CII Emerging Trends Research

1
CII Emerging Trends Research
NCCER Board of Trustees November 17-18,
2009 Wayne A. Crew, Director
2
A research institute of leading owners,
contractors, and academics working together to
advance the business effectiveness and
sustainability of the worlds capital facilities.
3
CII Purpose

• CIIs purpose is to measurably improve the
  capital delivery process.

4
History

• Established as a recommendation from The
  BusinessRoundtable Construction Industry Cost
  Effectiveness (CICE) Project to address
• - construction research
• - fragmentation of the industry
• Founded in 1983 by 28 companies now over 100
  members.
• First to bring research to the engineering-constru
  ction world.
• First owner-contractor-academic research
  collaboration for the constructed project.
• The industry forum for the engineer-procure-constr
  uct process.

5
CII Principles

• Place a premium on safety, ethics,
  continuousimprovement (cost, schedule and
  quality), and leadership.
• Owner / contractor member balance and influence.
• Promote a high level of knowledge transfer.
• Provide leadership development through member
  participation.
• High member involvement small professional staff.

6
CII Knowledge Processes
7
CII Member Benefits

• Research results and Best Practices
• Implementation resources, information, and tools
• Benchmarking Metrics
• Development opportunities for employees
• Opportunity to shape the industry with other
  world class companies
• Safer, less costly, faster, project outcomes

8
Owner Members
Abbott Air Products and Chemicals Alcoa Ameren Ame
rican Transmission Co. Amgen Anheuser-Busch
InBev Aramco Services Company Archer Daniels
Midland BP America Bristol-Myers
Squibb Cargill Chevron CITGO Petroleum Codelco-Chi
le ConocoPhillips DFW International Airport Dow
Chemical DuPont
Eastman Chemical Eli Lilly ExxonMobil General
Motors GlaxoSmithKline Hovensa Intel International
Paper Kaiser Permanente Marathon Oil NASA Naval
Facilities Engineering Cmd. NOVA
Chemicals Occidental Petroleum Ontario Power
Generation Petrobras Praxair Procter
Gamble Progress Energy
Sasol Technology Shell Oil Company Smithsonian
Institution Solutia Southern Company Sunoco Tennes
see Valley Authority Tyson Foods U.S. Architect
of the Capitol U.S. Army Corps of Engineers U.S.
Dept. of Commerce/NIST/BFRL U.S. Dept. of
Energy U.S. Dept. of Health Human Srvcs. U.S.
Dept. of State U.S. General Services
Administration Vale
9
Contractor Members
Oracle USA Pathfinder Pegasus Global Holdings R.
J. Mycka SB Engineers and
Constructors The Shaw Group Siemens
Energy SNC-Lavalin Technip URS Corporation Victaul
ic Company Walbridge The Weitz Company WorleyParso
ns Zachry Zurich
Day Zimmermann dck worldwide Dresser-Rand
Company Emerson Process Management Entech
Solar Fluor Foster Wheeler USA Grinaker-LTA/EPC G
ross Mechanical Contractors GS Engineering
Construction Hargrove and Associates Hill
International Hilti Jacobs JMJ Associates KBR Kiew
it Power Lauren Engineers Constructors M. A.
Mortenson McDermott International Mustang
Adolfson Peterson Construction Aker
Solutions Alstom Power AMEC Atkins Faithful
Gould Autodesk AZCO Baker Concrete
Construction Barton Malow Bateman
Engineering Bechtel Group Bentley Systems BIS
Frucon Industrial Services Black Veatch Bowen
Engineering Burns McDonnell CBI CCC Group CDI
Engineering Solutions CH2M HILL CSA Group
10
Universities involved 1983-2009

• University of Alabama
• Arizona State University
• Auburn University
• Bucknell University
• Carnegie Mellon University
• University of Cincinnati
• Clemson University
• University of Colorado-Boulder
• Colorado State University
• University of California-Berkeley
• East Carolina University
• University of Florida
• Georgia Institute of Technology
• University of Houston
• University of Illinois
• Iowa State University
• University of Kansas
• University of Kentucky
• Lehigh University

University of New Mexico North Carolina State
University North Dakota State University Oklahoma
State University Oregon State University The
Pennsylvania State University University of
Pittsburgh Purdue University Polytechnic
University San Diego State University San Jose
State University Stanford University State
University of New York-Albany Vanderbilt
University Virginia Polytechnic Institute and
State University Texas AM University The
University of Texas at Austin University of
Washington University of Waterloo University of
Wisconsin-Madison Worcester Polytechnic Institute
11
2009 Emerging Trends items with potential to
impact the capital facility delivery process in
the next 3-5 years.
12
Emerging Trends Process
13
Trend Categories

• Workforce and Human Capability
• Project Delivery
• Corporate Strategy
• Technology and Innovation
• Markets and Demand Drivers
• Social and Political Influences

14
Major Changes 2009 vs 2008

• Global Recession
• Financial instability
• Lower / more selective consumer spending
• Surplus of skilled labor and management in U.S.
• Large government stimulus spending
• Lower trust environment between government and
  business

15
Trend HighlightsWorkforce and Human Capability

• Talent shortage no longer single most important
  issue as construction unemployment rises.
• Companies reducing staff to low water levels
• World Economic Forum CEOs predict that the
  shortage of skilled trade workers may return

16
Trend HighlightsWorkforce and Human Capability

• Increase in outsourcing operations (accounting
  and finance, HR, conceptual engineering and RD)
  to Best Value locations.
• Not just production engineering anymore!
• Information and communications technology
  enabling distribution of knowledge work.
• Growing challenge to attract and retain best and
  brightest individuals in EC industry.
• Facebook Generation attracted to sexier
  fields (IT, nano- and bio-technologies) meeting
  societal needs.
• Increased mentoring a must for new employees

17
Trend HighlightsProject Delivery

• Increase in Green Consumers and the movement
  toward sustainable construction.
• Use of Lean practices and the application of
  prefabrication and modular systems.

18
Trend Highlights Corporate Strategy

• Managing through the current economic recession
  resides among the highest concerns of the EC
  members of WEF.
• A growing trend of the purchase of domestic
  engineering and construction companies by foreign
  owners (FMI).

19
Trend Highlights Technology and Innovation

• Role of virtual teams will grow as budgets
  tighten.
• Experts see increasing movement from work in a
  centralized office to production from a network
  of virtual teams, globally distributed and
  working 24/7.
• Integrated project management systems continue to
  grow with interoperability of systems still a
  challenge.

20
Trend Highlights Technology and Innovation

• Growing interest in Virtual Design and
  Construction, specifically in the area of
  Building Information Modeling (BIM).
• Government entities accelerating BIM use.
• Half of the industry is now using BIM or
  BIM-related tools (75 more than in 2007).
• Convergence of BIM, Lean, and Green?

Source Mortenson website
21
Trend HighlightsMarkets and Demand Drivers

• Abrupt fall in consumer spending
• Businesses must prepare for slower long-term
  growth in global consumption, shift investment to
  Asia, focus on older consumers and find ways to
  offer luxuries on a budget (Harvard Business
  Review)

22
Trend HighlightsMarkets and Demand Drivers

• Majority of giga projects constructed outside
  U.S.
• Ethics-related issues will become even more
  prevalent as work is pushed internationally.

23
Trend HighlightsMarkets and Demand Drivers

• Bigger government
• U.S. government infusing large amounts of money
  through stimulus packages into shovel-ready
  infrastructure projects.
• Greater need for Public Private Partnerships due
  to aging infrastructure

24
Trend HighlightsMarkets and Demand Drivers

• Greater use of alternative sources of energy and
  renewable energy.
• Construction of power production facilities will
  lead all other sectors of construction ( growth
  in 2009).
• FMI forecasts a10 power construction increase in
  2009.

25
Trend HighlightsSocial and Political Influences

• Precipitous decline in trust (in government,
  banks, insurance companies, etc.) since beginning
  of recession
• Leading to higher transaction costs, lower brand
  value and greater difficulty in attracting,
  retaining and managing talent. (Harvard Business
  Review)
• Due to increasingly interconnected global
  construction industry, many leaders fear
  corruption will negatively impact the success of
  international projects.

26
2009 Trends Summary

• Trend Environment is drastically different as a
  result of the global recession.
• Lower consumer spending, labor surplus, large
  government stimulus spending, and lower trust
  environment.
• Some trends remain on track and continue to
  accelerate.
• Outsourcing, green, lean, BIM, virtual teams,
  integrated project management systems, growth
  outside U.S., and alternative energy.

27
Questions?
www.construction-institute.org