Building industry needs XML links to meet deadline for online tenders

Antony Adshead discovers that construction companies have yet to develop the technology needed to bid for public sector contracts...

Antony Adshead discovers that construction companies have yet to develop the technology needed to bid for public sector contracts online.

Construction industry IT directors have been warned that they need to develop XML technology to meet government standards and communicate with public bodies online.

The E-government Interoperability Framework (E-gif) standard defines technical specifications to allow electronic communication between public sector bodies and their suppliers. It is core to the Government's aim of making all public sector services available online by 2005.

The implementation of E-gif in the construction industry will enable tendering, planning, procurement, regulation, invoicing and other business processes to be conducted online.

Ovum analyst Neil Macehiter said that IT directors in the sector need to become "facilitators" in dealing with the business to determine the best way to represent business documents in XML to comply with E-gif.

While construction firms are not the only ones affected by the requirement to comply with E-gif, getting the sector on board is crucial to the initiative because the volume of public sector construction work runs to several billion pounds a year.

"Developing XML schemas is not, by definition, something that can happen in isolation. Government needs to work with the construction industry to bring about development. IT directors in the sector need to make sure that they have the infrastructure in place to comply with E-gif's XML requirements and push those specifications down to their suppliers too," added Macehiter.

Industry IT watchers are worried that E-gif may fail or construction companies lose business if it is rushed through without proper consultation.

John Prewer, IT director of construction, plant hire and property group Birse, said, "It is on my list of things to look at - I heard about it at a conference last month but I have a low level of awareness of the issues at present."

David Bentley, managing director of construction IT consultancy Netconstruct, warned that while the leading players may be have the resources to effect a smooth transition to online dealings with the public sector, the bulk of the industry could be left behind or prove an obstacle to the success of the initiative.

The top 10 players only account for about 2% of construction work each - the rest of the market is covered by regional players, so getting them onside in such an initiative as E-gif is vital, said Bentley. "Construction companies are unready and are not natural adopters of IT. They are deeply involved in cost-control and have developed closed channels up and down their own supply chains. Implementing such an initiative across a very disjointed sector will be extremely difficult," he said.

Besides the headache of complying with E-gif, construction companies battle with consistently low profit margins - averaging in the region of 1%.

Director of the Construction Industry Computing Association Eric Winterkorn, said construction IT departments are helping to boost profits and productivity by integrating IT systems and automating the flow of information between them.

"Construction companies are aiming for total integration of information systems so that when data enters the process it flows all the way through to produce on-time, on-budget, and defect-free buildings," said Winterkorn.

But this easier said than done. Construction firms have vast data requirements, including complex tender documents and processes, environmental regulations, links to suppliers of materials and subcontract work.

Suppliers often underestimate the data needs of construction companies, said Winterkorn. "We get IT companies offering such things as network provision and all sorts of promises about service levels. Then when they see the level of data which needs to be moved when drawings are being worked on they are taken by surprise and service suffers."

Birse invests in thin-client technology
Construction company Birse has invested £450,000 in thin-client technology aimed at facilitating easier flows of information out to numerous remote, temporary building sites.

The company, which has a turnover of £400m a year, is piloting the technology at a site in Newcastle before rolling it out nationally to the 60-80 sites per year that Birse operates.

Head of information management and technology at Birse, Andy Chipps, said, "We set up and dismantle on average five construction sites per month, with sites remaining active for between six months and two years, so we are moving equipment on a regular basis.

"The sheer volume of paperwork across the company means that any impact the IT support team can have on the document management process should lead to significant improvements on the bottom line," added Chipps.

The architecture, which is being put in place by consultancy Esteem, will comprise Microsoft Windows 2000 and Citrix Xpe software running on Wyse thin clients.

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