Get Smart And Smarter

Technology helps you retain the knowledge that exists in the minds of estimators, project managers, and accountants.

The construction industry is in a conundrum, of sorts, these days because as more and more companies lose employees, they are not only losing the manpower—but their expertise and experience too.

Change is happening so rapidly in this industry, from new delivery methods to sustainability initiatives. Companies are quickly discovering that in order to remain competitive and to move forward with less personnel they must incorporate a knowledge-management system to retain the knowledge they are losing in this ever-evolving environment.

But with no universal definition of knowledge management in the construction industry and with a number of different techniques and technologies available to lend a helping hand, how can construction companies go about setting up a successful strategy?

Professors, consultants, and industry experts are all weighing in on how knowledge management can impact construction firms today and into the future. Understanding the role technology plays and how to overcome some of the obstacles and measure the true ROI (return on investment) can make the decision process more effective and cumbersome for all involved.

So today’s construction companies are hoping to not only get smart, but to get smarter by doing more with less.

Role in the Industry
Knowledge management is a way firms can gather and capture the insight and experience of employees so other members of the organization can take advantage of that expertise. While this concept is not in any way new to construction, a number of sources point to a new revitalization of knowledge management in today’s industry.

Hoyt Lowder, managing member, HGB & Associates, www.hgbnet.com, Tampa, Fla., says before exploring the role, the industry has to define knowledge management.

“The closet definition that I have been able to come up with for my own self is that it is applied experience plus the data and the facts,” says Lowder.

Jim Kissane has been a consultant to construction firms nationwide, training individuals and organizations on construction “best practices” for more than 30 years. With the exception of some of the larger players in the industry, Kissane believes knowledge management is an emerging concept, which requires two types of knowledge—explicit and tacit. Explicit knowledge is more granular, can be articulated in a manual, and is the fine project details that trade-specific contractors use on a daily basis. Tacit knowledge is the organizational know-how that exists within the senior members of construction firms.

He says, “(Tacit knowledge) has been decreasing at an alarming rate because you have over the last 10 years many senior members of the firms that are preparing for exit through retirement or more recently because of layoffs.”

Kissane points to a few specific areas—such as, how to win a particular bid; dealing with government regulations; monitoring safety—that are typically person-specific. That person in your organization has spent years developing a knack for dealing with that particular situation, and if that person leaves, how is that knowledge passed on? Unlike methods and manuals, this knowledge doesn’t get passed along very often, but is becoming more important as employees retire or move on. According to Kissane, this is why it is important for the construction industry to consider knowledge management today, and in many cases technology can play an enabling role.

Christian Burger, president, Burger Consulting, www.burgerconsulting.com, Glen Ellyn, Ill., agrees saying, “If what they do, what they know, who they know, their expertise, so to speak, exists in a system—an ECM (enterprise-content management) system perhaps—and (it) is protected, (then) if they leave it doesn’t leave with them.”

Burger adds most companies likely already have some type of knowledge management structure in place.

“It might be on an index card. It might be on a Rolodex. It might be an Outlook email inbox. It might be in file folders in the back room,” says Burger. “They have knowledge management systems today, and the question is how efficient are they. Generally, the answer would probably be not very.”

While index cards may not be the most efficient way to manage knowledge, contractors can turn to technology to enable the capturing and sharing of knowledge across the entire organization. Burger believes contractors must first look at what is most important to save, store, and deliver, and then determine which tools can be used as a part of the overall knowledge-management strategy.

Burger says, “Then I think companies need to map out not just how they are going to deploy this technology, but how they are going to prioritize the knowledge that they captured and teach their people how to use what they keep.”

And most consultants, analysts, and experts agree the first step to putting a knowledge-management plan in place is identifying what type of knowledge needs to be captured. From there, you can identify what type of system would work best.

Smarter Solutions
Systems in the industry aren’t categorized as a knowledge-management application. But there are a number of solutions—from ERP (enterprise-resource planning) to ECM—that contractors can use to enable the process of managing knowledge.

“Most companies haven’t yet settled on any one technology or set of standards to help them organize, manage, and control the knowledge,” says Burger. “That being the case, I would say the likely platform for that information is the ECM systems that are now emerging. So I guess in some ways you can say that enterprise-content management is emerging and growing in this industry in order to, in effect, aid with knowledge management.”

Ed Anderson, principal, Anderson Technical Services, Apopka, Fla., specifically identifies a key element of ECM solutions—the ability to deliver knowledge instead of just storing the information statically on a CD or in a database. Enterprise-content management allows contractors to see how knowledge was gained.

A key component of knowledge management is being able to allow users to gain access and interact with the knowledge that is being stored.

Mark Federle, professor and McShane chair of construction, Marquette University, www.marquette.edu, Milwaukee, Wis., points to another solution that can help with knowledge management in the construction industry, one which is gaining a lot of widespread traction among contractors—Microsoft SharePoint.

“How do we go about capturing the content and then organizing the content and then presenting the content?” asks Federle. “For those that are strong Microsoft shops, you are clearly seeing a strong preference for SharePoint. You are going to develop it in that regard. For others, they are looking at document-management solutions.”

Federle believes it is very important that the knowledge be searchable. He says search technology has become stronger in recent years, meaning contractors can find the right information relatively quickly rather than going through a bunch of the extraneous information first.

While there are a myriad of technologies contractors can use, Kissane says, “When you think about it, it really needs to be something that allows you the ability to capture not only company-based information (but also) project-based information, which for example, if you are using something like a SharePoint or some other type of collaboration solution, it will give you the open accessibility ability and Web-based access, allowing everybody involved in the process to see what is going on.”

While a number of professionals point to SharePoint as a good tool for knowledge management today, Lowder of HGB & Associates says Web-based technology in general can help share knowledge.

In particular, he identifies CRM (customer-relationship management) as a key process where contractors need to manage knowledge because ‘the customer will always choose the company they believe knows the most about their business.’

“If you want to improve your effectiveness at gaining business and enhancing the relationship with your customers, improving your knowledge-management system might be a way of improving your competitive advantage with those customers … ”

One of the biggest challenges is the broad scope of knowledge management. While some companies may want to focus on CRM, others might need to focus on competitive bid strategies.

Burger says, “When you look at a heavy/highway civil contractor who has a lot of equipment and is bidding against 10 or 15 bidders on every job in a hard bid environment, well there is competitive information that they need and there (is) equipment information that they need. Now, these are data elements that a negotiated general contractor doesn’t really care so much about. So what they need in terms of their knowledge-management database is different. However, it is quite possible that both of them could use the same ECM system and the same tools to basically house and deliver that.”

Overcoming Challenges
When the time comes to implement a knowledge-management plan, there are a number of hurdles that can stand in the way. One of the biggest challenges in the construction industry is the reluctance to take the time to enter and manage knowledge.

As an example, Burger says, “If I go out to lunch today with a prospective client or contact, and I have a good lunch and I learn a couple of pieces of information, I store it away in the back of my mind because I know that in the future I may need it. Now, the school of knowledge management would say put that in a system. Put those notes in the system and index them properly. But with competing intrests for my time, it may be a challenge to follow through on this. The technology is there to capture all this knowledge, but the challenge is getting the discipline and the standardization within the organization to do it.”

This can particularly become a problem across the various generations, and the older generations—the ones that are the most reluctant—typically have the most knowledge that needs to be passed along the younger generations.

Kissane adds, “Older members of the firm and senior members of the firm that may still be getting secretaries to print out emails and put them on their desk may have a little bit harder sell when they are talking about the investment in this kind of technology, but it is that very element of that senior member that is in his 50s or 60s that is going to be looking at the door in the next two to five years. That is exactly the kind of reason why you need to do it.”

He says the education of upper management is key in being able to pass along knowledge using technology.

Knowledge Associates, www.k-a-i.net, Berkshire, U.K., outlines education as one of several critical factors needed to create a successful knowledge asset management initiative. Some of the key points of successfully educating employees include senior-management engagement and commitment, identification of the critical knowledge areas, a shared knowledge-management vision and strategy, a knowledge sharing culture, enabling knowledge technologies, aligned rewards and recognition, and measures to gauge the benefits.

Speaking to construction, Lowder agrees with the point that adequately educating people within the organization to understand the value of technology to this process is one of the key steps to developing a knowledge-management plan.

“In today’s time, the knowledge-management systems in most companies—even the large companies—have been primarily anecdotal and informal and exist with relationships between and among people within the organization,” says Lowder. “There are some natural inhibitors that are going on even if employees stay—that is one of the problems with the generational scenario in the construction space.”

He adds technology can be the solution that helps overcome that sharing of knowledge, saying knowledge management can still be somewhat anecdotal, but the process is based on facts that have been captured and can be interpreted on a regular and continuous basis to help improve contractors’ ability to interact with similar situations moving forward.

Another great concern in today’s economy is measuring the ROI of such systems. While some experts say there is really no true way to measure ROI because knowledge is a bit too ambiguous, others say you have to look specifically at what type of knowledge you are trying to manage, and then determine if the system is doing an efficient job.

As an example, Kissane says, “If you are talking about legal issues, you just look at what is happening in terms of the number of legal cases and how many of those go to arbitration and how many of those end up in disputes.

“Those are metrics that are very specific, very tangible, and very easy to identify. Yes, you have to make an investment in it. But the real question is, if you don’t and that knowledge walks out the door, what are your profits going to be like five or 10 years down the road?”

Companies that use technology to capture and share knowledge across the organization and throughout the generations will be able to improve a number of construction processes.

In fact, Knowledge-Management-Online.com, www.knowledge-management-online.com, a strategic partner of Knowledge Associates, outlines some benefits of knowledge management technology, including a dramatic reduction in costs, potential to expand and grow increased value and/or profitability, improved products and services, and faster response times.

Kissane says, “Building a knowledge library of all these different elements and artifacts makes it easy for you to capture that (knowledge) … We have more tools to do information analysis than we have ever had before. But the trick is we are trying to do it to build on a new kind of structure … that is we are creating a storehouse for the information about our organization and the way we do business.”