Mind Your Money
In conversation with Peter Cheney, managing director of CCC
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Peter Cheney is excited about 6D BIM. Having developed a popular construction software himself, Cheney is, understandably, looking forward to what the future holds for Building Information Modeling (BIM).
“6D BIM is a very advanced concept and is nearing full completion,” he beams. “Essentially, it’s taken the basic 3D process and supplemented it with facets like cost, which makes it 4D; and timing (schedule), which elevates it to 5D.
“The 6D approach is going to focus on the integrated construction and maintenance operations of the project. I believe that’s truly unique.”
Cheney is the founder of BuildSmart, an enterprise resource planning (ERP) system that focuses on construction costing and accounting. BuildSmart, when combined with Candy, a construction estimating and project control system, forms Construction Computer Software’s (CCS) holistic Integrated Cost Management Solution.
Dealing with money is serious business, more so when it is being circulated around one of the most active construction industries in the world – the GCC’s.
As the managing director of CCS, a construction software solutions provider which has participated in landmark projects like Burj Khalifa, Cheney’s history with construction systems could be more than just handy for the firm.
Back in the 1980s, freshly out of grad school, Cheney started off as a resident civil engineer for a designing firm in South Africa, where he resides even today.
“Registration as a professional engineer required the candidate to have undertaken site work; it was during this period that I realised how the management of projects and contracts needed more attention than was being devoted to the processes,” he tells Big Project ME.
“There were no systems available to allow the management and monitoring of projects – and some of these were pretty substantial projects in South Africa back then,” Cheney continues.
“There was a need for computerised processes from the most basic project planning stage, all the way through to pre- and post-tendering. Construction is a difficult job and you only get one chance to get it right, so managing costs is integral.
“Costing, accounting and planning are the three legs on which construction rests – you cannot separate the three, and this made it even more important to understand cost management models,” asserts Cheney, who went on to receive his master’s engineering degree in 1985, with a thesis on cost models.
As we return to 2014, Cheney is optimistic and pleased with how the cost management software industry has shaped up, especially in the GCC. Cost management tools will be specifically crucial for contractors working in a region where construction costs and projections run into billions – reports have estimated KSA had up to $81 billion-worth of projects under construction as of January 2014, while the UAE projects market at the same time was valued at $66 billion.
Despite the typical allegations levied against the GCC market for lacking technological savviness, Cheney is confident about cost management solutions sustaining their stronghold with the region’s construction professionals.
“We’ve found an interesting phenomenon,” he narrates. “Younger project managers, who are only just entering the markets in say, the UAE or KSA, realise that they don’t have the expertise that their predecessors do. They’re knowledgeable, but just not as experienced. This furthers their desire to have a database pool, almost, for reference-sake, to know what works and what doesn’t work; what makes money and what doesn’t make money.
“This younger generation is recognising the benefits of cost management software systems, which not only provide extensive information about projects at their fingertips, but also help them make informed decisions using validated data, which would have otherwise taken them far longer to acquire.
“The uptake (for costing systems) in the Middle East has certainly been very good and encouraging,” Cheney says.
Prod him, though, and Cheney will admit cost management systems were not always warmly welcomed. The initial struggle for systems developers like Cheney was to source for the product – computer manufacturers, language coders and operation system developers were limited in numbers and exclusive towards their native functions.
“If you were to produce anything on Hewlett- Packard, you were more or less stuck with Hewlett-Packard operating systems, languages, platforms and so on,” Cheney reminisces.
“If you wanted to get involved in a business, you’d have to do it yourself, and so we programmed, developed operating systems and wrote the codes ourselves back then – the code itself would have a limited lifespan, depending on the rate of advancement with the computers.
“In that sense, IBM did us a favour by launching the IBM personal computer in around 1983; we now had a broad standard to base our developments on, and since we knew their product would do well, our applications found stability and could also be migrated over time,” he says.
The test did not end there, if Cheney is to be believed – while the evolution of the global technology industry has been dotted by landmarks such as the commercialisation of the Internet, the creation of Microsoft and even the progression towards cloud computing, organisations continue to avert the full acceptance of systems such as those for cost management.
Cheney insists a large factor contributing to this hesitance is the human element of the corporate makeup, which can only be cured through intensive education about the actual functions of cost management systems.
“It doesn’t matter whether we speak to a big contractor or small, the resistance to change will always be there. Longer procedural barriers means the process (approval for system implementation) or not takes more time to come through with bigger companies, but broadly speaking, all firms we interact with tend to immediately understand the benefits of cost management systems. Margins in the contracting world are very tight and slim, so a small saving can go a long way in increasing profitability,” Cheney warns.
“Eventually, no matter how big or small the contracting firm is, their problem is the same when the client refuses to increase budgets. Technology is not a replacement for good, solid knowledge,” he responds, when asked if cost systems could replace the role of a traditional project manager.
“Software systems like ours will certainly help the firm wisely allocate their resources, but technology cannot fix the foundation, procedures and processes of a company. That is where most of our energies are diverted; to educate our clients about the role and benefits of cost management systems.”
