The Golden Thread. Establishing the conduit of information needed to understand, reshape and drive the value chain through actionable analytics, targeting pain-points and opportunities.
‘Outside In’. Ensuring that enterprise data and data services form an enduring bedrock supporting an API economy, so that the business can choose the best apps and tools that it needs from the outside without creating new information silos, opening the door to new entrants.
Business model innovation. Investing in smarter solutions alone risk a ‘race to the bottom’ through cheaper and quicker delivery. How can companies discover new and better sources of revenue?
Knowledge economy. Knowledge workers spend over one third of their time simply searching for information, or re-using out of date information and knowledge hoarding prevails over knowledge sharing, but this is a major obstacle to continuous improvement.
Experience-driven. Digital is customer-centric, supply-chain centric, user-centric, workforce-centric, NOT IT-centric. Digital optimises and centralises stakeholder experience no matter whether they are online, on mobile, in virtual or augmented environments. This is about leveraging data, ‘the new oil’.
The EC&O sector is multi-faceted. Major players can be divided across the entire value chain from design to decommissioning: design specialists, implementation specialists, EC&O firms and service providers working across built structures, facilities or B2C services. Infrastructure operators, building operators, utilities and smart city authorities are part of this mix. Multi-professional consulting firms operate across most or all of these sectors.
IT and Manufacturing productivity have increased by over 25% since 1995, but EC&O sector productivity has not changed in this time and Industry 4.0 is some distance off. The industry needs to become more consumer facing, concerned not only with optimising TOTEX, but also understanding and interacting with those who will use the facilities, as well as the assets themselves. This new systemic thinking is focused on interaction, is highly dependent on information and insight, and challenges the traditionally fragmented approach. However, low productivity and uncertainty combined with a traditional view of business have held back progress.
Building Information Modelling has been hailed as a transformer of the industry. Focused on TOTEX optimisation, it is founded upon industry-standard workflows across the supply chain and between teams. UK research by BIM4SME suggests that only 6-7% of SME’s, the bulk of companies in EC&O supply chains, have so far attained BIM Level 2. The Digital Construction Review found 32% of their respondents had done so – perhaps a reflection of larger companies more able to make the necessary investment. Robotics, drones, digital printing and other next-gen technologies are gaining much interest but have low adoption, and the basic business model remains largely pre-industrial.
At the same time, a digitally connected workforce exists that is familiar with smartphones, apps and so forth, and with consumer expectations honed by a Digital world. This is a ‘B2C gap’ waiting to be filled and the prevalence of Cloud solutions now makes this far more achievable. A connected workforce enabled by mobile apps and with multi-channel communications services can experience an entirely new workplace, in which workers and their needs are at the centre of user experience.
New digital technologies – particularly SMACC (Social, Mobile, Analytics, Connectivity and Cloud) – provide the potential for this transformation. Process industrialisation, supplier ecosystems, prefabrication, additive manufacturing, standardisation, robotics and workforce connectivity can all help drive up efficiency and reduce uncertainty in the EC&O Sector, but may not themselves disrupt thinking sufficiently unless also used to do new things in new ways, and to look to new markets. In other words, ‘If business change is a better caterpillar, transformation is a butterfly’.
Against this backdrop and with a confusing and ever-growing array of solutions addressing the many aspects of the industry, we now look at the key shifts in more detail.
#1 Creating the Golden Thread
A value chain is a set of linked activities that an organisation carries out to create value for its customers. The total net value is the sum of net value at each stage, therefore to optimise value overall, the gains and losses of each stage have to be optimised. The ‘Golden Thread’is a smooth flow of information across the business, underpinning the progression of all work from horizon-scanning through to project acceptance and sign-off.
It demands a single conduit and one consistent view of performance and progression for every bid and every project, contractor and employee, with intuitive dashboards and preventative alerts supporting every key role and in any location via any device. It is central to:
- Winning the right work at the right price whilst recognising and controlling risk
- Structuring, managing and delivering projects consistently and safely, using rigorous stage-gates to identify and deal with risk before the worst happens
- Providing a single source of truth to pinpoint pain-points and opportunities.
Unless there is a real understanding of what works best and what does not, and a simple means for underpinning continuous improvement through cost reduction and better results, there will not be the means to invest in innovation. To be effective there must be a user-centric environment, bringing the right information to the right people in the right form when it’s needed, cutting out wasteful sifting and duplicating data in mountains of spreadsheets. Creating this golden thread is made easier through ‘outside in’ thinking and creating a knowledge economy, two more of our digital shifts.
#2 Thinking ‘Outside In’
The experience of business customers within an organisation and its ecosystem should be no different from the experience of consumers in the outside world, able to choose from an open marketplace what suits them best, tapping into social networks and crowdsourcing for advice. The opposite is too often the norm.
An ‘outside in’ strategy recognises that any large engineering organisation will be compelled to use a significant number of strategic tools such as Project Lifecycle Management, CAD or asset management platforms dictated by clients, subject-matter, local skills and technological advances. A much larger number of tactical tools will also be in place, growing with the Apps marketplace. To support these effectively the enterprise platform needs to be agnostic, evolving and ubiquitous, rapidly deployable, highly scalable and able to integrate readily with strategic tools.
Industry leaders have successfully broken open their locked applications to make the data accessible and enable Lines of Business to participate in what some have called the API economy. APIs democratise access to information and empower applications to form deep value-creating links. For example, consider a mobile app that supports field technicians. The app can use APIs to access a legacy service management application and link to Google Maps to provide technicians with the most efficient driving routes to appointments in current traffic conditions. Without an API, it would be difficult, perhaps even impossible, to unlock this kind of fine-grained information. Examples of new world suppliers in this space include IBM Bluemix, Trimble, Mulesoft, GroupBC, OpenBIM, SalesForce, ServiceNow and Safe Software.
The built environment is best represented using spatial data. The spatial technologies industry has traditionally been dominated by GIS tools with their own technology stack and with emphasis on trained operators. Despite the influence of destructive B2C services such as Google Maps, spatial insight and tooling remain under-exploited. Now, Cloud GIS Services are increasingly built from Open Source platforms such as Grass, Geoserver and Mapnik. Openstreetmap.org is a global collaborative, crowd-sourced digital map that can be consumed by other applications. Cesium provides Open Source 3D software, OpenLayers is a powerful geospatial services platform – see the Cesium New York project, built using Openstreetmap data. CSC’s IOT Analytics platform incorporates Open Source geospatial and 3D technologies in order to provide unique actionable analytics based on real time sensor and other data, and is contained in Bluemix. Geospatial and 3D can now be an innate part of the Digital business experience using Open Source software and data, and is no longer the sole jurisdiction of technical experts. . In parallel, the OpenBIM Consortium is sharing APIs for managing 6D data (including cost, time and materials) and groups such as the OGC Consortium are working hard to bring together BIM and GIS data into a unified experience.
#3 Business model innovation
Research shows that business model innovation provides over five times the return on investment from new products or process change and yet few managers would be able to explain succinctly what their business model is. A simple perspective is to set out clearly Who (market), the What (product or service), the How (way in which the service is consumed, and especially the form of contract / reward), and the Value – sources of revenue. Clearly a traditional ‘cost plus’ contract that balances reward against costs incurred and a fixed margin, will not result in increased revenues if smarter technology is used to drive down costs. In fact the net result will be business shrinkage where the value increased goes to the end customer instead of the business and there is more competition. There are numerous examples of businesses that have failed because their business model did not change (e.g. Kodak), and others that have succeeded by redefining their market, product definition or how it is consumed. Crucially, at least two of these factors must change and it is never enough simply to innovate the product.
Devising new business models is a challenge to companies heavily entrenched in terms of self-image and traditional ways of doing things. It may even be seen as a threat. Yet the 55 identified business model patterns provide available role models for transforming what a business does, or how it performs. The quadrant opposite demonstrates the need to streamline operations in order to reinvest in new business models – consider the difference between maintaining a road based on lowest cost and operating a road based on maximized value. Achieving this shift in thinking is hard, requiring new thinking around old and new operational models in order to reinvest in value chain optimisation as well as new revenue creators, moving a traditional low margin business into new high value areas.
#4 Creating a knowledge economy
Large engineering firms are typically awash with data stored on legacy network drives, CAD tools, geospatial, emails, alongside Office 365, SharePoint, Project Lifecycle Management tools and other repositories. Added to this are sensor signals, SCADA, video, Social and laser-scanned point clouds. Much of this data will be uncatalogued, often with inconsistent metadata. Semantic tools are increasingly important to discover and unlock value, and distill what is re-usable from work-in-progress. Intelligent information should find the user, be relevant and help with their tasks – whether unstructured or not.
It is essential to be able to discover, harvest and re-use knowledge to drive up excellence, reduce risk and cost. This search and discover process must consume all types of data, anywhere, automatically cataloguing using industry standard ontologies such as BuildingSmart. Semantic Web technologies such as SmartLogic Semaphore are able to automatically tag structured and unstructured content. The smart phone is now a data hub able to support consumables that are transforming the way we interact with each other and with information.
Knowledge gamification further helps drive culture change, encouraging and recognising, with the ultimate goal that sharing knowledge is power, not hoarding. Innovators can be rewarded with time and professional development. Ideation, the creation and management of suggestions, hypotheses, Lessons Learned and innovation, will also be boosted by digitization. An ideas bank can store and make accessible innovative capital and form the basis for different investment strategies and IP sharing from combinations of research consortia, crowd sourcing, a formal innovation pipeline, tech scouting, academic collaboration or internal knowledge transfer. Actionable analytics can identify where change is needed, what worked well and where ideation itself requires further investment.
Creating the knowledge economy also requires behaviour change, which is itself a substantial challenge. Focusing on intensive visualisation in creative and open workshops, rapid prototyping, collaborating and sharing via Business Social tools such as Yammer and the use of multi-speed management of IT can help this change, but demand new types of skill for a largely traditional industry.
#5 Becoming experience-driven
Something as simple as a toothbrush can be digitally transformed. The Oral-B Genius toothbrush offers a new digital experience, monitoring the effectiveness of brushing via a mobile app and providing feedback on how to improve, at the same time collating unique behavioural insight into how all customers behave. Users are coached on how to complete their task optimally and can review their history – turning something as mundane as brushing teeth into a win-win but also fundamentally changing the experience from a chore to a learning process. At the same time, the company is no longer transferring ownership of a commodity, it has redefined the nature of the transaction, ‘happiness traded for insight’.
The same principle can be applied within the EC&O marketplace. Most large players are now seeking competitive advantage through Big Data analytics, mining out untapped value from existing data and Machine Learning can make a difference here. Data scientists start with a hypothesis and collect data that could be useful in evaluating the hypothesis. They then generate a model and use it to explain the data. They evaluate the credibility of the model based on how well it explains the data observed so far, and how well it explains new data that will be collected in the future. When it comes to discovering insights, this method works consistently well – see http://blogs.csc.com/2016/07/05/how-to-build-and-execute-a-real-data-strategy/
“Imagine what could be achieved by doing this on an enterprise scale – not only optimising existing processes but discovering and exploring alternatives, running simulations and rejecting those that won’t work. What’s left is true innovation The models are business algorithms running in production and the experiments are done in very short sprints that force data scientists to focus on discovering insights in small meaningful chunks that the business can then digest and put to use.” .
In essence, an experience-led approach reduces risk. Augmented and Virtual Reality technologies are now appearing alongside more traditional UX. Major assets and their supply chains can be virtualised so that each stakeholder can contribute to a Digital Twin of the physical asset for mutually better outcomes. Skills communities with recognised leaders also play a key role in sharing experience, empowered through business social tools such as Yammer in creating a user-centric workplace. The recent trend towards focusing on experience is now undeniable whether B2C or B2B. Emergent immersive consumer technologies are all about experience. Agile methods are equally experience-focused, and yet large organisations must deal with a mountain of legacy technology much of which offers a poor and disjointed experience, often obstructing rather than enhancing.
Starting the journey
Enterprise strategy, culture, people and processes must be in full alignment if the true potential of the digital transformation is to be realised. Creating a solid foundation by establishing a common view of your digital intent and roadmap is the starting point for many organisations that are still building their digital future. Central to this is knowing where you are now with the five digital shifts.
There is a big difference between an organisation that does digital and a digital organisation, above all the acceptance that leaders must disrupt their own thinking. Successful companies have learned that digital disruption is more than change. It is also the foundation on which they can build new business strategies that can evolve at the pace wanted by their customers and markets.
 Including Engineering, Construction and Operations across Energy, Built Environment, Transport and Utilities
 Peter Rosseel. https://twitter.com/Rosseel_Peter
 IDC White Paper. Analysts: Susan Feldman and Chris Sherman. Information: The Lifeblood of the Enterprise
 Meaning that standardised and quality checked information is passed between different information systems
 Digital Construction Review March 2016 ‘A report on the current and projected adoption of digital technologies and practices in the construction industry’
 Geographic Information Systems from vendors such as ESRI, Intergraph and others
 IBM (2012). IBM Global CEO Study – The Enterprise of the Future.
 The St. Gallen Business Model Navigator. Oliver Gassmann, Karolin Frankenberger, Michaela Csik. University of St.Gallen.