Andy Verone:

Thanks for having me; looking forward to the conversation.

Andy Brown:

Perfect. So, Andy, hopefully, you won’t take offense to this, but you have been in the industry for a long time, an industry veteran. I’m just kind of interested in if you could cast your mind back to when you started. And just to give our people watching this an idea about what kind of tech the sector was using then.

Andy Verone:

It’s a great question. And tomorrow, September 15, will actually be the start of my 40th year. So, you are right. I’ve been doing this for a very long time. It is, I think, through that journey, and one of the things that I debate often with the analysts that cover the sector of engineering and construction, is all too often you hear that engineering and construction firms are under-investing. In fact, I love the slide when I see it at conferences, where they rank engineering and construction technology spend below farming and hunting. No disrespect to farming and hunting, but I disagree with that. You know, I believe you have to look at the sector in two categories. Look at what the engineering firms have done for years, as far back as when I started. And then you have to look at the other side. Look at the construction.

So, if I think back to those days at Michael Baker International, we were using software for roadway design geometry, calculating stormwater flow, assisting in bridge and structural designs, and even as much as going into GIS, geographic information systems, and technologies, you know, capabilities just to name a few. And that’s in the early ’80s. So, I think on the engineering side, there’s always been technology adoption. But on the other side of that equation is construction. And you know, I kind of lived it firsthand. My father, who was in the construction trades his entire career, was a fellow who worked really hard with no technology. And quite frankly, it was brute force. And it was, you know, how much can you install in a day? How many blocks can you lay in a day? How much steel could you erect in a day? So I think for me, the advancement of technology on the engineering side of the business has always been, you know, embedded. On the construction side, obviously, what we’ve seen since the early ’80s is pretty tremendous in the capabilities that are out there.

Andy Brown:

So, if you look at where we are now in 2023, what’s your view on the sector’s adoption of technology? And maybe, what might we be able to do to increase that?

Andy Verone:

I think it’s, again, if we look at it on both sides, look at the engineering teams that are out there and the adoption of virtual design and construction, Building Information Modeling, Digital Twins, and various visualization tools. On top of more advanced engineering design software, again, you know, there’s incredible technology and adoption on the engineering side. On the construction side, what’s interesting to me and what I’ve seen over these 40 years since the last time that I looked, there are somewhere around 4,600 companies that market themselves as construction technology software. I mean, there’s an incredible amount of tech out there. To me, I think from a consumer perspective, if I was on the other side of the equation and not with Contruent, I think it would be an overwhelming opportunity to say what tool I should be using. And there are a lot of point solutions out there.

So, I think we’ve flooded the market, especially on the construction side, with a lot of point solutions. But if you walk a construction site today, you will see technologies for material readiness. I would like to expand on not only materials management but also making sure the material is ready for installation, where it is in that journey in that lifecycle from fabrication all the way through installation. The other thing I get excited about is project progress capture. I think that the ability to track what has been installed down to two centimeters is going to really, really help the industry, and it can be done simplistically through cameras and drones. There are many ways to capture progress, which I think is huge.

I think surveillance is something that, you know, many of the job sites, and I try to do a site walk at least once a month. I think the surveillance capability on these massive sites is super important. Making sure we know who’s on-site and who’s not on-site, and making sure those sites are safe. And, safety, a lot of great tech out there around monitoring the safety activity on those projects. So, I don’t think there’s a construction site that I visited in the last four or five years that doesn’t have one of those technologies deployed. And that’s exciting to see, especially on the construction side.

Andy Brown:

Okay, perfect. So you might have kind of touched on them in your last answer. But I kind of wondered, is there a particular type of tech or element of tech that you think has the biggest impact or has a positive change on the industry?

Andy Verone:

Yeah, I think we step back from technology for a minute. I mean, all too often, you know, I think everybody gravitates to the software. But for me, if I look at what is happening in prefabrication and modular construction techniques, I mean, it’s really having a tremendous impact on the industry. I think that running up to the pandemic, we saw a lot of companies really embracing prefab and modular construction, and then the pandemic came, and supply chain issues became very, very difficult. And I think it pulled back a bit. But now, there are many massive data centers here in the US that are using modular construction techniques. So that gets me excited. I think we’ll see more of that all over the world. From, you know, it doesn’t matter if it’s a military installation or military base, a data center, and quite frankly, all over vertical construction. You’re seeing, you know, more prefab and modular.

I think on the software side, I think, as you said, I mentioned it earlier, progress measurement, quantities capture, and really getting under supply chain planning. I think there’s not a site that I visited in my, you know, my site walks that there isn’t some sort of supply chain issue. Material costs are very high all over the world. We know that. On-time delivery of materials, and it just says logistics. You know, when I talk to superintendents, there’s still waste. I mean, it’s better than it was when my dad obviously was building here in Pittsburgh, Pennsylvania. But there is still a lot of waste on the job site. So I think that supply chain planning and the logistics of those materials on-site are going to be some really good improvements in the industry.

Andy Brown:

Okay, perfect. Thank you. So, not going back right to the start of your career, but going back a bit earlier, one of the things you’ve done is co-founded Oracle’s vertical industry labs. Could you share with us what that experience was like? And were there any particular learnings that you took out of that?

Andy Verone:

Yeah, for me, I kind of bucket my career into two segments. So, it was the project work that I did for the first 25 years. And there are probably three or four projects in that portfolio that I’m very, very proud of. And then, on the technology side, I would definitely put the Oracle industry labs in something that I’m very proud of doing. We had a unique opportunity. You know, five years ago, we had the opportunity to build what was a simulated worksite in Chicago. Andy, you know how hard it is to get on job sites, especially as a software provider, a solution provider. So what we wanted to set out to do is really create a simulated worksite and have our customers and potential customers and partners have an environment that simulated a worksite. And that really got the program started.

Since then, we’ve had tremendous acceptance in the US and our Chicago lab, and we’ve built a wonderful facility there. We started an experience lab in the UK, and that experience is from what an individual would leave their home and start that journey into their office or start that journey into another destination. What is that experience? Are they on a train? What do they need along that way? So, very immersive experience. I think we’ve, my team, back at Oracle. We are super excited about not only the ecosystem that we built but bringing customers and partners together, you know. It was amazing.

One of the original design intents, and this is a big issue, especially here in the US, is getting young people interested in the trades. So it was my whole life. Andy, I mean, as I mentioned earlier, my dad was in the construction trades for 50 years. In the US, it is really hard to find craftspeople. In fact, many of the craftspeople in jobs today are coming in from other countries. So one of the design intents I had for the lab was how do we get vocational? How do we get high school, you know, younger people to come into the labs and see that technology and construction are really cool? And get them excited about the trades, which is something that was near and dear to me. And it’s just a great experience. I think it exceeded my expectations not only because of the funding that we received from the corporation but also because of the recognition that we got from our customers and partners.

Andy Brown:

No, that’s fantastic. I think that’s a problem, not just in America, but all over the world, isn’t it, in terms of skilled labor shortage and trying to get younger people excited about the industry? Changing tack slightly in your current role, obviously, one of the things you’re focused on is mega projects. I wonder if you could give us any practical examples of how technology has helped manage some of these different projects.

Andy Verone:

Yeah, Andy, for me, it’s why I joined Contruent, right? I think what, you know, when I was going through the, you know, the due diligence of leaving Oracle and coming to join the team at Contruent. Really, for me, it all starts with the project control center. If you’re on a mega project, you have to have the methodology and techniques in place that give you an opportunity to be successful. So, for me, at the center, how do we manage costs, change, scope, and schedule, and really enable these project control centers with Contruent Enterprise, which is truly the core cost engine for mega projects? More importantly, it will surround that core with real-time monitoring technologies. Sensors, cameras, drones. Then, providing those project managers on these major projects with the analytics they need to really have the insights to improve project performance.

Most of the big EPCs, EPCMs that I work with, they all have tremendous capabilities around data and analytics because you’re hard-pressed to find an organization that doesn’t have, you know, a data lake where they’re putting in their schedule data, they’re putting in their cost data, they’re trying to find patterns in that data. I believe, you know, as AI improves, evolves, enhances, I think you’ll see those large organizations running AI over their data and giving them predictions. I mean, I think that’s the one thing that I believe if we get more standardization on how we deliver projects, the value of the data that we’re able to generate, and those predictions will be truly tremendous. I think we’re a ways away. I think we have a long way to go.

I did a project years ago where we took every high-rise construction project in Chicago and we looked at the schedules. There wasn’t enough similarity in the way the schedules were built to actually glean relevant data because everyone does their schedules, and their WBSs, and CBSs differently. So, I think some standardization at the center of cost controls is going to be key.

I think rounding the question out for me, you know, I’m seeing a lot of adoption around advanced work packaging. I mean, that’s been around industrial for years. That’s nothing new for people who have been in the industrial construction space. But I’m saying AWP and the best practices of AWP really extend outside of industrial. Again, as I mentioned earlier, we got to get better telemetry and insights into the supply chain. I think the better we get at understanding our supply chain and the management of that supply chain is key.

Following that is materials readiness. Again, materials are better now than they were 18 months ago, but materials were scarce. All right, it was hard to even get the materials you need to finish your project. And then, as we talked about kind of rounding out the question, we got a huge labor issue. And it is. I don’t really don’t care what size project you’re managing, from small to mega, the labor shortage, and I’ll speak for my country here in the US. It’s daunting, just what we’re doing, what we’re doing to actually get the labor trades labor onto site. We’re definitely doing some acrobatics to do that.

Andy Brown:

Okay, perfect. Can I just ask you? One of the things you mentioned was the potential role of AI. Can I just ask you, how exciting is that? And what potential might it have for the future?

Andy Verone:

I think the industry, for me, has tremendous potential. I think there are two things that have to drive it. One, many organizations believe that their data and their process to generate that data are part of their competitive advantage. So it’s something that has plagued the industry as long as I’ve been in it. We have to get multiple organizations, multiple owners, multiple EPCs and EPCMs, and contractors to want to benefit from all the data. There is a tremendous amount of data that sits in this industry. So understanding, anonymizing that data, and putting it to work for us is really critical. So I think there needs to be a little bit of, hey, I’d like to opt in and use my data to help drive better insights across industries and verticals. That’s one.

And I think there are a lot of people that are still in the wait-and-see. As I mentioned earlier, a lot of these firms have incredible data warehouses. It’s their data. But how does it compare with other data? And I think that’s the danger of, if you keep it all in-house, and you’re trying to glean data from your organization. Yeah. Is your baseline right? Are your KPIs right? Or are you just managing your own firm? And you’re not looking at some of the other best practices that are out there?

I think there’s tremendous potential. I know it’s something I spend a lot of time, nights, and weekends looking at how other industries are benefiting from it. But you know, just yesterday, here in Washington, DC, there was a Senate hearing about regulations on AI. That worries me anytime the government wants to come in and regulate how, you know, an advancing technology like AI has been used, but we’ll see. We’ll see. I think it’s early days.