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E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
E&C Industry Review By Scott Boutwell Jan09
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E&C Industry Review By Scott Boutwell Jan09

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An overview of AEC (or EC) market drivers, associated business issues and impacts, and enabling technology solutions. Additional insights on advanced tech and that for sustainability processes.

An overview of AEC (or EC) market drivers, associated business issues and impacts, and enabling technology solutions. Additional insights on advanced tech and that for sustainability processes.

Published in: Technology, Business
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  • 1. Engineering & Construction (E&C) Industry Review For Discussion Purposes Only January 2009 Scott Boutwell C – Level Strategies © 2006 C – Level Search LLC All rights reserved.
  • 2. Overview E&C Industry Background • Global E&C Profile • Market Drivers • Strategies • Solution Mapping • Key Business Issues • Key IT Challenges • E&C Market Segments • Contact Info • © 1999 - 2009 C – Level Search LLC - All rights reserved. 1
  • 3. Global E&C Profile E&C Community • Trusted advisors to Fortune 500 and national governments for capital programs • Tight community: Know other firms very well, at all levels • Global: large, distributed workforces following the sun • 24/7 work teams; multiple engineering centers worldwide • Diversified: all segments/disciplines/stages of lifecycle • Risk-averse • Operate on relatively low margins • Executive management by engineers / geologists; limited operational experience outside • industry Operating efficiency focuses on direct labor utilization; consulting model • Technology • They are not interested in earning a profit on reselling product; important to remain impartial • on technology decisions with clients Attempt to drive technology costs into projects or to clients • Multiple & disparate systems and toolsets • Emerging trend to partner with strategic vendors • Emerging trend to partner with leading R&D and academia for advanced technologies • © 1999 - 2009 C – Level Search LLC - All rights reserved. 2
  • 4. E&C Market Drivers External Global (new construction, envt) and Driver US (security, upgrades, hazwaste). (Example: 7.5% compound annual growth rate on infrastructure spending from 2005 to Abundance 2013) Lack of qualified technical personnel: Aging workforce and Scarcity fewer engineering graduates Fortune 100 and national governments are increasingly Outsourcing relying on relationship-based E&C firms Successful mergers require compatible corporate cultures, Consolidation repeatable processes, and integrated multi-discipline toolsets Potential impacts on profits, brand, and resources: Risk • Health & Safety • Regulatory Compliance Management • Bonding & Insurance © 1999 - 2009 C – Level Search LLC - All rights reserved. 3
  • 5. E&C Strategies Business Business E&C Issue Impact Strategies External Driver Create a Ability to provide Corporate Abundance Knowledge services Impact Organization Shareholder value Innovative Revenue Impact Scarcity Resource Mgt. Competitive position Shareholder Technology Outsourcing Impact Standardization Service quality Employee Customer Consolidation Impact Loyalty & Employee Retention satisfaction Risk Customer Operational Organic / M&A Management Growth Strategy satisfaction Impact © 1999 - 2009 C – Level Search LLC - All rights reserved. 4
  • 6. Technology Solution Mapping Business E&C Technology Issue Strategies Solutions Create a Multi Discipline Ability to provide Abundance Knowledge & Targeted services Organization Tools Global Work Shareholder Sharing & value Innovative Scarcity Collaboration Resource Mgt. Enterprise Competitive Licensing position Technology Outsourcing Advanced Standardization Technology (3D Service quality Prototyping) Customer Loyalty & Consolidation Account Mgt / Retention Employee CRM satisfaction Risk Information Organic / M&A Management Customer Lifecycle Mgt. Growth Strategy satisfaction © 1999 - 2009 C – Level Search LLC - All rights reserved. 5
  • 7. Key Business Issues for E&Cs How do we increase & maintain operating efficiencies in an industry where margins are typically • low? How can we manage SGA costs? How do we identify, share, and leverage best delivery practices when the company has grown via • acquisitions? What customer segments should we focus on, relative to: risk management, profitability, and core • skill sets / resources? What growth strategies should be followed: incremental (‘organic’) or acquisitions (‘inorganic’)? • How can we execute globally with distributed engineering teams? • What business processes must we excel at? • Given the limited resources available, how do we align our organization to learn, innovate, and • leverage technology? © 1999 - 2009 C – Level Search LLC - All rights reserved. 6
  • 8. Key IT Challenges Better understand IT Investment (inventory, utilization, future use) • Align technologies with BMPs, and share across numerous business practices, cultures, IT systems Reduce number of toolsets / vendors, but retain flexibility for range of clients and expertise of internal teams Obtain economies of scale and leverage purchasing power Rationalize annual expenditures on core technologies Establish predictable annual expenditures with strategic vendors Enhance, leverage & communicate strategic partnership with strategic vendors Invest sufficient time & research into emerging technologies (i.e.. 3D prototyping, SaaS) Streamline licensing and deployment schemes Provide integrated solutions around key workflows © 1999 - 2009 C – Level Search LLC - All rights reserved. 7
  • 9. ENR Top 20 Design – Build Firms (US based firms only) The Top 20 firms control much of the global engineering & construction market © 1999 - 2009 C – Level Search LLC - All rights reserved. 8
  • 10. ENR Top 20 Design-Build Firms Revenue Segmentation Communications Manufacturing 2% 3% Other (i.e. Iraq) 4% Industial / Petrochem 33% Hazardous Waste Key Takeaways: 12% Industrial / Petrochem / • Energy = 45% Wide range of toolsets • Water / Wastewater required 5% Integration / use of renewable • energy technologies Infrastructure, Water / • Wastewater, Hazardous Waste = 34% Infrastructure 15% More outsourcing of • operations Energy Design – Build – Operate • 12% Workflow solutions Building Manufacturing segment is 14% • small (3%), but growing rapidly PLM / RoHS • © 1999 - 2009 C – Level Search LLC - All rights reserved. 9
  • 11. Top Ten E&Cs by Market Segment Key Takeaways: • E&Cs have multiple business units that work somewhat independently; varying level of control by corporate IT • International – based firms (SNC, Fugro, WorleyParsons) are dominant players in EMEA and APAC for local projects © 1999 - 2009 C – Level Search LLC - All rights reserved. 10
  • 12. Opportunities for E&C Vendors / Partners Business Solutions • Business Process Development & Management • Account / Services Management Strategy • IT Strategy Development & Validation • Organizational Assessment & Design • HR Strategy, Assessment, Change Mgt • Innovation & Learning Strategy • Business Continuity Planning / Risk Management Strategy • Technology Solutions • Toolsets for project use: CAD, GIS, PLM, PDM, Data Mgt, Risk Mgt • Enterprise Architecture Design • CRM process solutions • Project Management process solutions • Collaboration / work sharing process solutions • Training & E-learning process solutions • IT, app development, & BP outsourcing • Shared Services Strategy & Design • IT - based and cleantech for specific sustainability processes: buildings, water, reporting, GHG control, SCM • Partnering with E&Cs • Influence both E&Cs and their clients on toolset selection, customization, and integrated workflows • Identify pilot projects and get buy-in from both client and selected E&C • Develop solution maps and co-marketing with E&Cs for select market segments • Foster E&C interest to customize technology with their business process expertise for their clients • Foster E&Cs interest to develop integrated workflows for their clients • © 1999 - 2009 C – Level Search LLC - All rights reserved. 11
  • 13. Partnering with E&C Clients “Sell With” as well as “Sell To” Illustrative Example Highest Value Partnership Revenue Opportunity Direct Revenue Opportunity © 1999 - 2009 C – Level Search LLC - All rights reserved. 12
  • 14. Appendix CLS Background © 2006 C – Level Search LLC All rights reserved.
  • 15. Scott Boutwell Contact Information 16 Point Gallinas Rd San Rafael CA 94903 scott@c-level.biz www.c-level.biz 415-279-3730 AEC & Cleantech Trends Blog: www.scottboutwell.blogspot.com LinkedIn profile: www.linkedin.com/in/scottboutwell (has list of publications, work history, recent projects, and 11 recommendations) © 1999 - 2009 C – Level Search LLC - All rights reserved. 14

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