Sean Saunders, CIO of FNF Construction, gets hishands dirty—literally—at least once a week, visiting project siteswhere workers are expanding highways, repairing bridges andleveling land. He dons his blue jeans and spends time with thepeople who use the technology he implements.
Five years ago, when Saunders signed on as CIO at the Tempe,Ariz., construction firm, it took up to six weeks to determinewhether FNF was meeting project goals or failing miserably. Atthe time, revenues were $160 million and about one-third of projectswere on time and within budget. However, CEO Jed Billingscouldn’t pinpoint what contributed to a project’s success.
Today, nearly every project component is measured daily, evenhourly, against the forecasted budget, from how much rock iscrushed, delivered and used to how much labor is expended andhow much water workers drink. Now, 80 percent of projects areon time and within budget and FNF is on track to generate closeto $250 million this year, Saunders says.
By outfitting workers in the field with mobile devices andimplementing business intelligence tools that track and analyzeproject progress, FNF has been able to increase its project loadby about 65 percent and boost revenues more than 50 percentsince 2002—all with the same technology staff of three. Whereproject profit margins used to hover between five percent and sixpercent, today they are twice that.
The worldwide market for data analysis tools, including datawarehouse systems, business intelligence tools and analyticsapplications, grew 11.5 percent in 2005 to $6.25 billion in licenseand maintenance revenue, according to a June IDC study. ToddRowe, a vice president at Business Objects, says license revenuein the vendor’s mid-market division is growing 50 percent fasterthan in the enterprise area.
Business intelligence applications are integrated with internaldatabases or data warehouses, from which they extract data andrestructure it for easier reporting and analysis. While data capturedin spreadsheets can be manipulated for certain kinds ofanalysis, spreadsheet functionality is limited and large amountsof data can quickly become unwieldy.
By contrast, BI tools take the relational data model severalsteps further. For example, FNF used to track risk management(injuries, theft, time lost and so on) with Microsoft Excel spreadsheets.There was no way to analyze the data against externalfactors, such as revenues or weather conditions, Saunders says.
With business intelligence software, he can determine how safetymeasures and compliance affect the bottom line.”Companies no longer have to model hypothetical scenariosthat would affect the business,” says Michael Speyer, a ForresterResearch analyst who focuses on small and midsize businesses.
They can use actual data to monitor aspects of the business, hesays. For mid-market companies that implement business intelligencetools after years of managing information on spreadsheetsor simple databases, the shift “is like moving from the MiddleAges to the Industrial Age,” Speyer says.
FNF handles 50 to 60 construction jobs annually, mostly forgovernment agencies. Projects like the expansion of U.S. Route60, which traverses Arizona, involve dozens of components,such as moving dirt to elevate or smooth out land, laying asphalt,crushing rock and pouring concrete.
All projects have an approved budget for materials, equip-ment and labor, and a projectmanager responsible for trackingand measuring against forecasts.Monitoring what’s delivered andincorporated into each project usedto be an arduous manual task, saysSaunders.
When material arrived at a constructionsite, for example, managersused to fill out paper forms calledquantity sheets stating how muchcrushed rock, wood or other materialshad been delivered to the siteand used each day. They hand-deliveredthe forms to accounts payable,where staffers entered the informationinto an Excel worksheet thattallied each project’s budget. Butthe aggregate usage figures for eachproject weren’t available to projectmanagers until three to six weekslater—too late to make a course correctionif there were delays or costoverruns.
Getting information from aconstruction site to the back officewas primarily paper based and theaccounting staff manually entered the data into a proprietarydatabase in time to close the books for the month, Saunders says,but no sooner.