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Improving productivity in the UK Construction Industry
- 1. 6 ways to improve productivity in the UK Construction Industry The impact of Industry 4.0 on UK Pre-Construction & Procurement Analysis of Global Management Consultants Research by myConsole team
- 2. Credentials -Philip Collard MD of MarketingWorks and founder of myConsole Expertise Consultancy - 25 years of Consultancy experience advising firms to improve client-centric work winning behaviours, processes and culture. Research - 2014 Bid Cost Research with Reading University Digital Solutions – A cloud based tool to manage bid performance data, encourage collaboration, and best practice behaviours. 6 July, 2017 A sample of the clients we have worked with:
- 3. myConsole Partners 3 6 July, 2017 Eric Sandor Chairman • Accenture for 20 years, as Global Managing Partner • A profound understanding of using AI in business processes, and experience across strategy, operations, technology. Philip Collard Chief Executive • Managing Director of MarketingWorks Training & Consultancy for over 25 years. • Designed "win workflow" change processes, and helped over 2000 firms align the market and client facing behaviours. Anush Newman Chief Information Officer • 11 years of global strategy and operational consulting experience. • A deep understanding of data science techniques to solve commercial problems. Michael LeoValan Chief Information Officer • 20 years experience in IT, with 10 years in Silicon Valley, USA. • Managing the offshore team, his technology experience ranges from Product Development, ERP, CRM and Performance Analytics. Tony Bicknell Chief Operations Officer • Past MD of Futuresource Consulting. • Tony brings a wealth of experience in leveraging digitization to improve collaboration and achieve corporate transformation.
- 4. myConsole Webinar Team introduction Philip Collard Chief Executive Officer myConsole Ltd pcollard@myconsole.co.uk 07973 501599 Tony Bicknell Chief Operating Officer myConsole Ltd tbicknell@myconsole.co.uk 07718 625805 Amy Hazlehurst Projects Manager myConsole Ltd ahazlehurst@myconsole.co.uk 07951491154
- 5. Previous Webinar – Reducing the £3bn annual industry bid spend in 5 key steps 6 July, 2017 Same process being followed in BIM. In 10 years everyone will have this, but first movers get the profound advantages Technology can process and analyse immense amounts of data and instantly transforms data into knowledge - Real time insights - Vast processing capability - Each user can access their own data analytics - Complex algorithms inform predictable outcomes - Cloud based collaboration - Cognitive workflows Peak performance requires planning Invest time in developing relationships Selectivity is mission critical Well defined checks and balances Constant evaluation, feedback & analysis
- 6. Key themes on the importance of Digitisation from PwC and McKinsey How these relate to the Procurement Phase of Construction Demonstration of an approach to Digitisation in the construction industry Agenda
- 7. PwC and McKinsey are looking at Digitisation in the Construction industry* Forecast for 2020 Worldwide survey, of over 2,000 businesses in 26 countries 19% of which were from the construction and engineering sectors Current position • McKinsey Global Institute • Reinventing Construction: A route to higher productivity
- 8. myConsole analysis for Intelligent Procurement Strategy & Activity
- 9. Key findings from the McKinsey research show: http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 10. Productivity today has flatlined • McKinsey suggest the construction industry globally has averaged growth of 1% per year over the past forty years • The Farmer Report in 2016 highlighted that the productivity growth in the construction industry had remained flat since 1994 6 July, 2017 McKinsey tested 10 root causes for low construction productivity: 1 2 3 4 5 Of causes relate to procurement 50% 2 http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 11. The potential for productivity growth is massive To achieve anywhere near this target, we as an industry need to embrace profound change. McKinsey states if we do not adopt digitalisation we will miss a huge opportunity to turn around the industry. “Construction-sector participants should rethink their operating approaches to avoid being caught out in what could be the world’s next great productivity story.” 6 July, 2017 £££ Savings 33% The vision for Construction in 2025, includes a target to lower costs by 33% http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 12. How can UK Pre-Construction and Procurement change this picture? 6 July, 2017 http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 13. Making changes in these areas will deliver 13% to 18% in cost savings and could offer a rise in productivity of 29% to 42% within Procurement. 6 July, 2017 29-32% 13-18% How can UK Pre-Construction and Procurement change this picture? http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 14. Collaboration and Contracting * • McKinsey identifies a need to move to “a system focused on collaboration and problem solving.” • The tendering process needs to change from focusing on cost alone to “be based on best value and past performance.” • Visibility and transparency are paramount. • “Establishing a “single source of truth” on projects for monitoring progress early, potentially supported by collaborative technology, helps to minimize misalignments and enable joint corrective action.” 6 July, 2017 • at myConsole our new cloud-based collaboration platform delivers transparency and visibility across the entire procurement process . • All information is accessed and updated in real- time. • With everyone working from the same information, organisations can deliver a joined up approach, that increases client desired outcomes and expected performance • Pre-construction can innovate client centric value adding solutions that will help ensure our clients win more bids. http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 15. Procurement and supply chain management • McKinsey concludes - The industry needs to focus on using digital solutions to host and deliver best practice across the entire procurement cycle. • “…digitally enabled approaches can deliver substantial change. Improved planning and increased transparency among contractors and suppliers would reduce delays significantly.” • “Best practice in areas such as digitizing procurement and supply-chain workflows will enable more sophisticated logistics management and just-in-time delivery.” 6 July, 2017 • We designed myConsole to leverage benefits of 24/7 virtual team collaboration across a multitude of bids irrespective of their individual stage. • We integrated our workflows as a core management process so users can instantly undertake pre agreed or system prompted improvement actions, across complete virtual team activities simultaneously • This delivers immense benefits for all the team, visible via their own dashboards to ensure real time governance reporting across all gateways and reviews. http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 16. Technology Adoption Infusing Digital Technology as advanced automation • The report clearly states that one route to higher productivity is new technology. • “..the tools for that more productive approach are increasingly available through digital technologies...” 6 July, 2017 • Our platform, myConsole, is a digital tool that will follows the conclusions of the research to harness the power of digital in pre-construction work winning. • We predict our clients will experience 70% increase in profitability from achieving 1:2 win rates. through each member of pre-construction gaining a 20% personal productivity improvement. Theory into Practice • Improve monitoring Digital collaboration and mobility tools to track progress and collaboration in real time. • Data analytics that is real-time, both backward looking and predictive, can increase productivity by as much as 50%. • Imperative to ensure that the you have the right data, at the right time, flowing through the various points of the supply chain. http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 17. McKinsey Key Findings - Rewiring the contractual framework Establish a single source of truth There is a need to drastically improve transparency within the industry, and visibility along the supply chain. http://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/reinventing-construction- through-a-productivity-revolution
- 18. The impact of Industry 4.0 on Pre-Construction & Procurement Analysis by myConsole team
- 19. The case for digitalisation • Survey respondents identify significant opportunities for Construction to increase revenue and exploit huge efficiencies by adopting digital technology 6 July, 2017 Forecast for 2020 Worldwide survey, of over 2,000 businesses in 26 countries 19% of which were from the construction and engineering sectors PwC survey respondents plan to make significant investments in digital And expect to spend around 5% of their revenue p.a. And 55% of this investment is expected to payback within two years. https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital- enterprise-april-2016.pdf
- 20. Key findings from the PwC research show: • Annual revenue to increase by +2.9% on average as a result of digitalisation in construction Some forecasting ‘ T.O. increases of more than +50% over five years.’ Combined with 3.4% p.a in cost reductions over the next three years • PwC is calling this seismic change to the business landscape ‘Industry 4.0’. It is about digitalisation and integration of vertical and horizontal value chains. Huge cost savings & quick ROI Quantum leads in productivity & performance Empowers deeper collaborative relationships Through End to End Digitisation: https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital- enterprise-april-2016.pdf
- 21. Only an end to end solution will deliver these increases Digitalisation and integration of vertical and horizontal value chains 1. Vertical integrate process vertically down through client desired outcomes at concept and feasibility phases, continuing through procurement and delivery phases and right down to project completion and handover all within one end to end integrated digital environment. 2. Horizontal End to end integration of services within one digital platform. From planning to execution all key value chain partners are collaboratively working together, offering real time governance. Concept & Feasibility Procurement Delivery Project Completion Planning Collaboration With Value Chain Real Time Governance Execution Vertical Horizontal https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital- enterprise-april-2016.pdf
- 22. Vertical & Horizontal integration • PwC findings are reflected in the design workflows of myConsole • Bringing together client desired outcomes from concept and feasibility phases and using them vertically down through the entire process through procurement and delivery phases, right down to project completion and handover. 6 July, 2017 • myConsole provides a seamless process within one end-to-end integrated digital environment • with the additional features of real- time dashboards providing complete access to all business intelligence and governance. • PwC also positions how to exploit horizontal integration to share data across all operational processes. • The aim is to provide insights in real-time, increasing the capabilities for reporting and execution across the entire work winning and bid management process, which combined will deliver profound process efficiencies and time savings. • For myConsole users, this means sharing information across all functions of the pre-construction process • Business strategy, sector and key client planning and business development and pipeline management. https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital- enterprise-april-2016.pdf
- 23. Quantum leaps in productivity & performance • Successful data analytics drives transparency and performance enhancement. • Real time end to end platforms drive integration of key data and metrics from horizontal value chain partners. • Improved customer insight from smart data analytics also allows companies to better focus on additional high-margin business. • “Digital services based on data analytics, or even complete digital solutions serving a customer ecosystem, will drive breakthrough revenue growth.” Global Industry 4.0 Survey, p5 • “Improved customer insight from smart data analytics also allows companies to better focus on additional high-margin business.” Global Industry 4.0 Survey, p14 Data Analytics across vertical and horizontal supply chains https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital- enterprise-april-2016.pdf
- 24. Important Message from PwC about Digitalisation - First movers are 3 x more successful https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital- enterprise-april-2016.pdf
- 25. 6 ways to improve productivity in the UK Construction Industry The impact of Industry 4.0 on Pre-Construction & Procurement Analysis of Global Research by myConsole team
Editor's Notes
- Introduce the team Philip presenting Amy taking your poll answers Tony following up to see how we did
- Peak performance requires planning Before initiating formal bidding processes and preparing a tender for submission, your business unit needs to make some clear, focused tactical plans. This planning starts by identifying new clients who closely align with your target market and with your preferred contracts you have previously successfully delivered profitably. This way allows you filter out those projects and opportunities that you have a lower chance of winning. Tactical planning at this stage means less time is wasted pursuing ill-matched clients and tenders. The advent of digital tools that crunch large volumes of data means that business planning and decisions are based on hard facts based on actual past performance rather than instinct Invest time in the right relationships You also should carefully select a few key clients from all your existing clients being those that closely align with your business values and people. Now initiate engagement activities which focus your teams energy, time and resources on building strong relationships with client stakeholders in these organisations. It’s important to take time to develop an understanding of their personal and operational goals and motivations. New technology can not only help manage and coordinate these interfaces via virtual client teams but instant real time performance analysis bring a deeper understanding of clients needs and objectives and whether we are responding to specific requirements and issues. Obviously when all interactions are captured in one place and every virtual team member is able update or access relevant information, client relationships become easier to manage successfully. Be brave. Pull the plug. Rather than processing bids you slowly realise you can’t win, early selectivity assessments allows you to drop those bids earlier in the bid cycle so you can focus your energy on more suitable tenders. This is a key strategy in improving your win rate. By switching off bids early, you will free up time which you can reinvest in the bids you have more chance of winning. The traditional approach to winning work in the pre-construction sector is a tendency for teams to spread their limited resources over a large number of bids. Our research shows that average number of bidders per tender is five, which aligns with the typical length of a tender list - between 4 and 6. Our research also revealed the average number of hours firms spend on winning and losing bids. A losing bid takes, on average, 332 hours. A winning bid takes, on average, 483 hours. If a bid team wins one in every five bids, the total number or hours per successful bid is 1811 (4 x losses + 1 win). If a bid team wins one in every two bids, the total number of hours per successful bid of 815 hours (1 loss + 1 win). That’s a saving of around 1000 hours per successful bid - the equivalent of over six months’ work for one employee. The added edge that new technology brings is the ability to capture and analyse significant amounts of data. Real time monitoring and measurement analytics provides insights that means adjustments can be suggested to adjust your business unit weighted selectivity scoring to constantly improve informed decision about which bids to focus on. This is the same approach F1 teams constantly monitor multiple channels of metric during the race and make critical adjustments to the cars mechanisms. Well-defined checks and balances It is important to carefully manage the bid and use the right processes. Do you have strict governance across all the critical stages of your bid? Gateways need to be defined and passed through in order for a bid to proceed. This ensures that you constantly limit exposure to project risks and ensure only the very best tenders are processed that will deliver profitable work. Digital tools have embedded reviews and governance reporting to identify blockages and and pinch points. As well as assessing the overall bid team members’ performance. Only good governance can improve best practices. Constant evaluation and analysis Monitoring, measuring and analysis must be completed throughout the entire bid cycle. Although it is important to collect accurate feedback for winning and losing bids, it is also essential to constantly analyse the bid. These insights and learnings will help to keep your bid on track and make sure you are focusing resources in the right areas. The ability to collect and analyse this level of data in real time is only possible using the latest technology. The power of digital is its ability to capture new levels of data insights and to provide analysis of this all this information and make real-time changes that improve your chances of winning. This intelligence alone is unprecedented and will put your management teams in a position to dramatically increase win rates.
- PC to talk around issues, why they are intrinsic to boosting productivity
- Organisations and governments across the world are looking for ways to address stagnant productivity levels.
- The report identifies several areas that will significantly impact productivity and cost-savings three of which specifically relate to pre-construction. Another table – Carry across yellow categories. 29-32. Title: Pre-Con & Procurement. Totals – cumulative impact. 13-18 percent.
- The report identifies several areas that will significantly impact productivity and cost-savings three of which specifically relate to pre-construction. Another table – Carry across yellow categories. 29-32. Title: Pre-Con & Procurement. Totals – cumulative impact. 13-18 percent.
- 4.0 offers the opportunity to integrate process vertically down through client desired outcomes at concept and feasibility phases, continuing through procurement and delivery phases and right down to project completion and handover all within one end to end integrated digital environment. This challenge is now possible and the construction industry can experience phenomenal efficiencies and cost savings. This is this vision that myConsole has been developed to achieve. This challenge is now possible and the construction industry can experience phenomenal efficiencies and cost savings. This is this vision that myConsole has been developed to achieve. Combining data across all operational processes can deliver profound process efficiencies in real time. business planning and strategy, sales pursuit, selectivity and pipeline management all with real time report and execution capability so can be extended across bid management proposal development, negotiations and then project delivery. the real benefit digital offers is real time governance
- Marginal Gains theory mentioned here? Need data, and performance measurement to improve.
- this is why we have built in a key client relationship planning and management tool within myConsole as it put the client at the centre of the system. Virtual teams are easily co ordinated and activities and performance measured and monitor. It also offers the capability of managing relationships across frameworks.