When Emcor Group CIO Joe Puglisi recently decided to upgrade his company’s version of Lotus Notes, he quietly “pre-deployed” it with a cross-section of his company’s business managers. He plans, he said, on using the favorable comments from that group to act as a sort of viral marketing to make the upgrade come as more of a customer desire than an IT demand.
Shortly before the Notes effort, his department recommended and then negotiated extensive cell phone vendor consolidation, saving “a couple of million dollars.” And yet, the IT department has no jurisdiction over cell phones or telecommunications.
When the company was looking at better ERP hosting options, Puglisi’s department was expected to add resources and handle it internally.
Instead, he declined the additional people and argued to outsource it, which was done. The project came in $300,000 under budget and was delivered 30 days sooner.
None of these moves is what would have been expected from the CIO of an almost $5 billion facilities and construction company. But then, that was the whole point.
Puglisi has made a career of going into large organizations and creating traditional technology infrastructures. Today, though, the veteran IT leader is trying to change the corporate culture of Emcor Group Inc., which is an amalgam of about 70 different companies.
The bulk of Emcor’s revenue has come from traditional construction, which Puglisi readily concedes is not an especially tech-friendly environment.
“On a job site, if the computer goes down, someone is bound to notice within three days,” Puglisi said, adding a quip that the last major tech advances in construction came from a pharaoh.
But Emcor is starting to change, with less growth coming from the construction side of the business and more coming from facilities management. The facilities management side uses a lot more technology and is likely to see huge growth, as companies try to cut energy costs. If those efforts work, Emcor could quickly morph into a company that needs to rely very heavily on IT.
Jeffrey Beach, an infrastructure analyst with Stifel Nicolaus & Co. Inc., tracks Emcor’s stock and financial performance and said that energy control is crucial to Emcor’s growth—and IT is crucial to energy control.
“They’re saying, ‘Let us come in and manage not the real estate but the systems in your building: mechanical, which includes air conditioning and heating, and the electrical and energy,” Beach said.
“The energy portion is going to be growing, with energy prices moving significantly higher for heating and probably inching up for electric as well. Emcor would try to control operating costs for a building, and IT is going to become more important, too.”
Beach said technology will figure critically. “The IT is absolutely part of it. It’s a crucial part of their pitch to get in front of someone at the multibillion-dollar corporations,” Beach said.
Puglisi agreed. “From a technology perspective, we’re a company that is very much in transition,” he said. “Today, IT is not considered something that can drive the business. In facilities, we absolutely can be a driver.”
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But because of Emcor’s traditionally non-tech culture, Puglisi’s IT department today is much smaller than many similarly sized counterparts. To support 26,000 employees worldwide, Puglisi has about 75 IT people. For a corporation that reported almost $5 billion in revenue last year, its IT budget was small, just $3 million. That amounts to a little more than one-twentieth of 1 percent of Emcor’s total revenue being dedicated to IT.
To put that into context, InfoTech Research Group has reported that banking and finance companies tend to spend about 7.5 percent of their revenue on IT and construction companies spend about 1.1 percent. Gartner Inc. has reported that “leading-edge” technology adopters spent about 11 percent of their revenue on IT, “mainstream adopters” spent about 5 percent and “conservative adopters” spend about 3 percent.
To be fair, though, Emcor’s IT budget may not be as tight as it appears, because Puglisi is also trying to liberalize what is considered an IT project and paid for by IT.
“We don’t believe in ‘IT projects.’ There are no IT projects here. We don’t own anything, nor should we,” he said. “For example, we did an enormous forecasting and tracking system this year. It was funded by accounting, not using IT dollars. If you go to senior management and say that you want to spend a million dollars on a forecasting package, you have to be realistic. I’m hesitant to say that we should rush in with some new technology and say, ‘This will solve your problem,'” he said.
Puglisi is tackling what the industry calls IT alignment, as he tries to prove that IT can be a strategic focus for a company that never before needed to make it a priority.