A Strategic Perspective for the Use of IT in Construction

I.T .On the other hand the use of I.T in construction is lagging behind of most other sectors of industry. There are many reasons for that but one of the most important issue is I.T is considered as a more technical subject than a subject to be managed. The first issue to be made clear is that the technical efforts behind I.T can only be successful if I.T can be managed efficiently. There are various strategies and frameworks and applications of I.T in construction which we will try to examine in this paper. It is very difficult to say right or wrong for each different approach , and every different application of strategy in the sector. We must consider the facts about the time period it’s applied (because I.T is a very dynamic area of research –an application/approach which works well for today’s conditions may be out of date for tomorrow -)and about the region/country it’s applied (the sector can have a different fragmentation in professional organisations, professions etc.).One of the most interesting approach by Earl(1989) mentions that data processing activities are becoming information technology activities and which is leading a major change of our thoughts about information related activities. In the light of his approach Earl(1989) defines 9 propositions. To examine the issue more deeply, we will identify them to explore the ideas that are applicable for construction industry. There are several difficulties on implementation of I.T in construction sector ,including social problems as well as technical problems. The implementation of the strategy , in other words putting the theory into practise , involves more social difficulties than the technical ones .A simple example can be the viewpoint of architects about using computer aided design applications, we know that CAD technology changed the way of work in design and many architects became unqualified because they do not have enough knowledge of I.T. On the other hand the architects are not really convinced about the importance of CAD (even the ones who use it actively) , they are using it not because they like it but because they can not resist the pressure of time ,pressure of organisation and pressure of technology. There is a high pressure of I.T on all industries and at organisational, and professional levels and , that force enterprises to take actions on the I.T related fields. To summarise, we can conclude that I.T is an important issue for all sectors of industry ,for some sectors it is a vital for some others it is a support activity. Second important issue is I.T has to be managed efficiently .The strategies differ from time to time and place to place. There is not “a solution” but there are various different solutions to strategic problems in I.T in construction industry ,now we will examine them in detail.


Introduction
The construction industry started to have a strategic view on information technology management. As all we know information technology plays an important role at all areas of construction sector , the national and professional organizations need strategies for managing I.T .On the other hand the use of I.T in construction is lagging behind of most other sectors of industry. There are many reasons for that but one of the most important issue is I.T is considered as a more technical subject than a subject to be managed. The first issue to be made clear is that the technical efforts behind I.T can only be successful if I.T can be managed efficiently. There are various strategies and frameworks and applications of I.T in construction which we will try to examine in this paper. It is very difficult to say right or wrong for each different approach , and every different application of strategy in the sector. We must consider the facts about the time period it's applied (because I.T is a very dynamic area of research -an application/approach which works well for today's conditions may be out of date for tomorrow -)and about the region/country it's applied (the sector can have a different fragmentation in professional organisations, professions etc.).One of the most interesting approach by Earl(1989) mentions that data processing activities are becoming information technology activities and which is leading a major change of our thoughts about information related activities. In the light of his approach Earl(1989) defines 9 propositions. To examine the issue more deeply, we will identify them to explore the ideas that are applicable for construction industry. There are several difficulties on implementation of I.T in construction sector ,including social problems as well as technical problems. The implementation of the strategy , in other words putting the theory into practise , involves more social difficulties than the technical ones .A simple example can be the viewpoint of architects about using computer aided design applications, we know that CAD technology changed the way of work in design and many architects became unqualified because they do not have enough knowledge of I.T. On the other hand the architects are not really convinced about the importance of CAD (even the ones who use it actively) , they are using it not because they like it but because they can not resist the pressure of time ,pressure of organisation and pressure of technology. There is a high pressure of I.T on all industries and at organisational, and professional levels and , that force enterprises to take actions on the I.T related fields. To summarise, we can conclude that I.T is an important issue for all sectors of industry ,for some sectors it is a vital for some others it is a support activity. Second important issue is I.T has to be managed efficiently .The strategies differ from time to time and place to place. There is not "a solution" but there are various different solutions to strategic problems in I.T in construction industry ,now we will examine them in detail.

What makes the I.T era ?(The 9 propositions )
Before starting to look at Earls propositions , we have to take into account some other definitions in order to be objective (neutral). Gerstein(1987) argues that I.T has a large impact on the business of today and changes have to be carefully managed. He mentions five rules how I.T have to be approached.

1-
The key to successful utilisation of I.T is effective strategic thinking. Without an appropriate strategic perspective and robust conceptual models , it will be difficult to identify an appropriate role for I.T.
2-The chief strategic architect must understand the strategic nature and potential of I.T and specifically manage its evolution.
3-Various uses of I.T may require major reorganisation at the level of work group , the department and perhaps the whole organisation. 4-Applications of I.T that alters the firms core technology and ,which are therefore , closely related to its culture ,may be fiercely resisted 5-Managing the I.T function has become increasingly difficult as a result of these considerations According to Eason(1988) the potential of I.T in organisations is very high. He argues that strategic application of I.T depends on understanding ways in which technology can be harnessed to serve the organisational objectives which are set by the senior management. He also defines that I.T involves data processing, text processing and telecommunications(my own idea is I.T now covers a broader area ,with the efficient use of the net, than the definition of Eason), he says this could involve three different departments in a organisation(this idea of 1988 also seems to be behind today's needs).He concludes the implementation of I.T must be carefully monitored as it should take place simultaneously with major organisational changes.
Eason have following opinions ,he says it will have to be known that I.T. technical design alone is not enough, compatible social and technical systems should be created so that systems could be effectively harnessed and exploited by the users and serve some important organisational purposes. He says organisational and human change will have to go through evolutionary development to enable more mature decisions. After all those ideas it is better now to look at Earls propositions in construction perspective.
• IT : a high expenditure activity: The proportion of revenue spent on IT can be used as a guide to the extent to which a sector is participating in the IT era.. In 1990 McLintock did a survey for construction industry ,which we can see majority of consultants have IT expenditure between 1.5 and 5 % of their income, and contractors have IT expenditure between 0.1 and 0.25 % of their income. If we compare construction industry with the other industries , we can see that construction industry is required to invest more on IT . The majority of firms make inadequate investments which prevents them fully entering the IT era.
• IT : critical to many organisations IT is critical to some organisations like banks, credit card companies , travel agents ,where it has to be applied and managed carefully for the success of entire organisation. IT has a supportive role in some other organisations , Earl(1989) defines IT as a support activity if it is not critical to either the current operations of an organisation nor to the strategic plans for development of that organisation. Construction sector consists of number of different industries which covers large number of enterprises. Some enterprises are large but most are small or medium sized enterprises ,and the relations between them are formal or loose, working relationships are formed when they combine on projects. Brochner(1990) argues that the use of IT by a construction firm leads to improvements of coordination ,inspection and translation and reduces transaction costs.
It can be concluded that for most of the construction enterprises IT is a support activity. Koskela (1985) describes the plans of number of Japanese contracting firms who are planning to exploit the full range of IT including data processing , telecommunications , and automation technologies. It can be argued that some construction organisations have reached turnaround stage and as time passes they can find themselves at the strategic stage.
• IT : a strategic weapon IT offers new opportunities to gain competitive advantage , improve productivity and performance enable new ways of managing and organising and develop new businesses. The Ford motor company and its processes supplying parts to dealers offers an example of the use of IT to achieve internal productivity. An IT based distribution , storage and stock management system has been implemented which has led to major increases in the productivity of the organisation itself. OTIS is a major enterprise in lift and escalator installation and operation. OTISLINE is an example of how an enterprise has strategically used IT to create an internal competitiveness advantage over other enterprises. The system helps in allowing a highly efficient maintenance service with faster and better performance than competitors. Most construction enterprises see IT by means of improving internal productivity. The RICS Building Cost Information Service can be another example of how this can be done. The system is a central database of price information supplied by subscribing members who are all able to exploit the shared data to improve their individual productivity. These few examples of the use of IT to improve internal productivity, the RIBACAD system(a library of standard architectural details) can be an example of efforts to improve external productivity. But few organisations appear to offer a new or improved service by virtue of their IT use and even fewer to consider new ways of managing and organising themselves or to develop new businesses.
• IT : needed in the economic context In construction the emerging economic context is dynamic such that the strategic exploitation of the IT may be appropriate. The lack of stability is evident at organisational , national and international levels . Organisationally there have been sufficient criticisms of industry practice and responses suggested to it ,to suggest that structural change within industries of a fundamental nature may be imminent. As clients demands for quality and convenience continue to increase , am industry which has traditionally been conservative is realising the need for innovation in many respects.
The economic context at the international level is similarly dynamic particularly with the coming of common European market and internalisation of construction. The trends in these fields giving a great impetus to construction firms to seek ways and means of improving their productivity and competitiveness and to develop new businesses. The international dimension will be an important force behind IT applications in construction.
The economic context of construction is thus highly volatile and this is an attractive situation for potential strategic use of IT . New markets and business opportunities are going to be encouraged and IT will play an important role.
• IT :affects all levels of management A problem of an organisation having entered the IT era is the technology having permeated all functions and levels within an organisation. Early uses of DP were restricted to distinct DP departments and for specific number-crunching applications. Organisations are now in the situation of having a range of hardware and software technologies being used by a diverse range of groups of people and for a variety of different tasks and activities.
In construction industry majority of organisations still appear to have IT being used by IT specialists or for discrete applications and it would seem only by staff at the technical levels.
The construction sector (on basis of change at management levels) is a long way from having reached the IT era and that significant change is needed in the variety of levels of management that are using the technology and the diversity of functions to which it is being applied. For this to be possible will require all construction organisations to rethink their size , organisation structure , and their education and training activities in the light of their requirements in the IT era.
• IT : a revolution in management information systems A sector could be described as more fully being with in the IT era if it is exploiting a range of technologies for a range of existing and new applications. Earl(1989) in this context quotes soft technologies as expert systems and decision support systems and hard technologies as teleconferencing and executive management information systems Expert systems technology has been successfully applied in many areas , but construction industry has a very large knowledge domain and tends to evolve during a construction project.
For that reason it is also very difficult to create successful applications, and the ones who are developed are not applied into industry practice. A change of attitude is necessary for the construction industry.
• IT : involves many stakeholders Earl(1989) refers 7 different categories of stakeholders. These are government through regulations and policies, business users through their information needs and standards they demand, IT manufacturers through their technology and standards they set, customers and suppliers through networking and integrating arrangements, consumers through their expectations and behaviour, competitors through their use of new products in new markets and new businesses, and employees through any union agreements and their job satisfaction.
Consideration of IT stakeholders is important for two reasons. The diversity of stakeholders that are involved with IT in a sector may indicate how well the IT era has been embraced but could equally be seen as an obstacle for more extensive IT use not having been achieved. Stakeholders are also important to IT government planning.
A sector may enter the IT era either through its own commercial pressures, or through direction of economic policy makers and implementers. Central planning and direction may sometimes be necessary as an extra push to support the movements taking place in an industry or could be used to speed up the process. If central planning and direction is to be followed, it is important that all stakeholders are considered by implementation plans and even that they are involved and consulted during the process of plans being drawn up.
• IT :technology matters do matter It is easy to get carried away with technological developments and always assume that the next stage of the technological improvement will remove all the inadequacies of the current stage. It also not true to assume that incompatibility problems between parts of an industry will be able to be overcome as technology improves although in construction the extent of this problem could be very significant. On the other hand for a sector to enter the IT era, the right sort of technology must be owned by a sufficiently large number of the organisations that participate in it. There is a general problem here that construction organisations need to embrace all types of technology more fully to retain their competitive positions.
• IT : management makes the difference One of the most important ways in which IT differs from DP is in its need to be managed. A firm of management consultants , identified important management factors as top management support, degree of IT awareness by management, level of IT investment, degree of Board level IT direction.
In construction sector because of the poor management skills found in the industry and because IT is treated as a technological issue , the strategic exploitation of IT has been much less successful. There is a need of education of managers rather than the training of technologists.

Strategic IT planning techniques
Consolidating work by a number of writers, Flaaten (1989) describe an analytical framework for strategic business planning that entails defining an organisation's mission, identifying its goals and objectives and deriving strategies for alternate scenarios. The framework, which involves the use of value chains, the "five forces" model, and the "three generic strategies", together with techniques suggested by other authors has been applied to construction Betts and Ofori, (1991).
Value chains can be used to identify potential for competitive advantage within individual parts of the whole firm. The value chain is a structured way of analysing a business's constituents and its links to outside organisations. Value is defined as what a company creates, measured by the amount buyers are willing to pay for a product or service. The difference between value and cost determines profitability. The five forces model can be used to position a company in relation to business forces creating the changes. The five forces are buyer power, supplier power, threat of new entrants, product substitution and jockeying for position. The model helps us identify where IT can be used to prevent new competitor entrants, to exert buyer or supplier power relationships, to offer substitute products, and to help in jockeying for position between competitors.
The three generic competitive strategies are derived through analysis of markets by a combination of strategic target and competitive advantage sought .The strategies are product differentiation ,cost leadership and product focus. Betts(1992) defines a five level applications framework for construction industry as seen below :

Level 1 National Construction Industry
Level 2

Professional Institution
Level 3

Construction Enterprise
Level 4

Construction Project
Level 5

Constructed Product
He argues that the globalisation of construction means nations ,and more specifically their construction industries , need to undertake strategic IT planning and devise IT strategies. For the strategic use of IT at the national level requires fundamental policy making initiatives of a national body. In the absence of a group able or prepared to do it, industry must come together to perform the task .Professional level implementation is the responsibility of the institutions. Consequences at this level are at their most significant. Failure to act in the current climate of imminent deregulation may mean changes in a profession's relative position and strength , from which recovery is impossible.
Construction enterprise or construction company is the level that most significant and common examples of current strategic IT planning occur. In the near future many innovative strategic initiatives for using IT will emerge at this level. The consequences of this will be restructuring , the creation of new businesses and the emergence of new information intensive products and services.
In contrast to business and manufacturing industries , the fundamental operating level of the construction is the project, regardless the size of enterprise. At the project level , implementation and consequences will differ again. There will be software houses and project information management consultants with potential to exploit competitive advantage through IT. Finally finished buildings are a level which IT can be used strategically. The intelligent buildings are very good examples for this level. Possibilities exist for competitive advantage to be gained by developers and other industry participants with the objective in this case being better buildings.
In the light of the application framework and Betts(1992)

Multiple Methodology for Information Systems Strategy
Information systems strategy is defined as the long term , directional plan which decided what to do with IT. IS strategy was seen to be business led and demand oriented and concerned with exploiting IT either to support business strategies or create new strategic options. Most UK companies quote any one or more of four reasons for embarking on IS strategy formulation exercises: 1-Sector exploitation of IT is posing strategic threats and opportunities 2-The need to align investment in IS and IT with business needs.
3-The desire to gain competitive advantage from IS and IT .

4-The revamping of the IT function and elevation of IT activities.
These four aims are different they won't be achieved by one simple and universal approach, nor will they be satisfied at once. In complex organisations different business units will have different selections of these reasons -and this may change in over time. Yet most manufacturers and advisors have developed their particular methodology for IS strategy ,they ignore five important lessons learnt in recent years.
1-No single IS strategy formulation will work.
2-The preferred mode of IS strategy formulation depends on the firms sector.
3-Success in IS strategy formulation takes time and its influenced by past experience 4-IS strategic plans should be managed as portfolios.
5-Expectations of IS strategy formulation need to be explicated and managed.
As we can understand above it is impossible formulate a single IS strategy for the organisation. Top down and bottom up approaches are the traditional ones .Recently more structured techniques have been developed both by academics and consultants, one example being the critical success factors approach which seeks to logically confirm business goals , derive critical success factors needed to achieve these goals, and indicate IS requirements needed to support or deliver the critical success factors .
Top-down approach puts the business into IS .Commonly , business plans and goals are not formally available or are ill defined , and rarely will be expressed in terms easily translated into IS needs . A formal methodology is required to both elicit business strategy and derive IS needs .The properties required of a methodology are that it is easily understood and used by line and general managers, it can cope with varying robustness of business strategy , it does not consume too much time or resource , it can be repeated as circumstances inevitably change. The critical success factors approach seems to possess some of these qualities.
The first step of the critical success factors approach involves identification and agreement of business objectives for the company. The critical success factor method demonstrates that the essential ingredient of top-down methods is clarification. First business strategies and needs have to be clarified , as much for senior and line management as for IT managers. Then the potential contribution of IT applications can be clarified , suggesting key directions , main priorities and outline needs. This method and similar approaches have one over riding advantage. They end up defining a workmanlike business strategy first without looking as though it was a business strategy exercise. This is usually important in the politics and psychology of IS strategy formulation.
The other approach is bottom-up evaluation .While this may not seem strategic , most organisations when they begin or renew their attempts to plan IS strategically need to understand and evaluate their current IS investment. Examination of current systems may suggest either that some could already be better exploited for strategic advantage or be built upon to yield significant added value. It has to be known what the existing coverage of systems are. All the applications have to be examined for its business value and for its technical value. The systems audit grid represents a high level approach which can be applied into practise. The grid is : BV / TQ Low(Technical Quality) High(Technical Quality) Low(Business Value) Divest Reassess High(Business Value) Renew Maintain and enhance To find out the position of the firm on the grid three questions provide an effective metric on technical quality of the system 1-How reliable is the system 2-How easy is it to maintain the system 3-How cost efficient is the system To determine the business value of the system three other questions could be asked 1-What is the impact of the system on the business(what would happen if we took it away )' 2-How easy is it to use the system 3-How often is the system used.
After determining the position of the system on the grid, it shows us the action to take, like we have to renew the system or if the system is poor on both dimensions it should be eliminated or divested.
The next step is planning the IS in stages ,which will help us to formulate IT strategy. The table shows the learning process of the firms in order to find the right IS strategy ,or in other words to reach the mature level. After formulating IS strategy, the next step for the firm is to form an IT strategy.

Developing the IT strategy
The IT strategy can be seen as the technology framework or architecture which drives, shapes and controls the IT infrastructure. The architecture comprises four elements.
1.Computing-the information processing hardware and its associated software 2.Communications -the telecommunications networks and their associated mechanisms for inter-linking and internetworking .
3.Data -the data assets of the organisation and the requirements of use ,access, control and storage. 4.Applications-the main application systems of the organisation , their functions and relationships as well as the development methods.
The technology framework can contain four levels of guidance. The four levels for each architecture element may be called frames. The set of frames makes up the framework. The four levels are: 1.Parameters-the major design parameters of each architecture element. They represent the essential needs , constraints , and preferences that over time each element should aim to satisfy.
2.Schemas-logical and perhaps physical , models of what is required of each architectural element and how they should work. Sometimes called models or blueprints they may either be the visual ,logical state of the frame as it exists now or an agreed , detailed model of what is being pursued.
3.Policies-concrete ,practical statements of how each technological element is to be delivered. Included are technological policies , guidelines , procedures , and standards.
4.Plans-firm plans and goals for each element. These may include project plans or performance goals -plus time phased actions which will move the framework to the next stage of evolution By combing the four elements of the architecture framework with four levels of guidance a structure matrix can be defined like below:

Levels/Elements Parameters Schemas Policies Plans Computing Communications Data Applications
The IT architecture can be defined as the technology framework which guides the organisation in satisfying business and management information systems needs. Because it is broad in technological scope , has to cope with business uncertainty and technological change and will vary in specificity and detail with organisational strategies , structure and IT maturity, it is appropriate to see architecture as a framework. It is a framework for analysis , design and construction of IT infrastructure which guides an organisation over time.
The elements of architecture are those major sets of information technology which require discrete planning and control.. The first element is computing , is singled out as the principal information processing capability. The schema below is the total set of computer based information processing that has to be implemented in a manufacturing company.

Level
Functional site type 7 Group Processing 6 Divisional Processing 5 Business Unit Processing 4 Plant Computing Departmental Computing 3 Central Processing Function Group Processing 2 Cell Office 1 Machine Individual The second element is communications. It has become for many businesses the most challenging aspect of architecture today. Not only do they want to transport , voice , data , text and image around their organisations efficiently and reliably but increasingly they are communicating with outside organisations such as customers , suppliers and collaborators. These needs involve interlinking and internetworking.
Data in principle is the most important element as it is " raw material of information" and thus in sense both the means and ends of information systems. Data architecture issues include the determination of data storage location , use and access , the design and administration of databases and increasingly the definition and coding of the data for Electronic Data Interchange between the organisations including article numbering and bar coding.
Applications became an element of the architecture because organisations need a map or blueprint through which to plan development and anticipate the requirements of computing , communications and data.
As we look at the levels of architecture , parameters are the factors that must be satisfied by the design and construction of each element of architecture. They are firm , unambiguous ,ongoing and agreed criteria for design. They are thus the cornerstone of each frame and for complex uncertain elements , they may be the only necessary and feasible level of guidance that can be completed for the frame.
Schemas are often the mechanism for expressing and interpreting the parameters. Schemas may be logical or physical models of each element. The term is borrowed from database management , where the logical schema represents the user's conceptualisation and the physical schema the actual data organisation. A good example of the use of schemas is entity modelling diagrams in database studies.
Policies are in principle , firm , clear statements about how each architectural element is to be delivered. Examples might include a policy to acquire application packages or bespoke software rather than develop systems in house or the decision to adopt a single vendor for mainframe computing. There are also guidelines(which are softer versions of policies ) through which the organisation says " this is our preferred approach to be adopted until a firmer or clearer solution is required or necessary and thus it can be broken only by agreement." Plans are deliverables or actions. They are the detailed targets , goals and intents for each element. An example of a target would be that of a credit card company aiming to install a world-wide transactions database by 1995. A typical performance goal was the requirement in a commercial company for data centre operations never to be out of action for more than four hours.
These are the main elements used to formulate the IT strategy for a firm. Earl(1989) suggests a 4 step methodology for IT architecture. This is the last point to build the IT strategy after that the next step will be the managing the IT in business. Step

Conclusion
To summarise all ,it is difficult to say that construction sector has entered the IT era. It is possible that the situation may change in the future. It is very important to determine what change is necessary to bring the IT era closer. This can happen by commercial pressures or through the industry itself understanding the need for change. There are many limitations with the current use of IT in construction. The tools that have been developed are stand alone programmes many of them are just for design and analysis purposes. The implementation of the new IT , particularly those based on CAD , knowledge-based systems and robotics , will be a difficult task since the management and dissemination of this technology in a fragmented industry requires careful and strategic planning at the industry and professional levels. Betts (1992).For the strategic competitive advantage IT has to provide an environment in which the computer functions as intelligent tool for communication, co-ordination ,problem solving and decision making. Internal and external competitiveness will be important strategies and the role of research and development by companies themselves is also very important The professional organisations and educational institutions should offer courses in relevant subjects. The factors that Earl(1989) mentioned should be taken into account when the enterprises start to develop new IT strategies. On the other hand a sixth level-global levelis starting to appear on the IT application framework. The use of the internetworking technologies will enable global business opportunities and the change in the global market will have an impact on the construction industry. My own idea is there won't be many major changes at the lower levels of application framework ,nor there will not be major changes on the management frameworks , but the firms which make more expenditure on information technology will benefit from global opportunities. The IT needs of the firms change dynamically ,parallel to the improvements in technology. The important issue is that the dynamic structure of IT should be taken into account ,when defining new strategies for the companies. The most important fact is that the gain will be high only if IT can be managed effectively.