Integrating IT technology in the construction industry

September 27, 2005

To most people working in IT, the construction industry has always been perceived by many as a tough sell when it comes to adopting and effectively integrating data processing and information technology in general.

For a Chief Information Officer, the idea of creating massive business changes in an environment that is traditionally very reluctant to implement the latest IT technology is hard enough to deal with. To do so in an industry where integration and industry-specific project management are so vital to a company’s immediate and long-term success poses even bigger challenges.

Tridel, a developer and builder of condominiums in the Greater Toronto Area, recognized this problem early on. In the late nineties the company’s management team made a decision to approach IT much more aggressively, and with an eye to achieving strategic business goals. The plan involved automating business processes, eliminating the use of paper and giving staff real-time access to critical data.

The goal was to reduce the time and expense of putting customers into new homes, and give Tridel the kind of control over its business that it was used to having on construction sites.

“A lot of the technology we’re doing is for control,” said Tridel CIO Ted Maulucci, pointing to the need for automated workflow, and enabling staff to access the information they need in a timely fashion. In the construction industry, control over workflow – and ultimately costs – is key. “That translates itself out to the construction site, where we’re able to operate more efficiently, so that people want to work with us. As a result, we’ll get better pricing.”

Tridel’s strategy – one that the company continues to follow today - involved overhauling its existing disparate and heterogeneous technology foundation and that of its key partners by implementing a common platform.

The first step was selecting the operating environment. Tridel relies heavily on in-house development, and used Microsoft software on the front end, so the company opted to standardize on the Microsoft .NET platform. According to Maulucci, this enables developers to easily build applications where necessary and help them quickly and easily integrate with packaged tools. “It makes everything easier if we’re using standard tools,” he said.

Next, Tridel needed to demonstrate to management how technology could help reduce operating costs across the company. As an example, the firm was logging a three per cent error rate when it came to assigning commissions to its sales staff.

Local offices were busy selling units, canceling contracts or transferring suites, but subsequent commission payments were tracked separately by the sales office and head office with the two entities trying to synchronize their information.

By enabling staff to enter sales data into a new SQL Server database used across the organization, and by building rules that enable commission payments to be automatically calculated and processed only after the requisite property deposits have been logged, Tridel was able to save an estimated $10,000 per month in erroneous commission payments and was able to guarantee the timely collection of deposit monies.

Revamping internal processes, however, was only part of the solution. For the company to truly realize a return on investment, automation needed to extend outside of its walls. Tridel relies heavily on partner firms and it aligns with short and long-term vendors in various capacities.

Partner satisfaction is just as important as customer satisfaction, and their partners’ experience working with Tridel has to be good enough to keep them from working with competitors. “We’re able to create that competitive advantage so that there’s really nowhere else that they can go to get what we’re able to offer,” said Maulucci.

To accomplish this, Tridel needed to collaborate with its partners on an entirely new level. DelZotto Zorzi, a Toronto law firm that handles Tridel’s client property contracts, was a prime candidate.

Legal documents are crucial to Tridel’s business, and a lot of information-sharing occurs between the two firms. However the level of business-process integration between Tridel and DelZotto Zorzi was poor. Contracts were arranged manually by administration staff and then couriered to the lawyers where they were again manually processed – a process that could often take a full business day. With as many as 500 closings per day generated during peak periods, Tridel recognized the system needed drastic change.

“Here are all these different people working with the same information, but storing it and managing it on their own. If we put them all together, there’s going to be a huge efficiency gain that ultimately will translate into things running better and at less cost to the purchaser,” said Maulucci.

Seeing the value that could be gained by a tighter linkage, Tridel extended the .NET-based platform into the law firm by building an application called Document Server. The new application automatically generates closing documents according to the specific details of each sale, and then collates and prints the documents without manual intervention. The resulting documents can be downloaded and adjusted by lawyers and their support staff via a Web portal. This last step is crucial, as changes to documents are often required well into the final stages of the closing process.

The reduced reliance on administrative tasks and couriers as a result of using Document Server has helped Tridel save more $130,000 per year since it was implemented. This has also helped DelZotto Zorzi devote more of its time to client work and secure more business.

Projects like this have also helped to underscore the value of improved collaboration and workflow for a company that relies heavily on transactions, added Maulucci. “When you really look at our company, what do we own? We own a process that can turn a piece of land into a finished condo. Really, that process which is technology, training, the whole package – that’s really what we own.” And improving that process is core to the success of the business.

As in all projects of this size and scope, challenges arose as Tridel implemented its technology vision. The first was buy-in. Given that technology is not always a priority in the construction business, and given the sheer number of partners Tridel works with, the main challenge involves winning over skeptical users and colleagues.

Tridel chose to address this at the root level; training programs are all developed in-house by the technology team, which helps them get user feedback first hand.

“We have one construction supervisor who is near retirement age who doesn’t really care to look at a computer or know what a computer is, yet every morning he goes in there and gets somebody to get him on the weather network,” said Maulucci. “This shows that if the tool actually does something to help the people, it will get used.”

To win over partners and colleagues, Tridel’s technology team has worked hard to hone its presentation skills, as projects are rarely sold on technical merits alone. Staff also regularly attend trade shows to keep a close eye on what competitors are doing. Such knowledge often proves useful when making a business case.

The benefits that have resulted from the five-year plan are clear. Whether it’s helping to process sales contracts in a more timely fashion or streamline formerly inefficient (and therefore costly) business processes, Tridel has gained far more control over its operating environment, and thereby raised its level of trust in the construction community.

This has enabled the company to consider revisiting expansion into the U.S., a move that had been explored previously, but with limited success. The issue then was lack of control – partnering with new firms in a different country ultimately required a level of technology and business integration that was lacking.

Today, the firm is well equipped to handle that challenge. Tridel’s newfound flexibility is also behind recent industry recognition: Tridel was recently awarded the Tarion High Rise Builder of the Year Award and the Greater Toronto Home Builders’ Association Builder of the Year Award.

In an industry where IT is not always top of mind, by working together with stakeholders – both inside and outside the company – Malucci said Tridel has managed to put technology front and centre by making it an integral part of its success, and enhancing its reputation in the construction and home-building industries in the process.

“I never want to minimize the fact that our people have talents for designing buildings and marketing them. But definitely, IT has become one of the key selling points of our company.”

Source: IT World Canada