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.

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

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

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