Optimizing Capital Projects: Efficient Delivery Through Centralized Project Controls

Rick Deans:

Well, hello. Good morning, good afternoon depending on where you are in the world. We’re excited to have you with us. You are in a webinar that we’re putting on that is going to talk about optimizing capital projects. As we all know, the last few years things have been getting a little bit more complex. Complex owner requirements, demands for safety, quality, not only cost control and schedule control, but all kinds of other vectors. So today we’re going to talk about the benefits of having a centralized project controls solution. Really excited that you’re here. We’re going to go through a couple of housekeeping items. So upon entering the meeting, you will be on mute. If you’re experiencing any technical issues, there is a chat feature and you can message our host and she’ll be able to take care of you. And we certainly want to hear from you as well. So there is a Q&A box. If you have any specific questions as we’re going through our presentation, we’d love it if you could drop a question in to the chat there and we could take a look at that and see if that’s something that we’d be able to address.

We’re going to do some introductions of our panel, of our esteemed panel, and as we do that, we’re going to actually launch a poll as well. We’d like to get some information from you in terms of what sort of organization you represent and what your role is within that organization. But I’m delighted today. Who better to talk about the benefits of an integrated project controls platform than a couple of our customers that are using the InEight platform. Justin Terminella from Kiewit Corporation. Justin, would you like to introduce yourself please?

Justin Terminella:

Sure thing. Good morning, good afternoon again, depending on where you’re at. Delighted to be here. I currently oversee the shared services for the Kiewit Industrial Group at Kiewit Corporation. That includes really all things pre-construction, estimating with procurement, commissioning and startup, project controls for engineering and construction. Kiewit, if you don’t know, is a construction and engineering company and we perform most of our work across North America. We’re divided into four major sectors including power, power generation and distribution, oil and gas, infrastructure including roads and bridges and whatnot. And then industrial, which is really everything else. Every major sector has its own engineering division and we really focus on engineering the work that we build. Most of our revenue comes from self-performed type of work, but we generally do GC type of contracts as well and all kinds of other different things in today’s markets.

I’ve been with Kiewit for 17 years in a variety of roles and started out as a field engineer in our estimating group and have been in field operations across the United States. But was with the power generation for over 12 years. Then went out to our … We have an electrical contracting business in Boston. Was there for a few years and now I’m with our industrial group. Our projects include all different types. I said that a minute ago, but it’s basically everything outside of the power roads and bridges and oil and gas markets. And our main focus today is really around advanced technology, mining and minerals including processes like lithium. Our projects range from a hundred million dollars to multi-billion dollar type of mega projects and every project has its own unique challenge. So in general, I would consider what I oversee and what my teams do as really the life cycle champions of a project. And I’ll talk a lot about that today. But we are the experts in understanding how a project starts and ends.

Rick Deans:

That’s great Justin. I’m glad you’re here with us. Thank you so much for that. And maybe we can bring up the other poll question while we introduce Rod Wales, VP with Ledcor, another one of our clients.

Rod Wales:

Thanks Rick. Pleasure to be here and welcome to the webinar. I’m Rod Wales, the vice president of construction services here at Ledcor. I’ve been in this business for over 30 years. In the last 16 of them with Ledcor. I’ve been primarily focused on the heavy civil mining and infrastructure space over my career. I’m a civil engineer and I’ve held pretty much every role in the hierarchy of project management. Starting as a surveyor, spent some time as a project engineer, a project manager, a general manager, and now vice president. I had the opportunity to participate in some of the largest projects in the world in the Canadian oil sands over my career so I’ve been exposed to most of the major projects that have happened in that space so I have a passion for project controls.

My role currently is the program sponsor for the implementation of the InEight suite at Ledcor. Happy to say that we’re just over 60% complete with that journey and integrating the entire suite. This implementation is a huge step forward for us in enhancing our project management capabilities, our consistency and overall efficiency. I should also point out that we’ve been an InEight estimate customer since 2018, so this is really an enhancement to the products that we already utilize today.

A little bit about Ledcor. We were founded in 1947, so we’ve been around a long time. We’ve grown to over 8,000 employees and $5 billion of annual revenue. We are a highly diversified construction company, which makes some of our challenges around project controls a little bit unique and we operate throughout North America. Our specialties include heavy civil and mining infrastructure, pipeline, industrial, buildings and communications. I really appreciate the opportunity today to share some of our insights and experiences with InEight and how it’s helping us move our business forward. Thanks Rick.

Rick Deans:

Thank you Rod. I’m glad to have you here. So again, we’ve got a pretty qualified panel if you ask me. My name’s Rick Deans. I’ve been working with InEight for some time. I used to round up to 25 years to make it sound like I had a lot of industry experience. Now I round down to 25 years for completely different purposes. But I work across a lot of different functional groups here at InEight. I get Involved. Primarily my main role is working with our customers. Working in the field with our customers to ensure they’re getting maximum value out of our tools and products. I’m also a bridge between our customers and the product groups. And I also help out with some of our pre-sales capabilities as well, pre-sales presentations to help folks understand what benefits they can expect from using an integrated project controls platform. Appreciate the folks taking time to fill out the poll. That really helps us. We can fine-tune our presentation based on the organizations that are represented and based on the roles that are represented within the organizations as well.

Little bit about InEight. We are a software provider and we have a series of interconnected modules, but they fall into three broad categories. So those three broad categories are contract and change, cost and schedule, construction operations, and then we also have project information management. So all of these areas are interconnected within our modules. We know the competitive landscape pretty well. There are some excellent tools that do one or two of these things, but we feel the value add that we bring to the market is the fact that we handle all of these different business processes in one scalable modular integrated project controls platform. So what I wanted to do now, I wanted to engage our panelists a little bit and talk about some of the discussion points that we’ve used to set up this meeting. And I want to talk first about visibility into project performance. And maybe Justin, I’ll pick on you initially. How has real-time access to budgeting and forecasting data helped your organization proactively manage risks and prevent project delays and cost overruns?

Justin Terminella:

Yeah. There’s a lot lot to unfold here. But as I think back on my career, we’ve gone through an entire technology landscape change. But fundamentally the way that we manage our projects hasn’t really changed. Even through the advancement of the technology. However, it’s allowed us to get much better. And so the real-time access brings an interesting element. It’s a very valuable tool that has certainly made us better. But interestingly, it’s also been a challenge for some of our project teams to really trust what they see. And I’ll talk more about that throughout today. And maybe I’ll start with the end in mind, but having too much information at your fingertips can be a challenge to manage.

And so we proactively use it in many, many different cases. Fundamentally, maybe one of the first things would be just estimating. So how does the suite allow you to get the right price for the job? Going to more complex things of how many people do I need on site today or how many engineers do I need on the project right now to produce what we need to do to meet the schedule today? And so we use it a lot for managing manpower needs. What do we need next week? What do we need next month? Do we have too many people? Do we need to reevaluate the schedule? What is our productivity doing to our manpower count today? Do we need to account for a loss in productivity? And seeing that on a specific type of operation right now gives us that ability to make that adjustment and real decisions in real time to say, “Hey, I need additional people or better focus in this particular area based on how we’re performing on this type of scope right now.” And I’ll go on to some more things, but that’s primarily how we use it today.

Rick Deans:

Well you mentioned a couple of things in there Justin, I’d like to maybe dive into a little bit. You started off by saying we haven’t really changed the way we work. And it’s interesting. Before we got started on this presentation, I was talking to a group of prospective customers and it was funny because at the end of the meeting they said, “You haven’t introduced any concepts to us that are foreign. Everything that you do in your application is stuff we do in a variety of side spreadsheets, Word documents, et cetera. But what really compels us about your solution is we’re doing it all in one place and it’s all standardized.” So that was interesting what you said is we haven’t really changed the way we work, we’re just doing a better job of it. And I would assume that a lot of that is through automation and elimination of redundant tasks and being able to report on data versus going out and gathering it and creating a research project for your team.

Justin Terminella:

Yeah. For sure. There’s certainly those advantages and maybe the most important thing that we’ve recognized over time, specifically on the forecasting side is everything that we do in our business, it revolves around the quantities. And so quantities drive our scope of work, it drives our schedule, it’s an integrated approach to how we update or progress our schedule. And cost or the forecasting of dollars for a project specifically for our clients is a byproduct of knowing your scope of work. And so we have had times where we focus in on how are we forecasting this and is there better ways to forecast something? But fundamentally, if your quantities in scope are wrong, your forecast is inherently going to be wrong as well. And so quantities drive everything. And so a lot of our standardized processes revolve around that controlled management of pure quantities and making sure they’re in the system at the right time and that everything else is a byproduct of the quantity management.

Rick Deans:

We’re going to come back to that quantity topic in a minute. Rod, you mentioned earlier you’re about 60% of the way through implementing the entire suite of tools. So this is probably a good question to ask you as well. From your perspective, based on where you are in your implementation process, are you seeing less cycles and less time to get data? For instance, the time between when work is performed in the field and you can see a meaningful report of that. Have you seen that shrink at all in your experience with implementing these tools?

Rod Wales:

Yes. Absolutely. The key for us is that we use InEight time capture as well. So that is collected accurately more so than it ever has been before. The point there is that we use plan to organize the work by supervisors, so they don’t only have the codes that are applicable to them. The chance of them picking the wrong code is much less. We spend a lot of time thinking about the coding that we use so that we’re not collecting data too small or too granular a level so that we’re not collecting … Because if it takes less than an hour or half a day even, I’m not sure how accurate your data is going to be. So we spent a lot of time organizing that. But once it’s in the system, it goes fairly quickly. We upload daily, so our time capture is sent to our ERP, which then is integrated back to an InEight where we can actually see that data on a daily basis if we like. Some projects work daily and some work on weekly basis. But compared to what we have previously done, we would dump all that information from our ERP, that would take several hours. It wouldn’t always succeed. We’d have failures and then we’d have to redo it. And then we’re talking about 10, 12 hour cycles here.

So by the time it gets to the user or the people that need to utilize it … I also should mention that once it’s out of the ERP, there’s a bunch of Excel gymnastics that have to happen to get it into a usable format. That’s all gone away with InEight. That all happens automatically in the system. If you want daily information, it’s there for you probably sometime the next day. So that’s been a huge improvement and efficiency for us and we’re able to see things, trends occurring much quicker than we ever were before so we can deal with it much more proactively.

Rick Deans:

That goes back to what Justin said about having that real time data and being able to be that resource manager in the field and see where we really need to shore things up. As a customer told me, Hey, I just want to see where I’m bleeding. I might have a thousand lines that I’m tracking against. I just want to know where I need to put my effort in today. So that’s cool. We did have a question from the audience, Rod, and it’s a question designed for you. Mike asks, when you chose InEight, I’m sure you’d also evaluated other good tools. What was it about InEight that differentiated it and ultimately motivated you to select them from the others? And then he has a second part of that question as well. Were there any concerns you had about InEight at the time Ledcor made the choice? And if so, have those concerns been realized or were they unsubstantiated?

Rod Wales:

Yeah. So our business is primarily self-performed and InEight suits that business very well. I’d also mention that I’ve had a relationship with InEight and its predecessor for 30 years. Going back … Well it’s not quite 30 years.

Rick Deans:

We go back.

Rod Wales:

Go back to 1997. And Rick and I know each other from back then. So we used the old product for estimating at that time and in my opinion was top of the heap at that time and still is. And we’ve switched over. When I first came over to Ledcor, we used a different estimating system. We’ve since reevaluated that and selected InEight. So I think the InEight culture is very similar to Ledcor and how we do business, how we analyze business, our peers. A lot of our peers, it’s obviously Kiewit and others are also using the platform. And one of the things that drives us a lot is our business has really shifted into a lot of partnerships where we’re doing large projects with our peers. It’s nice when we’re all on the same system.

So there are some of our peers also that have made the switch to InEight. That isn’t the driving decision maker, but certainly influences us because partnerships are difficult, they’re complex and challenging. To take that project control side of it out of that equation is certainly helpful in making those projects successful. That’s pretty much how I would sum it up. Those two key points really it’s the self-perform work that we do or anywhere from between 70 and 90% self-perform. It really helps to have a tool that’s organized and structured that way and InEight definitely is.

Rick Deans:

And then the second part of that question, were there any concerns going in that have either been realized or have been found to be not valid?

Rod Wales:

That’s a tough question to answer. There’s always a few concerns. There’s always a few things that don’t fit quite to your business model. Our diversity drives some uniqueness in our approach to things, and the only concern we had was trying to fit InEight into all our business sectors. That’s probably the biggest challenge we had because some sectors are more heavily subcontractor dependent and some sectors are just about 100% self perform. And then we also work in different industry lines as well, like from telecommunications to heavy civil mining. They’re vastly different businesses. We had to boil it down to find all the consistency between them. Most of them collect time and we receive invoices from subcontractors and have to manage that. We picked up on those threads and tried to maximize the use out of that. But as we’re going through implementation, we are certainly surfacing a few things where it’s not quite the right fit all the time, but our motivation is to have some consistency and efficiency and that is overcoming those challenges that we’ve experienced along the way. There’s certainly no fatal flaws, I can tell you that.

Rick Deans:

Appreciate that. And Andy has asked a few really good questions I think we’re going to get to a little later. So Andy sit tight. The questions that you’re asking are certainly aligned with what we want to talk about today, but I did have a follow-up question for Justin. We talked earlier about the importance of having real-time data and making decisions based on good recent current information. Can you share an example of a project where maybe this visibility really made a significant difference for you guys?

Justin Terminella:

Yeah. I’m going to go back just a little bit Rick and I’ll hit on that just so I can make this point. As we think about budgeting and forecasting and preventing risks and all that on a specific job, I would like to say that it’s just as important to not make the same mistakes you’re making today perhaps on new jobs happening on these multi-complex type of projects when you’ve got multiple ones of them going on. And so it’s really hard to overcome a bad estimate, if not nearly impossible. And being able to track and trend real data on real projects, not only for that project but for the better good of all the other projects, I think brings a value to clients that we don’t talk about enough, but it’s a huge advantage to the software that we see day in and day out. And it really comes back down to the benchmarking and past costs.

But to hit on your most recent question there, there’s a lot. And just thinking through … And I’ll probably give some more examples. But I was on a project once in my career and it was deemed to be the worst project in company history. It just didn’t seem to make sense from the project management side, but the data was telling us that we were heading down the wrong path and that we were about to head to disaster. And so I got assigned to the project to go check it out. After further investigation and understanding of the project, we had quantity issues. We had way too much quantity for certain things in our budget that were never going to be built, which was indicating that we needed a lot more staff, even though the team was telling us we couldn’t put any more craft on the job. Staff or craft, but craft on the job specifically. There’s got to be something wrong. And what ended up happening was is that the data was telling us we needed a lot more people, but again, back to the quantity management was wrong. We didn’t have that much scope. And lo and behold, the project actually ended up being one of the best projects in Kiewit history after it was all said and done. And this was 40% into the project.

And so it’s a little different twist on identifying potentially a bad thing but ended up being a good thing. But the same thing can happen to the reverse where we are in a bad situation. But it allows us to identify that we have a situation and then look into it and either correct it earlier on in the project or bring it to bear and figure out what we’re going to do to solve the problem. And so that’s happened on so many projects. And we have weekly reviews, monthly reviews, and we look at the same information week to week, month to month. And so I think that really helps get everyone on the same page.

Rick Deans:

No. That’s really good insight Justin, and you nailed it. You can’t really overcome a bad estimate. The way the business is, the margins are thin, the projects are very complex. You can easily put your company at risk by having a bad project, but you cannot easily pull your company out of the ditch by having a good project. And we see it all the time across the industry. Large contractor declares bankruptcy because one thing went wrong or a few things went wrong on one project. Being able to look out for those tripwires I think can be a really healthy thing as well. Rod, do you have any anecdotes on that? Or Justin, if you wanted to finish that.

Justin Terminella:

I just wanted to say one more thing on another project or situation with a client that I think brings a different element to this or different viewpoint. But depending on the contract type can also depend on what the client’s asking for. And we were on a time and material type of contract and we were just doing the work that the client was asking us to do. And what we didn’t really understand though is what the client was really wanting. The client wanted to know where is the project heading and how many more hours do I have to spend to get this thing done? And we weren’t the engineer of record, and so the project team had a hard time understanding what the client was really after. After we got involved, we had the ability and the information to show the client what was remaining on the project, although it wasn’t part of the contract structure to give them the solutions they needed today through our software and the way that we control jobs that really you could tell the appreciation from the client of what they were really after, even though the contract type wasn’t as such that we were responsible for the additional scope. But just giving them that answer was a huge benefit in their eyes. And so that’s just another way that we’ve used it to bring it to light.

Rick Deans:

No. And I’m glad you mentioned that because as we saw from the polls, we do have a good representation of owners out here as well. So even though the owners might not be tracking or estimating or processing data at a granular level, hey, that’s what we hire contractors for. It sounds as if you’re able to share some of that value with the owners by providing them that insight into the project health regardless of how you initially set about doing it.

Rod, we got a question I want to address to you. It’s coming from Bob in the audience and he’s asking specifically about linear project execution. So you mentioned earlier you guys do some pipeline projects. Have you noticed … And I hear this sometimes at a linear project like a rail system or a pipeline has a lot of inherent differences from say building a bridge where everything’s happening in one place. Can you talk a little bit about maybe some of those challenges and how you were maybe able to solve some of those?

Rod Wales:

Yeah. Well, I think it’s a little different today. I guess in historical context of pipeline and highway construction are the two that come to mind that are the most linear projects I’ve ever been exposed to. But I would say our experience in primarily the pipeline world, it’s not as linear as it used to be. We do a little section and then we have to jump and do another section then come back and fill in the gap. A lot of that revolves around permits and acquiring those permits and land access and a bunch of things that that didn’t exist before. We used to just start at one end and go to the other. So long story short, I guess is we haven’t had any particular unique challenges with linear work that doesn’t present itself in other sectors as well. So not really sure how to answer that question other than that the linear work is not very linear anymore and we see the same challenges in highway construction. You can’t enter a stream until such and such a time so you have to work around that and then come back and fill in the gap. So our linear projects have become much more like our regular projects is what I would say.

Rick Deans:

Oh, interesting. No. Good. Good. One of the mantras that we hear you take a business class do more with less. Let’s talk a little bit about scaling, scalability, scaling business processes efficiently. Justin, how have you guys integrated the solutions to help you manage complex projects without necessarily rolling in dozens or hundreds more staff to be able to do so?

Justin Terminella:

Yeah. I think one, having consistent terminology. As a manager or a senior leader in a company, you can go from one project to the next and you’re talking the same language. Has a huge benefit. I can tell you 10 years ago that wasn’t the case. Whether you’re looking at a visualization of an earned value report and then you didn’t understand what green versus red meant and every single time you went to a project, it was a debate on what the right one should be. Those conversations are over. Evaluating an original budget versus a current budget versus a current estimate versus forecast, those are always a debate as well. And now that we’ve standardized that through using the software, that isn’t a problem anymore. And so when we do weekly or monthly reviews, you’re talking the same language, you’re looking for the same stuff and people understand what you’re asking for. It’s ingrained at a lower level all the way through senior leadership at this point of what the tools are.

Rick Deans:

That’s really interesting. I was spending some time visiting with another customer and he basically said the same thing. But the way he said it really resonated with me. He said before we had InEight, each project manager had his or her own set of tools, his or her own set of methodologies that they would use to manage a project. And so when the project team coalesced and got together for the first time, everyone had to adapt to the way the project manager wanted to run the project and see reports and what data was important, what data wasn’t important. And then they said but after implementing the InEight platform, really the only new piece of information that they needed to learn from project to project was that project code. The tools enabled them to have standardized processes that they could roll out to every project and people didn’t have to adapt to a new set of tools and a new standard of reporting KPIs. Everything was just the same as the last project. Let’s roll. Right? So on that day one, they were able to hit the ground I think a little bit more.

Justin Terminella:

Yeah. One more point I’ll make on that is as these projects get so complex and it takes so many people, the more standardization we put in place, at least at a high level, it allows us to monitor a project at a very, very accurate level to where we don’t need the experience level necessarily on site to run the operations in some cases. And so that helps get the right number of folks on our work to manage. But then in that same vein, it also allows us to cross train different individuals from different silos that we used to have within the organization. And so you start to learn more about the full life cycle of a project and where does that data really start and where does it end? And how does it affect other parts of the business along the way? And I think that knowledge alone as we continue to gain that is really paying dividends for how we’re collecting it at the beginning and using it at the end, which has been really cool to see.

Rick Deans:

So as an example, if I were an estimator at Kiewit every so often I might get asked to leave the comfortable confines of my desk and actually go out in the field and help report on some quantities out there. Is that what you’re saying? And then …

Justin Terminella:

Yeah. We actually do that as a mandatory ask a few times throughout the project. But the expectation is that our estimating group can tell the story of the job and understand every bit of the past cost. So absolutely that happens.

Rick Deans:

Presumably that helps them with the next estimating cycle, correct? Is

Justin Terminella:

Yeah. Yep.

Rick Deans:

Rod, you mentioned earlier that one of the challenges or one of the issues that you dealt with at implementing the software at Ledcor was the fact that you’ve got different business units. Early in my career, I heard someone say standardization is fine as long as everyone does it my way. What issues have you might’ve run into encouraging folks to standardize and what benefits have you seen thus far 60% in by introducing a more standardized model?

Rod Wales:

The biggest issue we’ve run into is low code, quick base and things like that. And a lot of people go and they can develop anything they want and build their own little special program to do things. And we’re still off boarding that type of functionality. And there’s power apps and lots of things that can add a lot of value in a lot of ways. But if it becomes your primary project controls system and everybody has a different one, it’s really difficult to manage. So what that transpires into for us is that we have to take away some of the functionality that they currently enjoy. That’s never a great conversation, but we look at it as, look for the greater good we need to be consistent and we all need to use the same tool. To Justin’s point, we move up people around a lot now, and that’s really in response to mega projects.

And that seems to be a big chunk of our business is these billion, two billion, $3 billion jobs. And we got to move resources around to suit that and they come from different divisions. If the challenges we’ve experienced previously have been, I don’t know what language you’re using here, and then I got to learn a whole new system every time I move around. And it takes people … They have to go through the learning curve. It takes a while to get proficient in that. Add onto that, all the Excel gymnastics that I talked about before. Our project control systems tend to break down, especially in those larger projects because you just can’t stay on top of it.So taking some functionality away to be consistent, not always the easiest conversation, but it’s one we have to do. We eventually win. We don’t always win in the best way. Sometimes we have to tell. But they have to believe that the greater good is served by having the same system talking the same language.

We’ve adopted all the InEight language. It wasn’t exactly aligned with the language we use at Ledcor in different divisions, particularly if you compare each of our division. Whole different language set. We’ve aligned it all with InEight and that has started to help us at least when you say this is an apple, everybody knows what that is, and we’re not challenged by, well, what you mean by that? Is your productivity factor earned over burned or is it burned over earned? And all sorts of things like that that comes out of the woodwork when you start doing this. That’s where we’ve seen the biggest benefit is just getting consistent even though in some cases we’ve lost functionality by taking away low-code solutions. In my viewpoint, and I’m a little bit biased perhaps, but it propels us into the future. I use two words to when we’re talking about our project, when I’m trying to sell this to our folks is that there’s the sustainable part of it. We have to be able to keep a system running. It can’t fall apart every time if it gets too much information in it. And that’s what we run into with mega projects. And it has to be scalable. And we’re not scalable when everybody’s got their own system either, whether that’s a spreadsheet or a quick base program that they’ve developed themselves.

Rick Deans:

That’s an excellent point and sometimes that gets overlooked. I remember I was working for an owner at one of the largest refiners in the world and we were implementing our solution to 21 of their refineries around the globe. And each refinery had their own guru that created either an access database or an Excel spreadsheet on steroids. And to your point, they were very helpful and beneficial for a specific function at that specific site. But one of the issues that the client really had a huge problem with was the fact that these one-off solutions that had been built and maintained by one person over a long period of time were so dependent on that one person being able to support them. If God forbid they got hit by a bus or if they won the lottery and decided they weren’t going to come into work again, they were going to be left high and dry. And I think that’s a real consideration when you start talking about these one-off, Hey, great, I can go off and I can build this access database and it can do pretty much anything I want to. But what’s the business risk associated with running your business on that kind of tool set?

Rod Wales:

Yeah. It’s certainly not scalable and it has that huge risk of, like you said, if somebody leaves, they take all that with them and you’re left with gibberish, really. You can’t make sense of it.

Rick Deans:

Justin, you mentioned this earlier, and this is something I hear from a lot of customers, just by having a standardized set of processes, we can all speak the same language. As Rod pointed out, an apple is an apple. How have you seen having a connected project control suite improving collaboration among different stakeholders throughout your organization?

Justin Terminella:

Yeah. It’s been instrumental for sure. There’s one … And I see a few questions from the audience that are related to senior leadership and how do you get those guys involved and whatnot. I would say that from a senior leadership perspective all the way down, we’re talking the same language so we know what things are and what they mean. An apple’s an apple like Rod was alluding to there. But the cross functionality between the different silos I think again is a huge benefit as we all have our jobs day in and day out depending on what we’re doing for a project or an estimate or whatever, but as they’re all feeding into the system, the software, it just breaks down those barriers and just gets everyone on the same page. That’s something that didn’t happen overnight. It certainly took us some time to get there, but that’s been a huge benefit.

Rick Deans:

Well, and peeking behind the curtain a little bit, I do know a little bit about Kiewit. I had the opportunity to lead the implementation when you guys first adopted our estimating system way back 10, 12 years ago. And what impressed me about Kiewit was that there was that direct line from the CEO down to the different business district leaders to the people sitting in the seats doing the work. Some organizations are not like that. Some organizations do not have that everyone’s on the same page flavor. What suggestions or advice would you give to an organization maybe not as … Regimented maybe is probably a bad word, but is not as disciplined as Kiewit is in that respect.

Justin Terminella:

It’s hard for me to say I haven’t been in that situation. But what I would say is that even internally when we do have that CEO alignment, there are certainly people along the way that don’t. And generally in the situations I’ve been in, it’s been a really easy conversation that there is no choice. But I think if I think about the lack of some of our leadership understanding data and how to use it the right way and utilize the software, there’s some people you’re going to fix and some you’re not so just move on to the next one.

But as we develop teams and are continuing to grow as an organization … I give the analogy of I need people working at the lowest levels of the organization to understand data and the expectation for a field engineer or an estimator or someone in the field or whatever, just an engineer or designer, we all need to be thinking about how can we better use data? And it doesn’t come natural to everybody, and sometimes teams need to supplement data-minded people with their team. It’s just another skill set. To help their team utilize the information in a positive way because it’s just not something that they naturally can do. And so I think as we evaluate teams and we see how things are being adapted or adopted or not, you got to get right skill set in with the teams themselves and forget about the others that just won’t ever connect and figure it out.

Rick Deans:

Good point. Rod, what’s been your experience in terms of getting leadership buy-in? I know you had mentioned for some initiatives you prefer having business leaders lead the initiative rather than for instance IET. Can you talk about that a little bit?

Rod Wales:

Yeah. From our leadership perspective, we’ve had an amazing support. Our CEO stood in front of all our executives and stated this was the most important project we were going to do in the next 10 years is implement this. For a lot of the reasons that I’ve already stated that we need that consistency so we can be sustainable and scalable. That’s just the way our business has taken us. Sorry. What was the second part of that, Rick? I got lost in my first answer.

Rick Deans:

Really just about the buy-in from the leaders.

Rod Wales:

Yeah. We have a steering committee that helps guide us through this journey. And again, the most engaged group I’ve ever experienced in my 30 years in delivering projects of any type. I remember what you said. It was what the IT side of it. The real help for us is that we’ve done this in the past and we’ve tried to have … This is no knock against IT or IS people. It’s not the point. What I’m saying is that you have to understand the business in order to mold the product into what you want it to be to serve the business in the best way that you possibly can. That’s impossible to do if you don’t have experience building projects. So I took this job for that reason. I have a passion for proper project controls and understanding the data and seeing where it’s taking us. But also understanding what’s the best information for the business? We can give them lots of information, but if it’s not useful to them, it’s of little value. We try to filter out what information does this business need and find that appropriate level of detail so that they’re not overwhelmed with data because if you’re overwhelmed with data, again, it’s not much good to you.

So we try to find that delivery system that gives them the right amount of data when they need it, where they need it so that we can make informed decisions on about what we do on projects. I’ve never been on a project that went exactly to plan. There’s always some things that change your path and you have to reengage and retool along the way. And that information that you get out of the system is vital in making a proper decision at the right time.

Rick Deans:

I think you brought up a really good point. It’s knowing at what level. We don’t want hundreds of codes with $75 each in them. We want to have data that makes sense to us. Justin, there was a very specific question in here I’m going to throw your way. And it has to do with applying rules of credit. So when we get the material that’s X percent, when we ship it to job site, that’s another X percent that we’ve earned. When we’ve installed it, we get the majority of it and then maybe we save five, 10% for a QA step or something like that. The question is, the way I understand the question, do you have rules of credit that maybe apply across all sectors of your business or do you create those rules of credit for each sector individually?

Justin Terminella:

Yeah. I’d say rather than sector, it’s more by type of work. So whether I install pipe in a data center or a bridge, it’s very similar concept of installation. And so as a company, maybe the four sectors I talked about have their own way of thinking about it, but we’re probably a lot more similar than I think across the board. But certainly have rules of credit that are applied to all of our industrial projects that are consistent across the board, whether that be construction type of installation or engineering progress on deliverables and things we need to do from an engineering perspective and having those be consistent is certainly key.

Rick Deans:

No. Great. And I think that as you’re able to introduce more and more standardization and consistency to the people in the field, it’s less of a mystery to them what they’re actually claiming that day, right?

Justin Terminella:

Yeah. The way … And we won’t talk about this too much probably. But when you control what the field sees in the system, it’s really easy to have standardized rules of credit. They can’t change it. When they go claim a quantity this is the rule of credit that they’re given and it’s controlled at in a centralized location. It is what it is and they just have to follow it.

Rick Deans:

I would argue that probably drives a more precise percent complete, and that gives you better information for earned value. It gives you a less subjective performance factor. It gives you a more objective forecast, so there’s more business value associated with that.

Justin Terminella:

Yeah. For sure.

Rick Deans:

I had a question here from the chat I was going to throw Rod’s way. This question is coming in, it looks like from an owner’s perspective. How does InEight overcome the challenge of estimating at a component level, cost tracking at a contract level, and scheduling at a work package level? So depending on what we’re doing, we’re looking at data at different levels. Rod, have you guys cracked the code on that? Is that something you’re grappling with?

Rod Wales:

Well, we’ve made some headway. I can say that. The way we estimate is quite different than the way we execute work. Most notably the level of detail that goes into an estimate. We go through an estimate form or conditioning. What’s the word we use? Estimate conforming exercise to put it into the project the way the project’s going to actually execute. And again, we roll up some of that detail so that we’re not tracking $75 items because I don’t think it’s of much value to us. I won’t say that’s an easy process. It takes some time. But it is much easier when you estimated your job in InEight and also running it in PMIS. That has revolutionized really how we do that because the old way was we’d do a bunch of Excel gymnastics and build a bunch of CSV files and then import it into our JD Edwards ERP and get our budgets in there, and that’s where we were managing our costs and whatnot, and that was super challenging. Now we can just roll that estimate right into InEight PMIS and utilize it right from there.

And the other thing we can do is see where all that information came from. Because a lot of this, we do see this where the detail that if we dumped it straight into our ERP, we lost all the detail. What did this crew look like? What am I supposed to be using? Do I need an 80 ton crane or did you give me a 150 ton crane? What does that look like? They don’t have any of that information in our old way of doing it. Now they can trace that back to the estimate because they know where all those numbers come from. We’re 60% there. So we’re still starting to see that benefit realized. For me, that’s something that really helps is understand how the estimate was built.

And if you extend that to the end of the job, one of the challenges we always had was it was installed cost per unit versus bid cost per unit and trying to reconcile those two. It can be a bit challenging as well since the data is coming in at different levels of detail, you have to do some extrapolating to figure that out if you’re building your rules of credit. I don’t know what it costs to form a pile cap, but we can figure that out by knowing what it costs to install the pile cap in total. So that helps us create those links between the final installed cost versus what we estimated because that’s a really important function for us. If we can’t do that, it’s hard to bid future jobs accurately if we’re unsure how we did on the last jobs.

Rick Deans:

Right. We’ve always estimated it this way, but how it actually-

Rod Wales:

Yeah. Who knows if it’s right?

Rick Deans:

I heard it described once from our CEO. I guess this is a shameless plug I’m giving him. He said when we estimate, we tend to get into a great level of detail because we want to make sure our cost is tight. We get down to the box of screws and the nuts and bolts, et cetera. But when we go out to the field, to Justin’s point, we don’t want to give these guys 37,000 tracking codes. So sometimes that information is rolled up and consolidated in that conformance process that you talk about, but then the field can then take a look at that overall budget. They might have one line item in their budget for small bore pipe in building A, but then they can begin to create components. And they can start to break that down to this pipe run and that pipe run and these fittings and those fittings.

Justin, I’m just curious from your perspective, we want to estimate at a certain level, we want to track at a certain level, we want to provide reports at another level. How have you managed that and do you find the information is readily, easily consolidated as well as broken out into component pieces?

Justin Terminella:

Yeah. I’d say my comment back to the lifecycle champion statement is we absolutely have to estimate the work like we build it and track it in the field. Now, we may not have all the detail at the estimate time period to get down to that component level, but the involvement with the field operations throughout the time of the project is important from our estimating perspective to be engaged with that so we know how we’re generating past costs. Now, past cost is also different than quantities or tracking quantities throughout the job or using quantity metrics to come up with an estimate. And so I think historically everything was wrapped around an account code and you had a quantity and you had pass costs for an account code. Well, that account code generally maps out to the CBS structure of a job. But oftentimes when you’re estimating you may not have all the detail and so you really need to start looking at quantity ratios at a much different level of detail than in the count code. And so that’s where the information you’re collecting through plan can be really useful in the estimate. But understanding that lifecycle and how the WBS ties out to how we’re estimating versus how a schedule activity is generated to how we’re spending and charging hours on a job is 100% critical and they all have to tie together.

Rick Deans:

Excellent. I know we’re coming up on time here, so to be respectful of everyone’s schedule, Rod, you have any closing comments? If I were in the audience and I were considering taking this digital transformation journey for my organization, what words of advice might you give?

Rod Wales:

I think the best thing that I’ve learned in the last little while is crawl, walk, run. We don’t have to boil the ocean in the first round of this. We need to get everybody on it and utilizing it and learning as we go. Sharing that information amongst each other and developing our own best practices. It’s a different system than been used in the past. It’s certainly a welcome change for 90% of our organization. I think they’ve been clamoring for it. Don’t try to do everything in the first deployment. We’ve had good success by giving them 75% of the functionality and then understanding how we want to use the rest of it. Because generally the first 75% is the core functionality of the system. All the bells and whistles come later and we can figure out how best to use them at that point in time once we’ve had a year or two under our belts to really get under the hood and understand the tool.

That’s the biggest thing I’ve learned in this whole journey is just that. Don’t try to do it all in one shot. And we’ve taken a phased approach to deploying. We’ve got the core financial pieces up and running and we’re adding in completions and compliance and model and some of the other pieces that come later. But if we tried to do it all at once, I think we’d have had a really tough time where we’ve had good success by taking it slow and deploying it at an appropriate pace that the organization can absorb.

Rick Deans:

Appreciate that. Justin, what would be your advice to an organization that was maybe doing everything they need to do in spreadsheets but maybe missing that organizational data repository piece?

Justin Terminella:

Yeah. I would second everything Rod had mentioned. But maybe in addition to that, and I’ve seen it here. You got to have the right people in the right place. And so you can’t expect to give a superintendent that’s been in the field their entire career a bunch of data and visualizations and expect them to make a decision off of that. Now, some of them can, but it just goes back to put the right people in the position. So if you’re setting something up in an organization, get the right skill set with that team. The other piece to it is that you’re going to have too much data, whether it comes from InEight or the other things that you collect data from. Understand that architecture and get a plan in place around it and cut out the noise. But then focus your time too on the visualizations of how you’re looking at the data. Not everybody can look at a table of data and draw a conclusion. But if you’ve got resources in place to visualize that information, specifically around a manager or senior leader, it really brings to light some of the advantages of what we’re collecting. But then it enables them to make decisions quickly just through visualization. And so take the time and the effort to make sure you understand that and you’ve got people in place to do it.

Rick Deans:

Well that’s super and I appreciate everybody’s attention. And I think the one takeaway that I got from those two closing comments is it’s great to license and in some cases install software, but unless you’ve got the teams dedicated to making it work for your organization, it could certainly fall flat. So obviously Ledcor and Kiewit are where they are today based on not only selecting good tools, but having the discipline and the wherewithal to implement them and to have the discipline to stand behind them so we salute you for that. Thank you so much. And I think that takes us to the top of the hour. So thank you everyone for attending, and we hope you have a great end of your week and a great weekend as well.

Justin Terminella:

Yep. Thank you all.

Rod Wales:

Thank you.