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IBRS iQ is a database of Client inquiries and is designed to get you talking to our Advisors about these topics in the context of your organisation in order to provide tailored advice for your needs.

Optus inCITE takes off

Optus inCITE, the Construction Industry Trading Exchange, has now been operating for twenty eight months and since my last update, in November of last year, there has been a significant increase in its adoption through the industry. In fact the increase in its use has been so significant that it has raised issues with the capability of the technology platform to handle the current and anticipated volumes. These issues are being addressed as a matter of urgency.

At this time there are:

  • 501 registered companies; and

  • 6,159 registered users

    • 5,708 registered for document management

    • 638 registered for tender management

    • 18 registered for purchasing

  • 1,500 concurrent users

  • 300,000 “clicks” per day

Volumes such as these were not originally anticipated until well after the third year of operation and they have tested the current technology platform to the extent that there has been inadequate performance when there has been heavy usage.

The Document Management System on the Exchange is being heavily utilised by large numbers of users on multi million dollar infrastructure projects such as the Lane Cove Tunnel in Sydney, the Mitcham/Frankston Motorway in Melbourne (Eastlink) and the North Western Busway in Sydney. There are numerous other large infrastructure projects in the pipeline such as the North South Brisbane Tunnel, the Gateway Bridge Duplication in Brisbane, the Fast Rail to Sydney’s Western Suburbs, the Melbourne Convention Centre, the new Headquarters for the Department of Defence in Canberra and the Sydney Desalination Plant, all prospective inCITE users. The construction industry in Australia is forecast to continue growing over the next five to six years, and maybe beyond, and the Tender Management and Procurement Systems on the Exchange have only been exercised to a limited amount to date.

The RTA are currently conducting a trial of the Tender Management System inviting selected contractors to submit tenders for a new project through inCITE. The RTA is one of the construction industry’s largest clients in New South Wales so if this trial is successful, and they adopt inCITE as a standard, the number of users on the Exchange will increase significantly.

To date the Procurement System has not had heavy usage with Optus still marketing to large suppliers to get them to lodge their catalogues on the Exchange. Interfaces with the more popular Construction Industry accounting systems have been completed which will enable end to end electronic processing of the whole procurement transaction. It is expected that the Procurement System will begin to be widely used as more suppliers get on board.

While this adds up to more and more users it is interesting to note that the number of Document Management users in Australia is already more than in Europe, where the software has been commercially available for a considerably greater length of time. Added to this Australian companies are exploiting the software to a greater extent than their European counterparts. A number of large projects have not implemented Microsoft Exchange preferring to utilise the generic email system built into the Document Management System. While the generic email system is definitely clumsier to use it ensures that all project related emails are captured in a single repository. This is considered to be of such value that issues with the user interface are thought to be relatively unimportant. It should be added that on one of these projects inCITE, and how it is used on the project, has been mandated by the project director. Everyone on the project has been instructed to use it.

There are also ten prospects who are eager to use the Exchange but being aware of the instability issues are waiting on the sidelines for the problems to be resolved before signing up.

The Exchange therefore, is proving to be a success but, ironically, that success has lead to the recognition that the infrastructure, as it currently exists, struggles with existing volumes and is incapable of handling prospective volumes. There is a plan to resolve these performance issues by reviewing the hardware platform, reviewing the data base engine, reviewing the technical architecture of the Document Management System, implementing some immediate enhancements that have been identified and revising the training approach to instruct users on how to build efficient searches which do not require heavy system resources.

In summary the initial aims of the group of construction companies who originally came up with the concept for the Exchange, that benefits would accrue to the construction industry through the utilisation of standard systems, using the Internet for selected parts of project management on construction projects, are beginning to be realised. The take up has greatly exceeded forecasts and there is steady month on month growth. Once the technology platform has been stabilised the on going success of the Exchange is virtually assured.

Enterprise Content Management

For some time now we have been, with varying degrees of success, implementing systems providing electronic document and records management capability; to address the large volumes of paper on construction projects and to better manage the complexities of engineering drawings. Due to the distributed project nature of our business and the power invested in project managers to make their own decisions, we have never managed to implement a single company wide solution, and by doing so have not realised the benefits that this standardisation provides. We find ourselves in the position where we are using several different ASP model solutions, one of which is of course inCite, and a number of proprietry third party products. This makes it considerably more difficult to introduce one standard system for managing project documentation across the business, while still taking into account the different requirements of the various delivery models i.e. straight design and construct, joint venture, alliance, PPP etc.

To satisfy an important part of the company’s strategic direction, we have been undertaking a review and formalisation of the organisation’s Management Systems. In this case Management Systems are defined as those processes which are integral to the way that the company does business. In the past these have been applicable to construction projects only, but the decision has now been taken to define, implement and maintain formalised business processes for all parts of the organisation. A large part of this review involves the selection of the optimum way of storing these processes and their associated business procedures, and publishing them. While these processes may or may not be enabled through an IT application, they will be maintained and accessed through an electronic repository. The million dollar question is which electronic repository.

Through this project the business has invested a significant effort in designing a revised format for these processes, and most of the content for construction projects has been put together in the new format. The business has now engaged, with IT, to go to the market to select a product to deliver the new Management System. Following a robust and detailed evaluation procedure involving a project team, including the major business stake holders, a decision was taken on the most appropriate product. A pilot is currently being undertaken to prove the suitability of this product with an initial implementation of the Management Systems planned for December 2006.

At this late stage of the project some doubt has been expressed about the value of the solution that has been chosen. While there is little doubt about the capability of the product to deliver the required solution, concern has been expressed in some quarters about the total cost of ownership for what is considered to be a point solution only. The chosen solution is a vendor driven product, with a significant cost for licences and on-going support. There is a feeling that a satisfactory solution could be provided through a commercial open source product, or through products for which we are already licenced because of other contracts with specific suppliers.

Supporters of the product claim, with some justification, that it has the capability of providing total enterprise content management to the business and can therefore deliver the value that is being questioned. Additionally, it can go a long way to satisfying the perceived need to have only one system in the business to manage all processes and associated documentation. The scope of this project however did not include other business requirements outside the Management Systems.

We have received well intentioned advice on this matter, both solicited and unsolicited, from a number of third parties. It has become apparent that there is a diversity of views on this subject which is of no use to us at all. The main issues seem to be:

  • what actually is an enterprise content management system?

  • having established what it is, do we need one?

  • having established that, do need one over arching enterprise content management system, or do we need a number of point solutions addressing business requirements as they arise?

  • if we do need one overarching enterprise content management system, what is the total cost of ownership – do we go for a vendor driven solution, open source solution or utilise one of the “freebies” that we are entitled to (assuming their suitability)?

  • where does an enterprise content management system sit in our IT architecture? Is it an infrastructure application, a platform, a business application, or a bit of all three?

There are some interesting schools of thought out there ranging through:

  • Enterprise Content Management addresses document management, records management, web content including intranet, extranet and internet and is underpinned by a work flow engine.

  • There is a significant immaturity in this market with little immediate sign of this improving. We should not be making a decision on one over arching solution until the market is more mature and there are indications that the major players are here to stay. We should be leveraging off our existing products in the meantime.

  • We should be considering commercial open source to reduce total cost of ownership. Is commercial open source really cheaper or is it just another model with much the same cost?

  • Enterprise Content Management is an infrastructure application to be built upon much like a relational data base.

  • Enterprise Content Management systems should be selected to suit the particular business need that is being addressed and is not necessarily one over arching system for the business.

  • Enterprise Content Management is a misleading name for managing unstructured information electronically.

  • Given our commitment to inCite and its current inability to deliver all of our requirements our chosen solution will always be a hybrid of point solutions

To help resolve these issues we have hurriedly put in place another project, running in parallel to the pilot; to which I referred above, to further analyse commercial open source offerings and selected other vendor supplied systems that could be considered to offer savings in total cost of ownership. We have a commitment to deliver the Management Systems within a certain time frame and we will honour that commitment. It may be, however, that we deliver them through a different product than that which is being piloted. The time frame for this decision is very tight.

Enforcing adherence to IT policies and procedures as part of IT Governance

Compiling and publishing IT policies and procedures (ITPP) is an important part of IT governance in order to ensure proper use of the computer network and security of vital data. But however detailed and well-designed these ITPP are their publication in itself is only the start. Ensuring that they are understood, accepted and adhered to is an on-going challenge which must not be underestimated.

Why managed print services? Which vendor should I choose?

In the current climate of cost reduction, implementation of a managed print service can reduce costs while providing efficiencies and business benefits to both printer vendors and to their clients. Cost savings and a reduction in the environmental impact of printing can be realised by user organisations while printer vendors can profit through changing their business model from strictly hardware and consumables supply to one that is more service orientated.

Centralisation or Federation? How best to structure the IT organisation to ensure excellence in service delivery

The structure of the IT function will more often than not be influenced by the structure of the organisation it serves. There is no one right way to organise IT within an organisation. Rather there are a variety of models, each with their own benefits and disadvantages. Whatever model is implemented however, it is important to ensure that decisions on the optimum structure for IT are driven by business rather than political imperatives, and that the CIO has significant input.

Successfully managing technical people and their transition into management positions

The tendency to promote highly skilled and successful technical people to managerial positions as a form of recognition and/or reward, if not thoroughly thought through, can have the effect of weakening both the managerial and technical streams of the IT department Before making such a promotion the ability of the technical people to make the transition successfully must be considered and the necessary skills and techniques to be successful managers imparted through training and education. Continuous mentoring through the provision of advice and support, particularly in the early days, is essential to a successful transition.

Building a sound relationship between IT and the user


Conclusion: IT departments that do not effectively engage with users, at all levels, within an organisation will fail to actively promote both their services and the value they can add and, as a result, will find themselves disadvantaged during times of cost cutting.

A lack of understanding by the user of the role, the position and the contribution of IT within an organisation can lead to significant issues between IT and users.

Open communication, and an understanding and respect for each other’s roles, vision, goals and objectives can go a long way to resolving these issues.

Achieving benefits from document management systems during periods of budget restraint


Conclusion: Properly managing a project portfolio and determining which projects can safely be delayed during the current difficult economic environment is a complex task. For example organisations which have been considering the selection and implementation of an enterprise document/records management system (EDRMS), but are nervous about the significant costs associated with such an implementation, should look carefully at the downsides of not having such a system.

The costs of implementing EDRMS can be high. However they can often be justified by the cost benefits that can be realised from a successful implementation, and productive use, of selective functions within a document management system, such as information capture, which can include payback periods of three to six months.

IT department restructuring in tough times. CIO role - Innovator or Utility Manager?


Conclusion: During hard economic times it is not uncommon for IT to be instructed to consider a restructuring to better serve the organisation. However the temptation to reduce costs by relaxing governance, adjusting standards and reducing the service structure, even with the best of intentions, may result in inadequate service levels and where possible should be avoided.

Where business units within an organisation have enjoyed a fully collaborative and cooperative strategic planning and development relationship with IT it is important that Innovator CIOs continue to fulfil this role during the economic downturn. Reverting to a more defensive utility manager role will disadvantage IT when the turnaround comes and business and systems activity increases.

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