FIATECH 2011 - Reducing Costs and Increasing ROI: Project Management in the Clouds

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Using New York City's reconstruction as a case study, Hill International and Aconex discuss ways to reduce risk, and calculate ROI using online collaboration on complex construction projects.

Using New York City's reconstruction as a case study, Hill International and Aconex discuss ways to reduce risk, and calculate ROI using online collaboration on complex construction projects.

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  • LEIGH – [Please introduce the session, and Shawn]
  • LEIGH – [Please introduce the agenda]
  • LEIGH: First we’ll talk about the information management challenges and resulting risks in construction projects, using a Hill International project case study to tell the story.
  • LEIGH:Shawn – Can you tell us a little about Hill International before we begin?SHAWN: Sure. Thanks, Leigh.Hill works on extensive project management and construction claims consulting services worldwide with a total construction value of over $250 billion. So we’re hired to help owners minimize risk and deliver projects on time, within budget with the highest quality deliverable. We work on many facilities you see and use every day – from the roads and railways you travel, to the vacation spots and community spaces you visit, to our healthcare facilities and energy sources. And the project we’re going to talk about today is a national landmark – New York’s City Hall.
  • LEIGH: Of course, before these facilities turn into the fully-operational facilities you just saw – that everyone can enjoy – a complex team of hundreds or thousands of people must come together to communicate about the work. And that’s where Hill comes in. They are hired to manage all of the information about a project on their behalf.
  • LEIGH: Shawn, can you tell us why the information flows are so complex on your projects?SHAWN: We’re all probably familiar with the mountains of data generated on a typical project…from emails sent and received, to designs, RFIs, contracts, change orders, BIM models….and more. It’s tough to manage it all –following that status of those emails you sent, or getting the approvals you need on those documents. And what about the time you spend searching for information when someone asks you for it?
  • LEIGH: So the example we’re going to talk about today is New York’s City Hall, which had its last major update in the 1950s and is in serious need of both structural and cosmetic repair to the exteriors and interiors. Crews began some of the exterior work in 2008 by reinforcing strained wooden roof trusses that were part of the original 1812 construction. Interior work will include installation of a new fire alarm and badly-needed sprinklers, upgraded electric service including solar paneling for better efficiency, elevator replacement, and rehabilitation of the City Council Chamber. The project also includes the addition of a sub-cellar for use by the city council beneath its existing basement. Shawn – can you tell us about the how the bottom two blue boxes shown here create a challenging information management environment?SHAWN: Well, to start, the project team includes 3 agencies, 3 general contractors, 12 subs and the construction manager. And at only 2 years into the project, we’ve already produced 18,000 project mails and 6,000 project documents across 45 team members. So the number of people and pieces of information makes it tricky.
  • LEIGH: And all of that information can be a liability to the project, right?SHAWN: Right – if we can’t find the info we need, or we’re not sure who has the latest version, it can affect the project schedule and budget.LEIGH: and so before this project started, you identified the information and process management risks that needed to be addressed?
  • SHAWN: Right. And we identified security, legal claims and efficiency as risks – which are very common on all projects. Security was a risk because cost, schedule, design and construction documentation must be handled with the highest level of security to ensure the safety this government project’s tenants – in this case the New York City Mayor’s Office and City Council. Claims are always a risk – an we are required by contract to capture and maintain a complete project record for ten years after the project’s completion - for claims management and facility management.  And efficiency is always at risk when you have a lot of people working together, and depending on one another for information on the project.
  • LEIGH : And we’ve all heard of project failures that happen as a result of letting those risks spiral out of control - a famous one is the Big Dig in Boston. And this kind of failure happens all the time. The result is not always structural failure, but often business failure and weakened economies.However Hill Int’l hasn’t been involved in a major project failure like this one because it is their business to manage risk.
  • LEIGH: So this is where information and process management comes in. Hill had some very specific requirements from their client, and expected some very specific results for their business. So they asked us at Aconex to help them create the best system and processes to manage risks before they affected the project outcome. And you’ll see that they have not only reduced their risk, but improved returns as well.
  • LEIGH:The ways that an online collaboration platform reduces risk is through a more complete capture of information, by increasing control over that information, and reducing the complexity of managing it.   
  • LEIGH:when Hill was asked by the project owner to find and deploy the best combination of technology to ensure the required level of data capture and security while processing the vast amounts of project information to progress the project, they asked us to help. And we were able to identify a number of ways an online collaboration platform would help them manage risk.[Talk to slide]
  • This approach also gave each project participant the flexibility to continue using their internal project management systems and processes inside their firewall, while collaborating on a neutral platform. For example, Hill International uses Primavera Contract Manager to manage documents across its projects, and uses Aconex to manage all correspondence and documentation with the project teams for those projects. Hill also uses design and scheduling systems whose output is shared centrally inAconex.Complements your systems: Aconex does not replace your internal systems: each organisation may have their own enterprise systems to manage and store corporate information. Aconex is the “capture engine” for project information. Industry specific – features are designed to replicate the common processes in construction, refined over 10 years, delivering thousands of projects.Software as a Service – Easy and quick to deploy, perfect model for construction projects, not strain on the IT department, highly configurable to suit individual project needs
  • LEIGH:To put some context around how much online collaboration helps, I thought I’d show you some examples of ROI from our clients. Shawn will talk you through the ROI Hill experiences in the next section. [TALK TO SLIDE]
  • LEIGH:[TALK TO SLIDE]
  • LEIGH:[TALK TO SLIDE]Shawn – can you walk us through your returns on the City Hall project?
  • SHAWN:Sure. Although we’re only about halfway through the project, we can already measure reduced risk and higher returns when compared to how we’ve managed our project information and processes in the past.
  • LEIGH: You were able to reduce risk and increase returns for the people on the project team significatly. Whichof these are most significant to you?SHAWN: [Choose 2 bullets to talk to]
  • LEIGH: And the same goes for the project stakeholders – the client. SHAWN: [Choose 2 bullets to talk to]
  • LEIGH: And you’ve also measured a number of processes that are faster or easier using an online collaboration platform. Can you show us the Returns you’ve found when it comes to searching for project information, spending less time on administrative information management, and faster RFI turnarounds?
  • SHAWN:Sure. By reducing how much time it takes to find something, we estimate we can save $1.2M across a project like NYC Reconstruction.By reducing search time from 6 minutes to 2 minutes, and multiplying that times 160 searches per day, you can see how the time and salary costs can create savings.
  • SHAWN: And here’s savings that we estimate for just one task from just one project team memberon this project.
  • SHAWN:[Talk to slide]
  • LEIGH:So you’ve gotten some pretty strong returns and reduced risk by just bringing everyone on the same platform. [Talk to slide]SHAWN: That’s right. So lets ask the audience about the risks or inefficiencies they see on their projects, so we can have a discussion about how to solve them.
  • SHAWN: We put up a couple of questions to start the discussion – you can answer these or ask us some questions…
  • LEIGH: And Shawn and I will be in our booth #2 toward the back left of the show floor if we run out of time here – stop by and see us.Thank you!

Transcript

  • 1. Reducing Costs and Increasing ROI: Project Management in the Clouds
    Given by:
    Shawn Pressley,
    VP Project Management Systems, Hill International
    Leigh Jasper
    CEO, Aconex
    April 20th, 2011
  • 2. What you’ll learn
    Why streamlined project team communication and collaboration are crucial to delivering projects on-time and on-budget.
    How online collaboration and project management systems drive the successful management of projects like New York City Hall.
    How quickly and easily a project collaboration system can be deployed—typically within 24 hours—to provide immediate value to your project.
  • 3. Agenda
    The Challenge: Construction Complexity & Risk
    The Solution: Information & Process Management
    The Benefit: Reduced Risk, Improved Returns
  • 4. Agenda
    The Challenge: Construction Complexity & Risk
    The Solution: Information & Process Management
    The Benefit: Reduced Risk, Improved Returns
  • 5. Hill International projects
    Community spaces
    Research and healthcare facilities
    Resorts and hotels
    Renewable energy sources
    Road and railways
    National landmarks/Government facilities
  • 6. Architect/
    Engineer
    Engineer
    Quantity Surveyor
    Services Consultants
    Town Planners
    Subcontractors
    Subcontractors
    Subcontractors
    Subcontractors
    Complex project teams
    Client
    Geotechnical Engineers
    ProjectManager
    General Contractor
  • 7. Architect/
    Engineer
    Engineer
    Quantity Surveyor
    Services Consultants
    Town Planners
    Subcontractors
    Subcontractors
    Subcontractors
    Subcontractors
    Complex information flows
    Client
    Geotechnical Engineers
    ProjectManager
    General Contractor
  • 8. New York City Hall project snapshot
    Project:
    • Houses Mayor’s Office, City Council
    • 9. Standing since 1803
    • 10. Last update in 1950s
    • 11. Major structural renovation needed
    Project Team:
    • 3 city agencies
    • 12. 3 general contractors
    • 13. 12 subcontractors
    • 14. 1 construction manager
    Project Information:
    • 45 project team members
    • 15. 18,000 project mails
    • 16. 6,000 project documents
  • Information can be a liability
    Efficiency: “I can’t find it. I have 400 new emails…”
    Accuracy: “Who has the latest version?”
    Security: “Why was HE cc’d?”
    Loss: “Did I forget to cc you?”
  • 17. Project risks are a growing problem
    Legal Claims
    Security
    Efficiency
  • 18. Poorly-managed risk makes headlines
    • 700% over budget ($3B - $22B)
    • 19. 5 years behind schedule
    • 20. $150 Million in claims
  • Agenda
    The Challenge: Construction Complexity & Risk
    The Solution: Information & Process Management
    The Benefit: Reduced Risk, Improved Returns
  • 21. The Solution: Online collaboration platform
    Online
    Collaboration
    Project
    Information & Process Management
  • 22. Reduce risk by managing information capture, control and complexity
    MaximizeCapture
    ImproveControl
    ManageComplexity
  • 23. Online collaboration delivers better results
    • Neutral online platform
    • 24. Secure information management
    • 25. Flexible for users to employ their own processes
    • 26. Auditable data trail
    • 27. Unlimited users
    • 28. Unlimited document storage and distribution
    • 29. Powerful search functionality
  • Online collaboration is neutral & secure
    PM
    Architect/Engineer
    Client
    Inbox
    Sent
    Document
    Register
    Inbox
    Inbox
    Sent
    Sent
    Document
    Register
    Document
    Register
    Inbox
    Sent
    Inbox
    Sent
    Document
    Register
    Document
    Register
    Inbox
    Sent
    Document
    Register
    Contractor
    Consultant
    Subcontractors
  • 30. Flexible to manage multiple parties & processes
    Industry specific functionality
    Easy and fast to deploy
    Web Services APIs
    Enterprise systems
    SharePoint 2010
  • 31. Provides Complete Project Data Capture
    Client
    Subcontractor
    Subcontractor
    Cost Consultant
    Quantity Surveyor
    Engineer
    ServicesConsultants
    Architect
    PM
    General Contractor
    Subcontractor
    Subcontractor
  • 32. Provides unlimited storage, training & support
    $
    Training &
    Support
    Usage &
    Storage
    Licensing
    Training &
    Support
    Usage &
    Storage
    Licensing
    Unlimited
  • 33. For unlimited users on a project
    $
    Usage & Storage
    Training & Support
    Licensing
    Unlimited
  • 34. Complete record for facility management
    Facility Manager
    PM
  • 35. Return on investment: $2.6m saved, review cycles cut by 68%
    Savings with Aconex: $2.6m
    Review time per document
    25 minutes
    Client example
    • Large contractor
    • 36. $800m office/ retail project
    • 37. Saved 17 mins per review
    • 38. 180k reviews (est 10% of all docs/ correspondence)
    • 39. Saving: 180,000 x 17/60 x $40 hourly rate = $2,040,600
    • 40. 220k less hard copy prints @$2.72 = $598,400
    - 68%
    8 minutes
  • 41. Return on investment: 84% saving in doc control costs
    Savings with Aconex: $628k
    Document control hours and cost
    11,997 hours
    $743,814
    Client example
    • Multi-disciplinary PM and engineering firm
    • 42. $268m industrial project
    • 43. Labor saving of $628k on specific, measured processes
    • 44. 40 month term
    • 45. 10,124 hours saved x $62 hourly rate = $627,688
    - 84%
    1,873 hours
    $116,126
  • 46. Return on investment: $6m savings in doc control costs
    Document control hours and cost
    Savings with Aconex: $6m
    449,280 hours
    $8,985,600
    Client example
    • Government infrastructure agency
    • 47. $6.7 Billion Rail & Transit Program (25 projects)
    • 48. Labor saving of $6m on document collection, update and distribution tasks
    • 49. 299,520 hours saved x $20 hourly rate = $5,990,400
    - 66%
    149,760 hours
    $2,995,200
  • 50. Agenda
    The Challenge: Construction Complexity & Risk
    The Solution: Information & Process Management
    The Benefit: Reduced Risk, Improved Returns
  • 51. Project team benefits & reduced risk
    Easier communication and collaboration between staff and project team members
    Fewer redundant work efforts to distribute information quickly and get responses to information requests
    Reduced risk of project error due to miscommunication or working from wrong document versions
    Clearly articulated responsibilities and action items in workflows
    Shorter ramp-up time
  • 52. Project stakeholder benefits & reduced risk
    Reliableprotection of profit margins
    Improved services and staff resourcing efficiencies, creating capacity to attract new clients
    Secure intellectual capital
    Reduced regulatory burden and risk of non-compliance
    Reduced risk of claims and losses, with complete project records and audit trails
  • 53. Increased returns
    • Less time spent searching for documents
    • 54. Fewer administrative man-hours
    • 55. Faster critical responses to project information requests
  • Return on investment: $1.2m saved searching for docs
    Time spent searching for documents
    Savings with Aconex: $1.2M
    23,360 hours
    $1,752,000
    • $1.2m savings searching for information in 4 years
    • 56. Search time cut by 60%
    • 57. Savings: 233,600 document searches 15,574 hours saved x $75 average hourly rate across project
    - 60%
  • 58. Return on investment: $21k savings on one admin task
    Project record assembly cost
    Savings with Aconex: $21K
    800 hours
    $26,400
    • $21k savings on just one administrative task
    • 59. Saving: 640 administrative hours saved x $33 hourly rate = $21k
    - 80%
  • 60. Return on investment: 40% faster responses to RFIs
    Wait time for FRI response
    Savings with Aconex: $TBD
    10 days
    - 40%
    • Creates potential savings in man-hours and promotes faster, more efficient project delivery.
    6 days
  • 61. Online collaboration brings measurable results
    By streamlining project team communication and collaboration, we can:
    1. Positively affect efficiency to ensure on-time and on-budget completion.
    2. Reduce and mitigate risk associated with project complexity, team
    complexity, and information management.
    3. Provide immediate value to a project by getting project teams working together quickly and keeping them productive.
  • 62. For discussion
    • What are some inefficiencies on your projects?
    • 63. What kinds of information bottlenecks do you have?
    • 64. What processes would you like to be faster in your project workflows?
    • 65. Do you have any data security concerns?
  • Thank you!
    Shawn Pressley
    VP of Project Management, Hill International
    Leigh Jasper
    CEO, Aconex