By Carol Hildebrand
2011 Primavera Special Edition
At first glance, you might be tempted to classify Hill International as a construction company. After all, the Marlton, New Jersey-based firm was recently rated by Engineering News-Record magazine as the eighth-largest construction management firm in the U.S., and the company has managed such marquee projects as Philadelphia, Pennsylvania’s Comcast Center and the Qatar Silhouette Tower Intercontinental Hotel and Conference Centre in Qatar’s capital city, Doha. But Hill executives have a slightly different take.
“We’re really in the business of risk management,” says Shawn Pressley, vice president of project management systems and development at the company. “In the last couple of decades, construction has become a risk-shifting game, as owners try to shed the risk to contractors, who then shed it downwards. One of the things we’ve based our success on is being able to eat that risk on behalf of the owner.”
This evolution of Hill International’s approach to large-scale engineering and construction project (and risk) management has been driven, in part, by management’s embrace of technology. This is no small effort in an industry that Gartner ranked among the last in technology spending in 2009. Gartner found that the agriculture, mining, and construction industries spent US$29.7 billion on IT in 2009—more than US$500 billion less than financial services, the biggest-spending industry sector.
Marlton, New Jersey
Construction program management
US$421.8 million in 2009
Primavera P6 Enterprise Project Portfolio Management, Primavera Contractor, Primavera Contract Management, Primavera Risk Analysis, Oracle Crystal Ball, Hyperion applications
But leaders at Hill have made technology a core part of how they deliver value to their clients, and that shows in their results. Hill is the fastest-growing firm in the U.S. and Canada among the top 200 architecture, engineering, and construction firms, according to the Zweig Letter, an influential newsletter that covers the construction industry.
“The reason Hill has been so successful growing globally is because they have the right people and very smart processes in place, and they use technology to underpin those processes. It allows them to take what may traditionally be a high-risk project and make the risk more manageable,” says Richard Sappé, engineering and construction industry strategist at the Oracle Primavera Global Business Unit in Bala Cynwyd, Pennsylvania. “They are taking on risk and have the confidence and ability to do that very well.”
The result: a global résumé studded with multi-million-dollar projects completed on time and on budget—allowing Hill to successfully tackle ever-larger and more-challenging projects.
Historically, Hill International’s IT strategy has focused on giving project managers the flexibility to use the tools they need to do their jobs. That meant employees used their own processes—and technology tools they selected themselves—regardless of their efficacy. This resulted in the siloed, heterogeneous IT environment—with critical enterprise data trapped on user desktops—that is so prevalent in fast-growing companies.
Despite the common problems that arise from such an IT environment, there was a surprising outcome. As they had with other technologies, Hill project managers chose Oracle’s Primavera solutions on their own, using them for new projects all over the globe.
Primavera software was first used for the reclamation of Palm Jumeirah, a US$2.8 billion project involving one of three artificial islands planned in the Arabian Gulf off the coast of Dubai, United Arab Emirates. Hill also managed the construction of 1,300 villas on the island. Right from the start, Hill project managers lauded the software’s abilities. “The trick with Primavera was its ease of use, usability, and how cost effective the licensing was,” says Pressley. “It scaled and deployed easily.” In fact, the project went so well that Palm Jumeirah was recognized in 2005 as the International Project of the Year by the Construction Management Association of America.
As the use of the Primavera solution reached critical mass, management realized it needed a strategy designed to extract full business value from the software. It wasn’t enough to implement separate modules, such as contract management or risk management. “Hill recognized that everything is interconnected, from design to subcontractors to owners,” says Sappé.
Now the leadership at Hill has built a reputation for successful technology adoption and standardization, launching an integrated project management strategy based on Oracle’s Primavera applications that manages risk and enhances productivity, efficiency, and collaboration across the entire project management cycle.
Laying the Foundation
The goal—a very ambitious one—was to integrate the Primavera solution across the company to build unified processes and increase the accuracy and availability of information. “It’s one thing to standardize on a project in terms of processes and technology, and another thing entirely to extrapolate and expand to the level of an enterprise,” says Sappé.
However, that enterprise-level integration was vital for getting the real-time information flow the company needed to manage risk effectively. “The traditional construction company has one enterprise application, and that’s the accounting system,” says Pressley. “The problem is that once something is invoiced and billed, it’s already happened. You don’t have the time or the information to make decisions—it’s already too late.”
This reality led Hill CEO Irvin Richter to realize that IT was a way to differentiate his company from the competition. He tapped Mike Patrisco as CIO in 2007 to build and implement a plan that took advantage of this opportunity.
As part of that plan, IT professionals at Hill took advantage of Primavera’s Web-enabled solutions to implement their enterprise system. By moving the existing Primavera applications onto Web-based portals using software-as-a-service delivery, the company made standard tools and systems accessible to globally scattered projects. “It allows us to utilize tablet PCs and remote tools to get systems out to the project people who need access and gives everybody access to the same information,” says Patrisco.
Hill implemented Oracle’s Primavera Contract Management, as well as Primavera P6 Enterprise Project Portfolio Management and Primavera Risk Analysis, across its project management workforce and integrated the applications via a dashboard that aggregates information up to senior management. The effect has been far reaching, allowing the company to streamline workflow processes and complex construction management tasks, all while allowing executives visibility down to individual project levels.
“Primavera has enhanced our management procedures and stepped up our workflow processes across the board. Now, our project managers focus on their projects, and executives have the visibility they need to monitor progress for the duration,” says Pressley. “Executives can start seeing current metrics and forecasts and know how they’re going to perform this quarter or for the year.”
Primavera at Work
If Palm Jumeirah gave the first inkling of the Primavera solutions’ value, Hill’s integrated technology approach helped the company strike gold with the construction of the Comcast Center in Philadelphia—a US$400 million initiative that produced the tallest building in the city. Designed by architect Robert A.M. Stern and structural engineer Thornton Tomasetti, the Comcast Center includes 1.25 million square feet of office space and 40,000 square feet of retail space. The structure is hardly run-of-the-mill, containing not only an eye-catching winter garden but also a four-story sky garden that soars more than 700 feet above the public area.
The project also had an aggressive timeline—two years from start to finish.
The integrated IT strategy paid off: the Primavera Contract Management solution tracked costs for 25 major organizations working on the project, and the team utilized the collaborative Web-based environment to act quickly and accurately on items such as Requests for Information (RFIs), submittals, and change orders. The solution enabled Hill to make all payments on time, while watching the actual and pending costs of contracts and the project as a whole.
For example, Njeri Waithaka, a project manager on the Comcast Center project, remembers the installation of the largest 4-millimeter LED screen in the world—a 2,100-square-foot video wall that cost US$20 million to build. The Primavera system allowed Waithaka’s team to track the subproject from sourcing to completion, keeping Waithaka herself informed about the status of the budget. “We always knew exactly where we were in terms of costs, and we could be proactive rather than reactive,” she recalls. “It tracked actual and projected costs—the information was invaluable.”
The contract management cost data was tied into the accounting system of the building owner, and the information proved more accurate and up-to-date than what the owners’ accountants had generated independently. In fact, the client ended up using the same financial reports for stakeholders and used contract management data to track invoices. “We could show the owners’ project accountants costs that were accurate up to the minute, where their data was a month out-of-date,” says Pressley. “We could show them documentation of change orders so that we knew what was coming for engineering, design, and so on. It saved the client time and hassle because they didn’t have to go out and produce new reports.”
The immediacy and centralization of the information also greatly improved efficiency in certain processes. Take, for example, RFIs—queries that contractors make when they need a particular issue clarified before moving forward. An RFI is traditionally delivered on paper and then routed to the project manager, who reads it and forwards it to the proper person—say, a design consultant—who then responds with the proper changes. With a paper-based RFI process, a simple question can take two weeks to resolve.
With Hill’s integrated contract management solution, the RFI is submitted electronically to the project manager, who can then route it immediately to the correct person. The design specifications are electronically tied to the RFI, which not only reduces latency but also eliminates the risk of mistakes with the design specs.
Meanwhile, the integrated Primavera P6 and risk analysis applications picked up on any changes generated by the contract management application and adjusted the schedule to reflect change orders or schedule delays.
Pressley and his team also used risk analysis to make sure charges and costs were accurate and that contractors were not padding their invoices. For example, the owner made late changes that delayed fabrication of the structural steel for the restaurant, resulting in a US$5 million change order submitted by the contractor. But risk analysis enabled Pressley’s team to assess the new charge and identify costs that were included but not directly related to the steel change. This gave a clearer view of the change and saved the client money. “We were able to say, ‘Hey, these are the issues related to the delay in steel fabrication,’ and cut the change order by [US]$4 million,” says Pressley.
All of this data then rolled up into one easy-to-read dashboard that was available to major stakeholders—from the clients to Hill senior management. By looking at detailed cost information from contracts, requisitions, changes, and proposals, the solution gave the team a real-time grasp of total project costs.
In the final analysis, the Comcast Center came in on schedule and on budget. “Well, actually we lost about 25 cents in calculating payments to contractors,” laughs Pressley. “It was due to rounding. Their accountants had a [US]$2 million discrepancy in the books, and when all was said and done, we overpaid by 25 cents. I had to pay them a quarter that day.”
To put that in context, Sappé points out that 60 to 90 percent of projects go over budget industrywide. “To get the reconciliation on a project of this magnitude down to a quarter is unheard of,” he says.
The accuracy and efficiency the company brought to the Comcast Center project is precisely the value that Hill executives view as a competitive advantage. “Our job is to lower risk and claims on our clients’ projects and to make things go smoothly,” says Pressley. “Saving a client [US]$10,000 once on a [US]$2 million project may not be a lot, but when we do that 10 times or so that number starts to look good, and it makes us worth the money.”
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