Building Smarter Projects Episode 3: Technology in Construction

At Enerfab, we are constantly exploring smarter ways to build and deliver projects. As the industry changes, we adopt new tools, implement emerging technology, and leverage our people’s experience to bring predictability to our customers.

In our third episode of Building Smarter Projects, we discuss the tip of the iceberg that is Information Technology, focusing on cybersecurity, data transparency, and how we implement new tools to build smarter.

Our teams deliver excellence, safety, and ingenuity on your projects no matter where we operate. By partnering with our prefabrication and modular capabilities, we can deliver projects SMARTER, faster, safer, and more efficiently.

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Brad Birck (Chief Growth Officer): The tip of the iceberg comment I think is interesting as you talk about, you know, hey, you can see this little piece?

I think I tease like that in general, right? Like, your help desk is kind of like the tip of the iceberg people see, and I talk about this all the time, for those that don’t understand what happens in that world.

365 days of the year, you keep everything up and running and moving. People only recognize that the 30 seconds something doesn’t work and they want to know what happened. You know, I think it’s kind of…there’s so much below the surface that’s going on every single day.

[Music]

Brad: I want to welcome Rajesh Kapoor to the episode. Hi, Rajesh.

Rajesh Kapoor (Vice President of Information Technology): Hi, Brad. So, first of all, thanks for inviting me to this podcast. Really excited to come here and share the ideas and the new technologies, things we are working on for the company. There’s so much going on.

So, in IT, traditionally we do still the traditional work of doing the help desk, support desk, making the communication happen across the company, connecting the job sites, doing the DR systems, backup recovery.

On the application side, we talk about all the SAP supports and enhancements, business intelligence, SharePoint, and those type of support services. But, what is new for us, is we are doing these services with the new technology in mind and in complete alignment with the business strategy. So, what has happened over the period of time that my role and IT has changed from a technology gatekeeper into more of a growth enabler?

Brad: Yes. I think that’s exciting, and that’s, I think that’s a big reason why, you know, we focused on, kind of, where we’re headed and bringing, I know for a while there you talked about anything that you developed, you wanted it to be mobile-first. And, I think we’ve evolved that now to field-first. And so, I think with some of the things we’ve done around here, it’s like, how do we get information in the hands of the people in the field that need it and into our customers’ hands?

And, I think one of the things that we’ve done recently that has allowed for that is a very successful ERP upgrade. Maybe talk a little bit about, I mean, you’ve been through several ERP upgrades. I know people out there listening, you know, often shudder when they hear the word, you know, “ERP,” “change,” “upgrade,” anything like that. You’ve been through a number of them. Why was it important for us to do it at this time? And how did you, I mean, by all accounts, extremely successful implementation. How did you manage that?

Rajesh: So, let’s talk about why. I think that’s a big question. So, we went with SAP live with 2009.

And if you look at a time of 2009, 2010, when we went live with the original SAP product, there was no cloud. There was no mobility. Mobility was their little bit of the iPad coming into play. There was no role of, if you look at the communication between the software, the user interface, at its best, was not there. So, all of a sudden, between 2009, 2010, into 2022, there had been a huge change in the marketplace.

We all noticed that all these new market forces came into play. So, when you look at SAP, you can think about SAP as a big ship moving forward with some kind of a grit. And what has happened is that we were not able to use these market forces, which make software like SAP like a sailboat.

So, these market forces allow us to use new technology and make SAP software more like a sailboat where we can navigate easily. So that is the reason how to use cloud, mobility, new user interface, software communication. That’s what led us to this direction.

Brad: Okay. And so, SAP is our ERP system. That’s the backbone of all our financials and things like that. What was this implementation going to HANA? Like everyone hears about HANA around here internally. What does that really mean?

Rajesh: So, where our data was sitting was with the third party here in Ohio. And, the big change we were trying to make is take this data from our privately owned data center into a hyper-scaler. And that is the biggest change because once your data is done in the hyper-scaler cloud environment, then you can actually do a lot more things which are happening overall in the marketplace.

Brad: Yeah, I hear it. So, this is like the on-prem versus in the cloud, right? I mean, I hear a lot about this. And in our decision to move from on-prem to the cloud is what you’re describing. It gave us so much more flexibility and scalability.

Rajesh: Exactly. Exactly. That was the whole idea. And how do you use the innovation happening in the marketplace? You think about Amazon Web Services, Google Cloud Platform, or Microsoft Azure. There are these big three hyper-scalers and where all the innovation is happening. So, that made perfect sense for us to move from on-prem third-party data center into public cloud. And now, in our case, even though it’s a public cloud, we have our own area carved out.

So, it’s a private cloud addition in this hyper-scaler. So, our data is not being shared with anyone. We have a private cloud inside these hyper-scalers.

Brad: I mean, I’m sure one of the initial things as you were evaluating this was security, you know, moving it out of our servers, you know, here on campus. How did you get comfortable with that?

Rajesh: So basically, we went through a very thorough examination on…What kind of software security does Microsoft Azure provide?

And they checked all the boxes as far as the security is concerned. The physical security, the security on updating the servers timely, because they have this fleet of engineers who are constantly monitoring our servers. So, if there is a patch there, we don’t have to worry about it.

Brad: We use that to do that ourselves?

Rajesh: Exactly, that is the biggest change.

Brad: Gotcha. So, if you’re maybe, you know, midsize or maybe a smaller construction company, you know, you would say, “Hey, if you don’t have a large IT staff, you should really think about being in the cloud because the level of service and the attention that you’re getting automatically?”

Rajesh: Absolutely. And, also, the administration, which we used to do manually has gone into the hands of SAP. So now we don’t have to focus on server or admin. We can focus on what it matters to the business, what it matters to the construction and then our company more with the technology it needs at this point of time.

Brad: So, what do you think that people need? What have we done over the last year to deliver information in the hands of our customers and into our people in the field?

Rajesh: So that’s a great question, Brad. That whole HANA database and S/4HANA system opens what we call the REST API. So, if you want to talk to a customer third-party system, if you want to talk to an interactive voice response system, that system opens it.

Brad: Or, I guess a lot of other construction technologies that are being invented out there, it allows us then to explore other technologies and allows it to fit into our ecosystem, correct?

Rajesh: Exactly. That’s what it does, too. So, where you have our document control system, where all the customer drawings are coming. Now, how do you take the drawings and pull it out of that system and bring it to maybe into SAP if you want or make it into the, what we call it, is our data or cloud AI platforms.

So now you’re basically at one place where you can collect all the information from diverse sources and bring it together for our next use, whether it’s analytics, predictive modeling or AI.

Brad: So, Rajesh, as we undertook the big S/4HANA implementation, so we’ve had SAP for a number of years, we did that big ERP switch and upgrade, you were a part of that, obviously. And as you talked about earlier in the episode, it was necessary for us to move to this S/4HANA platform to allow for mobility and analyzing more data/all the stuff that goes along with it. That process you mentioned took about nine months to do.

How did you manage internally? You got to run a current system and then you’re moving to this upgraded system. And there’s like, a lot of change that comes with that on the back end. So how did you make sure that we were rolling that out effectively, that we handled that change management in a way that didn’t stop the business? I mean, you know as well as I do, if we miss one paycheck to a union employee, you’re going to get a grievance.

And we had zero…zero issues at all, which is unheard of in my mind. I mean, I talked to a lot of people in the industry. That’s something that you should be very proud of because it doesn’t happen very often. So how did you manage that? How did you tackle that?

Rajesh: Great question. I think the team is the biggest part of it. And a lot of planning went into it.

So, as we are running our business, what we did is we raised four different servers on the HANA side of it. And, we did a four-level of very detailed cycle testing. We took all the software, we upgraded it, we fixed all the programming changes because of the HANA, and then we went to the next level. We tested in a quality system, then we built/tested in a pseudo-production system. And, to make this whole change successful, we actually did a mock conversion.

So, all of our month-end process (and you know how month-end is important to us), the revenue recognition is such a critical part. We did a complete mock conversion a week prior to the live production. And when it comes to the change management, which is such an important aspect of it, the training took a lot of time. So, we have dedicated people from each regional office being kind of our train-the-trainer type thing.

Brad: Champions.

Rajesh: Champions. They understood the software. They understood the change. And everybody went through a decent amount of training on how the new system looks like, where the changes are, what to expect. And when the big day came in, the timing was perfect. So, we did it right before the Thanksgiving weekend.

Unfortunately, some of the IT and the business people had to work through that time. But that was a perfect time, when the business pretty much was not happening. We took that opportunity window for four days, and we did the complete conversion on the fourth day. So, when we/everybody came on a Monday, the system was ready to go. People were trained about it. They knew what to expect and the change. And then there were small password-related hiccups, which we were ready to do. And we deploy a lot of people on the help desk to answer those questions. So…

Brad: I remember that you really beefed up the staff. Hey, if there’s any calls, we’re here.

Rajesh: Absolutely. And then a lot of people in those regional offices and job sites, they supported the business. Shop-floor systems worked as they expected because people were aware of what to expect. And if the things go wrong, who to call and what change can be expected.

So, I think we as a company spend a lot of time and energy on that change management training and the expectation were set right before we go live. So, I think it’s just a great teamwork there.

Brad: That’s awesome. Very successful project. So, this was a necessary change for a number of reasons. But it is now, because we took those steps…it set us up for all kinds of advancements, allowing us to use different kind of tools in the marketplace, take that data and look at it in different ways.

We’re able to crunch just such a vast amount of information whereas before, we had some limitations on that.

So, I think it’s exciting the way, now, we’re thinking about our data in a completely different way than we were. Now, you did a nice job early on, you know, as we talked about, you know, setting up fields and making sure we were tracking and things like that. But now that we have this tool, we can have things looking at it differently and seeing correlations and connections that we never really even thought about.

Rajesh: Yeah, that’s true. So, let me give you a great analogy here. Think about any software solution as an iceberg model. You have things which are visible to you, and there’s whole things of things which are underneath it. So, in our case, our long-term thought process, our mental models or beliefs are: Cash is the king. Or, in your case, you always talk about transparency to the customer.

Right. So, let’s talk about the cash situation here first for a second. We know that we have to take the advantage of vendor invoicing and cash discounts. Before we went to S/4HANA, we had no way to look at how much cash discount we are leaving on the table. Now, that is the part which is visible — that we are not getting the cash discounts. That part becomes very much visible with S/4HANA, but if you look at the underlined architecture of that, how do you fix it?

That’s where the robustness of these ERP systems come into play — that we can implement a vendor invoice management system. The invoice can come from vendors, which was pretty much going everywhere before that. It is going to the job sites, going to the regional office, is it now, it’s all coming into one place. It hits the inbox, and from there (depends upon what you need). Do you need it to send to the job site for approval? Or it’s a no-touch, straight to the accounts payable.

When these underlined architectures allow you to do that, you can actually make use of these things, and cash discount is a great example.

Brad: Well, I can think of so many, I guess, advantages that come out of just that single solution there, when you talk about being able to pay your vendors faster, being able to get the customer the information they need quicker, not bogging down 20 people within our internal organization, passing things back and forth.

I mean, it’s natural when you have a large organization. Bills go to the wrong place, things end up in the wrong spot. And it takes someone a while to figure out where it belongs, in this situation, in this new system, that’s all handled.

Rajesh: Exactly. So that’s the reason we, as a company, invested in these advanced software, so we can make use of all the advanced technologies. The OCR, which makes all this invoicing work — that’s at the center stage of it. So, we, as a company (our accounts payable department, our finance department, our vendors), came into play all together as a team, as a part of this implementation, and along with this S/4 successful, we had a very successful implementation of the vendor invoice management.

A lot of companies I have talked to are struggling with putting that thing in place, so I think I am so proud of what our team in the S/4HANA implementation, our end users who came to participate in the testing and everyone who participated in this thing. The complexity is to the next level. So, think about in S/4HANA implementation, it’s a nine-month implementation. We were dealing with SAP consultants from nine different countries.

Time zones, language barriers, plus on top of it, because the underlying change was such a big change that we had modified close to 2000 programming and tables to make this whole thing work. But in the end, it was all worth doing it because now we can see the results in terms of the cash applications and other applications.

Brad: And that brings me to thinking about, like, cyber security and what we’re doing around that to make sure that we’re keeping not only our employees and our information safe, but also our customers’ information safe.

Rajesh: Yeah, absolutely. So recently, we had been working with a couple of very good partners in the area driving this innovation around the cyber security and we have put in place for endpoint security. So, the endpoint could be your laptops, it could be your phone systems, it could be your iPads, and also your server-level security. And then, you put the sensors on your servers and your endpoint. So, if anything malicious seems to have been happening, we get the alerts on it.

We also put multi-factor authentication. And now, from the multi-factor authentication, we have to go back and advance into more like an app-level authenticator. So, our idea is that nobody should be able to get into a system, whether it’s at the Windows level, at the emailing level, or at the application software level.

So, we take that security very seriously, and we have taken a lot of measures to keep customer, employee, and vendor data safe.

Brad: You know, you talked about the rest APIs and the way we’re able now to talk with our customer systems and things like that, and we obviously have a large part of our business that is a TNM billing. And so, you’re talking about, you know, daily timekeeping, large volumes of information, and everyone needs to know where their job is.

Talk about what we’ve been able to do as far as creating dashboards, not only for our employees, but for our customers — how we’re sharing that information, how we’re being transparent, and how we’re trying to get that in the hands of our customers faster, quicker, so they can make better decisions.

Rajesh: Yeah. And Brad, this is close to your heart. The transparency and the ease with which customer connects as the data is got a great importance for you. Just being in your role as a Chief Growth Officer. And that’s what we bring it to the marketplace.

So, what I think that what we have done in the TNM marketplace…we have raised a bar for ourselves, and I would say that we have raised a bar for the entire industry, the way we brought these tools to the marketplace. The biggest thing which excites me about this is that we can talk to the customer systems, to the rest API, and exchange the information. And now, not every customer is the same, so some customers don’t have that level of sophistication.

So, what we do on the Enerfab side is we open up our system to the customer through a website, and the biggest part is that customer can actually look at where they are in their spend, on their cost, on a release level, on a project level, and as low as a work-order level.

So, they know exactly where they are spending the money so they can move the budget. What it does for us from the Enerfab side is because customers can get the information almost three weeks to a month before an invoice hits them. Think about that — how much more useful it is for a customer to know that they are going to go above the budget on a work order or a release, or they can save the money on this work order and they can move the money to a different place.

And when that happens, the changes which normally occur in a construction industry, that customer is moving the budget at a later date — that all goes away. So, the changes are so minimal at our level that our payroll changes actually get reduced in the same process.

Brad: Wow, and ultimately, that means we can deliver for our customers more efficiently and lower costs. We continue to kind of invest in these tools to make sure that we’re staying on the cutting edge of…you know, T&M isn’t like a, you don’t think of that as like a sexy part of the business, you know, just doing timekeeping, but there’s so much involved with that and so much process and so much chance for air, so much chance for delay in the process. And we’ve lived it, and nobody wants that. We want to be able to give our customers information quickly. We want them to know exactly where they’re on their projects so that they don’t have any surprises because surprises aren’t good for either one of us. We don’t make money on surprises.

And so…and then we’re on the back end trying to figure it out with them. How do we, you know, how do they pay us for things? How do they still take care of their needs? This way, they have the information. They’re making real-time decisions.

They can shift budgets on the fly during a critical outage if they need to. If they have a piece of equipment under inspection that suddenly needs a lot more work than they realized before we opened up the equipment or whatever. They can make those decisions now. We can be part of that process and we’re enabling them to be able to make those right and smart choices.

Rajesh: Absolutely. I think that’s the biggest part about that. The customer gets so much advantage to coming to these places. Now, you can always enhance. Once we have this platform for the customer, we can deliver them the invoices. We can deliver them the MTR letters. We can deliver them a lot more information. Get logs.

If people are not happy at what time the employees are coming as a part of our transparency, as people come in and we have these advanced tools in clock-in-clock-out system, our in-built tools, whereas people come inside the company, we can actually know exactly what time they come in, what time they left. And if the customer wants to see that, those logs would be available to the customer on the website.

So again, transparency, accuracy, and us and the customer on the same page. When it comes to the cost, it’s right there.

Brad: It’s an interesting…I want to talk maybe back up a little and talk about construction in general. We’re never really known for cutting-edge technology. We joke kind of like, I think there’s an old joke about Cincinnati. Mark Twain said, “You know what? Cincinnati is 10 years behind the rest.” I think construction’s in the same boat, right? If banking industry is working on something, or healthcare is working on something, it takes a while for that to make it to the construction industry, historically. But I don’t feel like construction’s like that anymore. I think that there’s so much need for these changes in technology, and people are wanting it, but part of the problem is as you go to these new job sites and you’re building a greenfield site, it always seems like the internet is the last thing to go in.

Well, all these tools that not only we want to drive efficiency and transparency and productivity and safety and all the things, our customers want it, too. Yet, for whatever reason, it seems like the internet’s the last thing to get installed on these sites. So, we’ve had a heck of a challenge, and I think it’s been a universal industry challenge. Talk about how we’ve kind of mitigated that through the use of Starlink and how that’s kind of changed the way we’ve been able to deliver information to our job sites and to our customers.

Rajesh: I think the Starlink’s had been such a great innovation, and we basically went into the wait listing. So as soon as they opened up, we kind of signed up for it.

Brad: I remember we were shooting emails around, “Did you hear about the Starlink thing coming? We got to get on the list.”

Rajesh: And we did. And we were one of the first companies to get the Starlink. So, the innovation had been so powerful and so meaningful because as the cybersecurity comes into play, the owners are becoming more restrictive to giving access to their network. And if they’re giving access, it’s being shared with 10 different other contractors on the job site.

So, for us to move forward, an innovation like Starlink had been so great. And we basically, with Starlink, what used to take three months itself for a big telecom company to show to the job site and then start from there, it’s a two-week process now. These Starlink satellites don’t even come to our corporate office in Cincinnati.

We drop ship at the job site. They plug and play, and they’re in business, and the cost is one-fourth what we pay. And, the innovation has been so great that we can launch more products to the job site, accessing the drawings, accessing the SAP SharePoint, and all construction software becomes so much more viable and easy with Starlink. It’s just been an amazing journey there.

Brad: Right. It goes back to…kind of…our mission field-first, you know, getting this information in the hands of the people that need it. And why we do that — it’s like there’s so much time wasted on job sites, walking back to the office, looking up information…How do we get it in their hands quickly? How do they see the updated drawing immediately?

I know we’re making a major investment in Procore. You know, that’s probably going to be a big help with us in delivering those documents, you know, in a mobile application to the field first. You know, with this power, with this technology, with all the advancements happening, obviously everyone’s talking about artificial intelligence, AI. Is it rag age, AI? Is it gen AI? You know, we’ve learned so much in the last two years. How do you think AI is going to affect, shape, change the construction industry? And what are you thinking about it?

Rajesh: So, like everyone else, we are also trying to explore what AI can do for us and construction in general. The good part with that is that we made some progress in that area. So, I think the biggest change it is going to do is, once you get to the right platform, it has a lot of things it can do for you. The number one which comes to my mind is, for example, Google and Google’s Gemini and Google’s Vertex AI. They have these great tools called Document AI. So, you can take these drawings and run through this and get information out of these drawings, and then you can use that information whichever way you want. That’s one part of it.

The second part on AI, especially in these machine-learning models, is that if you look at it, we have the data for whether it’s a firm price or a TNM job, whether it’s a procurement or the billing. We have all this data stored in our database, so can we run this data through these machine-learning models and do some predictive analytics on it? That’s a huge part of it. We can predict if the project is going to be late, is going to run over cost. When we would need more labor, what type of labor would be needed as we go along with that?

Then the third part, and this one is a computer vision. So now there’s a concept of multi-modal. Earlier, you would do a text-to-text. You write something in ChatGPT, it’s going to reply back to you, but if you go to ChatGPT now, you can say, “Draw a picture for me, or create a video for me.” It’s text, it’s video, and it’s picture, together. So now imagine that we can take the video of a job site and run it through an AI model and try to find out if the people are following the right safety protocols or not, if they are wearing the hard hats or not, if the safety goggles or not, or anything related to the safety can have a huge impact running these videos generated through the AI.

Brad: As we keep exploring this — and a big piece is getting our data in the right spots and organized, you know — I know you’re spending a lot of time around, kind of, our data strategy, which lends into a lot of this. But a lot of these tools and the HANA upgrade is allowing you to think that way now and explore those type of things.

I think that, you know, getting information quicker, it’s the things, you know, for all kinds of conversations around this. Some people are obviously worried AI takes away jobs, but what I think it can do is take away the meaningless stuff. The stuff that nobody wants to do anyway that’s necessary. You know, those mundane tasks, those things that take time, it’s the search, it’s the comparison, it’s the finding the information that you’ve already thought and written before, accessing it quicker.

And then, like you said, looking at things differently, making analysis and connecting dots that maybe we had concepts around or maybe kind of thought about but didn’t really know. And it’s kind of shedding a light on different things.

So, what do you think is next for us from a technology standpoint?

Rajesh: Yeah, I think that that whole data strategy of building a very robust team of people with the right skill set. Once that is there, then quality of data is important. We will work very closely on how to do the quality of the data. That’s extremely important. Choosing the right platform is the most important thing. And you and I had several meetings with so many other people, and picking the right platform — that’s an important part. But when that’s all said and done, what it’s going to do for our users is that they would be able to make the decisions from that data.

So, what we call is a data-driven decision that’s going to come into the hands of people. That’s going to be one most important thing. And then…

Brad: What’s a simple example of that? Like someone in accounting could type in and get some…give me some sort of example?

Rajesh: So, the data-driven decisions is that let’s say you want to know when I build a customer last. Now, first of all, can you rely on that information? So, when the data comes from this ERP system, your scheduling system, can people rely on that one? So, once they are comfortable and say, “Yeah, this data is right,” that’s going to build the data culture in the company.

So, from IT side, it’s our responsibility to make sure that the data which is going into the hands of the user — whether it’s a data through a very fixed report, it’s a data through BI platform, or it’s a data through a generative AI — if that data is accurate, then user can actually rely on the data and make the decisions based on that.

Brad: I was just sitting here thinking, you know, if you’re not from our industry, and I don’t know what people think, because I just lived it my whole life. But I mean, my gut is they don’t think about IT, they don’t think about technology 100% when they think about construction.

I think people will be shocked to understand our technology stack — right, wrong, or indifferent. You know, how large is a, you know, mid-level construction company’s technology stack?

Rajesh: It is..it is pretty large. Now, in this conversation, if you talked about, we talked about Azure, we talked about GCP, we talked about Procore, we talked about Premiere P6, we talked about SharePoint, we talked about Exxon, SAP, Salesforce…you name it.

Brad: And those are all the things we use on a daily basis. We want them all to talk and we want the data to be accurate in the systems.

Rajesh: And that’s the hardest part.

Brad: My gut is just like, if you were from the outside, you would just be shocked to hear that.

Rajesh: It’s just too much data. And then on top of it, you bring the mobility, you bring the iPads. What has happened in our company? And I’d like, we try to keep up with, with the pace and a little bit ahead of the curve, if you think about it. In last three months itself, our IT department has issued more than 100 iPads to different field jobs.

Brad: In just the last month?

Rajesh: Yeah. Just on our big projects. It’s just how much technology we are moving out. So, then the burden back on us is to track those assets. Make sure that if they are lost, the data is wiped out from there. So, the technology adds more work just to keep it safe and secure. So, it just keeps adding to our portfolio.

Brad: I guess it’s good job security. That’s one way to look at it.

Rajesh: Just serving the customers and then just making the company safe. Yeah.

Brad: Um, I really enjoyed our conversation today.

Rajesh: Thank you very much, Brad, for having me on this one. So, I would just close one thing before we close this podcast is…is that, um, we are working on a very modern data platform. So, a takeaway for our listeners and viewers for this is we are working on some very advanced technologies and a modern data platform, which would allow our company, uh, and across the board within the company, different parts of the organization to make the data-driven decisions. So, I’m very excited for that. And again, thanks for, uh, for the chance today.

Brad: Well, thanks for being here.

That wraps up the latest episode of Building Smarter Projects. We hope you found it insightful and please tune in next time. Thanks a lot.

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