Picking up Pace

Initially slow in the adoption of technology, the Indian construction

sectors IT adoption picked up pace in the last decade. The initial resistance

to IT adoption was a result of ignorance, but with the construction industry

going global, there was a need to introduce efficiency and productivity in

business processes. The growth in infrastructure projects is one of the leading

drivers in the construction industry, providing necessary spurt to the IT

adoption curve in the vertical.

Agrees Satish Pendse, CIO, Hindustan Construction Company (HCC) that the

construction industry is under a rapid growth phase over the last six to seven

years and every business system is surprised by the growth.

The increased government spending on large-scale infrastructure projects is

another reason contributing to the growth. Until six to eight years back, the

government spending was only about 2% of the GDP, which has now gone up to

around 5%. This figure is likely to go further up, as India looks to catch up

with China.

The construction industry is broadly categorized into two segmentsbuilders

engaged in the construction of residential and commercial buildings; and

infrastructure (bridges, dams, roads, highways) construction players. In

addition, the sub-segments include contractors for the above two segments, and

niche service providers who specialize in specific areas like waterproofing,

industrial flooring, tunnel repair, rehabilitation of old buildings, expansion

joints, etc.

With the entry of new players in the sector, adds Pendse, the competition has

taken a turn since these new players come with no legacy systems and new

processes. The projects undertaken are on a bigger scalebe it residential

projects, townships, to shopping malls.

However, as the competition is getting aggressive, the older companies, too,

are getting bigger by the day and are bracing up for the competition. With the

government allowing FDI in the sector, foreign players too are entering the

fray. This, in turn, is putting the pressure on the companies to improve

operational efficiencies. With the growth, companies today are handling as much

as around sixty to seventy projects simultaneously as compared to around ten to

twelve simultaneous projects till about a few years back. This apart, the value

of the projects has also increased substantially with the ever-increasing

pressure to reduce the cycle time and costs, as well as greater strictness to

deliver the projects on time.

The business dynamics have changed; there are various models nowthe PPP

model, BOT, EPC modeltherefore, the only way to work efficiently at such a

large-scale is to have strong operational systems in place that take care of

everything from procurement to financials to timely project execution. Sometime

back most companies were using basic IT. Over the last few years, there has been

an increase in the uptake of world-class IT solutions by this segment as they

reap the benefits of computing, project management, and collaboration

technologies.

Solutions on the Platter



Even though the global giants have been using various IT solutions for

improving operational efficiencies, the Indian counterparts too are now

deploying IT solutions for growth. With the corporatization of smaller players

becoming professionally managed companies, they have had to adopt technology in

various areas of business.

Moving on from home-grown solutions to islands of computerization, the

adoption of IT in the construction sector is now moving to deployment of

standard ERP systems.

The move towards the adoption of integrated solutions has come about due to

the combination of several factors like the need for tighter control over

operations, quality compliance in execution, global business practices due to

global expansions, MNCs entering in joint ventures with Indian corporate, and

streamlining operations as prerequisite norm before going for public funding

like IPOs.

The ERP solution can be categorized into contractor suite and builder suite.

The contractor suite includes pre and post tender estimation, labor management,

purchase and inventory management, billing and MIS based solutions. On the other

hand, builder suite has features like estimation and costing, client management,

billing and site management.

Apart from deployment of ERP, there are specialized engineering solutions

like geotechnical, structural, mechanical, transportation, hydraulic,

environmental, land surveying, etc. These solutions have enabled the civil

engineers to construct durable, aesthetic, higher functional, and user-friendly

structures which are economical and time-saving.

Besides, work is on for development of solutions for structural analysis for

increasing the lifespan of buildings and protection from calamities. New systems

are being adopted in infrastructure development, civil engineering and

management of projects to enable construction sector to perform better.

Construction professionals engaged in designing of architecture, engineering

designs, detailing, estimation, tendering and procurement of materials and

project management have the solution at their fingertips which was not possible

through traditional methodologies.

There is an increasing focus on integration of sales, inventory, finance,

procurement, costing, integration with other project management tools.

Therefore, the focus is now on consolidation across locations, projects, MIS,

and a complete WAN in the construction segment.

"Most of the processes like financials, HR, legal, and construction process

are IT-enabled. Technology is also being used for land bank management, sales,

and after-sales processing" says Pendse.

Project management, however, is becoming a big focus area keeping in mind the

sheer size of projects being undertaken by companies. The growing size and

volume of the projects are also increasingly making it difficult for companies

to manage their data. As a result, they are also looking for IT solutions that

enable them to manage their vast data in order to increase efficiency, reduce

procurement costs and wastage, boosting productivity, and thereby, cutting

project execution time.

Benefit



Technology enables companies to do bid analysis effectively, manage projects

more efficiently, finish projects on schedule, and manage global operations with

flexibility. It is also crucial that solutions are customized in line with the

processes specific to the construction verticals. Therefore, customization will

hold key to success factors for how far vendors are able to make inroads into

the super highway.

Stuti Das



stutid@cybermedia.co.in