In March 2016, Australian SaaS construction collaboration provider Aconex acquired Anglo- German Conject, with its eye on international expansion. Aconex CEO Leigh Jasper speaks with Paul Wilkinson about the drivers behind the acquisition, as well as more general worldwide developments in areas including cost management, BIM and digital transformation
The day after Aconex presented to investors in Melbourne was a good day to get an update on the software-as-a-service provider’s recent progress from CEO Leigh Jasper — but our meeting took place in Woking, UK rather than in the company’s Australian home town.
Founded in Australia in 2000 by Leigh Jasper and Rob Phillpot (now the company’s senior vice president of product), Aconex grew rapidly in its domestic market before expanding into other markets including Europe, southeast Asia and the Middle East. In December 2014, it floated on the Australian Securities Exchange (ASX) in Melbourne.
Today it has over 40 offices worldwide, and its online platform has been used to help deliver over £600bn worth of construction and engineering projects. Customers include AECOM, Bechtel, Dubai Airport, Fluor Corporation, Lendlease, Marriott and Mace, while supported projects range from London’s Battersea redevelopment to a Japanese liquid natural gas terminal, and from a copper mine in Peru to Seattle’s $1.4bn State Route 99 tunnel.
Since Leigh Jasper was in the UK to visit offices once occupied by BIW Technologies and then its subsequent owner Conject, a company that Aconex acquired in March 2016 for A$96m, it seemed a more than appropriate venue for a conversation on how the integration of the Anglo-German business has progressed so far.
The Conject merger
The background to the Aconex/Conject deal is a little complicated, so it’s worth clarifying that first. BIW Technologies, or BIW, was a privately held British company providing electronic collaboration technologies to the construction and property sectors, which was acquired by a German company Conject in 2010. Conject’s merger with BIW was a prolonged process and one that delayed development in key areas such as mobile technology and BIM at a time when, particularly in the UK, rival vendors were investing heavily in product development. As a result, Conject found itself lagging behind rival SaaS collaboration companies such as Aconex, Viewpoint (formerly 4Projects) and Asite in adding mobile applications to its portfolio, while the same rivals were also pushing ahead with support for BIM.
Enter Aconex, a company with an eye on expanding its market presence and user network in Europe. It swooped, and Conject (along with BIW) became part of the wider company.
Among Conject customers, reaction to the acquisition has been very positive, Jasper says. They are not being forced to switch over to the Aconex platform and current projects managed on Conject will continue to be supported until they are complete — even if this takes five or six years. And the number of customers lost since the deal? “Maybe only one,” he says
In fact, some Conject customers, including international construction firm Mace, have already started new projects on the Aconex platform. Jasper puts that down to what he sees as a strengthening of the Aconex proposition with the addition of Conject, among customers that might previously not have considered either.
“In the UK market, we are selling in to new customers where Aconex wouldn’t have won them, but the strength of the product, combined with the strength of the sales team, means that we now have a very strong combination. There was probably a bit of underinvestment in the UK-based Conject products and having a stronger Aconex platform has helped,” he explains.
The upshot is that UK and European customers can now be confident they are dealing with a company with a strong regional presence. But above and beyond that, he said, the deal has also extended the technology capabilities on offer.
Foremost among the acquired capabilities was Conject’s Financial Control module, a mature construction project cost management application that, in its early days, helped differentiate BIW from UK rivals.
Coupled with Aconex’s July 2015 acquisition of US-based vendor Worksite from ARES, Aconex now has a strong cost management team and a powerful cost tool, Connected Cost. (The Worksite acquisition, he adds, was fundamental to this, bringing the company forward several years in being able to get Connected Cost to market.)
Aconex Connected Cost was beta-tested with some customers, and then made generally available in late 2016, and enables Aconex to compete with US-based vendors whose systems have historically been stronger on cost control than on document collaboration. It has proved a strong differentiator.
“We are seeing really big interest, and a number of deals have already been done on the product,” he reports. US carmaker and energy storage company Tesla is now a customer and it’s one that Jasper feels his company wouldn’t have won without Connected Cost in its arsenal, “so it’s helping us win more work, and it’s really important to our customers.”
Particularly in the US, he adds, cost is more important than collaboration. “I think our cost product is the best SaaS solution on the market, particularly when you compare it to some of the products built 10 or 15 years ago.”
Meanwhile, Aconex has been working for some years on its Aconex Connected BIM product, which was launched in October 2014. It is marketed as part of the core platform, rather than a module for which customers have to pay extra, as part of a wider ‘digital operating system’ strategy, Jasper explains.
“As it’s part of the platform, in a sense, everybody uses it — but obviously, to varying degrees,” he says. Some companies will use it very heavily and put “loads” of models into the system. Others might use it at a more shallow level.
“But BIM is a critical part of what we do — it wasn’t going to be something that was optional. We are putting digital building together enabling us to create a collaborative operating construction system for the industry, and BIM is part of that operating system, as is mobility, how we handle documentation, workflows, costs. All of these interlink. Everything needs to be able to link to everything else.”
Jasper says he has seen growing use of Aconex for BIM, bolstered by an approach embracing open BIM standards, such as IFC and BCF. The Aconex website features a BuildingSmart video, showing how its platform can be used to share model ‘viewpoints’ generated in Solibri Model Viewer, and to manage the underlying workflow). The company’s open philosophy also extends to open APIs, he stresses:
“The more open companies are on the market, the better it will be for adoption of technology. Everything we build, we put an API around it, and then our customers can consider to what degree they want to integrate with internal systems or even other providers in the market.”
The Australian domestic market is not as far advanced as the UK in BIM adoption, Jasper says, partly because the UK has benefitted from the collective incentive of a government mandate. That said, BIM adoption in Australia still outstrips that in the US — something he’d like to put right.
“In the US, BIM became really topical about three or four years ago, and we need to get that back. One of the challenges in the US is that people only look at it from their point of view. BIM is one of those things that, the more that owners and contractors work together, the better the results for the project team.”
Asset information management, he feels, is probably the next step for the industry. “Owners need to assetbe specifying early what they need and then moving towards full asset lifecycle and the operations phase,” he says. As yet, however, he hasn’t seen any huge demand from customers to develop a facilities management (FM) solution.
“We see FM as part of that entire story, but the reality is that… in our development stack, there is still a lot to do in the design and construction phase,” he says. In five years, he predicts, Aconex will offer a SaaS-based FM product as part of the suite, but it’s not in development right now. Interestingly, Conject already had such a product, “but whether that’s the tool we end up taking forward, we are reviewing at the moment. It’s a bit separate to other parts of the business,” he explains.
By contrast, the functionality of Conject’s mobile tools will be retained. “We are pulling it all into one platform. Any functionality that we don’t have in Aconex Field, we are pulling into our solution,” Jasper says. He says the company is aiming to go ‘deep, not wide’ on mobile. “If we are going to add a function or a module, we want to make sure it’s really good.”
He summarises the company’s four functional priority areas as:
• Deepening its collaboration tools (developments include currently extending configuration to manage packages of work);
• Expanding field and mobility;
• Extending BIM capabilities; and
• Connected Cost (where Jasper talks about “making cost more collaborative”).
Aconex also wants to stay ahead of the game on security. As of March 2017, Aconex was seeking certification under the US Federal Risk and Authorization Management Program, FedRAMP. This, Jasper believes, will enable Aconex customers to win US federal government projects, through compliance with advanced security compliance requirements. In the UK, meanwhile, it is already registered on GCloud.
He also talks about incorporating scheduling information (currently dominated by Oracle Primavera and Microsoft Project) and geolocation services into the platform. The once-familiar Aconex product set is constantly evolving and expanding and he’s cognizant of the need to k eep reminding longstanding customers of that fact.
A former McKinsey consultant himself, Jasper has been gratified to see his former employer‘s Digital Transformation reports, released by the McKinsey Global Institute, showing how developed economies are pushing forward in digitising their construction industries.
While many companies in these regions are starting from a low base of technology adoption, he believes that this points to untapped opportunity for technology companies such as Aconex to help them adopt new ways of collaborating. In the US, for example, only agriculture and hunting are less digitised than construction, according to McKinsey. In Europe, construction was bottom of the league in digital transformation.
“The nature of the industry is that it’s quite conservative in terms of its adoption of technology. The McKinsey report shows that all the countries that have been early adopters of technology — collaboration or more general digitisation — have increased labour productivity in construction.”
Either way, if technology can take IT spend from just one percent to two or three percent in what is, after all, a $10 trillion construction market, he says, “the potential is massive.” Getting just a small slice of that business would be a major coup for Aconex.
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