the company increased revenues by US$225 million.
In the grand scheme, which requires 15.8 billion dollars of waste reduction, these teams are clearly playing their part, leaving their mark, and delivering some impressive numbers.
So in 2007 we got serious, engaged SMART – an independent business consulting firm – and funded our first return on investment case study. Our subject was Bechtel as it worked around the clock, and around the globe, to double the size of the already gargantuan Jamnagar Oil Refinery in India. To enable project teams it deployed ProjectWise – our engineering project team collaboration system, which is used by teams to help improve project quality, reduce project rework and meet project deadlines.
Connecting 2,500 professionals in nine design locations, 19 offices, and five countries, the team cut project delivery time by 20 per cent. They achieved this time saving by making more than 50,000 drawings immediately available to all connected team members for real-time collaboration.
In fact, the return on innovation measured by SMART showed that ProjectWise paid for itself within three months on this 36 month project. So, with industry norms demanding a one-year payback on technologies of this type and scale, ProjectWise is exceeding industry expectations by a factor of four! Better still, after 18 months, with returns accelerating, they had reached a payback of 19 times.
Delighted with the insight gained from the SMART report on Bechtel, we engaged the team a second time to run the numbers on Michael Baker’s contributions to the I- 15 NOW project – a US$182.9 million design/build highway reconstruction project – for the Utah Department of Transportation (DOT).
As lead designers for the I-15 NOW project, Baker chairman Richard Shaw challenged his team to innovate. His directive: grow profits by maximising the utilisation rate of the company’s employees, while reducing operational costs. Given this brief, Baker laid out a plan to connect all people and information across its 44 North American offices. The plan was to use ProjectWise to enable real-time collaboration among colleagues – regardless of geographic location. Baker engaged Bentley’s Professional Services team to deploy ProjectWise. The Global Bentley team reviewed other best practice deployments around the world – to determine the right balance of servers and services – to deliver a world-class solution.
The ProjectWise learning curve was short for the Baker team. Within just three weeks, everyone was trained and the project was proceeding to plan, with a fully utilised team sharing work in realtime. Studying the increases in team productivity, SMART noted that as each Baker team-member got connected, their utilisation rate increased, while individual relocations and employee travel costs reduced.
“The ability to transfer work between offices probably resulted in saving many jobs because the work could be sent to the people who needed it rather than terminating their positions, or having to make them relocate,” says Baker VP Bill Trimbath.
But their return on innovation didn’t stop there. Some great numbers followed. The independent analysis of ProjectWise ROI conducted by SMART revealed a peak ROI for ProjectWise at five times the operating cost. Better still, the payback period for ProjectWise was just six short months – two times faster than the industry benchmark of 12 months.
Indeed, Baker’s success on the I-15 NOW Project merited the firm some high praise from one of its key clients, as rigid quality control and improved quality assurance procedures impressed the state DOT in Utah.
On naming Baker its Consultant of the Year, Randy Jeffries, design review manager from Utah DOT says: “Baker accomplished all this and more, and the quality of their design is showing more and more each day as the project nears completion. All things considered, the Michael Baker team has succeeded in helping the minds here at the department stretch to places they’ve never been before.”
Finally, in 2007 we kicked off another study, this time in conjunction with Microsoft, to assess the ROI gained by another AE firm determined to increase utilisation levels through innovation. Barge Waggoner Sumner and Cannon (BWSC) – a multi-discipline AE firm with 11 offices spread across three US States – first got Connected by ProjectWise as a part of their ‘Location does not matter’ initiative to better balance workload across their distributed project teams and to increase utilisation rates.
Before they got ProjectWise and SharePoint BWSC faced challenges regarding document version control, information access and lost productivity as employees moved among offices. Now, employees travel less thanks to improved file version control that negates the need for in-person information sharing. Better still, BWSC now makes better use of all expertise from around the company. They find the right information quicker, regardless of its location in the corporate IT environment, and they make better use of people’s time and knowledge.
All this has been noted by David Davidson, president and chief operating officer at BWSC. “People not being used 100 per cent of the time is costly and inefficient,” he says. “With ProjectWise and SharePoint Portal Server, we’ve been able to increase utilisation and raise revenue per employee by approximately 25 per cent.”
BWSC also measured project-cost savings of around 15 per cent due to reductions in rework, and improved information availability. “We used to have very little financial reporting for project managers,” adds Philip Newby, BWSC’s corporate technology director. “And now it’s like trying to drink from a fire hose – they have more data, faster and more accurate, than they’ve ever had.”
Of course innovation is not new to BWSC, which has had to reinvent itself a number of times to remain competitive in its 50-year history. Indeed, in 2002, the company was one of the first to sign a Bentley Enterprise License Subscription (ELS), which enabled BWSC to load and utilise Bentley software throughout the firm, without having to pay any acquisition costs. This means that anybody in the firm can access any product, at any time.
Many firms have since followed in BWSC’s ELS footsteps with subscribers now totalling more than 150; a rich and varied group from which to select a few more ROI subjects to study.
This time we hired Nucleus Research – a global provider of research and advisory services – and asked them to conduct a series of independent return on investment case studies featuring some of our enterprise license subscribers. The results make for compelling reading. Nucleus interviewed five Enterprise License Subscribers and identified operational and productivity returns in a plethora of areas.
Even if you are not a numbers guy like me, you have to love these numbers. When you increase revenues, reduce costs, and eliminate waste you are always on to a winner.
Malcolm Walter is COO and senior vice president at BWSC. This article first appeared in the Summer 2008 issue of Prime magazine.