WITH MORE THAN 60 construction projects under way at any given time, Clayco Construction needed a way to check the torrent of paper that was flooding its offices. So the St. Louis-based firm created its online nerve center, “Mission Control,” to house blueprints, e-mails, meeting minutes and change orders electronically. Every document related to a particular job is a mouse click away for design-build clients, subcontractors and suppliers.

An architect in the home office, for example, can pull up a blueprint and then work in real time with a project manager in New Jersey. As the two “redline” the document, moving walls and fixtures in cyberspace, the project's owner in California can observe and contribute through his own connection.

According to Theresa Brigden, director of construction administration for Clayco, this e-collaboration speeds the construction process, allowing documents to be handled more quickly. “We work on a very fast-track schedule that went hand-in-hand with the process,” she says.

Collaboration Via Cyberspace

These days, an increasing number of builders and owners are following Clayco's example by using software to foster collaboration among the contractors, subcontractors and architects during the planning and construction process.

Lack of communication between participants not only delays a project, but also runs up construction costs. The push to adopt collaboration technology for construction took a great leap forward with the marriage of information software and the Internet.

These so-called “collaborative workspaces” create virtual communities in which team members in different locations can work and communicate in real time.

Companies that have implemented such technology say collaboration software represents one of the most promising methods of saving time and money available to the building industry.

A survey of architectural and building firms that use project collaboration tools conducted by Boca Raton, Fla.-based e-Builder found that software can cut communications costs by 20% to 60%. Companies saved up to $1,000 per month, and the need for site visits declined by 10% to 50%. Employee productivity increased by as much as 75%, and time spent on administrative activities dropped by 30%.

Both the stakes — and the potential — are great. At $750 billion, the construction industry represents roughly 8% of the nation's gross domestic product, according to a study conducted in 2000 by New York City-based consulting firm PricewaterhouseCoopers LLP. At the same time, the business is highly fragmented: an estimated 720,000 companies of varying levels of sophistication make up the Architectural/Engineering/Construction (A/E/C) industry.

“The sheer number of parties that require coordination to bring a project to completion is a challenge,” say the authors of the study. “In order to do so, the industry has relied on traditional communications methods, typically time and labor intensive, that have resulted in higher costs and inefficiencies.”

A typical request for information (RFI) for a building project might start as a handwritten note from a subcontractor, which is faxed to a general contractor, who in turn faxes it to an architect. The architect might fax the note to another subcontractor for input before replying. In the meantime, several days have passed, with work slowing or even halting because the contractor cannot proceed.

Early Innovators

Major construction firms are jumping on the technology bandwagon, and these trailblazers are on their way to creating universal acceptance in the industry, either by building their own sites or by outsourcing to other vendors.

PricewaterhouseCoopers found that most architects and general contractors are using some form of online project collaboration. Specialty contractors, on the other hand, are least likely to be users. Owners, although eager to try new technology, were hesitant to adopt at an early stage, the study reveals.

“Many subcontractors, manufacturers' reps and even some smaller building product manufacturers are not computer literate,” says Ian Howell, vice president for strategy and business development at San Francisco-based Citadon Inc.

“It's been a huge obstacle in the past to get everybody collaborating on a project. The real value is when everybody is sharing the documents and making their comments online so all the issues are being tracked for the entire team to see.”

Advantages Create Acceptance

Clayco is one company that has decided to go its own way. In fact, the company recently garnered an award for technological innovation. The firm maintains a fully integrated project-management system that merges job costs, payroll, equipment modules, general ledgers and cost estimates into one system.

This technology allowed Clayco to direct and coordinate the building of the 1.5 million sq. ft. The Gap/Old Navy distribution center in Fishkill, N.Y., from remote locations. While a project manager and local subcontractors were on site, the design and engineering of the project was handled from Clayco's St. Louis headquarters. Mission Control created a secure Web site so the owners could see drawings, Web cam images and change orders at any time. In addition, the owner was able to watch the progress of construction from his desktop via the Web cam.

Mission Control's collaboration system not only makes it easier for contractors and architects to work together, but it also saves money. At the 890,000 sq. ft. Pearson Education warehouse project in Cranbury, N.J., Clayco reduced costs by 10% and shaved two months off the planned construction time through close coordination of staff and improved design.

Architectural and construction firms often build their own systems in order to achieve greater customization of the site. The programs also provide an extra level of service. “It doesn't cost our clients anything, unlike the subscription services that are out there,” says Steven Epple, COO of Seattle-based Callison Architecture Inc. For example, Callison tailored its system so documents and alerts could be viewed on the Web site.

The decision to customize a collaboration site comes down to how much time and money a company is willing to put into developing a working model. Companies such as Callison readily admit that while the system provides a useful service, the savings do not yet outweigh the costs of the system.

Collaboration Success

With the increased popularity of outsourcing in recent years, it's not surprising that most larger companies are turning to outsiders to provide collaboration sites.

A Web site created and maintained by e-Builder routed more than 3,400 RFIs between project participants during the construction of the Staples Center Arena in Los Angeles, according to Jonathan Antevy, e-Builder CEO. To keep the 18-month project on schedule, the building contract included a $50,000 per day penalty if construction wasn't finished on time. The Web site gave registered users access to documents and assigned clear responsibility for each task. RFIs were completed in nine days, compared with an industry average of 21.

The use of collaboration software fosters a greater sense of accountability among team members, partly because everyone else has a record of who is doing what. “With documents, there's always an issue of ‘I didn't get the change,’” says John Stampes, senior vice president for project management at Dallas-based WorkPlaceUSA Inc. The company developed PilotToolbox, a Web-based project management system.

WorkPlaceUSA evolved from a tenant rep company to an integrated provider of services, including architecture, interior design, general contracting, construction management, brokerage and real estate information. The company has adopted a full range of Web-based tools, each designed to facilitate the company's turnkey approach to building and leasing.

In addition to PilotToolBox, the company also developed LeasePilot, a lease transaction management tool that helps clients anticipate future leasing needs and availability.

Leasing Cyberspace

Citadon and e-Builder, along with a dozen or so other firms, bill themselves as application service providers (ASPs) that lease products to customers that don't want to build them independently. In effect, clients rent the products for a monthly fee. Vendors host Web pages, and customers share the cost of the infrastructure.

The ASP provides the software needed to upload documents from a wide variety of computer-aided design systems, for example, and places them online in a format that any team member can view.

These sites also can work with a company's own back-office systems, using custom forms and workflow. While the Web-based programs boost efficiency, the cost can be quite high — as much as $100,000. Providers bill on a subscription basis that is determined by the size of the job and the number of registered users. Multiple project sites can reduce the overall costs of the service, lowering the charge per user to as low as a few dollars a month.

While there are no published figures on the size of the collaboration outsource industry, experts say the total revenue generated by these tech companies is $25 to $30 million.

Owners Jump In

Online collaboration is all about speed. So it is little wonder that the process has piqued the interest of large owners. In fact, some owners won't hire architects and contractors for a project unless they use collaboration technology. “These owners have numerous building projects, and typically they're all very similar (in design and execution),” says e-Builder's Antevy. “So it takes the same amount of work to create the infrastructure for one project or 100 projects.”

Antevy says large owners — who may be building $30 million worth of space a year — usually want to bring greater standardization to the process.

Delray Beach, Fla.-based retail giant Office Depot adopted online collaboration as a means of opening stores faster and increasing profit margins.

“If owners can open up their stores faster and realize even an extra week's worth of revenue, it's not hard to produce a tremendous amount of savings,” says Antevy.

In addition to managing the project, the software provides a historical record for billing purposes, and a chronological account if a problem arises. A review of documents can reconstruct the chain of events that led to the mistake.

Integrating Programs

Collaboration sites permit the integration of accounting and project management software with basic work software, such as Microsoft Office. This allows services and activities such as change orders to be more easily tracked and billed to clients.

Atlanta-based Batson-Cook Co. uses a Virtual Private Network (VPN) to communicate between the firm's four offices and remote job sites. Using software applications created by Citrix Systems, users have secure, point-and-click access to business-critical applications and information. By logging onto the Internet, a contractor in a trailer at a remote building site can access the company's system through an encrypted connection.

The system also unites drawing software with the Primavera Systems Expedition contract management program, the Timberline accounting package and the full line of Microsoft Office products. “Citrix runs on our servers, and it accesses whatever applications are running on our databases or our application servers,” explains Ron Futrell, director of information services for Batson-Cook.

A remote computer provides access to software programs and information to all end users. When a user turns on his computer, the desktop on the screen is connected to the main server via the Internet.

Through this “thin-client” application, users access a screen image and keystrokes of the program rather than loading and running the entire program on their PC.

The company also is in the process of installing a Web version of the Citrix program that will give outside clients access to a portal. This advancement will allow bids to be taken online and specifications to be viewed on a computer screen.

According to Clayco's Brigden, the industry-wide adoption of collaboration software is inevitable. “Eventually people will come on board because they don't have a choice,” says Brigden. “General contractors, architects and even owners are going to start requiring it. Contractors who don't will be left behind.”

Contributing Editor Randy Southerland is a Marietta, Ga.-based writer.

FROM CLICKS TO BRICKS: Clayco Construction used collaboration software to coordinate the construction of a 1.5 million sq. ft. The Gap/Old Navy distribution center in Fishkill, N.Y.