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The Evolution of Digitization at the Jobsite

Peggy Smedley sits down for a candid conversation with Annika Ensrud, vice president, sales and marketing, Hilti North America, and Javed Singha, cofounder and president, Fieldwire, about the role of documentation and digitization at the construction jobsite. They all discuss the evolution of what has happened, challenges the industry faces today, and what construction companies can anticipate in the future.

Peggy Smedley: Times have changed since 2008. So, talk to me about the real need now for digitization. Can you explain how you foreshadowed what the industry wasn’t even imagining yet?

Javed Singha: I think you’re spot on. And there’s definitely luck in being in San Francisco. I would say San Francisco sometimes, is about two years ahead of time technologically than most of America, and still about two years ahead of time of even Europe and other locations, sometimes. Especially when you start looking at other markets.

We really started to take off when we walked down the street at lunch, and you would see construction workers take off their gloves and start using their smartphones. It was at that moment you could see people were using it. The funny part was we initially distributed entirely bottom up. The field realized the problem and that there was a real need before the office did. We targeted jobsite end users because they felt that pain and they were the ones actively looking for solutions. And so, a lot of the time it was convincing the folks in the office that this was going to be something that they really needed. So, it was an absolute backwards way of going about the market. Fairly traditional for your SaaS (software-as-a-service) tech company, but very, very different for construction.

“…Construction is, again, and it has been well documented, the only industry that is less efficient now than it was in the ‘60s.”
Javed Singha – cofounder and president of Fieldwire.

We really saw there was this need for it because construction is, again, and it has been well documented, the only industry that is less efficient now than it was in the ‘60s. And I think a lot of that is just because of a lack of technology adoption and because there is a lack of information sharing in realtime. You bring multiple teams together to work on a project for a short period of time. There’s not a lot of shared technology, and that was essentially what we are looking to bridge.

It’s not like manufacturing where you know you’re going to run a plant for 20 years. You can invest heavily into doing that. Here you are bringing folks together for as short as 24 hours, sometimes as long as five years, but you need something that’s a lot more agile. And so that was what our focus was on. How can we move that 30% up to be much more productive, closer to 50-60%, which is what you’d see in manufacturing. When you look at the ratios, they’re only performing their trade 30% of the time. The rest of the time, 30% is just idle. That’s always going to be the case, because of just the natural components of any sort of building (construction). But there’s another, essentially 30% that is essentially waiting for information, materials, and equipment, and that was what we were focusing on. We want to make people better craft men and women. We are saying, how can we remove a lot of the paperwork and the lack of information to allow them to perform their trades more effectively, and that is what digitization helps do.

Smedley: Who were you trying to target initially? Because you have some very large customers and then you talk about the small construction companies, or does it not matter? Who did you have in your mind as the types of trades people you were targeting?

Singha: That’s a good question because I think as a startup initially, you really try to focus almost on some of the smaller end of the market, because we were trying to figure out how to get in with limited friction. Most enterprises, if they talk to you and realize you’re a five-person team right away they say, ‘“In no way are we sharing our information with you all. This project is going to be four years, you’ve been around for four months. That’s nuts.”’ So, we thought we would be going after a lot more of the smaller end of the market.

I would say the midmarket is predominantly where we have the most customers, partly just based on how the market shakes out. But we found ourselves having enterprise discussions very early on, which was really surprising to us because again, I think it’s pretty wild that people would take on that level of risk. But we had some folks that really saw the potential in the product, and so we ended up selling to some large, billion-dollar general contractors in the first couple months of the company, which we hadn’t expected. But realistically we were thinking MEP (mechanical, electrical, and plumbing), specialty contractors, were where we were going to focus predominantly because again, they get the most immediate benefits of using software like ours, but they’re also incredibly tech savvy themselves. And so, for them, the learning curve to just deploy this and get running was super obvious because the cost of those trades are higher. When you’re focusing on productivity, they get the benefit and it’s a larger bottomline impact immediately. And we were a little surprised that we ended up in the higher end of the market earlier, but then it’s more normalized as we’ve gotten more mainstream adoption, and the midmarket is again the lion share of our customer base as well as specialty contractors.

Smedley: That statement makes more sense to why you would be interested from a Hilti perspective, understanding both construction and the industrial space. Can you then explain why you’re interested in Fieldwire?

Annika Ensrud: Initially, back in 2017, Hilti was primarily partnering with different startups, making sure that we invest in a couple different areas that were interesting to us. We then dove deeper into this productivity problem that construction has, because productivity has always been Hilti’s focus, and we’ve always solved it from a perspective of applications trying to make our customers more productive within the application, through delivering innovative hardware and services.

we realized that the breakdown in productivity in the construction industry is around processes. Trying to figure out where my stuff is, to get it from point A to point B, accessing information, getting more digitized, and making sure that these processes are smooth and that the labor force isn’t standing around, but actively working on their craft and doing the applications that we are trying to improve.

We realized that we can only go so far with improving the application through hardware improvements. It was necessary to tap further into software processes to improve these processes that are currently not working smoothly. We believe that Fieldwire has done a great deep dive into this topic and figured out the amount of time our customers are spending performing their work, which amounts to on average, 30%. 70% of the time is really spent on doing other things, trying to figure out where to go, what to do, how to document it, what work needs to be completed, and where the materials and tools are to complete the work. The focus has been to flip this metric on its head. We want to maximize the amount of time our customers do productive work, which has always been our mission on the Hilti side as well. This partnership just made perfect sense because we had the same dream, which is to drive more productivity in the industry.

Also from a product perspective, there’s a fantastic fit too. Our focus has always been to produce tools that are easy to use, that are easy to adopt, that are obviously safer, and bring productivity to the game. And that’s very much the mission of Fieldwire as well.

Smedley: You answered the questions already, but the types of companies that benefit from using Fieldwire run the gamut. I don’t think there’s any one type of company then.

Ensrud: No. There really is not. And we can cater to projects of any size, companies of any size, and any trade at this point. We really haven’t narrowed it down to a particular trade. Because the whole goal is improving the process of communicating between the office and the field. It happens in all the trades. Everyone must be on the same page and there must be a single source of truth. And so yes, no company is too big enough for us, and no trade is too complex for us to tackle.

Smedley: The industry is very cyclical, as you described, are you seeing those trends again, and if so, how is your tool playing a part in helping? Now that we’re starting to see this is where it really becomes very prevalent, now the real benefits of the tool that you have become clearer, as things get tighter, tougher, bigger pain points, now they see the greater strength of the software are revealed.

Singha: I think you can see it when we talk to customers, you can see that there are sometimes two thoughts. And you have a group that very much is forward looking and saying, “’Hey, I need to do whatever gets me more leverage.”’ They know there is a lack of skilled trades people.

And they’re saying, ‘‘“What can I do to find more leverage?”’ And solutions like ours will help. I think you see some, sadly, that are so financially strained that they don’t know what to do and that becomes quite sad because they’re making tradeoffs that fundamentally aren’t going to be great to the bottomline and that’s just the nature of the industry, it’s quite tough given the margins are really low, but I think the ones that are a little bit more forward-looking are saying, “’This is what I need to do because I’m going to get left behind by the industry if I don’t continue to evolve.”’ And the majority of customers, I think, have picked up on that and look around, and they’ll say things as simple as “I look so silly as the only one walking around with paper on a jobsite still, or I can’t retain my 25-year-olds because they’re used to using this type of technology in their private lives and we don’t have anything like this when they come to work and it’s going to be hard to retain them.”’

So, there’s a myriad of factors where people have just realized this is the direction. Now, I think it’s really, going back to an earlier comment, dependent on the markets. And one of the reasons I think that joining forces with Hilti at the time we did was important is we’re seeing Europe really starting to hit the same trend right now, and it’s starting to also begin a little bit more in places like Asia and the Middle East. The challenge sometimes is again, due to when you’re driving a productivity product, it’s about labor costs. In certain markets it is just significantly easier, like San Francisco, to sell a product like ours because labor is so expensive. Everybody can immediately rationalize the solution. But when an iPad costs the same as someone’s salary in certain markets, it is much harder to say, we want to solve this with technology versus we want to solve this with people. And so, there are market-by-market conditions that dictate the speed of technology adoption.

Ensrud: I just want to emphasize two things that you said that we hear over and over again. It is the skilled labor access in the industry that’s extremely challenging, and with that comes attracting new talent and to actually attract them to this industry, and to have them stay here. And I think both of those heavily create a great match for a solution like Fieldwire. First, we can streamline a lot more of those tasks that need to get done. If you have an unskilled labor force, you can control a lot more of the work through checklists and standardizations with a product like Fieldwire, and then obviously by outfitting the teams with iPads, and software, the new talent will come in. It creates a much more exciting environment for them to stay in the industry and see the future opportunities develop further.

Smedley: Are you saying the next generation taking over the leadership positions will not even consider a company without technology like this?

Singha and Ensrud: Nope.

Smedley: Is construction starting to take a stronger position within, and dare I say leapfrog other industries like financial services and manufacturing?

Singha: Good question. I spoke to a company earlier this week who is selling a version of Fieldwire for maintenance, essentially for a large utility. It is interesting to see that they’re now thinking about this. I would say in some capacity, yes, construction has really leaned in technologically to have a lot of advancements, which is impressive to see. Getting out in front of finance might be a stretch, or healthcare, or other ones that are interested in what they are doing from a computing power standpoint, but I think they’re definitely catching up in getting in front of certain markets.

Ensrud:  I would agree with Javed. I do see some differences in trades, like the MEP trade has always been a little bit more advanced than maybe some of the others, but we’re seeing some of the other trades now really catching up. If I think about interior finishing trades, also lower cost of labor rates typically in that particular trade, but we’re starting to see them with tighter margins adopting this kind of technology too, because they are seeing that they have to, and in order to also play on these bigger projects and participate in kind of the overall digitization of the industry.

But yes, I don’t know if they are leapfrogging anybody else. But we’re definitely making good progress, and those trades that maybe haven’t been at the forefront are catching up quickly.

Smedley: You talk about your three pillars, which are your value pillars, that you have. Are those essential?

Singha: We think the three value pillars being access to and sharing information, the ability to plan and manage work, and then tracking and reporting on progress. I would say, since the time we started, accessing information has become more commoditized, which is a good thing. It seemed novel 10 years ago, but just accessing your drawing on a jobsite was quite magical.

At this point, that should be ubiquitous, and it’s the same way that, with Box and Dropbox and OneDrive, you have a lot of products that allow for document access. It is really the coordination of work part that is still fundamentally changing. So, a lot of things around lean construction being agile, I think some of these elements of just change management. Some of them also have the software to do that. That is fundamentally what we really lean in on and where we think the biggest impact is going to be. There’s a ton of room still to drive additional change in that space, and so that’s where there’s a lot of room for growth still.

Ensrud: I would add one piece, and this is where I also see Fieldwire having tackled this topic fundamentally differently, coming from that field angle and making sure that the software is super easy to use really helps with the adoption on the field side. So yes, these are the value pillars and the topics that we’re addressing. we are also trying to make sure the software remains super simple in its usage so that those team members who are in the field that don’t work every day with a computer can adopt it super quickly, and the ramp up is small. Low training effort.

Smedley: Is the idea that there isn’t that knowledge base that we always had? We don’t have mentors like we are saying, so that they can get it in the field. Is that the idea behind that?

Ensrud: Yes, that’s the idea. And, I think, everybody nowadays, at least in their personal lives, uses a smartphone and you’re pretty quick to figure out an app.  we’re coming from that same angle if we want that adoption to be super simple and quick with very low training effort. Yes, no mentors on site need to walk people through it, but also, from our side, we of course offer training, but it should be very low effort to get into the product and start implementing it into your day-to-day workflow. that’s been a big focus, because typically what we’ve seen is software is implemented, but mostly on the office side and lacks adoption in the field, and then the companies never get the return on their investment if only one part of the organization actually uses the software. That’s one key element that Fieldwire really does differently.

Singha: Yes, that was something we’ve seen, especially when we started up, and we still continue to see is, there’s a lot of good ideas for software in the space, but frequently it’s someone asking for people on a jobsite to just do work for them. There’s not a lot of software that empowers the people who are on the jobsite, and I think that is what we really tried to focus on doing differently, which is, hey, we can unlock a new stream of data if we are collecting data in a way that benefits the people that are interacting with our software.

If we just ask them to fill in forms all day, nobody is excited about that. It does not matter how glorious your form is going to be, it’s still considered busy work at that point, which isn’t what people in construction got in to do, the industry that they got in to build, not fill out paperwork. And so, you must find creative ways to build your software in a way that doesn’t require any sort of training, that people will adopt it, they’ll engage with it because it benefits them in that process of it creating benefit for that individual. You can then provide a new data stream for the office. And so, I think it’s flipping around the process on its head a little bit from previous software, which was very back-office driven.

Smedley: How has this acquisition been?

Singha: From the Fieldwire perspective, we really looked at Hilti as an interesting opportunity for us to continue and accelerate. I think a lot of times you see acquisitions happen and it’s kind of the end of a product. That was one of the fears we had heard from customers…. But typically, when some of the known entities out there buy someone, that product does not continue its momentum. I think one of the things that’s a little different, obviously the founders are still in the company, but Hilti really leaned in and made this a new pillar for their company. Obviously, they had everything around their product and services more hardware specific, but software became a new pillar and I think they really, on my side, we’re impressed with how much they have leaned into this and it’s why the entire team is here. In fact, we’ve more than doubled or almost tripled the team since the acquisition. I think one thing that sometimes people have fears of is, oh, the company got acquired, that is the end of it. This is the exact opposite, which is one of the rare, good acquisitions of you bring things together and find the synergies that work well, you add resources, and you keep moving forward. And that is one that from our side, it just made a ton of sense when we looked at Hilti, that all the things we were really looking for, they had, and some of the things that we had, they were looking for. And you don’t see integrations that can work that effectively. And so far, a year and a half later, I would say it has been fantastic.

Smedley: What’s next looking beyond digital transformation and even immersive technologies?

Singha: I think right now the more near term, which is generally where I like to live, is much more on trying to integrate the various services and offerings we have between Fieldwire and Hilti, as well as a lot of the things that the Hilti team is cooking up. And so, there is a lot of opportunity to combine things like ON! Track and Fieldwire that become exciting. I’m going to focus on making sure I do that versus start promising things.

Ensrud: from the Hilti perspective, where we see people struggle is trying to track their people, their stuff, and their projects. So those are the three big challenges that our customers are facing, and we’re trying to offer solutions around that. We want these solutions to be integrated, and simple to use to help solve those challenges. And really drive productivity along those pieces. There is certainly a lot more that we can do down the line. But over the next couple of years, I think we’re pretty set on what we’re trying to solve.

Smedley: Any final remarks?

Annika Ensrud

Ensrud: Our goal for the industry is that we become our customer’s productivity partner, and that we make construction better Hilti’s vision is to solve problems to ultimately get the work done in the most efficient, the safest and fastest way possible. We believe that by combining forces we can deliver solutions quicker together because we have the expertise from the Fieldwire side now from a software perspective, and we have access to the customer from the Hilti side with our boots on the ground. combining forces makes us a strong productivity partner for our customers.

Javed Singha

Singha: There’s a lot of software that sounds good in the market that will solve your problem. I think the best thing people can do is put it in the hands of the team and see if it is good. That would be my recommendation is confirm you have buy-in from the people on the jobsite, and if they like it, then you should try to figure out how to deploy something. I would not start just saying, Ooh, this looks like it checks every box. Let’s roll it out. I would do the exact opposite, which is make sure there is organic buy-in and then go from there. But if there are any customers who have any questions or prospective customers, reach out to your Hilti account manager (AM) and we’d be happy to chat.

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