I recently read a blog by Thomas Wailgum in CIO Magazine's online advice section. Wailgum's headline was,"How Much is a Simple User Interface Worth?" He cites by example the story of Zappos.com CEO, Tony Hseih, who publicly explained that a $1.6 million loss stemming from a pricing error was the result of overly complex business software.
I can really relate to the topic because I consider myself a UI snob. I'm sure I cannot design a good UI, but as a user I know one when I see it. By way of example, I think Google SketchUp has a brilliant UI. Of course, I am biased on that one. Apple is singularly famous for gorgeous and simple UI's. For this reason, my laptops have been exclusively Mac's since 2005 when an Apple employee first talked me into switching. (Thank you, Paolo.) And I recently purchased an astronomy application titled Starry Night which has a great UI. Surely, I am a UI snob.
A brilliant UI takes a complex business problem or process and turns it into a simple and manageable presentation to the user. It masks the underlying complexity without sacrificing the user's control over the intricacies of the problem. And it must be intuitive so the user can think ahead with the software. Those are not light requirements. A brilliant UI was one of our goals in developing the Vico Office suite. Well-integrated 5D Virtual Construction surely qualifies as a complex business problem and process. We wanted to turn that complexity into a simple, manageable, intuitive presentation to the user without sacrificing control over the intricacies. And we think we succeeded.
Caption: This example from Vico Office contains a workflow panel on the left; the quantity takeoff items from the model in the middle column; and a section cut of model on the right. Note that one element is highlighted in yellow from the quantity takeoff items list - it is also highlighted in yellow in the model.
We have several uber-smart people working on product design at Vico, but our UI guru is Aviad Almagor. The same guy who brings you the Vico Comics in his blog. Aviad possesses an ambidextrous brain. He is, at once, one of the most artistic and scientific guys I know. He is an architect by education and a technologist by profession. He is equally comfortable studying a piece of art as he is solving a set of differential equations. His mental yin and yang has produced our Vico Office UI, and the elegance of this UI is a great service to the complexity of the underlying applications. Well done, Aviad and Team. Never underestimate the importance of a brilliant UI.
My life as an executive is all about decisions with just a few absolutes (a.k.a. unchangingvalues) and many, many operational trade-off's. The operational questions morph as fast as the environment around us, and making the right decision at any point in time requires a mix of broad perspective, speed, and detailed knowledge - enough detailed knowledge to determine what can succeed and what can't. Following right behind every business decision is, of course, the implementation of some change within the company in order to effect that decision. And making that change is often the real trick. Years ago a friend summed it up for me in what I call Spenser's Razor - "The best plan is the one you can actually get done."
One operational consideration around change comes up time and again. It is a very human consideration and your answer to it is nothing short of a direct reflection on the culture of your company. The question is, "Can your employees make the change that is required, and can you make that change really stick?" Or better yet, "Can you make that change really stick until the NEXT change that you have to make?" Change is hard. By definition it is going to force someone(s) out of their comfort zone. My colleague, Dr. Olli Seppanen, has blogged about contractors' resistance to change in BIM implementations whether by the estimating team, project managers, superintendants, executives, or others. Countless books are written on the subject of change, but I have yet to discover a magic formula. Making change happen is so dependent on the circumstances surrounding you that one magic formula escapes us.
I offer no formula here but, like most of you, I know a few of the ingredients. For example, participating in change has to be safe. Teammates have to know that it is OK to miss... just as long as you get up, dust yourself off, and try again. Likewise, succeeding in change has to bear some reward. Those who lead the change and those who embrace the change must become the positive examples in your company that others are inspired to follow.
Good leaders create an internal appetite for change. Great companies learn to direct that internal appetite at the issues most important to their customers, and they realize that external factors can magnify or diminish that appetite. If there is a silver lining in the cloud that is today's construction economy, it is that appetite for change has been magnified. Your employees know that something has to change if you are going to remain successful in a construction economy where commercial starts are down nearly 50%, all new starts are down over 25%, and unemployment has risen to a level that, heretofore, only our grandparents had known. Change now is an obvious requirement, and few leaders are experiencing the resistance to change that characterized the past.
I see this situation playing out in our customers' ranks today. This BIM thing is more than a passing fad, and firms are acting on their magnified appetite for change. 5D Virtual Construction does require significant change, but enough experience has been gathered by the leaders to know, without question, there is a safe transition and there is a real reward. Leaders can point to project costs avoided, fewer reactive RFI's, compressed project schedules, and a genuinely collaborative process that delivers a superior owner experience. They can also point to better performance in recruiting top talent and higher employee morale even with today's torrid work pace. Perhaps most importantly, these leading firms are winning the projects they want to win; easily differentiating themselves from those builders who have yet to embrace this change.
Virtual Construction technology is not the driver here. It is the enabler through which progressive builders are changing the way projects are planned and built. We've all known for years that something had to change in the building industry. Now we are experiencing a simultaneous magnification of the appetite and a technological means to actually get it done and make it stick. Spenser's Razor strikes again.
Holly's Note: We have some great resources available on this website to help you get started or get those around you up to speed on BIM in Construction. Here are a few helpful links: >> The BIM Master Class Series >> The BIM Checklist (what your competition is saying they do and what you need to be offering Owners) >> Using BIM in a Hard Bid Series >> Win the Deal offerings from our Professional Services Team
Several weeks ago, we produced a Fridays with Vico webinar focused on how General Contractors move from a 2D paper-based process to an integrated 5D model-based process. This section, excerpted from the BIM for the Enterprise webinar, describes the many benefits for GCs who embark on this journey.
I'll try to be quick because I think we pound these points home over and over again...We get excited about them and we are highly biased, I realize. But we've just seen it work so well so many times and we're anxious to keep getting the word out.
Number one is Associativity. If you get on this 3D curve and you actually use information in the model (not just "M" in BIM but also the "I" in BIM), you can derive a lot of information and a lot of answers about the project from the model. That automation is not prone to errors and omissions and allows you to respond rapidly to change. You don't have to wait three or four weeks for a new workup on "what does this do to the cost? what does it do the schedule?"
The second thing we call Leveraged Integration. It's in the tagline of our company and it's a difficult thing to describe for sure. The briefest way I can put it is that it is not common that one department in a company will do extra work to benefit another department. They usually do extra work to benefit themselves and if it's something somebody else can use that's great. But to ask somebody in my finance group to fill out extra forms so that somebody in my sales team can get better information on their customer is asking someone in the finance team to go an extra mile. I can mandate that, but it's nicer if it happens naturally.
The great thing about the 5D BIM workflow is that information added by one group is actually useful for someone downstream. It's actually a head start for them and you don't have to mandate it, it just works that way. The data accumulates and becomes useful. We call that leveraged integration for lack of a better term.
Another thing I want to point out is that a lot of owners ask for BIM. They want to know what your BIM expertise is. Many of them call it Virtual Design and Construction like us. Some of them know what they're asking for and some don't. They are all to be forgiven because what they're trying to do is exploiting "how can I run my project better"? And you have a huge opportunity to make proof points to them about this. It's been our experience that owners who do really get it know how to interview you and ferret it out. And Owners that don't are a great education opportunity.
In both cases the visual communication is key. It's so fast to cognitively look at. The beauty of the model isn't that it's hyper-accurate; the beauty of the model is it communicates so much so fast. And it's a great filing cabinet for the information. So this is a great opportunity for you to establish superior communication and excellent rapport with the owner and owner representative who may not see drawings every day like you guys do.
Finally is the credibility and control of the project. Your team and the design team put together can finally answer "what would this change do to the project, cost and schedule?" and they can answer it in a timely enough fashion that they can actually entertain changes. I think this is really the key. For all of this innovation to the industry, for all of the time you have spent pursuing technologies and trying new things, the holy grail is to be able to sit in front of the owner and say "I can tell you pretty confidently what that is going to do to the project." And to have everybody else in the room understand why you're concluding that and know where your numbers came from and agree to it.
What have your experiences been? Does winning new business trump the internal efficiency gains? Or have you developed a new measurement system for your firm? Post your comments so we can all learn from your experience.
If you're interested in this topic, you'll also want to research:
In this excerpt from the webinar, I show the current construction process, alongside the new path that so many of our customers are utilizing. There is no "easy button" for change management, but the technology is making the transition much faster and smoother...
Whether you are on the 2D workflow or 3D workflow, the first thing you have to do with a new set of data is to find out what has changed. And a lot of design partners are great at documenting that and a lot of them aren't. So either you know you know which one you're dealing with or you'll have to do a little more diligence to determine what has changed about it. (Our solution for collating and comparing construction drawing sets is called Doc Set Manager. This is a cool entry point for BIM because you have the certainty that all design changes have been detected from one version of the drawings to the next.)
After you've determined what has changed, if it's 2D, someone has to create a model. If it's 3D design data somebody has to create what we call a construction model or coordination model and that's where the means and methods of construction come in. I'm not one to fault the design team for not including those as I think it's outside their scope. So, I've always viewed it as if the design team can give you a head start, great, take it but you need a construction model and there are differences.
I've talked to a few authors lately who are writing books on the difference between a 3D design model and 3D construction model. I was delighted to see that. So it's not going to come from a vendor like us and sound biased. It's going to come from outside experts and I think the industry will really benefit from that. The people who have been through this twenty times already know the differences but if you haven't there will be some independent reading available soon.
That's the construction model and what is so interesting about this is that there is really no 2D equivalent. So it's pretty easy to get excited about the fact that this is where all the coordination is happening. And this was the low hanging fruit when BIM found its way into the construction side of this equation for good reason. There is a lot of opportunity to avoid errors, save cost, and deliver a new experience to the owner and construction team.
So whether using onscreen takeoff or some other technology on the 2D side, or using model takeoff techniques on the 3D side, the next step is not a change in the data set but an extraction of data from it called quantities. That's a key thing and I think if you were to map out your business as a computer scientist would and build an information language around your business, quantities is one of the key pivot points of running a project successfully. And having a handle on those quantities as things change and move around over time is therefore really key.
What this is an eight story commercial project with an east wing and a west wing. So it's subdivided into 16 or 17 zones. There might be zone one as the site and then the next 16 zones are first floor east wing, first floor west wing etc. If you zone the project like that this is how people are going to schedule it. You're going to schedule formwork for east wing of level four as one task, you don't schedule each column. And those have a big impact then on how many materials need to be delivered to site on what date. So now you have derived location based quantities. I know how much sheetrock is going into the east wing of the fourth floor. I can therefore stage procurement, for example, accordingly. (One of our customers, Klorman Construction, has put together a great demonstration of locations, resources, materials, and productivity rates in Vico Control.)
So this is the 5D BIM line we keep talking about and this is how our customers usually get to it. More often than not, there isn't a 3D model from the design team yet. So somebody is looking at 2D data, determining changes, creating a model that is the construction model and adding locations, deriving quantities, linking it to their 5D library and deriving cost and schedule. It is a highly productive, highly repeatable process.
And what's exciting to me about it is when something changes, you go back to the beginning of this loop and replay it, but you do not have to redefine the location structure. Those location structures are a persistent piece of data in the Vico Constructor and Vico Office databases. You don't have to redefine the 5D Library, it is there and ready to be used on this project and the next one. So you go back and based on those changes modify your model and replay quantities and derive costs and schedule. That's why you can turn this around so quickly. You're using the model data and it just turns out to be a great handle for us. A fantastic filing cabinet in that we've added more space to the second story subgrade parking garage and that's going to flow right into an impact on cost and schedule.
Now it's not as simple as clicking a button (I'm not pretending it is that simple), but it is this automated and it is this path that most of our users are taking. And it is this repeatable in terms of turning answers around in a short time and sitting in front of the owner or design team and showing them the impact that this has on the design.
Which line is your firm on? The Path to 5D BIM is very doable. Let me know your experiences, challenges, and successes getting to Enterprise BIM.
In that blog I pointed to the top five factors (whether it's the U.S., Japan, the European Continent or the Nordic Countries etc.) that would influence how fast VDC was taking root and accelerating there. And in no particular order those things were...
1. The degree to which the competition was really open vs. the winners of the competition being predetermined somehow or heavily favored for any number of reasons. Open completion kind of fostered innovations...
2. The degree to which the construction industry and higher education institutions were partnered. I would cite, for example in the U.S. the CIFE partnership between Stanford and the Construction industry partners.
3. I think you all know this one instinctively... the degree to which that society (whether it's the U.S., U.K or France) is litigious. I think the degree to which a construction project can be optimized out of court instead of everybody worrying about how they're going to look in court has a big impact on how willing people are to innovate and try new processes.
4. I think there's a cultural difference in problem solving that we've observed in how the planners vs. experimenters tend to approach something as new as BIM in construction differently.
5. I focused on government spending vs. private spending in building construction because in most countries the government is the largest building owner. I'll point to Singapore as an example... The government is the largest building owner. It's a heavily regulated industry on Singapore and they can mandate change overnight and have done so. And if there is a very large private sector that pretty much defines the economy (as in, for example, U.S., U.K. and Western Europe) it's harder for everyone to get on one page. The GSA has done a great job trying to drive initiatives in the U.S. and they are as far as I know still the biggest building owner in the country. But they can't mandate change overnight and they know it so I think they've done a very rational thing.
So those five things kind of laid it out for me and when I wrote that blog I really did have a leader in mind. And today it's still true. If you look at Finnish construction companies and how the industry operates in this country it really is where VDC really leads in the world. They have all of these factors going for them from research and sponsorships by the government to the educational institutions. It's not a litigious society at all. When something goes awry in the project everybody gets together immediately, puts their thinking caps on and fixes it. And the last thing they worry about is pointing fingers and blame. It's not a panacea but these guys really are cooking. And they're going really, really deep. You can talk to people in any of the construction companies here and they really understand the subject. They've tried every piece of software, every new process, and I think they really are leading the world in virtual construction today. And it's probably no accident I think they're very focused on doing just that.
So for whomever I've offended in the audience (laughs) at least I've finally declared what I really think in terms of who's doing what. And we'll see how that evolves over time.
What is your opinion? Should we be examining other factors? Should we be placing more or less weight on these contributing factors?
Mark Sawyer, Vico CEO and President, recently addressed a gathering of Vico international channel partners. His comments are excerpted here.
State of the Industry:
I just wanted to give a quick snapshot (now that we're coming up on the end of 2009) of what the industry feels like, what's happening inside of Vico, and then reiterate the mission and vision of our company.
I don't know if you've all seen some of the same statistics I have. There are regionally specific numbers around this. But if you look at those regional numbers and compare them to the world I think there are only a few regions of the world that did not follow these same trends. In 2009, construction starts across the board for all construction projects is down 25%. Now we're talking about an industry that is the largest private sector contributor to most nations' GNP. For that to be down 25% is a whopping change. In a growth year, an absolutely on-fire year, the construction industry may grow five or six points. Anything in double digits is a big move and of course down twenty five points is drastic. The curves on the right show construction starts from 2001 thru 2009 and construction put in place for the same period. And you can see that 2009 was very challenging for our customers. Commercial construction, that is commercial buildings, was even worse...down 43% in terms of starts.
Most of our customers are the larger GC's and CM's who came into this financial crisis with a fairly large project backlog (18 to 24 months in many cases). So they entered this with projects that kept them busy and the real test is how many projects begin to emerge before they start to run out of work. I'm happy to report that most feel like we've touched bottom and now some new projects are getting let go and some of our customers that have been very busy in bidding new projects are actually starting to win some. And that's true around the world as well.
The drop off was less severe in what we call the institutional space. That is, government and public projects or large healthcare projects and large education projects. There are really two reasons why the institutional market was less impacted. One is that the demand didn't diminish greatly in 2009. The other thing is that many of the institutional projects are owner-funded. Or at least a large percentage of these projects are owner-funded. They don't have to borrow so much money to create it whether it's a big hospital built by a medical group or an educational facility like a lab at a large university. There may be a little bit of lending involved but mostly owner-funded. And with the banks being in the kind of trouble they were is what really shut the commercial market down. Bank lending for commercial construction all but stopped.
So it was a very tough year for our customer. Many of them remained focused in the government, healthcare, and education space and survived because of it.
The other thing that changed quite a bit is the delivery system around how these projects worked. You've heard us talk about, you've seen it blogged a lot, and Holly has covered it a lot in Fridays with Vico. We used to do a lot of work with our customers in a paid preconstruction engagement where bids for construction hadn't even gone out yet but the contractor was on a paid and fee-based engagement with the owner and with the design team to put some constructability know how into the project before it went to bid. Those have changed quite a bit and I think of all the things that changed in 2009 because of the economy the one I'm most disappointed in is that owners almost immediately reverted to the old, bad behavior of hard bid and predatory pricing in a market where every builder was hungry. So a lot of things went to hard bid, a lot of paid pre-con engagements shut down and we've had to adjust to that as our customers have had to adjust to that. So, lots of moving parts, a very difficult year, and yet virtual construction grew in 2009.
What we're experiencing now (and I think the various regions of the world and the business cultures of these regions handle this topic differently)... In the Nordics, where there is less bragging and just a lot more performance, I would say that those customers have always "walked the walk instead of talk the talk" to use an American expression. But certainly in most of the world we now see that creating a 3D model and spinning it around on the screen to impress the owner is no longer sufficient. We have a lot of customers who are walking the walk now and actually using Virtual Construction techniques to plan the project and run the project. This is being verbalized to us it's not just an observation that we have noticed. Our customers are telling us they have to move on to be differentiated and to be competitive.
I've included here and excerpt from a 2009 SmartMarket Report published by McGraw-Hill Construction Group. And they've been doing this kind of survey for years. The one I circled is BIM adoption and they would categorize our 5D Virtual Construction as BIM for Construction so it's all in the same category. For BIM adoption in 2009 I've circled the contractor poll which shows that 1/3 of all contractors polled are creating and analyzing models using BIM in the construction process. 51% still are not using BIM at all. So that shouldn't surprise us. But fully 1/3 are. Look at everybody else, look at the architect, look at the engineer, and look at the owner. In 2009 the contractors passed everybody. Now they might just be making a 3D model and doing clash detection... that counts in this survey. But that's good news because once they get past that they've got to go to the next level and we need everybody to do 3D before they're ready for 4D and 5D. BIM usage by contractors has quadrupled in the last two years. Our customer is moving faster than any other supply sector in the AC industry. So it's very encouraging to us that the contractors really get it and see the benefit for them.
State of the Company:
As far as Vico goes, a little report on the state of the company. Revenue will be up for 2009 over 2008. As I've said despite the economy virtual construction grew and so did Vico. I won't pretend that we grew to the target that we had hoped for. So 2009 fell short of what we had hoped but I'm declaring victory that it's bigger than 2008. We did close our series B round of 3.6 million in financing from our investors. And commensurate with the 2009 year being a rough one we did reduce expenses for the near term in order to bring ourselves back within a financed plan as a company. So financially we're in great shape. As I said, we're encouraged that while 2009 was an unwelcomed bump in the road, it feels like most of our customers are coming up now from the bottom they've been at for about six to nine months. I wanted to point out our new account production (that is, people who had not previously done business with Vico) was smaller than it was the previous year. So new accounts came in but they spent less but by number they increased over the previous year. We won more business from new customers albeit they were smaller orders. You could find fault with the fact they were smaller orders but what is important to us is that they are new accounts in the fold that we know will grow and will increase and demand more from both of us... for partners as well as for Vico. That's building the account base for the future so that's really good news.
The other thing is existing accounts (those we have done business with for more than a year) are maturing and as they do so they move from just using these tools for planning a project to actually using these tools to run them. Or from just using these tools to experiment and try to understand where the benefits might come to actually implementing because they now understand where the benefits do derive. And from 3D to 5D, I think a lot of folks would have defined virtual construction three years ago as "I built the model and I did clash detection." That's all pretty low hanging fruit 3D stuff and now moving into derived schedules, derived estimates, and production control usage right off of the model as the dashboard for the project is becoming more prevalent. And as I've said we are hearing from the customer we're not deducing this and announcing it to you ourselves. So that's the really encouraging news and I think we're in a strong position to move forward from here.
Excerpted from the Fridays with Vico Unplugged Edition webinar, Mark Sawyer discusses the current economy and the many shades of BIM available for the commercial construction market.
If you look just a few years back, it wasn't that long ago, Economy A ruled. And I would characterize our customers' business with these top bullets. The building industry was booming and our customers were pushing the boundaries. Things like alternate delivery systems, collaborative teamwork...new approaches with the goal of delivering a new owner experience. It's very exciting to see customers embrace this and owners benefit from it. In that environment, Vico is very focused on a couple of key things: delivering interoperable solutions and making those solutions "consumable one step at a time." So even though those things are very integrated and it's a closed loop, it's still that each one of the steps in implementing 5D Virtual Construction across a project team carries with it impacts on roles, responsibilities, and process. And so "consumable a step at a time" becomes an ingredient in a good solution.
An important half of our business is Virtual Construction Services and for that team we were pretty focused on high value pre-con services that then led over into integrated project controls and the operations build and production phase of these projects. Interestingly enough, during this time (as a lot of this technology was being deployed for the first and certainly less than the tenth time on a project) a lot of this was used in parallel with legacy systems. That was our focus in response to those conditions characterizing our customers business.
As we moved into economy B in the back half of 2008 and throughout 2009 our customers business has changed. The building industry is contracting in most parts of the world. That has brought with it a certain amount of retreating to old boundaries and old practices. Design/Bid/Build pretty much rules the day again. Hard bid with fierce competition and what were collaborative teams is still in place. I think the desire to make that work is still in place but the economic environment has created an every-man-for-himself atmosphere. And the owner experience suffers. I think owners specifically have kind of forgone the pursuit of a better experience and better project delivery in favor of the alluring competition and low cost bid that comes from it.
Our business has to respond to the change in the customer environment. Interoperable solutions remain the same in terms of the focus and so does consumable one step at a time. But at the bottom of the chart there are nuances we have to address. What use to be high value in the pre-con stage that then led to integrated project and production controls... that value is still there it can still be utilized. It's still intelligence that the general contractor needs on the project... but it has to all be compressed into a hard bid cycle. So we've had to adapt to that and on the services side that's a pretty big adjustment. A more subtle one is that on the technology and services side we have to be able to deliver to our customers something that can be used in place of legacy as opposed to just complementing legacy.
Second topic: the grayscale BIM topic... If BIM is a source of differentiation and project efficiency for our clients then one would hope that we could all define it. And as it turns out BIM is a big amorphous word. It's the best word we have so I'm not suggesting we substitute something but I think we have to understand what we mean by it. And it's pretty big spectrum. I've denoted these with the escalating ladder in terms of degree of sophistication. I would advertise going along with it the degree of ROI that comes from implementing some of these steps along the ladder. But the low hanging fruit I think everybody is pretty familiar with and that would be 3D modeling for visualization purposes or clash detection purposes. Interestingly enough for us, the goal at Vico is to partner with companies that help us fill in the boxes and to check the major boxes ourselves to deliver an integrated solution. And as I said before make it "consumable a step at a time" so our customers can move up the ladder a step at a time.
So the coverage is pretty extensive. I think the nuance I'd like to tell you about here is that ... (we carry into product planning and implementation planning for customers) ... Is that, below a certain point in this ladder a lot of what is done here is good for planning purposes and very useful in the planning stage. But if it's not an integrated approach...if a change in one place isn't updated everywhere, those plans can't be updated as fast as the project changes. Once the project is underway for our customers things happen pretty fast and they have to adapt pretty quickly. So a lot of planning goes out the door and a lot of production and reaction happens. In an integrated environment those same systems that built a good plan can continue to monitor the activity of the project and update the plan accordingly for forecasting in the schedule. Verifying subcontractor payment based on quantities in place, etc. So the examples abound but that's not to say that things used below like clash detection aren't used again in production... of course it is. But the overall system needs to be built according to the production timing and the production rhythm and the further we go up the ladder the more important that becomes. So as a vision and as an overall philosophy for us that becomes very important.
Finally, the third topic is what do we do about the multiple models? And not just models but also the disparate data coming from all sources on a project team. So I'd like to kind of break this down into two discussions. The first one and our first priority was: the general contractor is responsible for project quality, cost, schedule, and workers safety. Those are huge responsibilities. If we're going to make this work we can sort a bunch of stuff out later... Let's figure out how to take construction models from popular 3D BIM tools and make them useful for the general contractor. So going all the way back to 2004-2005 this team was focused on that.
The second priority for us and where we find ourselves now... and I think the industry finds its conversation centering on this topic quite a bit today... is now that we know how to make one model work that the GC had to build for himself how do we begin to actually leverage this? If I can eliminate steps for my customer I should. How can we make that happen becomes more of a best practice and process discussion now? Because the picture changes. There are architects and engineers with valuable data to contribute. There are subcontractors and fabricators with valuable data to contribute. How does the general contractor pull all that together and get what he needs out of it?
So for us this little bullet down at the bottom becomes key. We have to support multiple formats because that's how the information comes to my customer. Importantly, we have to understand not just the real analytical components of data that are coming together in a virtual construction model but we have to understand what the stage of that data is. What is it intended for? What is the appropriate use? It's not unusual, for example, for designers to put placeholders in their data for something that will be further engineered later. So the idea of communicating across the team the appropriate and intended use of the data is an important concept.
And then finally as I've said I think a couple of times this isn't a linear process. Certainly planning is iterative and then when it goes from planning production it remains iterative... There are a lot of changes that take place. How can our customer thoroughly detect those changes and incorporate them in his next or revised plan for the project? That becomes a key focus for us, it remains one today, and the fundamental strategy of our products and services are centered around making use of information from multiple sources and communicating across the project team the intended or appropriate use on that information. (We talk about things like the Model Progression Specification... you can find white papers and other webinars on our website regarding that topic.) And then thoroughly detecting and tracking changes which have a lot to do with Vico's contribution to that topic but also integration to project management system and the like to our customer.
I hope the point is pretty clear. There's an underlying Vision that doesn't change. But with the key focus on what the customer is going through and what the customer will experience next we can tune our product strategy, delivery, and our services to try to mitigate issues and accelerate the efficiency and the profitable outcomes that our customers are seeking on these projects.
Jim: We're here today with Mark Sawyer, President and CEO at Vico Software. Thanks for joining us today, Mark. First off, what are the big challenges for the building industry today?
Mark: Key word is today. Top of mind for everyone is the world economy - the built environment took a real hit this year and that's tough for everybody: from architects to engineers to contractors. But the demand for buildings isn't going away, so long term I don't think that's the big challenge for this industry.
I think the big challenge probably is still that graph we've all seen for years that shows building construction is the only non-agricultural industry to decline in productivity over the last 40 years. So, while advances have taken place in building systems, quality, energy performance, and so on, it's still less productive to put up a building today. That's measured in economic output per man hour and that means cost and schedule.
I think the big challenge then is how does a builder become one of those people who can beat the norm instead of performing at the norm? How do you deliver more value to the owner, how do you improve cost and schedule performance? Those who are comfortable running their business on the averages will lose to those who push the averages and hit better numbers. So it's simple math. I think that's the big challenge.
Jim: What are the long term goals for Vico Software?
Mark: One way to summarize it would be - Vico has a goal to create technology that is part of the solution instead of part of the problem. Certainly, technology is not the only thing that is going to solve the challenge I just described. I think, for example, alternatedelivery and different contract forms are huge factors in solving that challenge. But technology can play a very key role in addressing this. Our long term goals center around creating the technology and work processes that shatter the averages. That is not to just differentiate our customer by a marginal amount but set our customers way apart in delivering value to the owners, and separates them from the pack when it comes to value for their clients.
You know, building construction for big projects is a complex undertaking. There is a lot there that cannot be reduced to bits and bytes and computer algorithms. But, there is a lot there that can be automated and the industry has not been well-served by technology companies in the past. When you look at the tools they have to simulate and manage these projects, you realize there is a lot of room for improvement. Vico's focus is exclusively on this industry, this customer and this problem, and we do get it. Our goals are to exploit those opportunities for our customers and help them become highly differentiated performers - highly competitive and at the same time predictably profitable.
Jim: How is Vico helping the building industry today?
Mark: If you're going to accomplish what I just said, you have to walk a mile in those shoes. You can't do this by cheering from the sidelines. So, for us, that means delivering Services for hire that prove the point to our customers. Our services group uses our own software to perform the work, and we prove the benefits of this approach in the real world - on our customers' projects. To be sure, we have customers who buy our software who have gone through no pilot projects with our services group - that's not uncommon. But only because we've proven it on several hundred projects before with other customers. So I think the proof in any approach and the benefit to the customer is really critical. But in this industry it's indispensable. It probably sounds a bit ironic to hear someone at a software company say it's better for them to perform this and not only make the software but use it themselves as a service provider... but that's just the point. We are a better software company because of it. We make better software and we learn real best practices this way because we perform it ourselves, right alongside our customers. So, I think thenew Vico Office Suite is great evidence of that. We took our experience and that of a couple hundred customers and pulled it all together in a next-gen solution for 5D virtual construction and that is Vico Office.
Jim: And how is the market responding to Vico Office?
Mark: I think very well. Even at a time when Builders have less to spend on software, we are seeing existing customers switch overto Vico Office and new customers signing on, so were very encouraged by that. I think there are three reasonsat the root of it. One of those is just the applications themselves. We're covering everything from model management and coordination to cost estimating, target cost planning, line of balance scheduling... We're covering the full 5D spectrum with very easy-to-use applications. I think we've done a really good job of hiding what can be very complex concepts behind a simple to use interface.
The second key ingredient isour BIM-neutral approach. This is a strategy that we undertook the day we founded the company. It's taken us a while to realize it but it's clearly popular with our customers and it's probably no surprise why.3D modeling tools are abundant and they're pretty good, so why invent a new one or favor a single one when customers are already experiencing these tools on their projects? And they've already made some investment prior to us coming along. So our goal is to support what customers are already using, whether it's Revit, Tekla, ArchiCAD, 3D AutoCAD, IFC's, etc. And that's what Vico Office does. So that's been critical I think. Interoperability is a large component and we're there.
The third key point is what we call leveraged integration. That's a Vico term not an industry term. I'd love to make it an industry term. What leveraged integration means to us - if you step back from the solution for a minute - users create data that benefits them in performing their job. Users don't routinely perform "extra" work to benefit someone else and this is especially true in the building industry where disciplines are all separate companies. So, that "extra" work is not in the defined fee of any one member of that team. It becomes real critical that the data you create to do your job is actually a usable, or better yet, leverage-able (if that was a word) as a head start for me to do my job. Then as I add data or further embellish the 5D project, that is usable by the next discipline down the line. So that's what leveraged integration means. It means that something done in one place is actually a head start for the next guy on the project, or the next discipline on the project, or the next step in preparing the project plan.
I like to think of it this way... if all project data is some kind of currency, then leveraged integration is money in the bank... When it's integrated, anyone's "deposit into the 5D bank" is more usable "wealth" for everyone on the team. That's been a key component of the overall strategy of Vico Office and the integrated 5D approach from Vico.
Jim: Thanks Mark, any closing thoughts?
Mark: Looking at all these issues we've discussed here... We're excited because we have this convergence. You know, our customers have faced these challenges long enough that for them inaction is very unwise. Progressive firms are acting decisively and we feel we are right where they need us to be. We've got team-friendly applications that cover the entire 5D spectrum. They are integrated and easy to use so they work in that leveraged environment that I described. They areproven by us in terms of the services we perform and by a couple hundred customers around the globe already so it is not some giant experiment. They are BIM-neutral which has been key in solving major issues for the customer. It no longer matters what modeling tool authored the 3D data. And finally, our company - Vico is laser-focused on this industry and this customer so we only get better at serving them. I said earlier that building contractors have been poorly served by technology companies in the past. We are changing that.
It's good to be Vico.
For more frank conversations with Vico, view the archived Fridays with Vico Unplugged webinar, featuring Vico co-founders discussing the current commercial construction market, the re-emergence of hard bids, the genesis of Vico Office, and customer success stories.
Constructech Magazine recently announced the 2009 Vision Award winners at their annual Technology Day conference in Chicago. I was on hand to see one of our customers, Jim Bostic of St. Joseph Health System, win the Gold Award in the category of Corporate Owner: Healthcare.
From right to left: Peggy Smedley, publisher of Constructech Magazine, Jim Bostic, AVP of Construction at St. Joseph Health System, and Mark Sawyer, CEO of Vico Software
St. Joseph Health System is a not-for-profit Catholic health care system sponsored by The Sisters of St. Joseph of Orange. The system operates fourteen hospitals, three home health agencies, and multiple physician groups throughout several western (USA) states. Owing to the importance of facility delivery in their overall mission and to effectively manage their $2B+ system-wide capital program, SJHS runs a progressive construction division. Jim is the assistant vice president of construction operations and a member of SJHS's multi-disciplined executive management team.
The 2009 Vision Award went to SJHS based on their exploitation of Virtual Design & Construction on the Mission Hospital project. Well into the construction phase, this project team foresaw some problems and took decisive action. Problem analysis and resolution all took place in a virtual mock-up environment before any real problem was encountered in the field. The team was able to document a savings of $1.8M in hard costs and avoided ten weeks' of project delays using Vico's Virtual ConstructionTM methodology. To learn more about this case study, you can view The Mission Hospital webinar and experience a fly-around the steel and glass virtual mock-up.
We know that this example, while noteworthy, is a fraction of what Jim and his team have done to foster innovation and secure real value for SJHS. Not all examples are as easily traced back to quantifiable costs and schedule delays. Such is the nature of problem avoidance. We have had the pleasure of working for SJHS on half a dozen construction projects, and look forward to the continued success of Jim's team. Our congratulations go out to Jim Bostic and St. Joseph Health System for this well-earned 2009 Vision Gold Award.
Our thanks go out to the staff at Constructech for hosting the event and for the weeks of work that go into researching and scoring each award category.
My seventeen year old son, a junior in high school, is in the midst of his PSAT's, SAT's, ACT's and all manner of prep for what will largely determine his college choices next year. (For the benefit of my international colleagues - these are standard exams in the US that are used by our colleges and universities to determine a student applicant's suitability for enrollment. An exam score is not the only factor considered when a college accepts or rejects a student's application, but it is unquestionably one of the most important factors informing their decision. The higher the student's score, the further down the road he is to "Accepted" at his college of choice.)
So knowing that I'm a BIM-for-Construction geek, you can see where this is going. Thankfully (and I mean that on multiple levels, :)) there are now many builders around the world with deep experience in BIM. And there is a rapidly growing appreciation for that expertise within the owner/developer community. But when choosing a contractor how does an Owner ascertain the difference between a builder who talks a good BIM story (my son would call these firms, the "posers") and one who actually practices what they market (continuing with my family's vocabulary...my dad would call these firms, the "genuine article")? You have to admit, in the pursuit phase a poser can make his facile stuff look pretty good.
Well if the Owner is the equivalent of the College Admissions Office - deciding who to accept and who to reject - then the pursuing contractor is the equivalent of the student hoping to score well on the entrance exam. Don't we need some kind of scoring mechanism so that the posers and the genuine articles are easily differentiated? The manufacturing supply chain did this with ISO9000 in their pursuit of constantly improving quality. The software industry did this with CMM in order to bring some science to bear in qualifying vendors and software outsourcers. (Version 1.0 of the Capability Maturity Model, or CMM, was developed by the Software Engineering Institute at Carnegie Mellon University. SEI continues to expand the model for process improvement. www.sei.cmu.edu/cmmi). And, perhaps closer to all of us, the US Green Building Council did this with LEED rating systems.
What do you think? I'm asking builders, architects, owners/developers, engineers, construction managers, and subcontractors alike. Should we leave one's "BIM Maturity" or "BIM Rating" open to persuasive argument, or should we entertain the idea of an independent rating or certification? Such a score would not be the only factor considered when an owner awards a contract, but it could be one of the more important factors informing their decision. The higher the contractor's score, the further down the road he is to "Awarded."
I know my son wishes he could talk his way into Dartmouth. And there is a reason it doesn't work that way.
At Vico, we've the BIM Master Class Series to help GCs "cram" for a BIM test. It's a 7-session series for GCs and Owners to learn more about BIM technologies, methodologies, and best practices, including an in-depth look at contracts, coordination, model-based scheduling, and model-based estimating. We'll continue to add courses to this series, so stay tuned.
If you want to see how your firm stacks up across seven areas of BIM expertise, please considering calculating your BIM Score. And let us know if your score is what you expected.
So what say you? How should the industry reward/distinguish GCs who make an honest investment in BIM? Please offer your comments or feel free to email me directly.
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