Building connections

Having just signed a €5.5 million contract with Cable & Wireless to build a new communications network, Kier Group’s investment in IT shows no sign of being dented by the recession. But the construction giant’s head of IT Terry Walker tells BM that while technology is a top priority for the company, there are tough times ahead in 2010.

“IT is seen by the management as a business tool”
-Terry Walker

What were the reasons behind the company's decision to migrate to a Cable & Wireless communications network?
Terry Walker. We've moved to Cable & Wireless because we felt we'd get a more responsive approach and more of a partnership approach with Cable & Wireless. And so far that's proven to be the case. Prior to that we'd been with BT for ten years. There was a lot of dissatisfaction with BT. It has been broken into various parts and its very hard to find a way through that. The organisation is not transparent to the client. And I didn't feel that they were sharing our problems. There was a lot of pain but it wasn't being shared.

Mainly it was to do with getting sites set up quickly. Getting people on site to do the telecoms work when they said they were going to be there. And resolving issues that came up. And it was just not happening in a very effective way.

Did you consider contracts with other communications and networking companies?
TW. There was a tendering process and we took the view because we're pretty stretched resource wise that we would use a third party company for this. They are called Total Network Collective. They fronted it for us and they did a very good job. We did a virtual RFP first and they recommended companies which they thought, would meet our requirements. We chose Cable & Wireless because we felt they were onboard in terms of a partnership approach. We wanted shared responsibility for resolving the issues. And one of the key things was that we signed up to a performance bond, so if they don't perform then we get some sensible recompense for that. With BT they do pay if they don't respond in time but they pay nothing that's worthwhile. It means that Cable & Wireless have put their money where their mouth is in a way. They are sharing the load with us. Taking the risk. We're currently in the process of migrating to Cable & Wireless and are still actually finishing that off. We've been going on that for about six months now. And we're letting some of the BT lines just run out naturally.

Why is it so important for a company like Kier to have a robust communications infrastructure?
TW. We have offices and sites across the country and obviously the sites are fairly fast moving. Some can last as little as 12 weeks and others go on for years.
Any company needs good internal communications. But when you're dealing with construction you have to set up a site at very short notice and we're dealing with very large clients. We work in frameworks and we have to be able to both tender electronically and receive instructions electronically so when we go on site we need to have access to all the contract documents and be able to deal with amendments electronically. Plus be able to run collaboration software on site. This may be mandated by the client and if we don't have that we can't start. We can't dig a hole, we can't do anything because we don't have the detail we need. So it's critical these days that as soon as we start on site we have the comms infrastructure in place. The comms lead time is the biggest issue for us from an IT perspective.

What new technology will Cable & Wireless's WAN introduce to Kier's construction sites?
TW. Cable and Wireless have got some interesting new products which I think will help us. We're going to get some more bandwidth on site. And whereas in the past people, would just want email, now they are using collaboration software. We're also using document management systems and web based systems so we need to move a lot of data rapidly to and from the site. Mainly we're going to get better bandwidth than we've had before and resolve any issues we had.

What are the challenges involved in running technology on so many different construction sites and are there uniform systems across all your sites?
TW. We offer different types of products depending on the size of the site. If I've got a short run 12-week site then I'll probably put in broadband. Where we've got a large project, say building a prison that is going on for two or three years, then we'll put in pretty much office based comms. At one end of the spectrum the main criteria is to get a rapid site set up as fast as possible. On the other hand we want resilience and back up and stability. Therefore we over engineer the line to some extent.

Can you describe a particular project the company is working on and the IT set-up on the construction site?
TW. One we're doing currently is a prison called Featherstone Prison in the West Midlands and we're putting in several bandwidth there. We are going to sell some of that bandwidth on to our contractors. So rather than them having to set up their own comms we are going to provide the whole comms side. Cable & Wireless provide the line and are helping us to se t up the technology and they are helping us to sub divide the technology so we can sell on the link to our sub contractors. So it's a close working relationship with them to get that set up."

Kier works on several international projects, including in the Middle East and Dubai in particular. Do you run the same systems in those countries as you do across UK sites?
TW. Not directly because in Dubai, for instance,  the cost of comms is very high and the cost of putting a line back to the UK is prohibitive. So they use their own local internet service providers in Dubai. Working in Jamaica, we do have comms directly to Jamaica. And they use our systems based in the UK. It depends which country we're working in and the cost of putting in the solution. Dubai is particularly difficult because the comms costs are very high. There is a big difference in costs in Dubai compared to the UK. We're just looking at doing some work in Saudi Arabia and that also represents a bit of a problem for us. This is to do with the infrastructure because the places where we work are not necessarily next to any major conurbations. It will be dealt with locally.

How high a priority is IT within Kier and how crucial is it to the smooth running of its operations?
TW. It's pretty critical these days. A large part of our business now is also support services and that is very much process driven and the IT systems drive the business. Support services is a 24/7 365 days a year operation so keeping that up and running can be quite a challenge. On the construction side we're moving to a more rapid site set up pace. We  are also moving higher volumes of data and we do rely on IT for receiving all this information. IT seen by the management as a business tool. We have a top-level steering committee, which is a sub set of the board so it is seen as important. Traditionally IT spending in construction is not as high as some other industries but I do I think that is increasing slowly. And I think IT is more important than ever now in terms of communicating with the client and managing the business.

What IT projects will you be working on at Kier in the year ahead?
TW. This financial year we're not looking at new projects we're looking at consolidating what we've got. There's a lot of work going into buying better so we're reviewing all our suppliers. So the Cable & Wireless choice was one of many buying operations we've got going on. We're currently looking at hardware, voice and printing. We're doing a lot to try to buy better and standardise what we've got.

Is managed printing services an area that you will be looking at in particular?
TW. We're going to look at that. It will be difficult for us to do but we're certainly going to move along that way. And we're going to go out with a tender in the next couple of months. We've currently got far too many printers of too many different varieties across the group, bought in different ways. So we need to buy better, standardise and reduce the asset base."

Are there any other aspects of IT that you could considering contracting out?
TW. Not specifically at the moment. We've got a good in-house team and we can do most things ourselves here, more cost effectively than going outside. We go outside for specialist help with back up all our systems and we do that extensively. And with our in-house team we don't really need to rely on outside people too much and we can probably do that more cost effectively ourselves.

Many European companies are currently considering the benefits of cloud computing and virtualisation. Are these areas you and your team are looking at?
TW. We have had a look at that. We think that will come in but I don't think it's in its full form that we can use at the moment but we're keeping a close eye on it. We're moving heavily along the virtualisation route because that will save us costs and reduce the hardware requirements. We are looking at servers because for a given investment I can reduce the cost of running a service. I don't need to buy new hardware every time and it gives me a lot of benefits in terms of disaster recovery. I can recover a system very quickly if it is virtualised.

The global construction industry has been hit hard by the economic downturn. Has this affected spending on IT within Kier?
TW. Yes, in the last year we've made a move to centralise our IT. In the past we've had a hybrid model. Centralising IT has resulted in some cost savings coming out of that. And we're looking at putting in an asset management system, which would include both hardware and software. We're finding that hardware is sitting around in various offices. It's spare and not used whereas I could use that elsewhere in the group. Software, we could put in software harvesting so that if somebody is not using an application we could take it back and reallocate it to another person. There is uncertainty. We are not sure where the bottom of the downturn is going to be in terms of construction. We are thinking it will probably be late this year that things are going to get quite tough. We are building projects that were designed before the recession now and there is not enough stuff going through the design phase for us to build later in the year. The private sector has been badly hit and we're doing quite a lot of public sector work and that has held up well but that may be affected by a change of government so there's a lot of unknowns at the moment.

Does this situation make it difficult to forecast what should be spent on IT projects in the year ahead?
TW. Yes it does. We're going into the budgeting process for next year and I don't quite know what the finished position will be at this point. I'll go with a wish list then we'll have to look at whether we can justify that. The situation is very patchy. Some bits are looking quite positive but other bits we just don't see the work coming through because of the private sector. We think it will be very difficult for the next 12 months at least.

You have worked at Kier for ten years. How would you describe the experience of working there and how has it changed since the ten years you have been there.
TW. It's very big. It has traditionally been largely decentralised so it's quite difficult to co-ordinate things such as IT across the group. Centralising IT has been quite a challenge for the group to get their heads around that but it's throwing up a lot of savings. I'd say also that Kier is a very people orientated company. There's now much more business understanding of the need for IT and there's a better understanding of the value cost model. I think we're moving in the right direction. We've achieved a lot in Kier in the last ten years.

About Kier Group
Kier Group operates through four divisions and its activities span building, civil engineering, open cast mining, facilities management, residential and commercial property investment as well as PFI (private finance initiative) project investment. Its construction division comprises a UK-wide network of regional contracting businesses as well as major projects overseas. As part of its support services division it provides full life cycle support for buildings in both the private and public sector, including building and grounds maintenance. It has a specialised private house and commercial property building business and an infrastructure investment arm which delivers PFI projects. Kier Group's building specialisms include airports, prisons, schools and hospitals.