IT, Web Increasingly Important to Owners

December 7, 2000

By Judy Schriener

Information Technology and the new tools and services available over the Web are changing the way owners get their projects built. “It’s strange—I am part of the [automated, online] approval process [for construction projects] and I’ll sit in my cubicle all day and respond to all these e-mails and at the end of the day I’ll think that I’ve gotten four buildings built today and I didn’t even set foot on a [job]site,” says Paul Czajkowski, manager of construction workplace resources for Cisco Systems Inc., San Jose, CA.

Czajkowski and four other owners spoke to attendees of the ENR International Construction Summit being held Dec. 5-7 in Miami Beach, FL. The topic wasn’t specific to information technology (IT), but each owner emphasized how important IT and the Web are becoming to their operations.

Moving from mainframe computers to Web-based operations is “the single most important initiative for us in the next 24 months,” says Read Adm. Michael R. Johnson, commander of NAVFAC, the U.S. Naval Facilities Engineering Command. NAVFAC is focusing on moving plans and specs onto the Web, managing documents online, offering human resources services, and expanding program management on the Web.

The process is too slow for Johnson’s taste. “We’re taking too long,” he says. “If we screw it up, so what! We’ll fix it.”

Fellow military man General Stephen Roades, commander of the North Atlantic Division of the U.S. Army Corps of Engineers, says you’ll see “more and more paperless contracting” at the Corps and “a lot of contracting on the Web.” The value of becoming more Web-based is “outreach as much as anything,” he says. The Corps has goals to involve small businesses in its projects, and the Web helps that effort, mostly by allowing small businesses that wouldn’t normally think they could qualify for work with a large government agency to see how they fit in with the federal government, he says. The North Atlantic Division alone is spending $2.6 billion on construction in fiscal year 2000 both domestically and internationally.

Patsy Thomasson, deputy assistant secretary for the Office of Foreign Buildings Operations for the U.S. Dept of State , says that collaborative Web sites can help bridge the geographic gulfs, whether they are domestic or international. It’s as difficult to travel from the East Coast to Oregon as it is to Frankfurt—at least Frankfurt is a direct flight, whereas there’s always a stop on the way to Oregon, she points out. “They have the same challenges,” she says.

The State Dept. spent $627 million for upgrades to security on its embassies worldwide in fiscal year 1999, about 80% of which was awarded to private contractors, Thomasson says. In fiscal year 2000, the budget is $581 million, with about 65% going to private contractors. In fiscal year 2001, it will be about $515 million, with at least 65% going to private contractors, she says.

While owners have the resources to create standards for the industry for e-tools, at least some owners believe that is the contractors’ responsibility. Ricardo Aparicio, Contracts Manager for Corporate Properties & Services Operation, General Electric Co., Birmingham, AL, says that GE is moving forward toward becoming more Web-centralized. GE is using Citadon’s extranet service on its CNBC project that started in June. GE is just beginning to use electronic-based bidding services, which it is building in-house. “How that integrates into Web-based system—we haven’t figured that out yet,” he says.

GE spent $2 billion in for plants and equipment in 1999, about one-third of which is for construction, and $66 million just for capital improvements for facilities, Aparicio says.

Cisco Systems has perhaps the biggest challenge an owner can have—building facilities for a business that’s soaring from a $19-billion business to a $50-billion company, from 42,500 employees to 98,000. Currently Czajkowski is dealing with a 19-million-sq-ft gap between what he has and what he needs. “We’re hiring enough people now to build a new building every five weeks,” he says.

Czajkowski was working with a construction budget of $520 million when Cisco was calculating its needs less than four months ago, in August. About two months later, the figure was revised to $1 billion, due to the needs as a result of acquisitions of start-up firms with products ready to go to market and its own new products in development. He wants to keep up his record to date of each of the 48 buildings he has built over the past couple of years coming in on time and under budget.

Cisco is currently looking at four extranet services, and is using Citadon on one eight-building project in San Jose. Czajkowski isn’t looking to standardize, however. “There are reasons not to standardize,” he notes, including the global aspect of Cisco’s projects.

Again, integration is the challenge. Cisco developed its project authorization form (the one that traps Czajkowski at his desk all day) that has a preset electronic distribution trail. Cisco developed with Ariba an online purchasing requisition, in which a purchase order is created and gets approved online, but is trying to get the path to be different from the one that is in place for the project authorization form. Czajkowski also hopes to integrate the purchasing req integrated with existing Oracle databases for budgets, accounts payable and other administrative processes.

The main reason for Czajkowski’s not being interested in an outside vendor providing a solution to Cisco’s integration challenges is, “What we’re seeing is not nearly as sophisticated as what we’re trying to get.”