Data-centric business model

How can civil engineering firms gain a competitive edge through data use? Manuel Timita of illustreets and Chris Dice of Cude Engineers discuss.

[edit] Introduction

In Price Waterhouse Cooper’s Global Industry 4.0 Survey (2016), 72% of respondents from the engineering and construction sector recognise that data and analytics are becoming increasingly important to decision-making.

While the advantages of digitising may be clear in terms of cost savings and better integration with horizontal value chain partners, such as suppliers and key customers, there is very little talk about the potential for significant increase in revenue through data and knowledge exchange.

[edit] Success stories from other industries

In a recent report, The Wall Street Journal shows how equipment manufacturers are successfully leveraging data along their existing operations in order to increase profits, with their businesses evolving towards a service-based revenue model.

In a nutshell, companies facing decreasing demand for new machinery 'are finding veins of new revenue in selling unique information that they can leverage into sales of replacement parts and consulting services that keep existing machines running longer and more efficiently.'

Data can generate significant additional revenue, if put at the core of the business. Some other great examples that come to mind are companies who have been pushed to change by strong market forces.

One such example is Lego, who from a nearly bankrupt business in 2004 went to setup new successful digital businesses, such as Lego Digital Designer and Lego Mindstorms. Another example is IBM, who transitioned from being a hardware seller to a technology and consulting service business.

[edit] The reality of today

Successful 'data as business' models cannot be achieved until companies recognise the importance of data as a driver of business, and not simply as a support activity.

For engineering companies, the key ingredient is already there: they already collect, produce, and manage large amounts of data. With storage space and sensors getting cheaper and cheaper, there are no practical barriers in relation to collecting and storing even larger amounts.

The challenge is in being able to analyse the data in an intelligent way, and exchanging the results of the analysis with key stakeholders. The industry should recognise the need for a multidisciplinary approach, and start attracting digital, data and analytics skills.

At the same time, the companies who are ready to make the leap ought to recognise the need for partners and vendors who understand the unique nuances of the civil engineering and construction sector.

These realities beg the question, what does this new business model look like in the civil engineering industry? How does a traditional, professional services industry embrace and adopt this concept of a data-centric business model?

[edit] A civil engineering application

With 15 years of experience in the civil engineering consulting industry, I have witnessed the rapid evolution of how data is collected, stored and utilised as a tool to efficiently and accurately complete many of the tasks we are called on to perform as professional consultants.

We have rapidly progressed from paper maps, land records and rolled sets of construction plans, to large collections of digital information in various forms.

As civil engineers, we must answer three simple questions at the beginning of any new land development or infrastructure project, whether it be a new public roadway extension, a regional stormwater detention facility, or a new residential subdivision:

• Are we permitted to build our project on a certain piece of property within existing regulations and laws?
• Can we physically provide the needed utility connections and accessibility for our proposed project?
• Is it economically feasible to design and construct the desired project considering all other factors?

In the past, we have been called on to answer these questions by performing in-depth feasibility studies. These studies required visiting multiple governmental agencies, reviewing numerous published maps and researching the location and condition of existing utility connections. It would take hours upon hours to complete, costing both the consultant and the client time and money.

Online mapping applications and the movement to digitise and publish much of the desired information has already reduced the required time and effort needed to complete these studies, but we see an opportunity to further those improvements substantially.

Instead of simply compiling large data sets and mining those data sets for information when requested, we are curating the data and providing the data itself to our partners and clients as a separate and distinct service line. By providing this data-centric service, we are empowering key stakeholders and giving them the tools needed to make informed decisions about their property.

The result: A feasibility study that used to take a week to research and compile, can now be represented graphically on a map in a matter of seconds.

This new reality gives land developers the ability to quickly evaluate the viability of multiple proposed project opportunities, enables regulatory agencies to visually see where new development is occurring and provides private property owners with valuable information about their property when assessing its worth. Additionally, it allows engineers to focus their expertise and experience on designing, permitting and managing projects.

Civil engineers hold a unique position in the project delivery chain. Unlike other engineers and architects, civil engineers must be intimately familiar with the specific geographic area in which they are working.

This includes understanding various environmental, geologic, hydrologic and regulatory characteristics (among many others) of a specific area of interest. Since all of these characteristics are based on defined geographic areas, they are easily represented graphically on a map.

This places civil engineers in the ideal position to be the provider for this type of data-centric business model.

[edit] Moving forward

As data collection continues to become easier and more prolific, it is imperative that the public and private sectors of the civil engineering and infrastructure management industries work together to share and enrich the available data.

The ripple effects of this cooperation can reach far into our daily lives:

• Public utility providers and governmental regulators will be better equipped to plan for new development and to manage existing infrastructure.
• Private land owners and developers will be able to quickly make informed investment decisions.
• The general public will benefit from more effective planning and execution of projects by both the public and private sectors.

Finally, creating a business model based on providing data as a service to key stakeholders does not diminish the need for the skill and experience of a competent civil engineering professional. In fact, it does the opposite by enhancing the consultant-client relationship through the open exchange of knowledge and information.

This article was originally published here by ICE on 16 August 2017. It was written by Manuel Timita of illustreets and Chris Dice of Cude Engineers.

--The Institution of Civil Engineers

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