Hytech-Business Intelligence in Construction Industry

DamnD
The Value of
Business Intelligence
In Construction Industry
An ISO 9001:2000 Certified Organization

9 Sugarberry Dr, Nashua NH 03062
Email: askus@hytechpro.com www.hytechpro.com
Why Business Intelligence is Mission-Critical in Construction

By Damnish Kumar
Business Intelligence
Defined
THE NEED
In a broad sense, business
intelligence encompasses all the
strategic information that
entrepreneur-owners and
managers in any firmmanagement
reliesy on to plan and decide. We
use the term strategic precisely,
not in the loose way it is often
bandied around, because every
CEO and committed head of an
operating unit feels the urgency to
contribute to growth and profits.
Damnish Kumar, CTO at HyTech Professionals, leads
technology initiatives for a wide variety of clients in the
US, the UK, Japan, Germany and Sweden. He brings
to HyTech his technological expertise in n-tier
architecture and distributed database applications and
a special affinity for industrial environments.
Having managed all stages of the software product
life cycle throughout his career, Damnish has
ultimately been responsible for hundreds of
operational e-commerce, mobile, ERP, SCM and retail
applications. He also brings to the leadership of
development teams mastery of RUP and Extreme
Programming development methodology.
Damnish holds an M.S degree in Mathematics and
Scientific Computing from the Indian Institute of
Technology (IIT), Kanpur campus, and is a certified
project manager.
Every annual, monthly and weekly

plan rests, whether deliberately or
otherwise, on a finite set of six
known or imponderable factors
(see Figure , page 4). On one hand,
stakeholder preferences and
organizational factors are usually
well known. But the rest are fluid
and dynamic. In a dynamic and
volatile business environment, its
important to make these decisions
on an almost real-time basis.
Management is better positioned to
make these decisions by utilizing
data and visibility into all the
departments of the organization.
Disclaimer:
HyTech Professionals
www.hytechpro.com
9 Sugarberry Dr, Nashua NH 03062 Email: askus@hytechpro.com Phone: (888) 683 8281 Fax: (801) 991 3740
All rights reserved. The content of the publication is copyrighted.
Page 2
Business Intelligence in Construction

This study was conducted using market data and HyTechs historical information. This whitepaper is brought to you for
educational purposes only. The information is sometimes related to interpretive individual opinion, and is not intended to
represent the standard The views are those of the contributors and are not necessarily endorsed by HyTech Professionals.
Tip:
Business Intelligence is a
whole class of applications,
data storage, analysis and
networking technologies
targeted at assembling,
granting access to, and
combining information to
foster more timely and ontarget decisions. The
essential difference from ERP
is the emphasis on:
External factors that
impact the business; and,
Performance reports and
the state of company
resources.
Managers know what resource base the

enterprise owns but they often lose track of
how much is available and where it is precisely.
Feedback on the state of performance is
uneven and does not always arrive in timely
fashion. All planners know that the economic,
social, political and technical ecology
surrounding the firm changes the conditions for
competition and enduring advantage from day
to day. Worst of all are gaps about how one
stands vis--vis the competition. But all this
vitally-needed information is frequently
imperfect and incomplete. The truth is that
growing and even established businesses often
lack a means of visibility into all aspects of the
company.
The solution is business intelligence (BI), the
combination of market research and internal
performance data warehousing.
Firms intuitively recognize the necessity for
complete and timely information. But BI is not
about simply having a mass of information
scattered throughout the network or in standalone desktops. Neither Excel spreadsheets
nor financial package reports, if uncoordinated
(and worse, contradictory) delivers vital
intelligence to a firm in the form of analytics for
decision-making.
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Page 3

Figure 1: Strategic Management Process: Basic Conceptual Framework
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Page 4
3. Real-time while projects are ongoing and

up to the minute because reliable decisions
demand it.
WHAT
TO
LOOK
FOR
1. Analytics Extracts
meaning from
company data.
Information that is
strategic, coherent,
timely and enables
well-informed
decisions.
2. Synthesized
Information has
been validated
across various
databases where it
exists, sliced,
diced and rendered
useful for missioncritical decisions. BI
is not about the past
alone, it is about the
present to get
foresight about
future impact of
decisions.
4. Information is accurate and reconciled -One consistent, common version of how the
firm and construction projects are doing.
5. Connects all facets of the firm Across
accounting, sales, field projects,
warehousing, purchasing, bill collecting,
Employee Relations, your customers, your
suppliers, and your partners.
The Advantage BI Brings

In plain terms, BI stops waste and inefficiency
dead in its tracks.
Slashes the time staff spend on
unproductive search and reconciliation
missions. The Center for Media Research
found in a 2005 survey that professionals
spend more than half their time digging
out information. This may amount to as
much as 5.4 billion lost man-hours for
American firms.
Reduces the risk of faulty decisions and
time and money spent on backtracking.
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Page 5
For proactive management rather than

management by
hindsight.
Without BI, What If Scenarios

Missed
Excellent BI advances your Risk Analyses miles
ahead of plain financial reporting and inflexible
what if spreadsheet work mainly by allowing
you to input ranges of risk, not just point
estimates.
Planning ahead means taking risk into account.
You must know what the risks are and what
impact they will have.
What if in September 2008, you needed to
forecast production for the U.S. holiday season?
Year-to-date sales had run 15% below prior
year because cautious consumers kept reading
about homes repossessed and employees
thrown out of work. Will sales increase at all
during the holiday season? By how much: 3%,
5%, 10%, 15% or more? What grounds does
the BI reading of the business climate give you
for even being optimistic?
Or another what if scenario: Indias dry
season has commenced and you expect your
construction companys projects to go full
blast. Several clients your sales engineers
prospected seem ready to sign on the dotted
line. So contracts will rise and thats totally
good news, right? But being an experienced
manager, you know this will use up
consumables like POL and welding rods fast.
By how much should you replenish now? And
what if the utilization rate for graders,
backhoes, pneumatic drills, etc.
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Page 6
A capable BI system should permit you to simultaneously plan different

levels of risk:
Overtime cost
Inventory shortages
Variable contract
build-up
Geological survey
results
Recruitment shortfalls
Delays in government
approvals
Underground
installation maps that
cannot be found
Unfinished
negotiations with the
labor union
Financing and
insurance costs
Schedule slippage
Penalty clauses
Effect on gross project

income
exceeds 95% without maintenance downtime?

What is the risk you might not have enough
leased equipment in reserve? What will delays
cost if you wait to decide till those projects
actually come on stream?
Excellent BI must permit you to simultaneously
process three levels of what if scenarios: best
case, worst case and most likely case. The
model, in short, accepts range estimates of risk
so managers can decide if the consequences
are acceptable.
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Page 7

Figure 2: How connected can you
be? The July 2008 Oracle release
of the free Business Indicators
client for the iPhone.
The Tools
In brief, the alternatives are:
A. Have your IT Department create a
homegrown solution from scratch. This
looks cost-effective. But if the most
complicated project they have done so
far is the company Web site, be wary of
how long you must wait while risk piles
up every day on the shop and factory
floor.
B. Purchase an off-the-shelf suite like
Oracles Business Intelligence Enterprise
Edition Plus that integrates modules for
end-to-end Enterprise Performance
Management System, including categoryleading performance management
applications, BI applications, BI
foundation and tools, and data
warehousing based on Oracle EPM. Be
sure to ask hard questions about
consultants costs to customize and
implement. Total cost-of-ownership can
be an eye-opener.
C. Request an independent application
provider to render you a bespoke BI-anddata-warehousing-only system built
around an open-source core like the
Eclipse BIRT (Business Intelligence and
Reporting Tools). Get references and
investigate the developers success rate
in hardnosed fashion.
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Page 8
Figure 3: A Business Objects Dashboard Implementation, One Reason SAP Acquired the Company
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Page 9
Getting There:
Critical
Success
Factors
Comprehensi
ve because
built around a
data
warehouse for
all operating
departments,
without
exception.
Scalable,
seamlessly
accommodates
the growth of
the entire
company or
just one
department in
the medium
term. And that
means the
next five years.
This is why you
have a timebound ROI in
the first place.
Figure 4: Conceptual Framework for the "Real-Time Intelligent
Enterprise" (Source: J. Griffin, DM Review Magazine)
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Page 10
Open system
that your own
IT staff or other
outsourcers
can access,
maintain and
repair.
Accessible to
all employees
who need
answers to
questions in
their day-today decisionmaking.
Flexible about
letting endusers switch to
more readilyunderstandabl
e report
formats on the
fly.
A solid plus is if
the BI system
features
collaboration
and resource
planning with
your supply
and value
chains.
And the ultimate acid test is that a BI

system must deliver actionable
insights
A competent BI system must enable smarter
and faster decisions with intelligence presented
in four ways:
1. Traditional Reports for compliance,
sales tracking, revenue management,
employee data and a host of others.
You must have both pre-formatted
templates and the ability to create ad
hoc queries and reports that can be
saved for later use.
2. Key Performance Indicators (KPIs)
Readily accessible metrics that give
visibility to, for instance, inventory
levels, outstanding CRM issues, the
number of new leads, payables
amounts, new orders, or cash flow.
KPIs move one step beyond
traditional reports by providing
seasonal indicators, period-to-period
comparisons and flagging of both
minimum and maximum thresholds.
3. Performance Scorecards Decision
support tools that can be flexibly
configured for analysis along multiple
dimensions such as across
construction projects, among
company departments, or one KPI
(such as plan versus accomplished)
over past week, past
month, a quarter, year-to-date and all
in one report.
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Page 11
Figure 5: A Project Management Implementation of a Business Objects Crystal Xcelsius Dashboard

(courtesy of Inverra.com)
www.hytechpro.com
Page 12
4. Dashboards
This is the BI
reporting
element that
really drives
productivity.
In one or a
succession of
screens, the
end-user is
presented with
all available and relevant external and

internal information he needs to plan
and reach more successful decisions.
Well-designed dashboards incorporate
both project activity and business
results. Ideally, therefore, a manager
could do it all via the BI Dashboard:
track projects, manage team
calendars, analyze costs, manage
customer records, approve or place
orders, etc.
Just as important as comprehensive content and visual presentation,

perhaps, is that the Dashboard updates in real time.
In a Construction and Engineering Milieu: Illustrative Case

Equipment may loom large on the asset side of construction company
balance sheets. The most successful contractors report, however, that they
also need to track, analyze and report on people assets just as much as on
the other resources of the firm. The strategic goal is to better forecast,
control and hence, employ resources so as to execute projects more
efficiently and deliver the promised service to clients.
A family-owned business, Paul Brenner Construction (disguised identity)
counts among the top 10 general building contractors in the United States.
Since PBC has perennially emphasized quality work, on-time completion, and
hiring skilled employees, more than 80% of project revenues routinely come
from repeat customers and referrals.
CEO Paul Brenner had posed a four-fold challenge to the CIO:
1. Continue to grow the business and improve interaction with clients
and value-chain partners by developing a system for online
document collaboration and real-time access to project information.
2. Optimise project management performance and internal
collaboration.
3. Simplify compliance and administrative tasks.
4. Control costs and restructure the business so as to branch out into
ancillary services in the near future.
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Page 13
The solution turned out to be customising an off-the-shelf BI and Data

Warehouse suite to build a secure standards-based, Web-based portal for
employees, customers, and partners. The portal linked to such business
applications as legacy project management and financial systems, both to
preserve prior investments and give seamless access to business information
with one log-in. With eDirectory in the picture, the system allowed dynamic
group participation.
Just 12 months later, the advantages were crystal clear, notably better
project performance as office, field, and remote employees accessed key
information at any time. Improved data accuracy and availability slashed
administrative overhead involved in searching for information. Delivering
real-time project data when and where needed enabled greater cost control
and yielded tangible efficiencies.
Conclusion
In the construction business, ultimately, the strategic need for BI is not so much
about environmental and competitive conditions as maximizing your internal and
leased assets for efficient use. As 2008 ends on a cautious note in respect of
domestic and foreign contracts, now more than ever may be the time to deploy a BI
programme that will quicken the pace of actionable analytics and strategic
decisions. To leverage profitable growth as the economic storm clouds gather, it is
more important than ever to know precisely the state of your human, financial and
equipment assets from day to day, in every state and country where you operate.
But it pays to be equally prudent about putting the ROI for a new, grand BI system
under the most serious scrutiny. Only then will you be sure to have just the right
scale of BI you require for incisive, fleet-footed planning and decisions from day to
day.
For more on applying rigorous ROI and cost-benefit analysis to your pressing application
goals, get in touch with us for a no-obligation consultation.
For queries you may have about this article or any questions at all, contact:
Damnish Kumar
Hytech Professionals LLC
email: askus@hytechpro.com
www.hytechpro.com
Page 14

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DamnD

An ISO 9001:2000 Certified Organization

Why Business Intelligence is Mission-Critical in Construction

Every annual, monthly and weekly

Business Intelligence in Construction

Managers know what resource base the

Business Intelligence in Construction

Business Intelligence in Construction

3. Real-time while projects are ongoing and

The Advantage BI Brings

Business Intelligence in Construction

For proactive management rather than

Without BI, What If Scenarios

Business Intelligence in Construction

A capable BI system should permit you to simultaneously plan different

Effect on gross project

exceeds 95% without maintenance downtime?

Business Intelligence in Construction

Business Intelligence in Construction

Business Intelligence in Construction

Business Intelligence in Construction

And the ultimate acid test is that a BI

Business Intelligence in Construction

Figure 5: A Project Management Implementation of a Business Objects Crystal Xcelsius Dashboard

Business Intelligence in Construction

all available and relevant external and

Just as important as comprehensive content and visual presentation,

In a Construction and Engineering Milieu: Illustrative Case

Business Intelligence in Construction

The solution turned out to be customising an off-the-shelf BI and Data

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