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How Technology Is Empowering
Capital Project Owners

Originally aired on 06/23/2022

53 Minute Watch Time

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Transcript

AJ Waters:
Hello everyone, and welcome today to our discussion on how technology is empowering capital projects owners. Specifically taking a look at different ways that we can utilize today’s project management software and find ways for owners to win. Instead of just a contractor being able to utilize such things. Today, we have a couple of housekeeping items to cover before we dive in, first and foremost, feel free to submit questions or chat with us in the chat. We have moderators there, ready to help push that all through and get those questions over to our expert panel. Also at the end, we’ll follow up with a QR code for a survey. We always welcome feedback on our webinars in different ways that we are presenting so that we can get better and improve the message each and every time. With that, I’d like to take a moment and introduce our expert panel today. First off, Mr. Greg Sizemore, would you like to give an introduction to the fine folks on the call today?

Greg Sizemore:
Yeah. Thank you, AJ. And it certainly is an honor to be with you today. It’s a pleasure to share our thimbleful, as we like to say around here, of knowledge, experience and perspective, I represent the Construction Users Roundtable, founded that group about 20 years ago and certainly technology, productivity improvement, and eliminating waste, whatever we can do to make projects run better and more cost efficient is what we’re about. So it’s great to be here today. Thank you all for joining us and I’m eager to get started in our conversation, AJ. Thank you.

AJ Waters:
Thank you. And mark, moving on to you. Would you like to say [inaudible 00:01:56].

Mark Triesch:
Yeah. Hi, I’m Mark Triesch. I’m sorry, AJ. You weren’t quite finished.

AJ Waters:
No, that was it. Yep.

Mark Triesch:
Oh, so yeah, I’m Mark Triesch. I am a co-founder of PrairieDog and I’ve known Greg for some time since PrairieDog was built by the industry for the industry on the back of some sponsorship from Construction Users Roundtable, and some research that was being done at the Construction Industry Institute. So our intention is to try and drive a different business model for people who build. And I’m looking forward to talking a little bit about what the implications are for the way owners use information today and get going with this.

AJ Waters:
Awesome. Thank you both. And my name’s AJ Waters, for those of you who may not know me, my role today is to moderate, but on other days I am a Vice President of Industry Solutions at InEight, with a specific focus on owners. I have a background working in the capital projects industry and am a proud member of CURT, so.
All right, first question, let’s dive right in. Mark, you first one of PrairieDog’s number one goals is to eliminate transactional waste. So when you talk about transactional waste with capital projects owners and managing their projects, what is the number one place that you first go to try to eliminate some waste? And is technology something that you utilize in doing so?

Mark Triesch:
Okay. That’s a great question. So first maybe just a brief definition of what we mean by project waste, crushing capital project waste, some studies that were done in support of this show that as much as 40% of project capital that’s spent on a capital project might just not go to better design, better construction, bricks, mortar, steel, concrete, it’s just wasted. And you say, “Well, that’s far too high of a number. Maybe you could give me a little backup on that.” And when we look into it we find things like trade credit and debt financing. The average payment cycle for someone to get paid in this industry is about 73 days from invoice to receiving cash. And so as you start to go through these things, you know that there’s probably 4% missed depreciation in charges, there’s logistics optimization and expediting, there’s fraud and other costs of claims and things like this.
And as you go through them, most people will go, “Yeah, that seems about right.” There’s really not that much pushback, but when they first hear the 40% number, it’s just absolutely shocking. They say, “Oh, maybe 10% or whatever.” Our industry in general probably has more money wasted than we make an individual margins as contractors. So this idea, when you say, where’s the waste? Where do we go after the waste? I want to break that kind of into two parts, because it was a two part question, especially regarding the technology.
This whole connecting of buyers and sellers, of owners finding contractors to do their work is a very wasteful process and the qualifying of them. And of course the contractor saying, “Oh, I got to put together all this information and go and win this bid. And I only win one out of three, but I spent all that time, or one out of 10 and I spent all that money.” So it’s a very wasteful process. And we know that can be done better in terms of lining up buyers and sellers.
We have a unique industry where we have a tendency, like if I wanted to buy a pair of Nikes on Amazon, I would go out and someone would sell them to me. But in our industry, the owner is both a seller of something, they make drugs in their factory or oil in their facilities or whatever. And they buy things. They buy things from companies like Keywood that say, “Please come and build this for us.” Or they buy from an InEight or whatever. And then their contractors both sell to those owners and they buy things. And so it’s really a two-sided market. It’s kind of an interesting market and it’s very inefficient. So there’s an opportunity there to drive out a lot of transactional waste in that market.
The other thing it resonates for everyone is getting paid faster. Cash is king in contracting and money is everything. And so, as I said earlier, that 73 days is killer, because most contractors cannot borrow money at the same rates owners can, yet owners push it into the contractor camp and say, “I’d like you to take that lump sum.” In high inflation environment, like now, in an uncertain supply chain environment, like now, in an uncertain labor market, like now, where you can see what happens. So that’s very inefficient as well and it causes transactional waste.
So there’s also these other supply chain issues, as I’ve mentioned, and things like ESG tracking where owners are more interested in things like carbon credits and stuff like that. That’s a very inefficient area because contractors are learning how to do that. They’re laying on more resources and they’re trying to figure it out as they go along. So a lot of stuff slips through the cracks.
And the last is labor issues. And this goes for both owner and contractor. Finding skilled labor, and getting them vetted, getting them engaged and getting them paid. And that’s a huge challenge. So some of the areas where owners are addressing that is they’re going and they’re saying, the contractors have been telling me, I’ll use whatever system you want. I show up with one, but I’ll use whatever system you want because you’re paying the bills. And so now owners are saying, “Well, I actually want to use that data. I want to apply technology. It’s part of my progress.” And so they’re starting to look at systems like InEight and say, “I want to get that adopted into my shop. And I will tell the contractor, this is what we’re using.”
And the second thing that we see in what we’re doing at PrairieDog, that looks like it’s going to be very helpful is the use of smart contracting. And smart contracting is just taking natural language contracts like we use today and converting some of the stuff that really gums us up into code, that automatically executes like a computer program.
An example of that might be somebody who says, “I want to put concrete in at this data center over here and I have a rebar installer. I have a rebar supplier. I have a concrete batch plant. I have a concrete finishing company that installs. I have a inspector that does it. I have a general contractor. I have an owner.” And all these parties are in this contract. And the idea that you could have computer code automatically go out there and say, “This line item for that kind of concrete. And I’m willing to pay for it now is very attractive to both owners and contractors. It gives you more predictable cash flow. It gives the contractors an idea that like, “I know I’m getting paid in five days on anything I do here as soon as I deliver and install that concrete.”
So those two pieces of technology, platform systems, like I mentioned, and then the use of smart contracts are really starting to come to the four. Smart contracts, depend on a little something or they don’t have to necessarily, but they typically use something called the blockchain. This isn’t cryptocurrency, but it’s just using the blockchain to register things. And what that does is it is imutable and instead of one source of truth, it allows people to look at it and say, “Yeah, when it’s registered on the blockchain, that’s when that stuff was installed.” Platforms can do that. And people just have to have confidence that we are sharing that and it’s not in one house’s kitchen or the others, it’s shared by all parties. So that’s my long answer to your short question.

AJ Waters:
No, it’s good. It’s good. Greg, any thoughts on or how you would expand on that?

Greg Sizemore:
Yeah, a 100%. And by the way, AJ, thanks again. Mark, that was a terrific answer. Technology’s not going back. We’re in the fast lane and you never can go backwards in the fast lane. So those who are slow to adopt, those who are slow to find themselves educated about it, those who are slow to be aware of what’s out there. I think a lot of times our industry is akin to a third world child that walks into this gigantic DSW shoe store. We know we need shoes. We don’t know where to begin. We don’t know what’s out there for what, do we buy dress shoes, casual shoes, gem shoes, sandals, beach shoes, blah, blah, blah. And so we don’t know. And I think that’s the dilemma of a lot of owners as well is we know that there is a technology solution. We know that there are options out there, but owners typically don’t know where to begin.
The other challenge we have is a cultural one, those who make those buy decisions are typically senior among us and maybe a little less adapt at understanding what the tech does, how it works, how you utilize it, what the value proposition is for it. But the younger folks coming out of school, the younger civils and construction managers, even architects, they’ve been introduced to this stuff since they were kids at the university. And so they’re eager to adopt, eager to embrace. And I think sometimes we have a culture clash between those of us who have the buying decision making power and those younger among us who are less experienced among us, who have the knowledge, knowhow, desire and passion to embrace it. And we’ve got to address that as owners.
One of the things we try to do at CURT, we have a technology and productivity committee and obviously we have fine industry leaders like yourself as a part of our organization. And we like to say at CURT, we have three things that we offer people. We offer shared experiences, we offer shared perspectives and we offer shared resources. And I think it’s the best thing to do, that latter one is what we’re doing right now for InEight, is helping those who have joined us on the call to understand what resources are out there. How do you make a tech buy decision? Do you get rid of all waste? Do we address the macro-problem or are there specific problems? And I tell you what I think is hot right now, and Mark alluded to it was the workforce shortage. We don’t have enough craft people.
And the workforce shortage has merged beyond craft to professional. CEs are now getting six figures to start out of the university. I happen to be at the University of Cincinnati on the Dean’s advisory board. And we have CURT members who are hiring 24 year old, somewhat inexperienced hires into six figures to begin. And so we’ve got a workforce shortage at all areas of the business and necessity the mother of invention, tech has to be a part of the solution. There’s no going back on this, you can’t get enough people in the field. You can’t get enough supervisory capability or office people, we have to have a technology based solution that is in a language we understand, is conveyed in a language we understand, and in a space we feel comfortable. And that’s what the curt tech committee wants to achieve. Not necessarily creating new technologies, but providing resources, experiences, and perspectives among owners, particularly, and understand what the value of each of them is.
I think the second big problem, AJ is interoperability among these technologies. I look like that got a little bit of a rise from you.

AJ Waters:
Yes.

Greg Sizemore:
This would be akin to, I’ve got an iPhone. Somebody else might have an Android or so, what if the iPhones only talk to iPhones and I couldn’t dial up those with Android phones or any other brand of phones. Or what if a particular kind of broadband capability wasn’t interoperable with another, think of the chaos that would have. Well, that’s where we are right now. We have this interoperability challenge and that’s got to be solved somehow. I don’t know how, but boy, the telecommunications industry could probably give us some hints on how to pursue and make these technologies interoperable so that we don’t have to shut down for each project, ramp up for a new one. Then you’ve got the learning curve challenge and it just seems to be AJ, clunky.
And I think one of the things that PrairieDog Venture Partners that Mark’s a part of tries to do is take the clunkiness out of that issue and take the complexity out of the issue, take the ambiguousness, the ambiguity out of the decision making process. That’s what we’ve got to have. We have to have more forms like the one you’re hosting right now so that we can do that effectively.

AJ Waters:
Yeah. That’s a really good point because Greg, one of the things that really gets me hot quick is when they say that the construction industry is slow to adopt technology. Right? They’ve been saying that for years.

Greg Sizemore:
Oh, when the cell phone came out, when the Blackberry came out, it was all steam out of the ears and pants on fire, but we got there.

AJ Waters:
Yep. Yeah. But you walk around a job site today, there’s tech everywhere.

Greg Sizemore:
Everywhere. Everywhere.

AJ Waters:
It’s not that they’re not adopting the technology, it’s that they can’t connect it. Right?

Greg Sizemore:
They can’t connect.

AJ Waters:
That is the issue. They can’t get the technology connected. And so that’s going back to, Mark, you mentioned blockchain as an idea platform services. Or Greg, if we play off of your shoe analogy, it’s like walking into the shoe store and you’re going to buy the sneaker, but you’ve got to then go buy the innersole separately and then the laces separately, and then the tongue separate, and you try to get the parts to assemble and fit. And it just looks like a mess at the end of the day. And that’s where the data becomes invaluable all of a sudden. So with that in mind, maybe kind of shifting gears, because one thing that connecting the technology does is connecting the technology kind of opens the gates a little bit, right? You become a little bit more transparent. You open yourself up for more people, being able to see everything because it’s all flowing and it’s connected and there’s tracking behind it.

Greg Sizemore:
Can I make a comment on that point, AJ?

AJ Waters:
Yeah.

Greg Sizemore:
I think the other thing is we have to realize is owners need to drive cultural change. And here’s what I mean. We are in a relationship business where no one trusts anybody. And so we’re close to the vest with data. We’re close to the vest with the financial aspect of a project. So we’re in a relationship business, but nobody’s trusting each other. And I think somewhere along the line, the owner has to say, “Wait a minute, we’re going to have a transparent experience here. We’re going to have the trust. We’re going to all for one and one for all.” But that’s a cultural challenge. And frankly, it’s on the owner to lead it, not on the contractor community. I think that’s an onus on the owner. Just a point I want to make on the transparency issue.

AJ Waters:
Yeah, exactly. And so one of the questions I had for the two of you kind of with your experience and your background, we’ve seen plenty of examples from pilot type projects, where open books, open transparency between the owner and the contractor give astonishing results. What do you think is some of the apprehensions still? What’s the cause between the contractor and the owner? They both want the project to be successful. Why are they so closed off about it?

Mark Triesch:
Well, maybe I’ll take that first and-

Greg Sizemore:
Well swing at that pitch, Mark.

Mark Triesch:
I don’t think there’s two goal alignment, AJ, and this is something we heard from one of the major owners very early on when PrairieDog was getting, moving on, crushing transactional waste. And true goal alignment, they’ll sit down and they’ll say, “Yeah, we want this. We want that.” But I’ll give you an example. An owner will show up and say, “You know what? We are going to build 10 of these plants. I don’t care what it is, low cost fuels. But here’s the deal with the plant, since it’s the first one, we got to get it to market fast. So it has to be really fast. And if you ever come to a fork in the road where you can go cheaper or more expensive, we want you to go cheaper.”
Okay. That seems pretty straightforward. The contractor heads out there says, “Got to have a cheap fast plant.” And then the owner says, “Ah, you probably need to do this and make this little more expensive choice.” And the contractor’s like, “Okay, well I’ll do it. Because that’s what you said. That confuses me a little. But because you said cheap.” And then the owner shows up and says, “Ah, you know how you didn’t put any digital control system in there because you went cheap. That’s going to really cost me a lot of money for operations.” “Okay. I’ll make that change.” And so now then the owner’s saying, “Well, now you’re hitting me with all these change orders.”
And the problem is one of goal alignment. True goal alignment to say. And that’s where open book should help where it says, “I’m structured for you. I’m structured to parallel you.” And what most owners don’t realize is they make contractors into who they are by what they ask of them, what they contract for, and how they treat them. And then they wonder why they get the results they do. And one of the things that led to the formation of PrairieDog was this conversation about owners saying, “We’re paying too much for our projects.” And it’s true and they are. And contractors saying, “We’re not making any money.” And it was true and they weren’t. And so you had to ask, how can these both be true? And it was because there’s lack of transparency and true alignment.
So the open book should work, but only, and this is what IPD and things work pretty well. And there’s great results as you’re pointing to, but only if somebody’s left on the hook for things that they can control. Because if you just say, “Open book, send me the bills.” Owners are not going to get the behaviors they want. And that’s back to my goal alignment comment.

Greg Sizemore:
And I think that also what folds into that Mark, is this whole concept of, “Hey, we’re paying too much pants on fire to contractors. We’re not making enough. We’re barely…” That’s where the waste comes in. Let’s say your 40% figure is a little incredulous. So half that, let’s call it 20% waste. Is that any more palatable? No. That still represents billions and billions and billions times billions for either stockholder value or profitability for a contractor. Cut that in half is 10% okay? No.
So somewhere along the line, we have to create these technologies that have some interoperability among them, interoperable systems. We have to create a culture of trust in an industry that trusts no one, we have to lead by example. And we have to have that constant alignment of goals articulated in all the media that goes along with the project, from the top down, both contractor and owner. So that folks in the field, the foreman, the superintendents, certainly the worker, the guy at the wrench in the field that is really generating all the money, that has to be clearly understood from top to bottom, I think. And there in lies the waste and the opportunity for improvement.
Now, when we talk about waste, we roll our eyes, we shake our heads. Certainly I do. It’s abominable, even at half the amount it’s abominable, but here’s the good news, that industry, this industry is ripe for revolution. If we can bring the right technologies along, create interoperability, change to a culture of trust and transparency, have better goal alignment and top to bottom stem to stern communication. Just what if that happens? I don’t think there’s any lack of knowhow. We’ve got great organizations, Texas A&M, Stanford SIFI out there CII down at UT, great minds working together to create technologies and great companies like yours, AJ, who are willing to deploy them. But we’ve got to shore up these links in the dike that Mark has so vividly pointed out. That’s a challenge. And I think it’s an owner’s challenge, contractor support, but the owner’s got to lead the dance here.

AJ Waters:
So going back to one of the things that Nark mentioned, just real brief, kind of in the middle there, some of the newer contracting methods like P3s or IPDs or those sorts of things, and I’ll Greg, I’ll ask you first this time just to share the, who goes first. Have you seen in your experience of late, these different contracting models, are they truly helping or is it just a new way to create the same problem?

Greg Sizemore:
So here’s the honest answer. I don’t know. I think we have to do a better job of measuring how these things work, measuring what the ROI is, understanding what we want to have achieved from these. The same hot water that hardens the egg softens the carrot. So those have different impacts on different industries, perhaps different vertical sectors. And I don’t think AJ, we have enough data to know where we are with it right now. And Mark mentioned this a few minutes ago about the data collection and then analysis being so important to decision making, going forward.
I think we just need simply more data on this and a more robust way to measure what result we’re getting for all these approaches. I’m not sure it’s out there. Now, we’ve got the silos who tout these various approaches that claim that there’s, does a meets expectation, but we’ve got to have, Ronald Reagan used to say, “Trust, but verify.” And so while we encourage these organizations to continue to work toward what we’ve enumerated here, we’ve got to verify the result with data therein and only then do we have the credibility for industry to move forward with it? Other than that, we’re just kind of scratching our heads and hoping it works.

AJ Waters:
I’m just going to say-

Greg Sizemore:
Go ahead, Mark.

AJ Waters:
After this webinar, I’m going to have a dozen new phrases from Greg, same hot water that boils the egg softens the carrot. That’s amazing. Sorry, go ahead, Mark.

Mark Triesch:
No, no problem. So when you talk about these, you characterize the majors new delivery methods or things like you mentioned open board. So when you think about AWP, work packaging has been done for about 40 years, maybe even more because we had to do some things manually. I remember a company working up on the north slope for Sohio, was doing work packaging back then and lean project delivery. that conversation about using various tools like lean or integrated project delivery or alliancing, alliancing came out of the North Sea in the ’70s.
So these models have been around for a while or different flavors. People always try and make a new flavor or name for it. But the truth is, a very experienced guy said, “I think that these things are technology and people in about equal measure.” So Greg has said that it’s a people business as well. And we’ve been talking about technology, but it’s in about equal measure. We’re not going to be able to do it without technology. We got to have that. And here’s the great thing about the technologies and things like InEight is, they have a tendency to democratize information. It flattens that curve. And much of our industry is based on information asymmetry. I’ve got the money, you tell me what you’re willing to do it for, and I’ll give you some of that money, but I can’t tell you what my budget is, And you tell me what your budget is.
So it’s always this, I’ll show you, but I won’t show you or you show me first. And the truth is that these systems, as soon as they say, well, this is one source of truth. There’s the budget number. You can see it, but you’re not going to be able to get that in the three bids, in a buy lump sum environment. So it has to be something like integrated form of agreement or where people are working alongside one another. And they’re saying, “You know what, what’s the thing for the best of the project.”
Here’s a couple of flies in that ointment. The first is many of the traditional lenders look at things like that and say, “I don’t get it. It looks like too many next to grab to get my money back. I don’t want to loan money for this.” And so that’s a problem, because the owners say, “Well, I really like working in this manner and I want to build a hospital or this or that. And I don’t know, if I can’t get money, I can’t build it. So would you just do a thing and give me a lump sum price? Because my bank says they like that.” So that’s one of the flies in the ointment is we’re we’re seeing a change and we’re seeing that there are financial institutions and non-banking institutions that are willing to invest in these models because they know they work better if they’re well run.
The second thing is the human element. And do we have the ability to take the humans that are working with these technologies and ensure that they perform? You can’t just get a group of people together, hand them a technology and say, “Integrated form of agreement, go get that done.” Because you will get a disaster. And so when we’re saying, is there proof in how well these perform, you do have to put the calories into integrating that team because it’s an integrated form of agreement, but the agreement itself doesn’t integrate the team. You got to put the calories into integrating the team and then use the technology.

AJ Waters:
Yeah. And it’s funny that you say that it’s 50/50 with the people and we’re going to have a good time when CURT gets together in Las Vegas here in September, because we’re going to talk about just that. It’s not just the technology, even though it’s a big technology summit, it’s not just about the technology. So shifting gears here a little bit, because the common perception of the contractors is they’re slow to adopt technology. Let’s let’s flip it. Let’s turn the camera off the contractors for a second and say the common misconception or the common perception on owners is that they don’t understand contracting. They don’t get project management, right? They’re just exactly what you were saying, Mark. They just provide the money and, “Wow go build it.” Right?

Mark Triesch:
[inaudible 00:29:14].

AJ Waters:
Have you noticed of late, an increasing trend among CMs or owners to kind of manage their own project, to get their own construction management team stood up. So they’re not just the dollar pushers, but they actually are in the project management business.

Greg Sizemore:
I think I have, I think it also depends on the industry vertical you’re in. How many billion dollar hospitals does a person build in his career? And by the way, we’re seeing more and more mega projects. And if you look at the data that we do know about, about mega projects, those are high risk projects. They don’t seem to go well and they invoke CLMs, you know what a CLM is, AJ, it’s a career limiting move. To be in charge sometimes of these mega projects. And yet at the same time, we’re seeing more and more of them emerge. And so you have to look at the owner team and ask, “Well, how experienced are you on a mega project?” And oftentimes it’s not very, if at all, that’s one thing.
If you look at some of the fortune 100 companies, I’ll take Procter & Gamble, for example, here in Cincinnati, that has about a four, five, $6 billion a year capital project budget. And they have stood up teams internally and they give awards for breakthrough and they call them a prisms award. So they, for example, have been setting up their own internal team that they hire young and they strive to keep for a long time to do exactly as you say there, AJ. And that is to be more well informed and well resourced decision makers. And they usually do a pretty dang good job of it. But I think it depends on the industry, the experience with the build out and the experience with the people on the team, Mark thoughts.

Mark Triesch:
Well, a couple of things that we’re seeing as well is only about 30% of the capital that’s spent on some of these projects is what we’d call traditionally sourced.

Greg Sizemore:
That’s right.

Mark Triesch:
So for example, to name names, maybe I shouldn’t, but it ExxonMobil shows up with two big bags of money and says, “Build me a refinery.” And that now is somebody else saying, “I want you to build me a string of 10 refineries of smaller size. And I happen to represent the Retirement Fund of Canada and the Policeman’s Fund of Mississippi or it’s people trying to invest money from non-traditional sources to make this set of apartments or these refineries or things like that.” So you see non-traditional investors. Non-traditional investors typically will not have project management office capability.

Greg Sizemore:
That’s right.

Mark Triesch:
ExxonMobil and those organizations that Procter & Gamble, as Greg has named did build that up over the years, they saw it as important. They said, “We’re spending $6 billion a year. We better have this ability.” But I’ve even seen in well-established companies that have spends in the billions of dollars per year, eviscerate that group. They say, “We don’t do that. We make toilet paper and hygiene products and stuff like that. I don’t even know what to do with a senior project manager. The guy’s asking for a lot of money, that’s the same as the vice president of marketing.” And so really, they don’t know how to treat it.
So one of the ways that we kind of thought we might be able to get at that as PrairieDog is what if we formed these groups using a sort of fiduciary relationship where they have a duty to one another. And therefore, if the owner is weak in certain aspects, that can be supplemented by a contractor who’s quite strong in those aspects, but not in a take advantage of you quite strong, a work with you quite strong and then a common technological platform. So they can share information and understand one another and see it.
And so really for us that looks like the cure as Greg has pointed out, the verticals can matter a lot. You get unevenness in the development of these project management organizations. And I think when you get high inflation environments and things like that, and difficulties as Greg pointed out with labor, even it in the professional levels, it’s going to have a real problem on both the contracting side and the owner’s side, which might seem kind of attractive. Owner’s organizations sometimes treat their people quite well, because they don’t know how to treat them like a contractor does. So they say, “Oh well, I’ve never had anybody at this level. I’m going to have to pay you the same as my operations manager.” And they put together some package for these guys that are in the PMO and then they don’t have enough money to build some more. And then they eviscerate the PMO and send everybody home.
And it’s this lack of continuity that creates this problem with owners having that capability and that technology and ability to build PMOs that can be a force for productive capital investment,

Greg Sizemore:
Here’s the squeaky part of that, tag, we’re it. The government isn’t coming and the church isn’t coming with the meal, we’re it, the men and women on this call and the men and women featured on this conference, including InEight, we’re it. And so we’ve got to figure this out. It’s not somebody else’s problem. And I think because of the way the industry has been so sliced and diced over the years, we kind of pushed the challenge onto the group, to the left or the right of us. And so there’s this constant tug of war between contractors and owners, owners and sub-suppliers, vendors, insurance carriers. And I can go on and on and on. And even owners among owners that it’s someone else’s issue. Well, it’s not. We’re it. And no one else is coming. the cavalry isn’t coming, we got to figure this out.
And one of the things at CURT that we seek to do, and maybe we’ve got a thimbleful of wisdom in the ocean of wisdom about these things is bring the tech-focused people together to try to first understand the problem, frame it, explore solution possibilities, ask of what if question, ask of why not follow up, and then learn to resource that and be committed to a direction that’s hard work. And that often expands over a long period of time. And I think that’s been the problem too, is that those who have enthusiasm and passion about it, who tend to be the younger or middle career folks and the people who have the influence and the money who tend to look more like me, you’ve got a limited time, the clock’s ticking on those folks and then out the door they go, and with all that knowledge, information, experience. So I don’t know what the answer is, but I know that we’ve got the people to figure that out are on this call.

AJ Waters:
Yeah. You hit the nail on the head right there, Greg, that you’ve got to be willing to fail, to keep trying, to fail, adjust, keep trying, fail. And it’s a tiring process.

Greg Sizemore:
And it could be a dangerous one because it gets expensive and somebody’s accountable for that.

AJ Waters:
Right. [inaudible 00:36:41].

Greg Sizemore:
And so gathering to what worked yesterday because I didn’t get burn up yesterday. So we’ll do it the way we did yesterday, and that’s human nature. And that’s why I say the owner typically needs to take the lead. I’ve always taught that the opposite of success has not failure. Failure’s a part of the success journey. And yet it’s anathema to everybody in this industry. The margins are so low, it’s easy to get in red ink quickly. And for that to get deeper and brighter and more prominent more quickly and there lies the dilemma, but we’ve got to have permission for…
Or let me put it a different way, a different way to do business and experimenting. And that’s the beauty behind PrairieDog. And that’s one of the reasons I’ve been enthusiastic about it. And CURT helped it up in the beginning. Is it’s something new. It’s another way. Is it the cure all? No, but what can it do and how can we exploit its capabilities to the part of the market that it addresses and improves. And we’re going to need more of that kind of thing as we go along, I think.
AJ, let me role reverse with you for a moment if I can.

AJ Waters:
Yeah.

Greg Sizemore:
Can you share with me some of the things that are on the InEight horizon? The what if questions that you guys are asking to help us as owners understand technology better or to be a better partner? We’re thrilled that you’re with us, help us understand some of the things you are doing.

AJ Waters:
Yeah, that’s a really good question. So let’s go back to the mega project example. So you mentioned mega projects and how there are risk and all these different things. One of the other keys about mega project is it’s never been done before, right? Typically that project or that mega job has never been built before. How do most contractors go about pricing their project? Well, how did we do this last time? Right? What are our historicals on this? So they’ve got to try to come together with some sort of benchmarking or historical analysis for each individual operation of a mega project where they’ve never been done at that scale or with that level of complexity or that many crews on top of one another. Right?
So one of the things that we at InEight are trying to do for both owners and contractors alike is instead of sitting here and pointing at all these projects that are over budget and over schedule is say, “Was the plan right to begin with?” What did we use to get there? What data points are references, instead let’s work to make more accurate plans up front, better certainty through risk analysis, through machine learning, through artificial intelligence of the data. Some of those things, suggestions and other ways based on everything you’ve collected in the past.
And that’s a good transition point for us into the last kind of major topic. And again, any questions that you might have feel free to throw them into the chat as attendees. This actually, it was the last item that we wanted to cover kind of as a group, but also a question came to the chat that really lends itself toward this.
So earlier it was mentioned, it’s the owner’s job to take the lead, right? And that being said, the data is collected, right? The majority of the data on a project site is going to be collected by the contractor and/or their subs and/or their fabricators, equipment suppliers, et cetera. Right? That’s where all the data is coming from. So how do we, as an industry drive this data culture to connect those two parties. Because again, if the contractor’s going to be the one doing all the work, collecting it, but at the end of the day, the owner needs it, think like digital twins, ONM but also for this kind of open book, this transparency mindset, how do we get them working together? Obviously the owner has some responsibility there, but are there other ways that we can work to connect the data?

Greg Sizemore:
So Mark, you want to swing at that one?

Mark Triesch:
Yeah. I think I will. I think they need different things, AJ, so if I look at InEight, one of the fabulous things about it is it has these connectors, these APIs, you can go through there and I’ll connect to this. I don’t care what you show up with. We’re going to try and connect to it. So it’s, let’s not repeat the data entry if we don’t have to anywhere, let’s see if we can pass that data around. But a contractor might be particularly interested for instance, in productivity data. And an owner generally might care about that only if they plan to build more projects of this nature and they want to be able to review bids or things like that. But generally, if you’re talking about digital twins and an operational viewpoint, they don’t care.
So there’s this transition from, and everyone does this, data to information, to knowledge. And owners are looking for information, typically, at least in the moment, they’re looking for information that can allow them to make decisions. And many of the contractors do not present that in a meaningful way. So the contractors have to get their journey going and things like InEight that have these visualization tools built in are a real aid for that. They have a tendency to engender that ability to see things.
Because owners typically will encounter a contractor showing up in their office saying, “Here’s a Primavera schedule or something like it. You see where it’s delayed there. If you don’t give me this permission and sign this document, it’s going to be a day for day delay. And I’m off the hook for my liquidated damages.” And the owners say, “You know what? I don’t believe you. Because you showed me a schedule in the first place. And you said, you’d build it for that. And now you’re showing me another schedule and say, I have to do something so I’m not signing it.”
And so you get this behavior toward information where the contractors have to be mature about it, to say, “Listen, I’ve collected all this data and it’s good data. We have reliable data.” [inaudible 00:43:28] of Trium talks about dark data. Can we bring data to light and make it so we can utilize it? And now can we visualize it in a way that people can use it for decision making and have confidence in it? Because it’s all about timing. Most of the information on a job is a couple weeks old unless you’re using one of these integrated tools.

AJ Waters:
That’s right.

Mark Triesch:
And if you’re using the integrated tool, how are you converting it to make your owner or decision maker, a partner in that process where they can visualize it and have confidence in their decisions? So that’s what I’d say is, that owner maturity has to do with being presented with data in a way that they say, “You know what? I go to those guys over InEight every day because they show me something that I need to get my job done.” And that’s what’s going to pull them across the line. Greg, you have anything to add on that?

Greg Sizemore:
Yeah, I kind of do. As you were speaking there, Mark, and Mark’s got just a wealth of information and a great passion for improvement for the industry, but I think back in my early days in this industry, when I was with the Contractors Association and all the talk of the town was about the howdy towdy, business round tables, cost effectiveness study, and a great example of that was safety improvement. We’ve got data on safety improvement, it’s measured uniformly. Contractors knew how to stop falls the day before the owner required it. And we began to put safety. It used to be called safety men, safety representatives on jobs to look for and prevent and report on near misses or actual incidences and the safety numbers plummeted.
What if we had a similar innovation person or a technology and integration consultant or somebody who was on these projects whose sole job it was to bring the groups together and put the information in a language that everyone understands and in a format or a place that he or she feels comfortable, similar to how the safety supervisors work on projects, those safety folks, the owner safety reps or contractors, they work together. They’re looking for a common cause, preventing injury, lowering incidences, et cetera.
What if we had a similar role that was a constant at all these larger projects, someone who just did that, who was agnostic in terms of their devotion and whose sole purpose and success measures was how well they were able to integrate and facilitate effective decision making, what would that look like? What would it do? I don’t know, but it just seems to me we’re not going to do this unless we dedicate people and brain cells to improving it, like we did safety. I think we know how to do it. We’ve enumerated and pontificated here today, what ought to be done. But when it actually comes down to empowering change, perhaps there needs to be an agnostic group of safety representative, like people who are charged and challenged with these issues.

Mark Triesch:
So Greg, when you mention that, I think about a platform like InEight and long ago, emotionally I declared war on the monthly report because monthly reports were a CYA kind of a thing. So I’m reading [inaudible 00:47:08].

Greg Sizemore:
They’re like weekly staff meetings, Mark, trust me.

Mark Triesch:
And it was shelfware. And I’ll tell you a story briefly of a company I heard of that produced a some 400 and something page monthly report, the client didn’t trust them and wanted hard copy of the entire 16,000 line item, Primavera schedule every month integrated as part of it. And even the person who was in charge of it, didn’t read beyond the executive summary.

Greg Sizemore:
Of course.

Mark Triesch:
And I’ve heard of companies spending $50,000 a month on assembling monthly reports.

Greg Sizemore:
[inaudible 00:47:46].

Mark Triesch:
And you think that buys a lot of platform time, that buys a lot of interpretation, that buys a lot of good dashboard development, that buys a lot of goal alignment. And if owners would say, “You know what, I’m okay if you have live data, good uptime, good decision making, good dashboards. We get together once a week as scheduled, we look at the stuff together and we decide.” That to me is the same cure that was for safety. Safety of course had different tools and a different time, but you can get that same sort of forward progress instead of, “Hey, let’s look at information that’s two to four weeks old that nobody really understands and argue about it. You can’t put that in there.” [inaudible 00:48:32]. And so it’s very important, you get the goal alignment and say, “So what’s the purpose statement of this information and how do we get it to the highest level where we can interpret it and use it for decision making?”

Greg Sizemore:
What if?

AJ Waters:
Yeah, that’s a really good point. I love. And even you spend 50 grand, you put together a monthly report, and tomorrow it’s out of date. Like [inaudible 00:49:03].

Mark Triesch:
Yesterday’s bird, cage liner.

AJ Waters:
Oh, well, before we hit close here, there haven’t been any other questions entered into the chat. But before we wrap up, I did want to share the QR code for feedback. So if you have any feedback or thoughts for us, we’ll throw that QR code up here on the screen. You can point your smartphone camera at that, and it’ll take you right to our survey. But as we close out, I made Mark go first. So I’ll make Mark go last. Greg, any final thoughts before we head out on, the topics today or what we covered?

Greg Sizemore:
Sure. Thank you, AJ. And again, once again, thank you for the privilege and the joy it is to share, especially with people as smart as you and Mark Triesch. I always feel like a marshmallow de wienie roast when I get together with you guys. But I want to also mention, we’ve got two upcoming events that some of your viewers and listeners may be interested in. First of all you’re going to be speaking at the CURT membership meeting on Tuesday, September the 13th in Las Vegas. If you go to curt.org and click on events, you can learn more about that. And then also that week we have a CURT Technology and Solutions for Better Business Outcomes, a summit, the agenda is being finalized. That will be on Wednesday, the 14th, also in Vegas in the same series of meetings. So I’d like to invite your listeners and viewers to look at curt.orgs, flip on events and come join us in Vegas later on this year, Mark.

Mark Triesch:
I don’t have any announcements of that nature, but here’s what I’d like to do is just encourage people on this call. If you’re an owner or an investor in capital projects, get contractors to help you with your digital journey. Some people think they got to solve that all themselves and go out and find out all the stuff, because they say, “Oh, that contractor’s got a vested interest and they’re going to lead me down the garden path.” You don’t trust them, ask more people, but get your contractors to help you on the journey.
And contractors, you guys actually are the early adopters for a lot of this stuff, because you think, “This is going to save me a buck. It’s going to make me better. It’s going to make me faster.” But we have a tendency to pass all that benefit on to the owner without receiving any of it ourselves as contractors. So I encourage you to reach out and help your owners on their digital journey to understand what their options are and why it’s important to embrace this stuff because they also are struggling with having enough people and enough capable people and people who understand the technology. So just know that this is in your job description. It’s not just, I give them the report. It, I have to show them why this is better than a monthly report and how we’re going to review the information together. And it’s going to make better decisions and more powerful decisions.
Very quickly. There are four parts to work. People often think of work as, I got to weld some pipe or place some concrete. The four parts are the direct work. Then there’s coordination, rework and decision weight. And these sorts of technologies can help drive out rework and decision weight, and improve your coordination and coordinated action and decision making is everything when it comes to a project. So help each other on our journey with these digital tools.

Greg Sizemore:
Well said.

AJ Waters:
Yes, very well said. Well thank you both for your time, Greg and Mark, this has been a pleasure. Thank you all for joining, those of you who have been online with us, send us your feedback or any additional questions and we’ll pass them along to the panel and hopefully get back to you afterwards. And as always, visit ineight.com/events for more great webinars like this. Thank you, gentlemen. Pleasure. We’ll catch up with you later.

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