Big Project ME speaks to the chief exec about how his firm’s digital platform is helping reshape the way regional contractors think about their projects
It’s fair to say the GCC construction industry has undergone something of a cultural revolution over the last half decade, with the aftermath of the financial crisis pushing companies to re-evaluate how they work and operate in tighter financial times. In the UAE, the biggest indication of this cultural shift has been the embrace of construction technology by the Dubai government, which has mandated the use of BIM on major construction projects.
This mandate has sparked a flurry of interest among contractors and subcontractors from across the GCC, with several unfamiliar with the technology and its applications, which go far beyond just design and planning. While this interest is certainly welcome, it also has led to a growing awareness that much more needs to be done to bridge the knowledge gap in the regional industry.
However, this is easier said than done, given the wide range of understanding and capabilities in the regional construction market. While the UAE may be making great strides in pushing forward with the use of software technology and processing in construction, markets like Saudi Arabia face significant challenges as contractors remain focused on cashflow concerns and payments – an understandable attitude, given economic conditions in the Kingdom.
Despite these challenges, Abdul Elbilly, CEO of International Engineering + Architecture Group, says Saudi Arabia is a market ripe for the introduction and use of construction technology. However, he tells Big Project ME that his firm is taking a rather different approach to the Saudi market.
“Our success in the digitisation process for design and construction comes from the fact that we don’t sell software or licences, rather that we’re implementers – we focus on the client’s output and we optimise the client’s existing infrastructure. Equally important is that we bring stakeholders closer to the projects, which in turns prompts an effective decision-making process,” Elbilly says as he explains the approach taken by his firm from its very first projects six years ago, to where it is today.
“When most digital providers were busy lecturing contractors and owners about BIM technology, we came to contractors with solutions about improving productivity and optimising our clients’ logistical infrastructure,” he recollects. “The clients felt comfortable with our approach as they were paying for output and not for licences and technology.”
In fact, Elbilly explains, his company ended up doing more digital projects in the Kingdom compared to its competitors, because it focused on the value proposition of digitisation rather than the technology itself.
“Our digital team integrates with the client’s project site; we blend with the client and become a part of the team and not an additional cost.”
Describing itself as an “Internet of Things VDC (virtual design and construction) provider”, IEAG is an Australian company with a Dubai hub, through which it provides BIM, construction and contract management to clients, with Saudi Arabia its biggest market.
“IEAG’s focus is on Saudi Arabia,” says Elbilly, speaking in his office at Dubai Internet City. “Digital FM is our core offering [in that market]. We’ve split our business 70%-30%, with 70% in the Asia Pacific region, with a focus on Australia, while also targeting Singapore, Japan, Hong Kong and Malaysia. Singapore is a good market for us with their standardisation and prefabrication, which is an area we’re mastering because we do the framework for fabrication.”
“Dubai is a hub for us, we bring in our product developers, planners and development managers from our global network to assist the team with product development, training and workshops. Dubai is an ideal platform for IEAG global initiatives and market access.”
Having first entered Saudi Arabia six years ago, the company has developed a digital collaboration platform that allows it to bring all the elements of design, construction, project and contract management together into one digital hub.
“We expanded our platform to digital planning and sequencing by rending project milestones, linking the platform to the schedule and reporting project progress in a 3D virtual environment. This allows the stakeholder to mitigate risk in real time and control both cost and time.
“Unfortunately, most contractors view schedule as a client requirement, with deliverables planned based on their cashflow and resources, and not as required per the contract. This process results in delays, more disputes and a confrontational relationship between client representatives and contractors.”
Given the changing dynamics in the construction market, Elbilly expects a unified approach to be increasingly prevalent in the coming years, with contractors now desperate to improve productivity and performance.
“Contractors are interested in productivity – they are now operating in a low-yield competitive environment and they don’t have the financial resources to invest in technologies. We form a partnership with our clients to cover the investment related to digitisation, while we let the contractor focus on what they do best,” he says, outlining IEAG’s business strategy.
“It might sound funny, but you can educate and inform the market by selling no digital. You don’t sell the technology of the platform; you sell the output of the platform. If their issues are BOQ validation, then you focus on BOQs. But how you do the modelling, it’s irrelevant to the client, so long as you give them the output that they want.
“We provide digital PMO – first we build a digital representation of the project, eliminate design clashes and discrepancies, and we integrate time into the model, while also working with the client on model validation. We then take the as-built site data and we enrich the model, and through various design templates, we feed the site output into the model,” he explains, adding that IEAG’s studio and on-site operations collaborate and share data in real time and speak one language.
Among the biggest challenges facing the construction industry in the Middle East is the structure of contracts. Elbilly is scathing in his assessment, highlighting how fragmented and self-preservative they tend to be, which does little to encourage the collaboration and cooperation vital for the industry.
“If you look at the structure of the contract in the Middle East, it’s the most fragmented contract. Everybody is trying to protect himself, even though they’re all working in the interest of the owner. I look at the project structure in the region, and it’s fragmented, it’s confrontational. When you look at BIM as a database, the accountability platform becomes integral to the delivery. We all have to collaborate from one source,” he asserts.
“Productivity is a chronic disease to the construction industry. Every other industry has moved forward – like manufacturing and fabrication, for example. The construction industry seems like it’s stalled in time. Typically, the main contractor’s role in the current market is to manage the contract. Improving site productivity without effectively managing the subcontractors will not bring benefit to the overall site performance. The integration delivery process is the key driver to improving productivity across the project delivery lifecycle.”
To that end, Elbilly explains that IEAG works to tailor technology and digitisation to suit the delivery methodology of each contractor it works with, in line with market trends. With its platform created to cope with a variety of challenges, he says the future is quite promising for the firm.
“The market is down in construction, but digitisation opens another door. If you optimise your virtual model, it’s unlimited in procurement, in operations and maintenance, in inventory tracking, in monitoring and in risk mitigation. It doesn’t even have to just be used for construction – restoration, renovation, expansion are all avenues for us.
“We know that Saudi Arabia is in a recession, and 2017 is likely to be no better. Maybe the recession will be a little deeper, but Saudi Arabia will always be the largest market, and if you look at the Kingdom’s budget now – I think it’s $240 billion to $300 billion – the bulk of it is for operational maintenance.
“Digitisation of operations and maintenance is our core business. We focus on facilities management, on IoT applications in a building, and we team up with companies that provide us with sensor technology. We link these sensors to the digital models as applicable and when required, and then we can show stakeholders the savings in operations and how we can optimise their assets.”
Finally, Elbilly points out that shifting economic forces in the region mean governments, owners and developers will now be exploring different ways to finance projects. As a result, construction technology of the kind IEAG offers is becoming ever more crucial to the health of the industry.
“The market is changing. PPP and BOOT will be the trend in project finance and operation. PPP is based on project lifecycle – it’s about optimising the operation of the built environment.
“Integrated project delivery processes will be a key factor in PPP’s success. Therefore, contractors, designers and operators will have to think about digital integration to work within the PPP model.
“Digital facilities management is an integral and core process of our platform. There are currently many millions of square metres of building without even the as-built record available. By us digitising these through laser scanning and drone technology, we can create a virtual model of the asset. This allows operators to manage the facilities cost-effectively, while the model itself can be used for renovation and expansion, if necessary.”
With governments and municipal authorities becoming more supportive of the use of technology in construction, Elbilly sees continued growth in usage and adoption within the industry, a trend that will only be of continued benefit to contractors, owners and developers, he insists.
“Government intervention and support can have a significant impact on the adoption of digital and integrated project delivery process.
“The US, UK and the Scandinavian countries are at the forefront of these national initiatives [and we’ve seen the results in those markets],” Elbilly points out.
“Any mandated digital application is a bonus to our processes and our platform. The more processes we digitise, the more we can centralise the delivery.
“This in turn provides one point of accountability. Digitisation and integration of the design and construction industry is having an amalgamation effect on the built environment, on project cost, fabrication, procurement, project management and even facilities management.
“By simplifying the planning process and visualising the milestones, contractors have now changed their attitude towards scheduling, because they can now see the visual impact of delays on their future cashflow and payment.
“With the plethora of information available from the digital sequencing, contractors have now started to look at integrated procurement processes in a new light,” he asserts confidently.