Building a sustainable digital foundation

Irish digital construction company Zutec aims for listing on Nasdaq First North market in Stockholm in the coming quarter

18th February, 2018
Brendan O’Riordan, chief executive, Zutec

As one of the least digitalised industries out there, construction has some catching up to do, but companies like Zutec are helping it get there.

Considering its origins and purpose, construction is overdue a digital renaissance. The slow speed with which it has embraced digital technologies can end up hurting it, as large projects typically take 20 per cent longer than expected to finish and can be up to 80 per cent over budget, according to McKinsey.

Worse, a McKinsey report from 2017 says construction is the second-least digitalised industry out there, only ahead of agriculture and hunting. Add to that how productivity in construction has declined and you realise the industry is not in a good position.

The solution to solving this isn’t the actual building process – concrete takes time to set, you can’t put in steel structures until the foundations are done and so on – but everything else around it, the data and administration side of things can always be improved and can save time in the long run.

Changes are afoot and one company at the forefront is Zutec, the Software-as-a-Service (SaaS) company which offers a customisable suite of software for the industry. For the reasons listed above, this is essential to overcome its productivity problems according to Brendan O’Riordan, chief executive at Zutec.

“Traditionally, to build something faster, you get more people on site, but that needs to change, the mantra needs to be more smartphones, not more hammers,” he said. “To increase efficiency we need to allow all stakeholders to access and share the correct information when and where they need it.

“It’s allowing people involved in processes such as progress monitoring, work sign-off, defect management and handover to create, view and comment on information easily both on site and in the office while also ensuring that the design is communicated to the people on site when they need it.”

O’Riordan gives one small example of how digitalising can lead to major efficiencies. During the building of a large infrastructure project in the Middle East, the work sign off process was being done on paper, each individual element of work in every area would have to be signed off by up to 12 people with every one of them printing forms, signing, scanning and emailing to the next person in the process. This meant it took 21 days to sign off a simple work element.

Using Zutec’s suite of products, this was cut down to two days.

“The inefficiencies are clear in that situation,” said O’Riordan. “by digitising the process and creating a database of information, it also allows for accurate, live reporting, which on a project of that size is essential, project management teams need this kind of intelligence to get a full understanding of where exactly the project is on programme.”

Efficiencies and frameworks

These efficiencies aren’t just limited to the construction industry; it also involves facilities and management. Important sectors that become relevant after construction is finished.

“Zutec’s mantra is getting the correct information to the right people at the right time,” he said. “That efficiency for a maintenance manager is in getting to the relevant information quickly and easily to service or repair something on site.”

That ties into the reason the company was started in the first place – its founder Brian McGuire was delivering an O&M (operations and maintenance) to a contractor for a electrical installation and the manual for it took up 14 wheelbarrows of A4 folders. It was obvious to him that this was not sustainable, as buildings were getting more complicated and the amount of information required to manage a building was only going to increase.

Immediately, you can see where efficiencies can be made, as putting that information in a database means you can search for the relevant information easily instead of trawling through a large collection of folders looking for information which may or may not be still in the correct folder.

This becomes more important when new technologies are brought into the equation.

“When you’re digital, you can also update information easily, you don’t have to replace entire documents, just update the parts you need,” said O’Riordan. “One of the projects we worked on, a large hospital project in the UK, was a new build hospital and it was on a Victorian hospital site.

“They were putting in a brand new hospital with all of the latest technologies, they had robots that automatically brought linen from the laundry to the room when it was required. You programme what room to go to, the robot goes to the lift, calls the lift and goes to the room with the sheets where the nurse or porter there will put the sheets on the bed.

“There is huge complexity coming into the hospital and the estate management team need to know how all elements work, when they need to be serviced, what the warranties are, what parts are held in stock and how to maintain each system. Having easy access to information on those massively complex systems is hugely important.”

While technology can be more robust and complex, there is a silver lining. The advent of smartphones and specifically apps means companies like Zutec have a framework to follow when bridging the gap.

The average person is familiar with using apps to complete tasks like booking flights, messaging friends or ordering food; there’s no reason why the same standards can’t be applied to the construction industry.

“If I’m on site, I’m an electrician and I need to know what the service requirement for something is, of course it should be on my phone, of course I should be able to access information,” says O’Riordan.

“People’s expectations are changing when it comes to technology and it’s changing fast, it’s an industrial revolution at the moment. The fact that it’s changing fast plays in our favour, not just for Zutec, but anyone providing technology to construction. It’s that the expectation of people that the technology is there and they can use it to complete their job.”

One characteristic Zutec prides itself on is its flexibility, not only can it solve a wide range of problems, but the customisation means that if you compare its usage between two different companies, there will be differences in how it’s used and what it’s used for. Every company and every project has different needs.

“Recently, we have concentrated on improving the user interface, making the user experience simpler, more satisfying and giving our customers a sense of ownership of their version of Zutec.

“I often describe it as being a bit like Lego, we give the customer everything they need to build a solution and some ideas on how it should or could look, but at the end of the day they need a solution that suits them and they know their business needs best,” said O’Riordan.

“One of the things we want to do is create a community around that, allow users to share tips and tricks and get a better experience. That’s a big part of our offering, adaptability and flexibility are key and have always been a part of our DNA.”

Expansion plans

Significant work has been put into its product, but Zutec isn’t satisfied with just refining its product, it wants to expand and improve faster.

Zutec is hoping to be listed on the Nasdaq First North in Stockholm in the next quarter which will give it the capital it needs to continue to improve and expand.

While it has built up its turnover and profits in the last few years, this step will help it grow even faster than before to stay ahead of the competition as well as expanding into markets like North America and Scandinavia.

The capital we raise will help us grow and we will bring in the people we need,” he said. “The sales director that scaled software products before, the operations manager that worked with a global company before, we’re bringing those people in to allow us to get to the level we know we’re capable of operating at.”

“We plan to use about a third of it for product development, as we have to keep improving our product. If we don’t, competitor products will catch up, there’s no doubt about that. It’s the nature of technology, it changes so fast and you can never sit still. You have to keep moving forward.”

Zutec will be holding an investor roadshow in the week beginning February 26, for retail investors and is currently looking for an Irish broker who can trade in the Nasdaq First North. Those interested can email [email protected]

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