End-user Case Studies in e Business

With a view to capture end-user processes ‘before’ and ‘after’ using e-business applications, the drivers for e-business adoption, reasons for companies to engage in e-business, the skills and competence requirements, and the business benefits and limitations of e-business applications, case studies with end-users of Products A and B were conducted. Management level staff, such as senior project managers and IT managers, from each end-user company were interviewed using semi-structured telephone interviews. In al1 eight end-user companies were interviewed. These
include four contracting, one quantity surveying and project management firm, one architecture and interior design firm, one construction management consultancy and one materials supplier. All, except the supplier firm were large companies employing in excess of 500 employees.

From the case studies it was clear that end-user companies had accrued several business benefits from using e-business applications. Several factors can influence the adoption of technology within construction organizations.
Technology adoption can be management driven, client driven, market driven or project driven. According to marketing guru, Geoffrey Moore (2003), technology adoption within an industry sector is based on a traditional Technology Adoption Life Cycle, represented by a bell curve. This bell curve comprises of industry end-users, progressing from innovators, early adopters, early majority, late majority, to laggards. While innovators are ‘technology enthusiasts’, early adopters are visionaries who have the insight to match an emerging technology to a strategic opportunity, and are driven by a ‘dream’. Their core dream is a business goal, not a technology goal. The early majority are pragmatists who share some of the early adopters’ ability to reiate to technology. However, they require well-established references, before they invest in such technologies. The late majority have a conservative approach to technology and are pessimistic about the ability to gain value from technology investments and start using it only under duress. Laggards are those who simply do not believe in technology.
This analogy can be used for the adoption of e-business within the construction sector. Case study findings indicate that the interviewed enduser companies fall within the early adopters’ category of the adoption curve as shown in Figure 3.9. In almost all end-user companies the use of e-business was driven by the companlr’s senior management. These companies believe that e-business is the way forward for project management within the construction industry and have adapted the technology to match their business needs. Quoting one response:

‘use of innovative technologies such as this, has been a primary dif-ferentiator that sets us apart from the rest and reflects our company’s drive towards innovation. This is because we fundamentally believe that that’s the way the industry is going to go and we would like to be at the forefront of innovation.’

One large construction management company, for example, made a strategic decision to implement Product A. It had successfully used EDM (electronic document management) tools in the past to manage large construction projects. The company has a policy for continual improvement and innovation, hence it was only natural to migrate to the next
level that is strategic move to use Web-based EDM systems such as those facilitated by e-business. Another company, a large contractor and property development company, believes in early technology adoption and it is a company policy to always be at the cutting edge of ‘whatever’ (e.g. technology). For others such as a small construction materials supplier, using e-business was primarily project led with a push from the prime contractors.

Figure 3.9 Technology adoption life cycle in case study of end-user

In hindsight, however, the supplier acknowledges that their competence in using e-business has opened new opportunities, which were not previously possible. This has given a competitive edge, which can be beneficial in future projects where clients seek expertise in this specific area. These business benefits as demonstrated by ‘early adopters’,
act as drivers for wider adoption of e-business amongst the ‘late adopters’ of the construction industry.

Early buy-in from senior management is a crucial factor influencing successful adoption. This can be ‘a hard nut to crack’, but it is not an impossible task. More buy-in can be encouraged through previous examples of success stories. Geoffrey Moore (2003), a management guru, says that ‘part of what defines a technology market is the tendency of its
members to reference each other when making buying decisions is absolutely key to its success’. Quite often the scepticism and techno-phobia, especially within the early majority, stems from the probable risks. Risks most companies are not willing to take. In addition, cultural issues associated with technology adoption are considered a key factor inhibiting wider use of e-business in construction. Software tools that’do too much’ or are complex to use, are not easily adopted by the industry. It is important that application service providers and system developers recognize
that their tool is simply an enabler in a bigger process.

Currently, there is evidence of process improvement resulting from automation of processes and removal of bottlenecks leading to rationalization of procedures. There is, however, no evidence of process re-engineering or development of any new processes that have led to paradigm shifts within the construction process. Such practices may work in the short term, but have limitations in that the end-users are not necessarily utilizing the technology to its full potential and are therefore not deriving full benefits from it. Instead of regarding e-business as an extension
of IT and fitting it into the existing business processes, construction companies need to recognize that it is a radically different approach to conducting business and therefore should explore new processes and opportunities, which may only be possible because of e-business. Changes that occur in the construction business process due to the adoption
of e-commerce need to be continually monitored and documented so that a best-practice strategy for e-business adoption in construction can be formulated.

Currently, application service providers develop applications that support individual processes (e.g. design management, procurement, trading, etc.). Thus, the resulting processes, although automated, are still fragmented.
Existing e-business solutions have the capability of providing a ‘single’ solution that encompasses the project life-cycle – from inception to completion including the facilities management phase, thus in effect overcoming the fragmentation issue. The industry, however, is still not ready to accept the radical changes that are essential to realize the full potential of e-business implementation. At present, the industry has accepted and adopted e-business applications that have minimal impact on their processes and hence are easy to implement and use. Such tools facilitate
the construction process and increase the probability that the project will meet its target cost and time schedule. In this respect, e-business contributes towards improving project performance. To gain maximum benefits from adopting e-business, however, the correct strategies and implementation plans have to be developed, communicated, implemented and monitored.

Taking this into account, construction companies who are currently using and those who have yet to use, e-business need to take measures to successfully adopt, use and benefit from the technology. it is important for companies that seek to adopt e-business tools to  assess their ‘e-readiness’ for adopting e-business to ensure a productive
and beneficial implementation. To address this need an e-readiness model for construction organizations and a prototype application, VERDICT that assesses e-readiness of the construction sector was developed and
implemented.