Creating a Digital SME Community in the Irish Construction Industry

Abstract

The Construction Industry is a sector where ICT and e-business are used to a lesser extent than in most other sectors. The high concentration of SMEs in the construction industry and the typical nature of the service provided in construction, being an on-site and often highly customised service are generally identified as the reason for the low ICT uptake. The majority of Irish companies in the construction sector are SMEs. It is essential that Irish companies become more effective and efficient with eBusiness technologies in order to compete in the global economy. The Construction IT Alliance in Ireland has identified a project programme that will promote Information and Communications Technologies (ICTs) in the Irish Construction Industry and research SMEs needs to develop a strong eBusiness environment and ultimately create a digital solution that will best suit their needs. ICT related sectors of the economy. The report suggest that as eBusiness opens up the Irish economy to international competition Irish enterprises should use ICT as a generator of competitive advantage in the context of the environment they operate in and that companies should have ICT systems that are robust and secure in order to obtain maximum benefit. It was reported in an e-Business W@tch (2006) report that the construction industry is a sector where ICT and e-business are used to a lesser extent than in most other sectors. The two reasons identified for low ICT uptake are: The high concentration of SMEs in the construction industry and The typical nature of the service provided in construction, being an on-site and often highly customised service. The eBusiness W@tch 2006 survey data suggested that large construction enterprises are increasing their focus on ICT issues, such as e-procurement systems, collaborative design systems and collaborative document sharing. However, it also stated that there were a low percentage of firms employing ICT practitioners, as well as a low adoption of enterprise resource planning (ERP) software and advanced eprocurement solutions. The survey also mentioned that construction industry enterprises have little focus on hiring ICT practitioners and ICT training and that the use of eStandards are limited in the construction industry but about in line with the weighted all-sectors average (eBusiness W@tch, 2006). Hore and West (2004) suggested “A proposal for re-engineering the procurement of building materials by effective use of ICT”. The problems associated with procurement of materials in the Irish Construction industry was witnessed first hand through an observation study. The results of the study illustrate the current traditional paper-based approach to material procurement. The process was shown as enormously inefficient due to the volume of paper, too many people involved and lack of a sufficient ICT investment to automate the paper-based audit trail. The authors proposed a re-engineered solution involving a wireless transmission of Purchase Orders, Delivery Notes and Invoices. For example a signed Proof of Delivery (POD) from the point of activity to the suppliers ICT system, to the contractors ICT system The benefits of this ICT uptake reported by Hore and West included reduced costs; reduced administration; reduced risk from unsigned PODs; improved tracking; prompter payment; improved reporting and increased control (Hore and West, 2004). The concerns of ICT education of Architecture Engineering and Construction (AEC) professionals were identified by Thomas (2004). Thomas reflected on the relationship between these professionals and how the AEC industry should change to include greater and improved use of ICT. Thomas concluded that the creation of separate professional grouping within the AEC industry is identified as a positive benefit but this fragmentation has hindered integration. 3 RESPONSE OF THE CONSTRUCTION IT ALLIANCE (CITA) IN IRELAND 3.1 Background to CITA CITA was established as a research project in Dublin Institute of Technology (DIT) in association with the Waterford Institute of Technology (WIT) in May 2001, with the vision of harnessing the potential of ICT in the Irish Construction Industry. CITA was formally incorporated into a company limited by guarantee with no share capital in November 2005. Membership of CITA is open to all stakeholders in the Irish construction industry who all share the CITA vision and want to participate in fulfilling CITA‟s objectives. CITA has identified its objectives as: To inform the Irish construction sector of ICT developments To establish and disseminate good practice in the use of ICT in the Irish Construction Industry To encourage ICT related research collaboration between Irish academia and Irish construction practitioners To establish and maintain links with relevant national and international organisations To encourage the strategic use of IT by all firms in the Irish Construction Industry 3.2 CITA Research Activity In July 2006 CITA initiated the CITAX project as an industry-led networking pilot project. The CITAX project involved a collaboration of 25 industry partners and a government body. The project aimed to demonstrate that significant measurable economic improvements could be achieved by using readily available ICT tools to radically improve business processes in the Irish Construction Industry. The project was supported by Enterprise Ireland (50%) and CITA membership (50%) and was completed in June 2008. The project consisted of five separate but collaborative modules, namely:Module 1 – Design Module 2 – Trading Module 3 – Electronic Tendering Module 4 – Project Management Module 5 – Computer Aided Measurement (CAM) Each of the modules had clear objectives and by demonstrating these objectives their achievements set out steps for future goals. The general conclusion was that clear economic benefits could be achieved through the pilot projects associated with the modules. For example CITAX Module 3 (Electronic Tendering) team aimed to demonstrate that there were clear economic benefits to be achieved by organisations that replaced the traditional paper-based system with an electronic tendering process. A pilot scheme was undertaken using FTP (File Transfer Protocol) technology and the results showed savings of 11% for Professional Quantity Surveying firms, which equates to a saving across the industry of €0.74m per annum; 10% for contractors on their tender costs, which equates to an industry saving of €4.8m per annum and 11% for sub-contractors, which equates to an industry saving of €3.75m per annum. The European Commission report Sectoral eBusiness Policies in Support of SMEs (2007) commended the fact that CITAX would use live pilot projects to show real benefits of eBusiness for the industry (European Commission, 2007). 3.3 Current activities Current activities include; The Construction Enterprise Innovation Network (EIN) to promote ICT research and innovation in SMEs in the Irish Construction Industry. CITA Skillnet which is a new Training Network, funded by Skillnets Ltd. for the training programme 2008/2009. It is a tailor made ICT training programme to suit SME company‟s needs. CITA Skillnet is also involved in the process of designing and developing a Post Graduate Diploma in Construction Informatics in association with DIT Bolton Street and the University of Maribor in Slovenia. 3.4 Construction Enterprise Innovation Network CITA officially launched their EIN project in February 2009. The project is sponsored by Enterprise Ireland. Initially the objectives of this research is to identify the eBusiness and eTendering software products tools and platforms available or potentially available to meet the business needs of SMEs in the construction industry in Ireland. The next phase will be to provide a development strategy for deploying these tools and platforms and the opportunity for CITA to supply an interactive service to its members. The research will also focus on similar research being undertaken in other countries in order to understand the main directions of technology development. The knowledge extracted from previous research will be analysed and developed to meet future requirements. The specific services that the EIN network will provide to its members are as follows: An initial one-one ICT consultation IT sanity check, advice on available software packages and backup and data protection policies. Access to the virtual EIN Receipt of regular CITA EIN bulletins An invitation to the CITA EIN intra-disciplinary workshops Exclusive access to all research results undertaken by CITA EIN 4 SMALL TO MEDIUM SIZED ENTERPRISES (SMES)