Beware the The cloud and BIM

In construction, everyone is talking about building information modelling (BIM) as a means of improving collaboration. At RLB, our use of cloud-based managed services goes beyond that. One of the main challenges with BIM in any environment is the storage and dissemination of data. To overcome this, we have increased our investment in cloud solutions to leverage a new technology to further improve productivity — virtual desktop infrastructure (VDI), which provides access to a virtual desktop hosted on a remote managed service over the internet. RLB’s 3D-enabled VDI solution stores all

of our BIM information in a central repository which can be accessed by authorised users via a secure terminal session over the internet. This removes the need to drag whole — or portions of — fi les of indeterminate sizes across any network. By enabling staff to access a virtual

desktop which provides a BIM environment from any device we are much more responsive as a business and can manage change quicker than ever before.

geopolitical nature of data storage. The Patriot Act in the US allows any cloud- based data to be obtained and taken offl ine by US security services. This potential loss of data, without warning and without recompense, was deemed an unacceptable risk at RLB. This proved pivotal in our decision not to place our data in a public cloud, a view which is shared by a number of our public sector clients. As a result, we sought a UK-based, UK-owned managed service provider who could provide us with robust private cloud-based services. Innovation isn’t just about the latest designs and building practices, it is equally about fi nding more effi cient ways of doing things. At RLB we have used cloud services to support a digital pen and paper solution we devised for one of our large retail customers to complete more than 800 site surveys across the UK. From receiving the request from the client, to rolling out the digital pen hardware in the fi eld took just three days, demonstrating the increased agility cloud technologies provide. The digital pens communicated the survey data via the cloud to a server in RLB’s data centre. The survey results were interpreted and uploaded onto a live portal showing the completed surveys, aggregated data and up-to-the-minute reports within a virtual environment. The ability to rapidly deploy a key value added solution like this was only possible by using cloud technologies which are key to increasing customer retention levels.

Mark Evans is head of IT at Rider Levett Bucknall

overtrading trap

As work picks up, Peter Vinden warns against taking on too much and losing control of your balance sheet

As the construction sector’s recovery gains traction, the cliche that “the path to success rarely runs smoothly” has never seemed more relevant. Contractors and subcontractors would do well to keep these words in mind, not just when dealing with the immediate problems facing them but also in the handling of positive developments that have the potential to take a very dangerous turn.

Despite a number of pressing issues that are attracting widespread attention, from unpredictable weather to shortages in skills and raw materials, construction companies also remain vulnerable to the threat of overtrading. The problem of overtrading and

losing control of your working capital requirements is a particularly tricky one, as the illusion of a return to stability may actually prove to be the harbinger of new problems. After a diffi cult few years, the

temptation to take on seemingly profi table work is hard to resist. The problem with this is that taking on additional projects can be at odds with your company’s working capital availability. Companies need working capital to fund daily activities and, as workload and turnover increase, so too does the need for working capital to pay your trading bills, salaries and other expenses. Past experiences show that

emerging from recessions can be a particularly vulnerable time for businesses which struggle to resist the temptation of what appears to be higher margin work that, in reality, cannot be funded.

process. The initial design may have been carried out without the use of BIM and it may then be expected that the design team shifts to a different method of working. Indeed, some projects are planned at the outset for BIM to be introduced at a later stage. This is understandable if the initial designs are created prior to the procurement of a collaborative team or without the certainty of funding that might justify an initial expenditure on BIM but, even so, this seems to lose some of the functionality of BIM

software to easily produce variations in inception design and lose the chance to use the initial stages of design to embed the intended methods of working. Ultimately, if these risks and

concerns are properly considered and addressed and if the project team is willing, the benefi ts of introducing BIM late to a project may prove too attractive to resist.

By Assad Maqbool, a partner at Trowers & Hamlins specialising in projects and construction

Spotting the symptoms Companies, large and small, need to be quick to spot the symptoms of overtrading. These will include overdraft levels rising month on month and a deterioration in operating margins. Other red fl ags will include mounting pressure from nervous suppliers, threatening to put you on stop, and your accounts team spending more time fending off suppliers and subcontractors chasing payment. It is not diffi cult to see how

these symptoms could lead to failure if not checked. What is less widely understood is that these problems are preventable provided the mantra of “cash fl ow analysis, projection and control” is rigidly adhered to. It is essential that a business

understands the cash infl ow and outfl ow on every project that it is

working on, as well as the outfl ow of cash required to fund operating overheads such as rent, rates, heating, lighting, administrative salaries, insurances and vehicles. From this information you should be able to produce a company model which shows on a week-by-week basis what your income and expenditure looks like and, in doing so, project and control what working capital is required by way of bank overdraft, loans or similar. Each new contract win should be analysed on the same basis and integrated with your operating model. Any potential contract needs to be analysed and fed into the company model before it is accepted.

Payment terms This might mean that you can only accept a new contract if advantageous payment terms can be negotiated with your client and/or with key suppliers and subcontractors. It also might mean that it cannot be funded at all. It should also never be assumed that the safety nets of increased bank funding and/or the extension of credit lines will be available. Assuming that your bank will provide an increase in facilities to overcome the shortfall in capital working requirements is a gamble that may not pay off. These guidelines might seem

to express the values that any company should have at its core, but history shows that failure to understand cash requirements has caused the undoing of many a business. There is no excuse for not knowing how the cash demands of a new contract will impact on your business and its working capital requirements. The construction sector has

navigated some dark waters, including low demand, lack of investment and restricted access to bank funding. However, we have not yet overcome all of these challenges, and optimism cannot be an adequate excuse for failing to understand your business and its cash requirements. Businesses must keep an eye

on sustaining long-term growth to avoid possible insolvency in the later stages of recovery. It is by maintaining fi nancial analysis and control procedures that companies in the construction sector can still avoid the overtrading crisis that could be waiting on the horizon. Peter Vinden FIOCB is managing director of Manchester-based construction and property consultancy The Vinden Partnership

CONSTRUCTION MANAGER | SEPTEMBER 2014 | 33