INNOVATION & MANAGEMENT OF IT IN THE CONSTRUCTION INDUSTRY

Khairul Firdaus bin Anuar

2009730137

Msc. In Integrated Construction Project Management

Innovation is a process where knowledgeable and creative people and organizations frame problems and select, integrate, and augment information to create understandings and answers (Teece, 2001). Hamel emphasizes the role of information technology as an enabler not only of product or process innovation, but also of what he calls business concept innovation (Hamel, 2002).

Information Technology in construction industry has become a key issue in the last two decades, gaining broad acceptance and is being implemented in the construction research domains as a tool to assist decision makers. Furthermore, emerging technologies offer new solutions to the construction industry, improving processes, enabling automation and effectual decision-making mechanisms and changing current ways of work.  However, the future of construction will be influenced not only by the developments in the information technology (IT) industry, but also by other technological changes. Societal, economic, environmental and political factors will shape the future, together with emerging technologies. Information Technology (IT) is the sine qua non of all businesses today, including the construction industry, so understanding its roles and functions in construction firms is a requisite in assessing their performance. However, little work in this has been done on Malaysian firms. Commonly, Information Technology (IT) plays a vital role in the sustained growth of a business. IT is defined broadly as “technologies dedicated to information storage, processing, and communications” Ang et al. (1997), that is, a combination of hardware, software, telecommunications and office equipment to transform raw data into useful information for speedy retrieval.

ICT innovation refers to the introduction of new ICT initiatives to an organization. The organizational process of introducing ICT initiatives for adoption by expected users is defined as ICT diffusion with an ICT diffusion limitation being defined as confrontation to change drivers occurring during ICT adoption and implementation. Resistance may occur at the organizational, group and personal level. Understanding diffusion constraints could help construction firms manage improve their ICT diffusion processes by focusing on possible ICT implementation diffusion barriers and finding ways to mitigate them. Stewart et al. (2004) offered coping strategies to mitigate identified barriers. 

IT innovation may be adopted by specific groups of users within an organization. For example, use of computer aided design (autoCAD) by architects or Master Bill’s or estimating software used by engineers or quantity surveyors is often implemented as a stand-alone non-system integrated initiative where only a small group of expert users participate in the initiative. A firm may independently operate small-group IT innovation such as planning and scheduling applications whereas a groupware ICT innovation needs cooperation both within a group to share and exchange data and information as well as with external project team and supply chain members. Successful company-wide construction firm ICT initiatives, such as introducing groupware applications, needs team adoption by project managers, engineers and foremen etc. There may also be need to include organization-external project participants such as designers, consultants and owners.

Innovation diffusion can be described in either technology transfer or intra-organizational innovation adoption terms. The technology transfer perspective can involve transferring innovation information from a research and development (R&D) unit to a targeted consumer unit – individual or organizational (Scheirer, 1983). Thus, innovation diffusion usually begins before any adoption decision is made. It requires delivering positive information about an innovation to expected adopters to hasten their innovation adoption. The more persuasive the information delivered to expected adopters, the higher will be the adoption rate. “Innovation diffusion” from the intra-organizational innovation adoption perspective usually occurs when top management and/or a champion (top-down approach) or expert groups within the organization (bottom-up approach) decide to adopt an innovation and encourage other users to adopt the innovation (Yetton et al., 1994). As diffusion of innovation deals with numerous variables, both of a technological and social nature, it is essential that organizations should provide adequate management support and monitoring of diffusion innovation (Livari, 1993; Rogers, 2003). Songer et al. (2001) argue that corporate culture is mainly responsible for poor implementation of information technology (IT) systems rather than technology issues. Implementation needs to be managed and structured because it is a critical process in successful ICT innovation diffusion (Griffith et al., 1999). 

Nevertheless, the building construction industry invests little in ICTs compared with the other sectors such as financial services and manufacturing (Construction Industry Board, 1998: 27–8). Furthermore, the current use of ICTs in construction firms continues to be ‘piecemeal’ (Mak, 2001: 258): few contractors are fully able to integrate ICTs with their business processes. Book-keeping and invoicing are the most common ICT applications even in the construction industries of relatively advanced countries (Samuelson, 2002). Except for a limited number of well-entrenched software packages, few computerized innovative solutions are easily welcomed by the majority. Most computer applications still consist of word processors, spreadsheets, accounts and administrative software (Samuelson, 2002: 23), and the usage is limited to the production of traditional documents (e.g. specification documents, detailed drawings or bar charts) that still require human interpretation (Luiten and Tolman, 1997: 114).

Besides that, IT is already widely used in construction organizations and much more dramatic effects are anticipated for the years to come. (Betts, 1999) reported that the construction industry in many countries is starting to consider seriously the strategic use of IT. The use of IT in construction is extending further than the stage of piecemeal application for improving the efficiency of discrete operations by individual organizations to an advanced stage where IT is applied strategically in commercial enterprise, government agencies and professional institution. From strategic point of view, IT has the potential to change the landscape of the construction industry.

As conclusion, since the level of IT use is prevailing at lower level, top management of construction organizations should have well-built commitment to expand the innovation strategic management of IT in their business processes. The hardware, software and their applications should be utilized to enhance both core and supporting activities to gain competitive advantage in today highly global business environment. Moreover, the firm's management should give greater attention to IT support and training, by making sure that there is sufficient trained staff for the implementation of IT, and making greater effort in training staff on the correct and efficient use of IT in the organization. Lastly, Government and public agencies should consider policies that encourage the use of IT in the construction industry thus making this industry sector more competitive, and encourage industry to make greater use of information system.

UITM ICPM JAN 2010: Innovation and Management of IT in Construction Industry

ICP873 3rd Assignment : Innovation and management of IT in Construction Industry

 

Noor Muslinda Bt Mustafa 

2009724471

Msc.in Integrated Construction Project Management 

Computing and communication technology, also commonly known as Information Technology (IT) have been radically transforming the way we live, learn, work and play (Capron 2000). Many companies in the construction industry do not generally appear to have appreciated the positive changes and advantages that the new technology was providing to companies in other sectors of the economy.

The issue of technology exploitation, particularly in the field of information technology, is of significant importance in construction industry. Information technology (IT) has created fundamental impact on the way business processes are carried out. IT can no longer be viewed as an enhancement to traditional business procedures but rather as an innovation agent that enables new and different alternatives to operation of business organization. This new trend will color investment attitudes of business communities in the world towards utilization of IT in the coming years.

The success of the construction industry is increasingly predicated on technology driven investments in information technology (IT) and this is expected to be even more so in the future. IT is already widely used in construction organizations and much more dramatic effects are anticipated for the years to come. Betts (1999) reported that the construction industries in many countries are starting to consider seriously the strategic use of IT. The use of IT in construction is extending beyond the stage of piecemeal application for improving the efficiency of discrete operations by individual organizations to advanced stage where

IT is applied strategically in commercial enterprise, government agencies and professional institution. A pragmatist's strategic vision for IT in the construction industry must solve the economic issues (Macomber, 2003). From strategic point of view, IT has the potential to change the landscape of the construction industry so understanding its roles and functions in construction firms is a requisite in assessing their performance. However, little work in this has been done on Malaysian firms.

Generally, Information Technology (IT) plays a vital role in the sustained growth of a business. IT is defined broadly as “technologies dedicated to information storage, processing, and communications” Ang et al. (1997), that is, a combination of hardware, software, telecommunications and office equipment to transform raw data into useful information for speedy retrieval. There have been regional studies (e.g., Asia-Pacific region). Valida et al. (1994) studied IT use in 230 business organizations, mainly in Malaysia, and concluded that IT use conferred a competitive advantage. 

Thong and Yap (1995) developed an IT adoption model for small business, and found that the companies with innovative CEOs had a more positive attitude to IT use. In Singapore, Ang & Koh (1997) explored the relationship between user information satisfaction and job satisfaction by developing two constructs to measure the relationship and found the two satisfactions to be correlated. In Hong Kong, Burn (1990) studied the strategic use of IT in small- and medium-sized organizations. She surveyed three medium-sized organizations and found that their IT strategy could be described by the Porter and Miller (1983) model of competitive advantage.

In Australia, Sohal et al. (1998) studied 530 Australian companies, and found IT use to be positively related to the organizations’ performance. Fink (1998) studied 280 small and medium businesses and identified 10 IT adoption factors in the firms. Back to Malaysia again, Yap et al. (1992) and Valida et al. (1994) concluded that IT use and its integration were higher in companies providing goods and services than those in manufacturing and distribution. Mui et al. (2002) surveyed internet use in the Malaysian construction industry, and found that most of the companies used the Internet and considered it an important tool. Nevertheless, they reckoned that they did not fully harness the power of the Internet - only using the basic functions like e-mail. To encourage more intensive use of the Internet, they suggested improving their own infrastructure and hiring more computer savvy staff.

      Information technologies or Software applications are available to support most aspects of a construction project. They have been designed largely as solutions to specific problems. These applications can be grouped into the following categories (Sun & Howard 2004):

·           Computer Aided Design and Visualization

·           Building Engineering Applications

·           Computer Aided Cost Estimation

·           Planning, Scheduling, Site Management

·           Computer Aided Facilities Management

·           Integration

·           Business and Information Management

Construction industry has lagged behind other sectors in terms of applying Information Technologies. In the main, the boards of operating construction companies are dominated by engineers and surveyors whose knowledge of computing is very often limited to what systems have been implemented at head office, and whose interaction with computer is limited to occasional meetings with senior computer professionals rather than fellow engineers. Their general view is that the implementation of any new system takes a long time, is expensive and involves 'outsiders', and this is aggravated by with the degree of skepticism in terms that it's generally believed that the end product will in any case not achieve its initial specification.

Nevertheless, many software is currently being used by the construction sector like CAD tools, Spreadsheets, Word Processing and so on. Information is used and should be managed from the conception stage, design, and execution, to the facilities management stage.

With the growth in the use of information technologies by construction companies, the increasing availability of electronic documents, manual classification becomes impractical. With such amount of information, Document Management Systems which are considered as a glue or integration of all the other software for cost estimating, planning, scheduling, etc., generated in a specific stage of the project, are an indispensable tool for the current Project Management activities.

References:

1)                              1) Andi and Minato, T. 2003. Design document quality in the Japanese construction industry:

    factors influencing and impacts on construction process. International Journal of Project

    Management, 21, pp537-46

2)                              2) Ang, J and Koh, S. 1997. Exploring the Relationships Between User Information Satisfaction,

    International Journal of Information Management 17(3), pp. 169-177

3)                  3) Burn, J. M. 1990. The Strategic Use of IT in Hong Kong Organizations: An Analysis of

         Applications in Small to Medium Sized Organizations, Proceedings of Internationa Conference on IT.

4)                  4) CIDB. 2003. CIDB Contractors Registration Report, Construction Industry Development

         Board, Malaysia. Kuala Lumpur: CIDB Publications

Innovation and Management of IT in Construction Industry

Innovation and Management of IT in Construction Industry

            The uniqueness of the information epoch has led us to a new set of technologies called “Information Technology.” Information Technology or in simpler terms “IT”  is defined broadly as “technologies dedicated to information storage, processing, and communications” (Ang et al 1997, p.170), that is, a mixture of hardware, software, telecommunications and office apparatus to transform raw data into useful information for prompt retrieval. Moreover, in line with Ang and colleagues (1997) statement, Zandia (2005, p.66) concurs to the idea of information technology (IT) as a series of different implements including hardware, software, information theories, information networks, workstations and artificial intelligence (robotics) which use different forms of information as a systematic process to carry out activities.  In the case of IT in the construction Industry, Gaith et al (2009, p.412) put it as the success of the construction industry is increasingly predicated on technology driven investments in information technology (IT) and this is expected to be even more so in the future. Furthermore, by the appropriate use of information technology, organizations can achieve sustainable competitive advantages. This technology because of including some characteristics such as being up-to-date, fast and precise and having different geographic localities all the time has improved organizational efficiency, effectiveness and performance (Talebnejad, 2008, p.59). This put us into view that IT and its eminence in the competitive construction industry play a major role in the quest to achieve the upmost competitive advantage and the ability to sustain in the industry along with meeting the growing demands of the industry itself.

            Current trends in information technology (IT) are yielding a wide range of new computer-based tools to support the architecture, engineering, construction and facilities management industries as described by (Froese, 2010, p.531). These tools as put by Froese (2010) particularly those associated with building information models (BIMs) for project modeling and integration— promise great increases in the effectiveness and efficiency of designing and managing construction projects. Nevertheless, these enhancements necessitate more than just technical solutions; their maximum potential cannot be materialize without parallel changes in the work tasks and skill sets of the project players. The innovation and management of IT in the construction industry can be classed into several eras discussed by Froese (2010, p.531). The initial era of construction IT  focused on developing stand-alone tools to assist specific work tasks such as CAD, structural analysis tools, estimating, etc. The second era (from the mid-1990s) of construction IT has focused on computer-supported communications such as E-mail, the web, electronic document management systems (EDMS), etc. This is a less mature field, with new tools and core features still emerging, and business practice still to become accustomed.  Much of the construction IT research and development over the past decade has pursued a third era of construction, where IT focused not on individual applications or transactions, but on the potential for uniting all of these as a cohesive overall system through integration, building modeling, etc. Nonetheless, the literature by Froese (2010) also stated that this emerging IT has seen some impressive innovative use in industry but has yet to reach mainstream application. This findings by Froese (2010) also was in line with Melville (2004, p.283) findings where it was stated that the principal finding was that IT is valuable, but the extent and dimensions are dependent upon internal and external factors, including complementary organizational resources of the firm and its trading partners, and also their practices. Therefore, it can be put that all of the innovation in terms of IT in the construction industry must be in line with the practice of the industry itself besides parallel changes in the work tasks and skill sets of the project players to really achieve its maximum benefit. After all, one of the major factors behind any success of IT application is mass participation. Therefore, without participation, all the hyped innovation and management of IT in the construction industry it wouldn’t not reach its ultimate goal that of benefiting the practice as a whole.

            Despite these arguments, there has been proof through research that IT can benefit the industry. Primarily in terms of cost saving, this fact is reviewed by Lautanala et al (2002, p.4) where they concluded that IT can create savings in the construction industry through automation of information work, leaning processes, and reducing waste, interoperability and transparency of information and also synergy impacts. Apart from that, the eminence of IT also helps firms to sustain in the industry Talebnejad, (2008, p.70) stressed that organizations which do not build their competitive advantage on the basis of information technology (IT) will eventually be omitted from the competition and activities field. Moreover, Talebnejad stated that organization can use information technology as a tool for creating sustainable competitive advantage through: the use information technology to codify, execute and control the strategies of the firm, the use of  information technology to create the utmost value for the stakeholders and particularly customers and the combination the strategies, the information technologies and organizational resources and skills appropriately and simultaneously using information technology (Talebnejad, 2008, p.70). In conclusion, IT is critical in the construction industry, Information Technology (IT) is the sine qua non of all businesses today (Gaith et al 2009, p.412), including the construction industry, so understanding its roles and functions in construction industry in addition to its innovation and management is vital in assuring IT’s contribution to the industry itself.

Mohamed Ikhwan Nasir b. Mohamed Anuar
2009170343-AP776
M.sc Integrated Construction and Project Management

2nd ICT Assignment: KLCC Projeks

Prepared by: Shaifulbahri Abdullah (2009706417), Mohd Ikhwan Nasir Mohd Anuar (2009170343) & Ozanul Ezree Othman (2009792183).

Innovation and management of IT in Construction Industry

Innovation and Management of IT in Construction Industry

1.0 Introduction

Construction Industry has a history of more than 3000 years, from the primitive civilizations up until now. When compare it with a young industry such as IT, one might consider the poor technology growth and innovation in construction industry. The construction industry has not been changed dramatically during the last decades, one might pin point the steel or concrete era in the last century but away from that noting of a great value has been changed. The parties, procurement approaches and many other parameters of construction Industry now is somehow the same as it was in 19^th century. Why is that? The author can think of two main reasons:

A.    Construction Industry Players are pessimistic towards new things and innovations

B.    Construction Industry Players are reluctant to change

When something new is introduced to construction Industry, most of the people in this Industry take a negative approach towards it, “I don’t think this works”, “this has lots of loose ends, this might not work”, “I rather do it my way, at least I know the risks”, “there is no school like old school”. These are common sentences among Construction Industry players when facing some new methods or materials.

Nowadays, IT is a non separable element of people’s life and with its day to day progress it plays more and more important and effective roles in forming people’s lifestyle, there are too few people who was not forced to work with computers in performing their jobs. Nowadays we come across lots of services starting with “E”, E-banking, E-tendering, E-business and so on. 

One thing is for sure, information technology has changed the way things used to work and be, some argue that IT made life easier while others are concerned about growing dependency on it.

2.0 IT in Construction Industry

Construction Industry is a fierce competitive industry in which a single discount in procuring a material can make one company win the tender, given the fact that the numbers in this industry are usually over million, wining a tender normally means gaining lots of money. In such a fierce industry, every player tries to deliver and present its services and goods in the best way possible or gaining some competitive advantage which other competitors don’t have or is very costly for them to imitate,  these advantages are mainly in line with client’s requirements where players understood that money can only been gained trough clients satisfaction.

Client’s requirements can generally be interpreted as time certainty, quality assurance and budgeted cost, this is where Information Technology comes in. There are lots of soft-wares that enable architects and engineers as well as quantity surveyors to deliver their services in the best quality available. There was time that a group of mathematicians come together to calculate the stresses and strains in a building structures using the most complex equations, but now all that engineers should do, is modeling the building structure and run as many simulations as they want and changing as many elements as they like to gaining the most economic yet safe structure design for the building. The story of architects and quantity surveyors is not much different, nowadays there is hardly any architect who actually use the old ways of using rulers and pen and paper, today, thanks to IT, all that the architect needs is a computer with AUTOCAD software installed on and a printer plugged in. technical and specific soft-wares made it possible to deliver the most accurate designs, while management soft-wares made it possible for managers to track, monitor and control every step of a construction project from inception to hand over and make sure that the project delivers all the deliverables in accordance to these main client’s requirements.

IT application in construction industry is not limited to technical and specific soft-ware usage, the internet epidemy, and its penetration rate introduced a new way of effective communication among players in the industry. E-Tendering which is a concept newly introduced to the Malaysian Construction Industry is mainly rest on the basis of internet communications.

The question is: how IT can bring about competitive advantage to the firms in Construction Industry, given the fact that everyone can use it and it is not costly to obtain? When every engineer can use a design soft-ware and every firm can provide precise Bill of Quantities and shop drawings using technical soft-wares how this IT can make any competitive advantage?

These questions rise mainly when one forget about the human factor involving in using the IT, and the characteristics of IT. IT is a fast changing technology which literally every day we witness a new more advanced technology being introduced to the market. Using IT to its full, requires changing at the same pace with the technology itself, it is where IT can be used as a competitive edge. Human factor involved in using the IT should not been under estimated. Although technical soft-wares made it easier to design a structure it cannot make sure that there is no mistakes in designing the structure or there is no better alternative for the being design.

Another thing which contribute to rising the above question is forgetting about innovation and IT management and their effects on the business. Everyone knows about internet but there is one alibaba group, one e-bay, one google, one yahoo, and so on. The thing that makes these distinguished companies different from others is that they never forget about innovation. They innovated and managed that innovation into forming a competitive advantage.

3.0 Conclusion

The story of Construction Industry can be something of the same. Competitive advantages coming from Information Technology is not in form of soft-wares but in form of how to use IT and its flexible characteristics together or in other words, IT management. Those who understand the capability of the IT are those who can use it to their advantage and make a competitive advantage. Almost everyone in construction industry can access to internet and therefore to alibaba group, but those who can use alibaba suppliers in their supply chain are those who used IT to their advantage. Everyone can install an internal computer network in his firm, but those who can use integrated information system are those who can make a competitive advantage.

To sum it all, IT brings lots of advantages in performing the timely and costly jobs in more accurate and time and cost saving manner, but in order for it to bring competitive advantages for party involved in construction industry, it should be combined with innovation and management. IT is a mean, how you use this mean will indicate your competitive advantage. 

Farsad Afroogh  2009724731