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, alternate delivery 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 the new 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 over to Vico Office and new customers signing on, so were very encouraged by that. I think there are three reasons at 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 is our 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 are proven 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.