The energy inside the New York Hilton Midtown matched the weekday bustle on the Manhattan streets outside as Oracle Industry Connect 2018 kicked off with record attendance for the Construction and Engineering program. Participants immersed themselves in innovation from start to finish on day one – absorbing and discussing insights from presentations showcasing business transformation and real-world customer success.
Oracle Construction and Engineering Senior Vice President and General Manager Mike Sicilia opened Tuesday’s three-part General Session by welcoming attendees and previewing the program ahead. Soon after, a keynote address from McKinsey Partners Steffen Fuchs and Gernot Strube set the stage for digital transformation in the E&C industry - painting a picture of urgent need and unprecedented opportunity. Fuchs shared that productivity lags in the E&C industry cost the global economy approximately $1.6 trillion annually – roughly equal to the GDP of Canada. He also identified seven levers that the industry can use to achieve productivity gains of 50% to 60% and capture billions in new value:
“Of these levers, technology represents the single largest opportunity for closing the productivity gap – offering gains of 14%-15%,” Fuchs said.
The McKinsey team also shared three compelling examples of digital innovation in the E&C industry, including a leading real estate development company that introduced 5D building information modeling (BIM) and achieved $25 million in cost savings from original project estimates while avoiding 3,000 design clashes, and reducing masonry by 20%.
The General Session continued with a spirited conversation between Lex Greensill, co-founder of Greensill, and Sicilia, focusing on a different element of innovation: the democratization of access to capital. Approximately $3.5 trillion in working capital is tied up at any time due to unpaid invoices, Greensill announced to a surprised audience. Inefficiency in supply chain financing also drives up costs; a Greensill survey found that U.K. contractors are loading bids by as much as 5% to account for uncertainty around when they would be paid. He also provided an overview of the collaboration between Oracle and Greensill that is accelerating and transforming supply chain finance in the E&C industry. “The partnership employs Oracle's leading-edge solutions and our innovative financing to unlock capital so our clients can put it to work,” Greensill said.
To close the session, surprise guest Rob Phillpot, co-founder of Oracle’s Aconex, took the stage to a welcoming round of applause. Aconex, which Oracle recently acquired, offers cloud collaboration solutions that have been used in over $1 trillion in projects across 70,000 user organizations in over 70 countries. Together, Oracle and Aconex will provide an end-to-end offering for project management and delivery that enables customers to effectively plan, build, and operate construction projects.
A wide range of breakout sessions followed the General Session and continued throughout the day, offering insights on project delivery trends and best practices across a range of industries. Programs focused on themes as diverse as improving project outcomes using technology such as drones and autonomous vehicles, to a case study of how Turner Construction is improving subcontractor payment management in the cloud with Oracle Textura Payment Management Cloud Service (see some exciting related news). In a fascinating dive into innovation across industries, Bob Weiler, executive vice president, Oracle Global Business Units, led a discussion featuring the heads of Oracle’s seven Global Business Units that explored challenges and opportunities in each sector.
Oliver Greenwood, vice president, Global Sales Engineering for Oracle Construction, moderated a lively discussion featuring customers of Oracle Prime Projects Cloud Service, each of whom is using the platform for a different use case. Stephen Libby and Jason Duncan from McCarthy Building Companies are early in their journey and are leveraging Oracle Prime Projects to digitize and enhance Lean scheduling. Heather Leide, senior project manager of airport development for the Metropolitan Airports Commission, shared how her organization is introducing Oracle Prime Projects to support portfolio management. Jeff Davis, director of quality for White Construction, discussed how the builder is transforming field inspections and reporting, thereby accelerating project completion. All four echoed a single sentiment when asked what they would have done differently: They wish they had begun their Oracle Prime Projects and digitization journey even earlier.
Parks and Recreation
Later in the afternoon, Diane Jackier, chief of Capital Strategic Initiatives for New York City Department of Parks and Recreation, brought local flavor to the program. She started her conversation by putting into perspective the scope of the department’s capital project portfolio. In the current fiscal year, the department will manage 530 capital projects, and she expects that number will hit 600 next year. Jackier shared her department’s journey and goal to provide better transparency – to the general public and government officials – into the progress of projects in the city’s beloved parks. The department used Oracle’s Primavera Unifier to launch - in just over four months - a Capital Projects Tracker that allows the general public, elected officials and administrators to get up-to-date, easy-to-digest updates on the progress of these projects. The tool delivers transparency and is driving additional results: The department completed nearly 20% of construction projects early (defined as more than 30 days prior to their scheduled completion date) in fiscal 2017. Read more about Jackier and her work in our interview.
The program took innovation to new heights at the end of the day when Darren Bechtel, founder and managing director of Brick and Mortar Ventures, presented his vision on the “Dawn of the Digital Era for the Built Environment.” His venture capital firm has tracked more than 500 start-ups in the E&C technology sector and sees innovation accelerating as the technology matures and the need to improve productivity through innovation becomes ever more pressing. In a wide-ranging discussion, Bechtel sketched out his vision for the construction site of the future, which includes: augmented workers; local and remote connectivity; 4D/5D plans and ubiquitous “digital twins;” real-time, data-driven insight and smart schedules and tasks; autonomous and remotely operated equipment; zero waste jobsites; ubiquitous off-site fabrication; and a transparent and efficient supply chain. For more on Bechtel’s work and vision, check out our recent interview.
For more of the happenings and insights from of day one, watch our highlights video.
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Discover what happened on day two here.
Read insights from the Oracle Industry Connect 2018 report here.