eCommerce eLessons for All eCommerce Applications in Construction

e-Commerce e-Lessons for All e-Commerce Applications in Construction Project Team John Voeller, Chair

E-Commerce Applications in Construction Project Team Patrick Bailey Kvaerner Judy Mason Intel Rosemary Bell Watkins Bill Mc. Cauley Shell Chemical Joe Brennan Butler Jean Mc. Ginn Corp of Engineers Clay Briscoe Zachry Mark Palmer NIST Ron Clark NAVFA Tom Pistorius Bibb Li Doyle IES Mark Plyler PSEG Winfried Ender Hilti Jonathan Robertson WGI Rick Hendricks GSA Jeff Russell University of Wisconsin Joe Hilgar Air Products Raj Veeramani University of Wisconsin Bob Kehoe NASA John Voeller Black & Veatch, Chair Ruth Wepfer Dick Corp Joel Koppelman Primavera

Specific Objectives • Identify state-of-the-art applications in construction. • Study best practices and models from industries and opportunities. • Identify barriers and business related find challenges. • Make recommendations on how companies can apply e -commerce successfully to become competitive.

Project Scope • Synthesize available information on e- commerce relevant to the construction industry. • Conduct a multi-page written survey of members. • Perform several dozen structured, onsite interviews with owners, designers, contractors and suppliers from different regions in the U. S. • Perform four to six case studies on e-commerce efforts in the construction industry.

Project Deliverables • Two CII Research Reports • Analysis of potential impact of e-commerce applications in construction: – Guidelines – Industry “best practices” – Recommendations for successful adoption • Case studies from research Case Study • CII Summary Report 180 -1 • Knowledge dissemination through the CII Web site

What Are Companies Doing? The models being used with the most frequency are: – e-mail communication – Basic, supplier-focused e- procurement for catalog items – Buyer/supplier integration using common e-procurement package – Marketplaces hosted by third party

What Are Companies Doing? • Many don’t know where to start, not sure of issues to consider. • Owners leading implementation of e-procurement models; greatest success occurring with MRO, commodity-type items. • Some companies have made equity investments in private, third-party e-business exchanges.

Participant Challenges Contractors – Lack of e-business tools that meet needs. – Culture that has not embraced IT. – Difficulties justifying investment in e-commerce tools. Owners – Internal resistance to change. – Connectivity – Using e-procurement tools with existing back-end financial/tracking systems. – Newness makes accurate planning difficult for all requirements and to “beta test” a potential solution.

Participant Challenges (continued) Design/Engineers – Cultural resistance. – Don’t see added value. – Believe e-collaboration initiatives are better investments. Suppliers – Differing demands of clients: • each with different type of connection, marketplace, or tool, or who may not be interested in Internetenabled transactions at all.

Functional Challenges Organizational – Leadership – Cultural change, top management commitment. Supply and Demand – Organizations showing differing willingness and ability to participate. IT – Systems Integration – Dealing with legacy systems. – Choosing stable e-business platform supplier. – Integration with back-end systems. Metrics – Difficulty justifying return on investment. – Unsure which metrics accurately indicate if an e- business tool is working.

Current In both activities now In construction now In engineering next 12 mo. Web site personalization capabilities Dynamic demo capability Web-based real-time collaborative design, etc. Establishing workflow for collaboration Online project planning, mgmt and control Web-based design doc storage, version control, change management Online review of docs collectively Sharing docs with partners via 3 rd party Web site Sharing docs with partners via company extranet Sharing docs within company via intranet 0 0. 1 0. 2 0. 3 0. 4 0. 5 0. 6 Percent Adopting 0. 7 0. 8

Aug. 2003 In both activities now In construction now In engineering next 12 mo. Web site personalization capabilities Dynamic demo capability Web-based real-time collaborative design, etc. Establishing workflow for collaboration Online project planning, mgmt and control Web-based design doc storage, version control, change management Online review of docs collectively Sharing docs with partners via 3 rd party Web site Sharing docs with partners via company extranet Sharing docs within company via intranet 0 0. 05 0. 15 0. 25 Percent Adopting 0. 35

Case Studies • Deployment Strategy and Metrics • e-Procurement of Catalog-Type Items • Reverse Auctions • Private Third-Party Exchanges

e-Procurement Continuum Matrix Classification Own/ Op Own/ Op Op Supplier-Focused Through an Extranet Advanced Supplier. Focused Procurement Own/ Op EPC e-mail Basic Supplier. Focused Procurement Own/ Op Integration Through a Common e. Procurement Package ERP Integration Third-party Web Site/Exchange Private Exchanges = doing a lot Sub- Sub. Contr Supply Basic Buyer-Focused Procurement Sub. Contr O O O = doing a little O O= in the works

e-Commerce Implementation Session • Learn how to leverage this power without penalty. • Meet the people who implemented the e-commerce systems of Shell and Air Products.

e-Commerce Implementation Session Winfried Ender Hilti Corporation, Moderator Dolores Englett Shell Global Solutions Joseph L. Hilgar Air Products and Chemicals William Mc. Cauley Shell Oil Company Jeffrey S. Russell University of Wisconsin-Madison Raj Veeramani University of Wisconsin-Madison John G. Voeller Black & Veatch

e-Commerce Implementation Session Grays Peak II 2: 45 - 3: 45 4: 00 - 5: 00