MOBILE & WIRELESS SOLUTIONS IN CONSTRUCTION:

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1 A Research Note MOBILE & WIRELESS SOLUTIONS IN CONSTRUCTION: DRIVING IMPROVED DECISION MAKING SPEED AND SCALABILITY Prepared by: David Krebs, Director Mobile & Wireless Practice VDC Research Group All rights reserved VDC Research Group, Inc. 679 Worcester Road, Suite 2 Natick, MA USA

2 A Research Note: MOBILE & WIRELESS IN CONSTRUCTION: DRIVING IMPROVED DECISION MAKING SPEED AND SCALABILITY 1 INTRODUCTION The construction, architecture and engineering markets have been at the epicenter of the recent global economic recession. Following a period of almost irrational growth and investment in real estate development both residential and commercial the industry faces numerous challenges following the burst of the housing bubble. As a result the sector has been forced to reevaluate and reengineer its traditional business models to drive increased efficiencies in operations and improvements in bottom line performance. What is evident is that effective management of engineering and construction organizations today requires standardized business process and integrated technology systems that improve project management and drive profitability. Today more than ever engineering and construction firms need to manage and have insight into the entire project lifecycle. Competitive success is tied to organizations that in compliance with government and industry regulations best control project performance and scope, provide accurate and consistent forecasts, hold suppliers and sub-contractors accountable and mitigate risk. In order to most effectively address these challenges best in class engineering and construction organizations are now more than ever investing in technology solutions. CONSTRUCTION INDUSTRY OVERVIEW The construction and engineering industry includes construction of heavy and civil engineering (highways, bridges, railway tracks, airports, etc.), real estate development (both residential as well as commercial), and specialized construction products (such as architectural products, electrical connections, decorative items, etc.). Some of the leading meta-trends impacting this industry include: Increasing government spending on infrastructure through stimulus funds and government intervention in construction organization operations. Significant reduction in human resources by contractors and the challenge of recruiting younger generation into construction profession. Shift away from centralized construction operations to a more distributed model. These developments are placing greater demand for increased project team collaboration solutions. To support the demand for central accountability organizations are looking to leverage the entirety of the organizations with shared services. This includes the roll-out of company standards while maintaining flexibility among the distributed decision making centers. The net effect is that similar to organizations in other industries construction and engineering organizations are leveraging mobile and wireless solutions to address the need for greater collaboration among a highly mobile and distributed workforce. TECHNOLOGY ADOPTION TRENDS: DRIVING IMPROVED DECISION MAKING SPEED AND SCALABILITY Long a laggard in technology spending the construction sector has historically ranked 80 th or higher among industries in the adoption of IT solutions the acknowledgement of many of these broader issues facing the construction industry is accelerating the acceptance of technology as a key decision support tool. Central to many of these investments is the deployment of mobile and wireless solutions to drive real time decision making at the point of interaction. A natural extension to the significant investment the construction industry has been making in collaborative solutions that drive the seamless dissemination of project information has been the deployment of mobile computing and communication solutions. While the construction industry has widely adopted solutions such as push to talk (PTT) telephony applications, the use of mobile and wireless data applications has been limited. IT solutions in general and mobile and wireless solutions specifically have been adopted at varying degrees within organizations and to support the various phases of construction projects. Currently the business planning, engineering and procurement operations have more effectively deployed IT solutions while actual construction operations have fallen behind in IT infrastructure and field automation solutions. The construction and engineering workforce is inherently mobile. However, construction sites have never effectively leveraged (wireless) communications networks to connect these distributed and often remote workers and their assets. Nevertheless construction project managers require real time access to a variety of information, VDC Research Group

3 A Research Note: MOBILE & WIRELESS IN CONSTRUCTION: DRIVING IMPROVED DECISION MAKING SPEED AND SCALABILITY 2 including real time tool inventory management, raw materials deliveries, job costing, time stamping and general project management information. The challenge, however, is the lack of network access on construction sites resulting in an information bottleneck on the job site. Buoyed by advances in wireless technologies including coverage, performance, security and cost of ownership this, however, is becoming an issue of the past for construction operations. MOBILIZING BUILDING INFORMATION MODELING: A KEY CATALYST According to VDC s research some of the most critical operational issues facing construction organizations on the job site are numerous and span materials accuracy, on-schedule delivery, schedule management and labor tracking to name a few. Beyond these on-site tactical operational issues, broader strategic issues relating to the process of generating and managing building data during its life cycle are beginning to be addressed with meaningful solutions. A critical development has been the adoption of building information modeling (BIM) solutions to address these lifecycle management issues. While BIM solutions were not designed with mobile applications in mind per se, mobilizing BIM applications significantly enhances not only their value but also the strategic value of mobile solutions to construction and engineering operations. What BIM solutions do most effectively is through a virtual information model bridge the information loss associated with handing a project from design team, to construction team and to building owner/operator, by allowing each group to add to and reference back to all information they acquire during their period of contribution to the BIM model. In addition and perhaps most importantly it limits or prevents errors made by various team members by introducing the practice of conflict detection where, through detailed computer visualization, the mobile computer informs team members about parts of the building in conflict. A conclusion of a report developed by the US National Institute of Standards and Technology was that the US construction and engineering industry is losing over $15 billion per year as a result of the industry s continued paper-based business processes, lack of standardization and overall lack of consistent approach to technology deployment among leading organizations. Key benefits of investments in BIM solutions in general and mobile and wireless solutions specifically are manifold and include: 1. Improved productivity due to ease of information retrieval 2. Increased coordination of construction documents 3. Increased speed of delivery 4. Overall cost reduction More specifically, according to recent research conducted by VDC Research, investments in mobile and wireless solutions provided real and measurable benefits. For construction operations these included: Improvements in worker productivity: 30.1% Reduced operating costs: 14.1% Increased sales/revenues: 13.6% 2009 VDC Research Group

4 A Research Note: MOBILE & WIRELESS IN CONSTRUCTION: DRIVING IMPROVED DECISION MAKING SPEED AND SCALABILITY 3 MOBILE CONSTRUCTION SOLUTIONS: MAPPING FORM FACTORS TO APPLICATIONS Key developments in mobile and wireless technologies including, among others, lower adoption costs, improved ruggedness and in-situ operational performance, improved wireless connectivity options, availability of third party mobile applications have made these indispensable assets to construction and engineering organizations. However, one fact is clear: the myriad mobile and wireless application opportunities will drive the selection of a variety of mobile form factors. Key among these will be larger form factors such as slate tablets and/or convertible notebooks to support more graphics and document management intensive applications relating to project management and smaller form factors such as handheld devices and smartphones that are best designed to support communications, material and labor management applications. However, one common requirement for all mobile devices deployed in construction is that they can sustain exposure to challenging environmental conditions. In other words VDC recommends that the devices are IP rated and can withstand drops of at least 3ft. Construction Industry Worker Segment Project Managers, Architects, Consulting Engineers Supervisors, Contractors and Subcontractors Field Workers/Inspectors Target Mobile Device Platform Tablet Computer Pen or Touch screen Bluetooth for I/O support Integrated WWAN and WiFi Rugged design Tablet Computers or Wireless Handheld / SmartPhone Integrated GPS Bluetooth for enhanced I/O support Pen or Touch screen Rugged design Tablet Computers or Wireless Handheld / Smartphone Digital Limited functionality Wireless Handheld/PDA or SmartPhone with GPS capabilities Pen or Touch screen Rugged design Target Applications Project management Automated schedule management and realtime dispatching Materials management Bluetooth-enabled data collection (bar code scanning; image capture) Code enforcement/ Regulation management Time stamping Work-order process management Materials management Automated schedule management and realtime dispatching Reference/ data access GPS turn by turn directions and route tracking Light and retrieval Bluetooth-enabled data collection (bar code scanning; image capture) and voice communications Electronic time stamping to register visit entry and departure Electronic job task stamping to register tasks performed Tools management Inspection process management VDC Research Group

5 A Research Note: MOBILE & WIRELESS IN CONSTRUCTION: DRIVING IMPROVED DECISION MAKING SPEED AND SCALABILITY 1 ABOUT VDC RESEARCH GROUP VDC Research Group (VDC) is a technology market research and strategy consulting firm that advises clients in a number of technology markets including: Automatic Identification and Data Collection, Embedded Hardware and Systems, Embedded Software and Tools, Industrial Automation and Control, Mobile and Wireless, and Power Conversion and Control. Using rigorous primary research and analysis techniques, the firm helps its clients identify, plan for, and capitalize on current and emerging market opportunities. We strive to deliver exceptional value to our clients by leveraging the considerable technical, operational, educational and professional experience of our research and consulting staff. During our nearly four decades of ongoing operation, we have had the pleasure of serving most of the world s leading technology companies, many high-profile start-ups, and numerous blue-chip early and later stage investors. Our products and services consist of research reports, annual research programs, and custom research and consulting services. Founded in 1971, the firm is located in the Boston area. Please visit our Web site at to learn more. For further information, contact: David Krebs, Director, Mobile & Wireless Practice, x136, For purchasing information, contact: Gerrald Smith, Account Executive, x113, 2009 VDC Research Group

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