2016 Engineering & Construction Conference

June 15–17, 2016 The Westin Austin DowntownAustin, Texas

Technology Solutions for E&C Growth

Jeff Gallant Senior Manager Deloitte Consulting LLP

Tom PendergastManaging Director Deloitte Consulting LLP

8:30 a.m. - 10:00 a.m.

Module/Topic

Growing the Business

Best of Breed Strategies

Integration Strategies

What are SaaS, PaaS, IaaS?

ERP Latest Functionality

Oracle JDE SolutionPrint for E&C

Q&A

Agenda

Growing the BusinessHow Does Technology Provide for Growth?

Argument for Growing your Technology Spend

$

Profit Margin Affected by the Use of Technology and Integration

Investment in technology are likely to have different effects on profit margins by reducing SG&A. Technology allows companies to deliver larger revenue projects with the same or reduced support team. Use of technology and integration may result in higher initial costs but bigger margins in the long run.

Revenue

Less SG&AMore SG&A

Time

The State of Technology Spend in E&CIT Spending Percent Change, by Industry, 2014 to 2015 IT Spending Percent of Revenue, by Industry, 2015

*SOURCE: GARTNER IT KEY METRICS DATABASE, 2012**ENR, March 2016

The State of Technology Spend in E&CIT Spending per Employee, by Industry, 2015 IT Spending Percent of Operating Expense, by

Industry, 2015

*SOURCE: GARTNER IT KEY METRICS DATABASE, 2012**ENR, March 2016

The State of Technology Spend in E&C• Construction industry is last or near last in IT spending compared to 21 other

industries

• The smaller revenue companies actually spend more on IT by Revenue, by Operating

Cost, and by Employee than the larger companies

• Underspending on IT may be a short sighted strategy

• 70% of US productivity growth comes from IT*

• IT investment is one of the key drivers in attracting and retaining young talent,

69,000 construction jobs will be filled with millennials this year**

• Are you putting yourself in a competitive disadvantage?

*SOURCE: GARTNER IT KEY METRICS DATABASE, 2012**ENR, March 2016

Best of BreedWhat is it and how does it work together to provide for Growth?

• Overview• Start with the end in mind. Where are you spending the most time

for the least value. Allow technology to deliver more work with less effort.

• Data View• Start with the end in mind, think Big Data to Small Data• Create a Master Data Management (MDM) strategy• Use a governance model to support the strategy

• Application View• Resign the fact that ERP does not do “Everything”• Resistance is futile, Cloud is here to stay• Use a Best of Breed approach to support business competencies

and to fill functionality gaps• Plan and test integrations to be invisible• Provide a comprehensive application roadmap so the entire

company can see the vision and understand the timeline

How Should Technology Solutions Work?

Best of Breed

11

BIM (3D)

AutoCadBentley

ArchiCad

Quantities by Location

Recipes

Schedule(4D)

PrimaveraMS Project

Project ScheduleChanges

Cost(5D)Unifier

Prism G2Ecosys

Materials & Resource by

Location

5D (Load Spring, Vico, Hard Dollar, McCarthy)

Oracle ERP CloudEBS, JDE, SAP, CMiC, Sage, VP

AutoVue, Cafeone, EDO

Tasks, Progress, Resources

WO, Bid Packages, Quotes,

Procurement

6D

Insite, SRM

Internet of Things (IoT)

Orchestrator

User InterfaceDashboard

Projects, WBS, Budgets, Actuals, Forecast, Change Orders, Rev Rec, Billing, Payments

Example of Best of Breed Decisions for PM Tool

Potential Solutions for Best of

Breed

Analysis is focused on the project management component of the current IT architecture – how best to manage forecasting, budgeting, and change orders, while addressing key pain points of duplicate and manual entry.

Option 1

Oracle EBS

Exposing EBS functionality to PM using a user friendly

overlay

Option 2

Oracle EBS PM Tool (GC friendly)

Utilizing a GC-specific PM tool and interface with EBS

Option 3

New ERP Platform

Implement a new GC-focused ERP solution

Oracle CRMMS Excel

MC2Timberline

Oracle EBS/ MS Excel Oracle EBS

Hyperion with MS Excel/ SmartView

Primavera Contract

Management

MS Excel/Tableau

Current IT Tools

SharePoint 2010 for Collaboration

MS Excel for Risk Management

Work Acquisition Estimating Budgeting

Financial Mgmt Forecasting

ExecutiveReporting/

BI Env.

Textura/MS Access

Vendor MgmtProject Mgmt

Primavera P6

Scheduling

HTML 5 Overlay

IntegrationWhat is the current vs. latest thinking?

IntegrationsCurrent Latest

Eliminate Manual spreadsheets Implement solutions to delegate time entry for jobs to the field, enter of productivity units and equipment utilization

Master Data Management Strategy – “We’ll get to it later, it’s a technology solution”

Construction companies have grown through acquisitions over the last 10 years and by having standards enable you to have 1 source of truth for data and eliminate the need to enter into multiple systems

How do I improve job cost controls? Automating the use and approvals of purchase orders, forecasting and integrations to best of breed PM tools

Creating Key Performance Indicators that are meaningful to Project Managers and Top Level Executives rather than traditional reports

Think more about the use of visible “Dashboards” that you can access on mobility devices

Forecasting once a month may identify surprises with your budget vs. actuals

Setup Watch list to be proactive in providing you with alerts if you incur cost over a certain threshold by WBS.

Managing suppliers and subcontractors across your organization is cumbersome

Get real-time updates on subcontractors to include reason codes for sub-par performance and quality of work

Plan and Test integrations to be invisible and simple

Systems Integration and MDM RepresentationGiven below is a representation of various steps of the construction process lifecycle, illustrating the data fields at each step, along with integration points throughout the process. (Job # gets entered 1 time!)

SharePoint 2010 for Collaboration

1 Integrate Historical Project information from Financial / Vendor / Project Management

Work Acquisition (CRM)

• Job #• Customer #• Contract

Amounts• Discrete project

attributes

Estimating

• Job #• Customer #• WBS/CBS• Historical cost

Budgeting

• Job #• Customer #• WBS/CBS• Budgets• PM name• Job attributes

Financial Management

• Job #• Actual Cost

(A/P, Payroll, GenCon)

• WBS/CBS• Committed

cost• Budgets

Project Management

• Job #• Subcontractor #• WBS/CBS• Change Orders• RFIs, Submittals,

Transmittals• Insurance and

Bonding Info

Vendor Management

• Subcontractor #• WBS/CBS• Insurance and

Bonding Info

Forecasting• Budgets• Actual Cost• EAC• ETC• EV

2 Integrate Job # and Customer # from CRM

3 Integrate Job #, Customer #, and WBS/CBS from Estimating

4 Integrate Job #, WBS/CBS, and Budgets from Budgeting

Integrate Subcontractor # and Insurance and Bonding information from Vendor Management

32

Scheduling - P6

1

Integration Points

4 5

6

6 Integrate Job #, WBS/CBS, Budgets, and Actual Costs from Financial Management

Risk Management

5

SaaS, PaaS, IaaSWhat is it and how does it impact my business?

IT a

bilit

y to

resp

ond

to B

usin

ess

need

sEvolution

4-5 years 4-5 years

Business Model User Technology

IT a

bilit

y to

resp

ond

to B

usin

ess

need

s

IT Inflection Point(s)

Evolution

4-5 years 4-5 years

Traditional IT Delivery model SaaS Delivery model

Business Model User Technology

Cloud offers the agility, scalability, and continuous updates to features in order to meet business, users, & IT’s evolving needs

IT Delivery Model with SaaS for evolving Business and IT needs

18 Deloitte Consulting | Oracle ERP Cloud

Operate

Implement

More EffortLess Effort Similar Effort

Develop Interfaces

Migrate Data

Configure SolutionInstall Hardware and Software

Train Users

IT & Operations Training

Perform Regression Testing

Install Patches

Upgrade to New Releases

Lead Change and Adoption

Standardize Processes

Test Solution

Cleanse and Validate Data

Manage Service Requests

DevelopCustomizations

Develop Reports

How does the effort compare to on-premise ERP Implementations?

19 Deloitte Consulting | Oracle ERP Cloud

Cloud computing is a model for enabling convenient, on-demand access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications and services), over the internet, that can be rapidly provisioned and released with minimal management effort or service provider interaction.

Infrastructure-as-a-Service (IaaS)Platform-as-a-Service

(PaaS)Software-as-a-Service

(SaaS)

• Personalized, secure, and connected

• Functional Applications hosted by a provider on a cloud infrastructure

• Delivered as subscription service

• Enrich your SaaS• Create New features & New

applications• Providers deliver not only

infrastructure but also middleware (databases, messaging engines and so on) and solution stacks for application build, development and deploy)

• Delivery of computing infrastructure(network, storage and compute resources, usually with some virtualization technology) delivered as a service

Applications

Platform

Infrastructure

Applications

Platform

Infrastructure

Applications

Platform

Infrastructure

Use Case(s) Use Case(s) Use Case(s)

• ERP, CRM

• Personalize the delivered UI

• Change existing business processes

• Extend SaaS functionality

• Create Custom Web and Mobile applications

• Modernize legacy apps

• Extend your existing IT footprint with advanced Engineered Storage and Compute functionality

Vendor Managed Customer Managed

What is Cloud?

Oracle Platform as a ServiceOracle Platform as a service is a cloud service model that provides a platform for customers to develop, run and manage applications in the cloud. Oracle hosts software and hardware on its own infrastructure and delivers it as a service to customers.

Complete stack of software and infrastructure products to build and extend Oracle ERP Cloud and

non-Cloud ERP solutions

Management

Content &Collaboration

DataManagement

Business Analytics

Integration

Application Development

PaaS

• Eliminate the cost of maintaining applications, databases, middleware and the underlying infrastructure that supports them

• Provide platforms that facilitate faster development and deployment of applications, integrations, and business analytics

• Enable customers to innovate and transform their business operations leveraging a combination of cloud product offerings

• Well-suited for hybrid cloud scenarios due to binary compatible on-premises and cloud and dev/test in cloud and Prod on-premises

• Range of products provides clients ability to “mix and match” best-of-breed products from the PaaS suite, based upon need

• Protects investments made in IT staff and leverages their knowledgebase in Oracle’s on-premises products

Marketplace is moving to cloud for new ERP projects Business

Transformation

NETSUITE

Proven cloud solution for smaller organizations or second-tier ERP for large companies

SAP

Claims S/r HANA Enterprise Cloud edition is complete ERP and cloud available. More of hosted solution.

Oracle

Oracle is committed to cloud-only for all new pursuits in FY17. (Exceptions require approval

Workday

Developing stronger ERP cloud marketplace position. Strategy is often selling future road map

Microsoft

Position full cloud version of Dynamics product

Cloud Computingproviders

• Oracle Financials Cloud• Oracle Procurement Cloud• Oracle Supply Chain Cloud• Oracle Project Portfolio Management Cloud• Oracle Accounting Hub Reporting Cloud

Example Oracle’s Cloud Offerings

PaaS

ERP Cloud

Customer Experience Cloud

Java Cloud

Enterprise Performance Management Cloud

Software-as-a-Service (SaaS)

Database Cloud

(partial listing of PaaS services)

BI Cloud Mobile Cloud

Integration Cloud

IaaS

Compute CloudStorage CloudPrivate Cloud

Managed CloudSOA Cloud

Cloud Devices

Human Capital Management Cloud

(currently for PaaS and IaaS)

Enterprise Resources Planning Solutions

What’s new and how does it impact my business?

Enterprise Resource Planning – ERP Cloud

Why is it Important?• ERP Cloud continues to add functionality at

a rapid pace• Will soon be a viable alternative to On-

Prem• Can be integrated to On-Prem for best of

breed solutions

How do I Prepare?• Upgrade to the latest version of your

software• Reduce customizations• Prepare for business discussions the

answer the question “Why Not?”

New Functionality• ERP Cloud now contains: Financials,

Accounting Hub, Project Execution Portfolio and Financials Management, Risk Management, Revenue Management, Procurement, HCM and SCM (limited)

• Project Controls, Costing and Task Management

Enterprise Resource Planning – JDE

Why is it Important?• JDE continues to invest in industry-specific

functionality• JDE is very IoT centric• JDE continues to invest in the user

experience through User Defined Objects (UDO) and Cafeone

How do I Prepare?• Upgrade to the latest version E1 9.2• Assign a functionality champion• Get trained• Download the ASU for Revenue Performance Obligations• Review functionality in Advanced Job Forecast around the use

of work orders (new HA ledger), new MOC, and detailed ETC calculations

• Prepare for JV Accounting changes• Leverage JDE mobile applications• Consider Best of Breed to leverage components of ERP Cloud

New Functionality• Environmental Accounting• Health and Safety• Project & Government Contract Accounting• Project Portfolio Management• Advanced Job Forecasting• IFRS Revenue Recognition Model• Mobile user and Store and Forward

Enterprise Resource Planning – EBS

Why is it Important?• EBS continues to invest in industry-specific

functionality• Closer to the Cloud User Experience

How do I Prepare?• Upgrade to the latest version 12.2.5• Prepare for more mobility• Get trained• Align EBS and Cloud vision• Consider Endeca

New Functionality• Modern User Experience and Mobility

• Converged look and feel with Cloud

• Optimized Tablet user interface

• Endeca Information Discovery

• Functional Advancements

• Advanced Asset Management

• Procurement Command Center

• Advance Project Planning

• Schedule of Values

• Map Visualization

• OTL Timecard Automation

Enterprise Resource Planning – SAP

Deloitte Consulting LLP

Why is it Important?• SAP continues to invest in industry-specific

functionality, although more slowly than Oracle

• SAP continues to invest in HANA, needs development resources

• SAP still struggling with a complete Cloud solution

How do I Prepare?• Upgrade to the latest version SAP ERP 6.0• Consider an SI partner that has pre-built

solutions (Kiewit) • Prepare for functionality gaps and the need

for development

New Functionality• Optimized project management• Mobility• Performance analytics• Visual design & construction• Team collaboration• Subcontractor collaboration• SAP HANA enhancements

Enterprise Resource Planning – CMiC

28Deloitte Consulting LLP

Why is it Important?• CMiC leads the pack in solution

completeness• CMiC is Cloud enabled• CMiC is 10 years old and a credible Tier 2

ERP• Limited large client experience

How do I Prepare?• If you are considering a change, be sure to

understand the Selection Process.• Concentrate on business process and

functionality, not bells and whistles • Use scripted demos with weighted scoring

and results• Don’t be swayed but the most dominant

player on the team

New Functionality• Integration with Vico (3D, 4D, 5D)• New Revenue Performance Obligation• Scheduling with Primavera• New mobile solutions• Cloud ready

Enterprise Resource Planning – Sage / ViewPoint

Deloitte Consulting LLP

Why is it Important?• If you are considering a change, be sure to

understand the Selection Process.• Concentrate on business process and

functionality, not bells and whistles • Use scripted demos with weighted scoring

and results• Don’t be swayed but the most dominant

player on the team

New Functionality• Sage

• Affordable Care Act• Payroll Outsourcing Interface• Integration to Sage CRM• Employee Self Service• Not a pure Cloud solution

• ViewPoint• ViewPoint Buys Maxwell Systems• Compliance with EEO, Certified Pay, DOT, OSHA, and ACA• Navigation still needs work

Pre-Configured SolutionIntroduction to the new Oracle JDE SolutionPrint for E&C

What is SolutionPrintTM?

•Deloitte SolutionPrintTM is a package of ready-to-use business process models, application instances and documentation sets that can be used to improve the quality, speed and affordability of Oracle projects. The SolutionPrints are tailored for both Oracle EBS and Oracle JDE.

Process Flows100’s of industry-specific detailed flows covering key process areas (OTC, PTP, PTM, RTR, etc.)

Requirements 1000’s industry-specific requirements linked to the associated process steps

Project PlanSingle ~4000-line project plan encompassing all threads and phases of the implementation

Technical Objects ~100 objects typically leveraged in implementations

ConfigurationsTested and industry-pertinent configurations of all modules within the solution

Increased Quality Time to Value

Project Affordability Reduced Risk

The SolutionPrint™ Difference

BuildDesign

Requirements &Fit/Gap

Design ProcessesUnit Test

Configuration Integration TestString

Test

Phase

Stage

Process & Requirement Confirmation

Integration Test

Lifecycle (Specs, Code & Test)

Lifecycle (Specs, Code & Test)

Adapt

Trad

ition

alSo

lutio

nPrin

t Phase

Stage

• “Cloud” delivery of a pre-configured JD Edwards instance provides greater agility

• Immediate Process Confirmation allows development to start sooner

• Overall ~ 50% reduction from traditional Design & Build Phases

SolutionPrint DifferentiatorsLeverage industry specific best-practice processes Minimize configuration, unit testing and string testing stages

Leverage industry specific system as part of design confirmation Jump directly into integration testing

Early identification and head start on development and data Timely Oracle knowledge transfer to client due to early system exposure

• By collapsing the traditional “Design and Build Phases” of a waterfall approach into an initial “Adapt Phase”, SolutionPrint helps our clients to accelerate the project, focus on the most critical aspects of their business with the agility necessary to ensure their to-be processes are aligned with leading practices.

Introducing the NEW SolutionPrint™ for Engineering & Construction

•Meets E&C specific requirements around:

• Environmental Accounting

• Health and Safety

• Project & Government Contract Accounting

• Project Portfolio Management

• Advanced Job Forecasting

• IFRS Revenue Recognition Model

• DSI mobility integration

This preconfigured JDE solution from Deloitte with accelerators addresses many of the pressing issues facing the core ERP functions found in E&C today and provides our clients with a shorter time to value and reduced Total Cost of Ownership. This SolutionPrint is based on Deloitte’s deep industry expertise and knowledge and addresses Key Design Decisions, KPIs, JDE gaps and the JDE roadmap.

Q&A

Business:• A Business event that’s driving

significant / foundational IT investment

• Business mandate to drive increased standardization, efficiency, reduction in operational costs

IT• An increased gap b\w evolving

business needs and ability of your ERP application to meet them

• A burning IT platform that’s driving significant / foundational IT investment

• Imminent sizeable invest in an upgrade project to stay current on technology platform

• IT resource and budget being consumed in "keeping the lights on", leaving little room for innovation

A move to Cloud can be positioned as a transformative event for IT organizations as they educate, equip and prepare themselves to be the next-generation, modern IT organization. Cloud fuels a shifts of focus from traditional to higher value added activities. Same is true for business organizations and their operations. A well thought out decision making process isessential to keep the right focus

Are you experiencing:

Maintain Status Quo

No

• The value of net new business transformation capabilities enabled by cloud

• The value of digital enabled built into the cloud: Mobile, Social and real time analytics

• Total cost of ownership (TCO) Cloud vs. On premise

• Cloud Operating model: ongoing release updates, adoption models, data security

• Suitability of standards-based extension tools

• Replacement of customizations with extensions

Have you explored:

Explore cloud relevancy for

your Organization

No

Yes

Cloud Day

What aspect of Cloud’s Value are most relevant to your

organization?

• Business transformation• Digital enablers• Innovation and upgrades• Focusing IT to higher value

added tasks

Yes

Outsourcing infrastructure support and maintenance only

Primary go forward

strategy: IaaS

• The right SaaS product by leveraging a comprehensive evaluation framework

• Ability to adopt leading practices

• SaaS capability fit for unique requirements

• The needs for PaaS and the right PaaS product

• A business case• Cloud adoption readiness

Execute Cloud Transition Lab

No

Cloud Transition Lab

Have you confirmed:

Enterprise Value Map

• The optimal architecture / roadmap for cloud move

• Hybrid / phased architectural considerations

• Low business risk and cost effective deployment options

• Master data, transactional data, close process, reporting and integration aspects

Have you considered:

• Phase scope, execution plan, cost estimate and roadmap to end-state

• Next generation IT operating model (see next slide)

Have you defined:

No

No

Yes

Yes

Cloud Decision Tree