While the economic slowdown has curtailed construction, a California firm that sells software solutions for managing capital building projects is counting on the need to reduce risk to spur demand for the technology.
Meridian Systems, a Trimble company based in Folsom, Calif., provides construction project management software for organizations that manage large capital building programs. Because the projects involve high costs and considerable risk, the companies use a software system to manage their planning, construction and operating phases.
Brasfield & Gorrie, a Southeastern general contractor of healthcare and other facilities, selected Meridian’s Prolog software to standardize its project management process. Susan Watkins, Meridian’s director of marketing, talked about the latest developments.
NREI: What products are your specialty?
WATKINS: Our focus across all products is construction management. We really provide deep functions for companies that have to manage the construction process. We are experts at this. If they want tight controls on their projects, this is what we are known for — managing project budgets and project schedules.
NREI: What kinds of companies are using the software?
WATKINS: That could include contractors managing projects for owners but it also includes commercial building owners like a hospital or university — anybody who has to build infrastructure. There are a lot of customers in the public sector and state and local government. Target is a key customer of ours. They manage a couple of billion dollars in construction every year.
NREI: How has the economy and slowdown in construction projects across the country affected demand for software products?
WATKINS: You will see different impacts by market segment. With government stimulus programs for public infrastructure and voter-approved bond measures that pass, there will continue to be spending on capital projects. The need for technology will be strong, as well as the need in international markets. However, for small businesses that need to hunker down, technology spending will be de-prioritized.
NREI: How important is such technology in this economy?
WATKINS: The current economic environment only creates more demand for this kind of technology, because more than ever, our clients need to operate efficiently, reduce project risk, and make sure their people are productive. Those companies than can manage costs and business risk well, can positively impact their performance in a recessionary environment.
NREI: How has the industry evolved over the years?
WATKINS: While the roots of construction project management started out in the AEC (Architecture, Engineering & Construction) industry, with contractors, program managers, and engineering firms wanting a better way to manage the build phase of a construction project, today our marketing has evolved to also target building owners in both the private and public sector. Usually, construction and engineering firms use our Prolog software as a construction project management tool to efficiently manage a project as it is being built. Building owners began to demand a solution that would allow them to manage the entire plan-build-operate lifecycle for all kinds of physical infrastructure such as oil rigs and pipelines, retail storefronts, waste water facilities, and sports stadiums. So we introduced Proliance, our infrastructure lifecycle management solution.
NREI: What are your clients looking for?
WATKINS: Companies like Target that manage large capital construction programs, and healthcare organizations like Baptist Health South Florida need software that will help them ensure that the physical infrastructure they need to provide their goods and services to the market are delivered on time and on budget. Their three top needs are real-time visibility into how all their building projects are performing; robust and tight project controls to they can manage costs, schedules, budgets, contracts, cash flows; and consistent and automated business processes so that they can be more efficient, workers can be more productive and have audit trails for approvals.
NREI: Does a company need to be a certain size to use the products?
WATKINS: We provide solutions that serve the entire spectrum of companies, so we are able to provide business benefits to the smaller regional contractor, and regional hospital or school system, as well as larger global organizations that must manage more complexity, like the GSA (U.S. General Services Administration) and CB Richard Ellis, who manage large volumes of real estate and infrastructure programs.
NREI: What is the potential for growth in the industry?
WATKINS: The AEC industry has been slow to adopt, and many organizations still need to make the transition from using spreadsheets, faxed in documents, email communication, and various other point applications into centralizing all critical project data in one central system of record. Also, our infrastructure here in the U.S. is outdated and in need of repair and expansion.
NREI: How does Meridian's Prolog software help Brasfield & Gorrie improve its construction project performance?
WATKINS: I think for them it was having one system of record to capture all their critical product data. Once you do that, you are more efficient. You have consistent ways of managing projects across their whole organization.
NREI: How does the software help to improve a company's capital program?
WATKINS: If they have consistent management on all projects, they as a company can have better project performance. They can see what’s going on all of the projects because the information is in one location. Their executive team can easily create a report on that data. Also, their people can do more. A lot of companies have fewer resources doing more work and technology like Prolog lets companies do that, particularly for contractors. That is really important right now in this economy.
NREI: How much does the Prolog program cost?
WATKINS: It varies depending on the number of licenses the company buys. It is about $2,000 for one license, but the price will vary according to company need and how much they buy. A lot of variables impact the final pricing.
NREI: Can you provide examples of results achieved by other companies, using your software? For instance, has it reduced management costs or operational costs by a certain percentage? By how much?
WATKINS: We did a pretty comprehensive study earlier this year about the benefits and there is a hard ROI dollar savings and business efficiency-type gains and our clients experience both. Not only do they see improvements with the process timeframe but managing the change process as well. Again, the information is in one place and easier to find project documents and that essentially translated into significant dollar savings every year. Our study showed that on average customers saved over $200,000 a year. Some were much more and some were much less.
NREI: What are other solutions will you will be offering in the future?
WATKINS: We will be launching Prolog Connect, a new technology platform that leverages Web services to allow our Prolog customers to create better integrations with other software systems. That will enable better collaboration across project teams, both internally and with external suppliers and subcontractors.