Chief information officers discuss strategies to improve economic productivity at annual workshop.

The role of the chief information officer (CIO) within infrastructure firms is changing—from technology guru to more of a business strategist—with an increasing number of CIOs coming from the project-delivery side of the business. More and more, information technology (IT) is viewed as an enabler of increased sales and a driver for productivity improvements, knowledge retention, and other business functions.

These are two of the findings of 60 CIOs from the ENR Top 200 Design Firms who participated in the recent Sixth Annual Harnessing Information Technology Workshop held in Washington, D.C. The theme of the workshop, sponsored by Farkas Berkowitz & Company and Bentley Systems, Inc., was "Strategies to Improve Economic Productivity."

The workshop’s theme grew out of discussions at last year’s workshop on newly released data from the U.S. Bureau of Labor Statistics (BLS). The data showed a troubling gap in long-term productivity gains by architectural and engineering services versus other business sectors. To gauge the current state and future outlook of IT at leading architecture, engineering, and construction (AEC) firms, Farkas Berkowitz & Company and Bentley conducted a survey, the results of which were used to set the 2007 workshop agenda. (The full results of the 2007 Design Engineering Firm CIO Survey can be found at www.farkasberkowitz.com.)

The workshop began with an address by Norman Mineta, former U.S. Secretary of Transportation and former U.S. Secretary of Commerce. The next day, the CIOs listened to presentations and participated in discussions on the principal barriers to economic productivity gains and ways to overcome them.

In his opening remarks, CEO Greg Bentley reported a sharp inflection upward in economic productivity gains for architectural and engineering services, as revealed in the most recent BLS update. "We at Bentley have been very cognizant of the infrastructure community’s strong and innovative responses to engineering resource shortages," he said. "We are extremely gratified to see so many in the professions taking advantage of the business process and workflow improvements made possible through the use of advanced IT solutions. Moreover, we are quite optimistic about further and accelerating productivity gains."

In his presentation to the group, John McQuary, vice president of knowledge management, Fluor Corporation, an engineering, procurement, construction, and maintenance services company, made it clear that organizations need to focus on the results of technology implementations and their value to the business, rather than on the technology itself. Consequently, to best leverage IT, McQuary said organizations need to "align technology objectives with the business strategies, use the technology to support the global community, … integrate the technology into work processes, and use it to make better decisions earlier."

However, according to the workshop attendees, CIOs not only are becoming more important to the business side of firms, but also face new challenges. For example, rate of change in IT can easily exceed the human rate of absorption. Therefore, IT rollout rates in firms are currently limited by knowledge transfer rates, and training has become a key requirement for IT investment success and consequent productivity gains. While the cost per person in IT is holding steady or going down, the cost in hours of training and mentoring is trending upward within infrastructure organizations.

Brad Vaughan, senior vice president and CIO, Black & Veatch, explained that the training challenge is one reason why Black & Veatch, an engineering consulting and construction company, decided to outsource expanded IT coverage through a global IT strategic partner. The immediate goal was to enable IT to meet the growing demands of the company’s widely distributed global enterprise as rapidly and as efficiently as possible.

Vaughan added that by properly leveraging these outsourced capabilities, IT at Black & Veatch is becoming much more of a "strategy influencer," rather than simply "an order taker." In this elevated capacity, said Vaughan, IT is assuming the role of "business model innovator, driving business opportunities through services or by facilitating mergers and acquisitions."

Another challenge, according to McQuary, is that of bringing the IT systems of project participants together. "Early IT engagement is critically important," he said. "Sometimes there’s the expectation that all the systems will magically tie together for free, or that the infrastructure is free, or [there will be] no issue of licensing bringing all these multi-party people together." He explained that when all the IT groups get together, "that’s when innovative ideas and thoughts come into play." In short, "the answer is good when you get the people involved early."

However, he said, the gelling of IT groups and creation of innovative practices raise the issue of protection of intellectual property. "How do we protect [these new tools and practices] in a multi-party project? Does everyone have access to them, or just the parent company?"

A related challenge is the difficulty of securing sensitive client information while collaborating with other organizations. According to Mike Williams, CIO, Parsons Brinckerhoff, Inc., the IT director is often put between the project managers, who are eager to start team-building and network implementation, and the legal department, which is determined to get information-protection policies in writing. "We’ve got to do collaboration, and we’ve got to be secure," said Williams. Considering the tension between these two imperatives, the breakout group came up with a list of do’s and don’ts.

"A lot of the do’s were related to process issues. … Make sure there are clear guidelines," Williams said. "Make sure you establish what we call, ’Where is the fence?’ We’ve got to protect our client’s data. If the client gives you access to sensitive data, there’s a fence around that, and you can’t go there. … It’s not negotiable. You don’t talk about it. It’s a line in the sand. It’s a fence."

Other do’s and don’ts included the following:

• Do make sure your policies are written.
• Do set guidelines to work together.
• Do set and enforce the same rules with both new and familiar partners. The "cost" of enforcement goes down as you work more with a familiar partner.
• Do use the tools that exist for content management, logical access controls, data classification, and other ways to partition information. To use them right, there has to be process, structure, and rigor about how they are used: a prescribed, consistent, well-communicated way.
• Don’t leave security to some other organization in the project. Everyone should take ownership of security.
• Don’t assume that everyone knows the rules and is following them; education and awareness are essential.
• Don’t assume the risks are the same in all cities, regions, and countries. Try to get implicit understanding of the risks made explicit in a positive, collaborative way.
• Don’t let the "irrational exuberance" of a project manager make you lower your standards. Do it right.

"Finally," Williams said, "Don’t sacrifice security for collaboration, and understand that collaboration is essential."

Glenn Sakaki, managing director-execution technology for Hatch, a consulting, engineering, technologies, information systems, and project and construction management organization, addressed the unique challenges that distributed enterprises face today, including shortages of skilled people and other resources, shorter time to market, the need for global standardization, and work sharing—among an organization’s own globally distributed resources as well as those of joint-venture partners. In the case of the latter, Sakaki said the principal IT challenge is to "link all of these organizations together and work in a common environment to successfully deliver a project."

Yet another challenge, he said, is the need to be "very clear on the way we divide up work and standardize work packages. These packages must be global in nature, allowing our project teams to effectively execute work amongst different project delivery disciplines and via centers of excellence around the world."

His breakout group also took note of several trends among CIOs. "The business function requirement of the CIO is becoming more and more prevalent," he reported. Discussions at earlier conferences were "more focused on the infrastructure and service delivery side of the equation … but the topics we’re choosing now are more business-focused. … The trend is going up, and greater than 50 percent of the people in our group came from the [nontechnical] side of the business." In another increasing trend, 80 percent of the CIOs in the breakout group felt that they had direct impact on board-level decisions about IT investments.

Also, IT investment within the firms represented is now among their top three capital expenditures. After debating whether IT expenditures are going up or down, the group concluded that while innovations from IT vendors are bringing costs down, investments in IT are holding steady or even going up. However, it is a "cyclical process." Expenditures depend on what part of the acquisition, integrating, licensing, training, and maintenance cycle organizations are in. "Growth and global investment are two key drivers in IT investment," Sakaki reported. At Hatch, he said, the board had asked him how the cost per person in IT investment had changed in the prior year, and he was able to show that the cost per person was the same, despite rapid expansion of the firm.

Because of the increasing complexity of IT solutions, he said, "Training and mentoring costs are an increasing trend throughout organizations. … The requirements for rapid knowledge transfer and supporting systems are increasing significantly." One of the participants in Sakaki’s group commented that the technical rollout rate is "limited by knowledge transfer and training." Sakaki explained this meant that we could "deploy more technology to our people than they could absorb at any one time now."

Another trend identified at the workshop was that AEC firms often use new technologies ahead of client requirements. Fortunately, new employees (Gen Y/X) tend to be more attracted to companies employing new technologies, and IT is now regarded as a driver for recruitment.

The next annual Harnessing Information Technology Workshop will be held May 6-7, 2008, in Washington, D.C.

Anne-Marie Walters is global marketing director of Bentley Plant, Bentley Systems, Inc., and currently serves as a member of the Engineering and Construction Contracting Association’s executive board. Walters can be reached at anne-marie.walters@bentley.com. Christopher Frangione is managing associate of Farkas Berkowitz & Company, where he leads the firm’s market assessment practice. Frangione can be reached at frangione@farkasberkowitz.com.

Workshop topics and session leaders

Leveraging Information Technology to Improve Productivity—led by Jim Jonassen, managing partner, NBBJ Architects; John McQuary, vice president of knowledge management, Fluor Corporation; Eric Leveque, partner, Carollo Engineers; and Jerry W. Barnes, manager of global support organization, Bechtel Corporation

Managing the Distributed Enterprise—led by Glenn Sakaki, managing director-execution technology, Hatch; Brad Vaughan, senior vice president and CIO, Black & Veatch; David Richey, IT director, CH2M HILL; and Robert Bell, director of IT, GHAFARI Associates

IT Strategies for Alternate Delivery and Lifecycle Services—led by John McQuary, Fluor Corporation

Aligning IT Investment with Corporate Priorities—led by Glenn Sakaki, Hatch; Jim Jonassen, NBBJ Architects; and Janerie Wheeler, vice president, information services technology, Malcolm Pirnie, Inc.

Collaboration and Security—led by Mike Williams, CIO, Parsons Brinckerhoff, Inc.; Angelo Privetera, vice president and CIO, HDR; and David Richey, CH2M HILL