Technology is the foundation for success in modern markets including construction, so why isn’t the CEO leading change?
We’re just going to come out and say it: in today’s world, digital transformation strategy should be at the top of the CEO’s agenda. It’s not just a job for the technology director; it’s not the work of your IT lead. Technology is changing so quickly — and the consequences for your capital project delivery business are so profound — that the CEO must be both the guide to and the champion for change.
Why? To start, technology has an increasingly big impact on your bottom line — and that impact will only grow in the years to come. It touches every part of the project lifecycle, from proposal to turnover; it is used by every person in your organization, from office to field; it directly influences everything from daily communication to overall organizational capacity, effectiveness and efficiency. (If you need proof of how central technology is to your business, consider what happens when your email servers go down, or the edge your competition would have with the ability to reuse standard digital work packages for construction.) As the use of big data and sophisticated knowledge architectures increases across the capital project and petrochemical sectors, the influence of technology on the bottom line will increase even more. The CEO should be in command.
Second, there is a great deal of research showing that when capital project organizations implement process improvements without leadership sponsorship, those improvements are destined to fail. It has also become clear that the piecemeal application of technical solutions is a recipe for failure. Meaningful digital transformation requires a centralized strategy and direction, and full engagement. Enthusiastic sponsorship from the C-suite sends a clear, unequivocal message to the entire organization that there is a business case for change — and it’s not optional.
Third: Predictability. If there’s one word that matters for everyone in the capital projects industry right now, it’s predictability — the on-time, on-budget delivery of critical projects. The CEO of an EPC company must make predictability a key performance indicator. How do we deliver more predictable projects? The answer to this question is complex, of course, but the proper use of technology, manpower, engineering resources, and knowledge, strong procurement and efficient management systems all contribute to predictability. Notice that technology influences all of the above.
Fourth, consider the improved value proposition of a technology-driven EPC company. Not only will you build your client’s project faster and with improved capital efficiency, but you’ll also provide them with comprehensive project data when the project is complete. This data can drive improvements for future projects, creating lasting value and continuous improvement over time as more data is captured, aggregated and analyzed. Technology can, in fact, be the basis for relationship business development. The better your company gets at this, the stronger your client relationship will be. You’ll be far more valuable in the marketplace — and if you start now, it will be harder and harder for your competition to catch up with you.
How to begin? Whether you’re an EPC CEO or someone in an executive leadership role for capital projects programs and portfolios, here are three steps you can start taking today.
1 » Test Your IT Leadership
Initiate a gap analysis in your IT department. Ask your key technology leaders to tell you where you stand in comparison to similar-sized organizations, both within the capital projects sector and outside of it. Ask specifically for benchmarks on the following:
internet of things
reliable data exchange
Resistance is red flag, and so is a cursory report that says everything is fine. Technology is changing fast, and your leadership must be alive to that change and ready to act. Use the report as an opportunity to decide whether you have the right people in place.
2 » Give Your IT Department Some Skin In The Game
The IT department should be fully integrated into the mission-critical work of a capital project organization. Technology leadership should be fully aware of each project’s bottom line and should — for lack of a better word — feel the pain of delivering that project on-time and on-budget.
Achieve this by setting KPIs that are directly related to technology. For example, a goal might be: “By the time we deliver our 100th project, we’re going to have 60% of our work processes digitized.” Or: “By 2020, our procurement department will be fully digitized, paper-free and procurement work processes requiring a minimal use of emails and attachments.” Or: “By the end of the next year, we need to reduce the average number of RFIs by 20% on average across all projects, using technology.”
3 » Stay The Course
It’s easy to launch initiatives, but it is very hard to stay the course. This seems trite, but it bears repeating — if you’re not 100% committed to driving technology forward in your company, your team won’t be, either. CEOs don’t need to micromanage, but by having a clear vision and setting clear goals, they can drive meaningful change over time. One must stay the course.