The New Reality for Customer Engagement
Corporate Headquarters | San Mateo, Calif.
Year founded | 1971
Top IT Exec | Gregg Davis, senior vice president Webcor Technologies
IT employees | 19
Revenues | $1.152 billion in FY 2001, down 24.6% from $1.528 billion in FY 2000
Sure, earthmovers still dig out the foundations, hard-hats still haul two-by-fours, and heavy machinery still hoists steel I-beams high into the air. A typical construction site, right? If it belongs to Webcor Builders of San Mateo, Calif., don't be so sure. High-speed Internet connections inside Webcor's job site trailers and Palm computers hooked to the belts of some construction workers do even more of the heavy lifting. Each device and high-speed data line is linked from the field to Web sites created especially by the construction company to help manage each of its building projects in real time.
Webcor's use of information technology has put it at the bleeding edge of change in the $3.5 trillion global construction industry. The company uses wireless devices and customized software to connect the dozens of partners on a construction project, and help them know in seconds, for example, if a steel shipment has been delayed or a heavy thunderstorm is idling workers at a remote job site. At any one time, Webcor has 40 or more Web sites active for each of the jobs it manages.
Construction isn't known for being a tech-smart business, but Webcor offers up one of the few examples of digital project management in industry today: Architects, engineers and electricians located in far-flung locations now have immediate access to each other and to complex drawingsand can make incremental changes as a project progresses without adding costly delays.
Sure, construction crews everywhere now use mobile phones and computers back in the home office. But Webcor's technology innovations go beyond the norm. The company named in 1971 not for the Web but for the initials of its founderswas one of the first to use information technologies to change the way buildings are built. The company continues to use databases, custom software and strategic alliances with technology partners to redefine what it means to collaborate using networking technology. Says Martin Fischer, director of the Center for Integrated Facility Engineering at Stanford University: "Webcor has made the importance of sharing data electronically very clearand it's changing the mindset of the industry long-term."
Webcor's goal, though, is all about the bottom line. Rising labor and materials costs have spiked the price tag for building materials by one-third, on average, between 1995 and 2000, and labor costs by 20 percent, says CEO Andrew Ball. While the recession has caused materials costs to drop by 10 percent, labor costs are locked in by union contracts. In an industry where profit margins are 2.5 percent to 10 percent, the pressure to cut costs remains strong.
"The name of the game in a climate of constant cost-squeezing is doing what you can to boost your productivity," says Ball. "You've got to innovate to survive." Webcor can use e-collaboration technology to cut construction costs by up to 4 percent, Ball says, and save about $12,000 per month in lower overhead costs and worker downtime.
Time savings also can be dramatic. When Webcor accepted the job to build the Serrano Hotel in San Francisco, Ball thought it would take 12 to 14 months to finish. But by signing up subcontractors willing to use Webcor's e-collaboration technology, Webcor was able to speed architect approvals and crunch job hours to work more efficiently. In the end, it took Webcor just 10 months to finish the hotel, which translated into more than $100,000 in savings for Webcor in overhead and some $1.5 million to the Serrano's ownersbecause they were able to open for business a full month earlier than expected. Another Webcor customer, John Igoe, vice president of real estate at Palm Inc., estimates that Webcor was able to reduce the design development stage of the Palm campus in Silicon Valley by 15 percent. The ability to look at blueprints online was particularly valuable, Igoe says, because the project's design leader and landscape architect were located 2,500 miles away from the project's architect and Webcor.
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