INNOVATION AND MANAGEMENT OF IT IN THE CONSTRUCTION INDUSTRY

ZAKIRIN BINTI ZAKARIA

2009566291

Msc. in Integrated Construction Project Management

The innovation and management 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.

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, 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 Usage of Information Technology in Construction Firms; Malaysian Construction Industry developing two constructs to measure the relationship and found the two satisfactions to be correlated.

Nowadays, IT is moving innovative in term of using the internet. Malaysia was connected to the Internet in 1990 when the Internet Service Provider (ISP) JARING was launched by MIMOS Berhad. In 1996, Telekom Malaysia launched the country’s second ISP, which is TMNet. (Rahmah,1999).

The feeling is that the Internet users have increased manifold in the last few years and that Internet is being widely used in daily dealings in the construction industry. However, information on the actual level of Internet usage in the construction industry is still lacking. Internet has made a major impact on the way business is conducted including the construction industry. As such, the Construction Industry Development Board, being a national body to spruce up the construction industry, should ensure that firms in the construction industry provide opportunities for their workers to be trained in the skills of information technology. Training should not only concentrate on general knowledge in using the Internet, e.g. emails and information search only, but also to upgrade the Internet skills to include e-bidding and e-meetings in an effort to fully utilise the potential of the Internet. (Lim et. al, 2002)

Meanwhile, for UK construction industry, they are also achieving innovation and management in IT by using a term “Accelerating Change”. The ‘Accelerating Change’ report acknowledged, however, that deriving the maximum benefit from introducing IT solutions would not be easy. The widespread adoption of innovations such as e-procurement, IT enabled supply chain integration and virtual prototyping would require the construction industry to transform its traditional methods of working and its business relationships. The construction industry has not benefited from the advantages that many other industries have realised through effective use of information technologies. (The UK Construction Industry, 1994)

In particular, while many construction companies have implemented niche solutions at the functional level (for example HR, Finance, Procurement and/or Project Management), few have pursued integrated cross-organisational applications such as ERP and ‘virtual’ integration. This tactical approach to IT has often resulted in investment neither providing value for money nor the modern technology platforms necessary to gain competitive advantage in the modern business age.

In the cement industry, Cemex, the world’s third largest cement company has been widely recognised as a strategic innovator through the use of technology to deliver ‘just in- time’ cement. Compared to the previous situation where customers were required to order days in advance and were then provided with a four hour delivery ‘window’, Cemex has created business processes that enable same-day service and free unlimited order changes as standard operating procedure.

The company also equipped its trucks with transmitters and receivers connected to a GPS (global-positioning satellite) system, thereby providing its headquarter’s computer systems precise, real-time data about the location, direction, and speed of every vehicle in the Cemex fleet. Today, Cemex can use its computer system to triangulate this information against order destinations and mixing plants, all the while taking traffic patterns into account, to enable highly efficient delivery processes. Today, Cemex is undoubtedly the best performing large company in the cement industry and has expanded its technology-enabled model to the United States, Indonesia, the Philippines, Latin America and elsewhere. Its financial performance is the envy of the industry.

Innovation as a strategic priority is ranked far down in importance for most of our respondent organisations and IT is not considered to play a significant role in strategy realization by a majority of finance function respondents, a view supported by the fact that only one-third of IT Directors feel that there is alignment between the IT function and the overall business strategy. (The UK Construction Industry, 1994)

Today, practically all project information is entered into software tools or generated by computer programs and is represented in the many different formats used by the many disciplines involved in a project. The software tools tend to be general purpose tools like spreadsheet and text processing software or specialized, discipline-specific tools like mechanical CAD programs or cost estimating software. The formats commonly used to represent information in construction include text documents, 2D and 3D drawings, schedules in bar chart and other formats, various diagrams and charts, tables, etc.

This use of IT is typical on projects. Because decisions are mostly based on personal and human interpretations of information generated by many engineers from many disciplines the decision process and resulting actions and results are not consistent and repeatable from meeting to meeting and project to project. As a result it is difficult to predict the outcome of the current design and construction process, and IT contributes little to predict the outcome of projects more reliably. (Martin et. al., 2004)

In conclusion, the proposed IT is to provides a holistic view of IT implementation in construction and offers significant contributions to current body of knowledge on IT in construction. 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 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.

References

Ang, J and Koh, S. (1997) Exploring the Relationships Between User Information Satisfaction, International Journal of Information Management 17(3), pp. 169-177.

Valida, A. C., Leng, A. C., Kasiran, M. K., Hashim, S and Suradi, Z. (1994) A Survey of

Information Technology Utilization Among Business Organization in Malaysia, Proceedings of International Conference on IT, KL: Malaysia.

Thong, J.Y.L and Yap, C. S. (1995) CEO Characteristics, Organizational Characteristics and Information Technology Adoption in Small Business, Omega, International Journal of

Management Science 23(4), pp. 429-442.Thousand Oaks, Calif.

Rahmah Hashim and Arfah Yusof (1999). Internet in Malaysia [online]. Interasia. Available from: http://www.interasia.org/malaysia/hashim-yusof.html [accessed 27 September 2010]

Lim, Y.M. et. al. (2002) A Survey of Internet Usage in The Malaysian Construction Industry, ITcon Vol 7, pp. 259-269.

Research Report The UK Construction Industry (2004) Achieving Innovation in IT, Atos Origin, London.

Martin, F. and John, K. (2004) The Scope and Role of Information Technology in Construction, Center for Integrated Facility Engineering (CIFE), Stanford.