By Krishnan Sampath, Phd., SMP (IIM-C), MBA,, MA., M.Phil.,

Life Fellow IIMM; Life Member, Institute of Rail Transport; Life Member, AIMA; Member, Chartered Institute of Logistics and Transport (CILT)

Construction as a service – CaaS has nothing to do with SaaS (Software as a Service) except for the phonetics. A discussion has been happening among academia whether construction as such could be termed as a product or a service. This author has dealt extensively on this subject in his PhD thesis in 2013. James Austin (2015) of Autodesk has used this phrase and visualised that technological platform could one day make the offerings under constructions, as a service.

Kenny Ingram (IFS Blog, May 2017) visualises construction industry becoming a service industry. His coinage ‘Servitization’, refers to the service part of the construction. I will agree with his assertion that construction contracts are outcome based which is due to a finite architecture. The end product or the outcome is an Asset. However, a facility management would treat this asset to deliver many facilities. This again is a service management and no physical product delivery is involved other than the facilitated is a product.

Construction of a building / infrastructure is a value creation activity for a client / user. However, the same activity has to create value for the stakeholders including the contractor or the creator of this asset. By bringing in the service element, the process of constructing this asset become beneficial across the chain, thereby creating value through both end of the spectrum.

Construction involves delivery of a final product – a road, dam, bridge, factory, swimming pool, stadium, school, mass housing, highrise apartments, house etc etc. Every building or infrastructure is individually designed, created and developed with innumerable permutations and computations that can be humanly possible. Therefore there is no uniformity in design or size or quantity etc. However, the construction process remains similar for every swimming pool or for that matter every road or every factory. The process from foundation to roof remains same and the direct materials used for this process doesn’t change from project to project – cement, aggregates, steel, sand, paint etc. The building codes and engineering basics for a construction remain same.

The fundamental and founding process remains same while the end product differs in each case and every time. The design, legal, documentation, development, engineering, procurement, construction, installation, commissioning and maintenance of each building / asset vastly varies from person to person, architect to architect, contractor to contractor etc. The costs involved remains highly individualistic depending upon the character of the end user or the employer.

CaaS – Construction as a service, aims to create an atmosphere of convenience to all the activities and the stakeholders, unite all the loosely organised and individualised systems and processes. A set of commonly agreed guiding workflow are to be created for voluntary adaptation. A co-ordinated approach based on the process for standardisation of cost, techniques, codes and delivery systems shall be established. Development of various sub systems and value chains on the CaaS principles will then be developed and encapsulated by various users of the industry. This eco system of encapsulation under a underlying process platform for all activities, series of events and players under one platform, using technology, engineering experience, industrial bodies, statutory authorities, facility and building management technology etc, which will eventually evolve a technology unto itself. A relational networking and value creation process can further be developed using the CaaS systems.

The CaaS has to create value for not just through a physical asset (for the end user) but to all stakeholders in the relational networking chain by a common platform.

Few Advantages of CaaS:

a.      The negative value tag attached with the construction industry will change. The financial institutions have this segment in the ‘Negative’ list.

b.      Industry tag will be achieved. Remember, the construction is still not officially recognised as a Industry, in India.

c.       Can become a OpenSource system of construction industry, where anyone can develop domain specific / customer specific sub systems

d.      Streamlined processes, sub systems, development of skills

e.      Organised way of doing business and running processes

f.       Will bring in more digitised modules

g.      Convert silos into chains paving way for vertical integration

h.      Single controlling ownership with many integrated partnership

a.      Ex – Engineering and design, Architect, Contractor, Employer, consultants,

i.        Distributed ownership model

j.        Cloud of the contracting business. The entire process will be connected through digitisation

Conclusion

Construction industry is the second largest employment generator in the country. However, this is still not recognised as an Industry. While the technology has advanced to a great extent, the overall supremacy that this industry should command, much more value creation has to happen across the relational networking chain. We will discuss further about CaaS based on the broad outline above.

1.      Construction is becoming service industry. To be a winner in the future, do we need to adapt? By Kenny Ingram, May 2017, https://blog.ifsworld.com/2017/05/construction-is-becoming-a-service-industry-to-be-a-winner-in-the-future-do-we-need-to-adapt/

2.      Construction as a service, by James Austin on 06/12/2015, https://beyonddesign.typepad.com/posts/2015/06/connstruction-as-a-service.html

3.      Supply Chain Process and Management in Construction Industry, Krishnan, 2013, Phd Thesis, VMU, Tamilnadu, Chennai