Parsons' Gregg Welch on what construction technology really means
The Parsons SVP outlines how tech can tangibly impact regional skylines, and reveals the US consultancy's plans to become a "digitally enabled solutions provider"
In the contemporary investment climate, one of the construction industry’s dominant challenges is to create a business model that paves the way for the burgeoning technology ecosystem to shape the skylines of the future.
Problem-solving experts from the Middle East's public and private sectors are working to address this challenge and spur the development of a ‘smart’ urban environment. The legislative framework to support smart city projects is rapidly being developed and expanded in the region – particularly the UAE – and the onus is now on construction companies to evolve and meet the needs of local asset owners.
US-headquartered consultancy, Parsons, recognises this changing environment, and has started to prepare for the developer demands it expects to contend with in the future, according to Gregg Welch, a senior vice president at the company. Welch also heads up Parsons’ built environment (BE) division, which plays a significant role at the company that is working to transform itself as a “digitally enabled solutions firm”.
“Parsons is evolving and transforming from a service-based entity to a full-fledged digitally enabled solutions provider,” Welch tells Construction Week.
“We are embracing new technologies and tailoring our culture in ways that will dramatically enhance our value proposition as well as our commercial returns to shareholders. We foresee significant opportunities in smart cities and the infrastructure required by them.”
As part of this remit, one of Parsons’ priorities is to introduce and expand its cyber, defence, and security service offerings, which Welch says the company already has a stronghold on in the North America region. Parsons, he explains, has adopted a “think-tank approach” to drive industry innovation, and is focusing on “seven prime technologies” to achieve its goal of becoming a digital construction leader. These tools, many of which are Parsons’ proprietary technologies, cover the internet of things (IoT), critical infrastructure protection, autonomous systems, artificial intelligence, cybersecurity, reality-based simulation, and space, including small satellite integration and space system resilience.
Admittedly, these technologies would be formidable additions to any construction company’s arsenal, but their functionality is enhanced by Parsons’ portfolio of high-profile construction projects. In Saudi Arabia, its repertoire includes work with clients such as the kingdom’s Ministry of Housing. Parsons is also part of Riyadh Metro Transit Consultants (RMTC) consortium, alongside Egis Rail and Systra, which is working on the $23bn (SAR86.3bn) urban rail development in the Saudi capital.
RMTC is the engineer of record for two Riyadh Metro contracts, which cover programme and construction management, and Parsons has “the lead role in the health, safety, and environment management” aspects of the development. The firm is also the project management officer for Saudi’s upcoming 334km2 Qiddiya entertainment city, which features plans for a Six Flags-branded theme park. Additionally, Parsons delivered the winning masterplan for the Red Sea project that is being developed in the kingdom.
Equally impressive is the company’s UAE portfolio, which features Sharjah International Airport’s expansion; the Abu Dhabi International Airport Expansion project; Dubai Municipality’s $3.26bn (AED12bn) Deep Tunnel Sewerage System; Emaar’s Dubai Creek Tower; and Route 2020, Dubai Metro’s Red Line extension to the Expo 2020 site, the latter of which is also one of Parsons’ projects.
These developments underscore Parsons’ influence in the Middle East, where it has been an active player for more than 60 years. Now, as the Middle East’s construction sector digitises core processes such as cash flow management and material procurement, Welch says Parsons can actively contribute to this evolution, regardless of the differing levels of tech-savviness in various regional markets: “We deliver consistently in all the markets using the same technologies – we don’t change the way we do business in a country that may have less of a technology orientation than others, because from our perspective, consistency and [tech-driven] methods of delivery are part of what we are. So we don’t switch [our approach] from country to country.
“We feel like it’s the way to be right now, because it just makes our product better, [and] improves our value proposition no matter where we go. If we go into a place that isn’t necessarily tech-oriented, we can bring that as a value add for [the local clients], and that makes sense for them and us.”
NEXT PAGE: The realities of tech adoption
Research published by McKinsey Global Institute in June 2016 states that the global construction sector has a “poor track record on innovation and the adoption of new technologies, tools, and approaches”. The report recommends that this trend is changed through support from project owners, who typically “believe that their responsibility ends when they award contracts, forgetting that they pay the economic costs of delay”.
One of the factors causing this delayed uptake is the perceived cost of technology adoption, which Welch agrees may, in the short term, raise capital expenditures on a project. However, a building’s operations considerably outlast its construction period, and Welch is quick to point out that technology is a sensible option for any development’s overall life cycle: “For a government or an [individual] owner, if you look at the life cycle cost of the project, […] you’ll find that having that technology during the project’s development makes more sense than not having it.
“Many of our clients are looking at ways of doing things more efficiently, more sustainably, and more cost-effectively. I think there’s a time when [developers focused on short-term gains], but I think [...] people are thinking along [future-focused] terms a lot more today. We’re seeing progress in all markets, and the UAE is clearly the leader.”
To fully understand technology’s true benefits, it is important to know how it fits into the average construction process. Welch says connectivity is a huge aspect in the cycle, as are data analytics. Using tech to deliver projects, such as by digitising designs or through drone-led supervision and mapping, lands on one side of the spectrum. On the other side, Welch explains, technology must be implemented to provide valuable operational data.
“The other component of tech adoption [includes tools] fitted in the actual project, with the end-user and owner getting its benefits. That’s the kind of data [developers would] use to analyse and using it for going forward. There is a crossover with facilities management (FM) here – you can’t have one without the other,” Welch adds.
This operational smartness makes business sense in a region racing to build the world’s next ‘smart’ cities, and these long-term benefits are steadily attracting developers in the Middle East, especially the UAE.
“It’s encouraging to see that [developers] are understanding the benefit of [smart tech] because of not only its benefits to the end-user and to the owner, but also for the operations and maintenance (O&M) stage in the long term,” Welch explains.
“There’s been a lot of progress in the fundamental understanding of that importance over the last few years in the UAE. I think it’s a combination of the government, which sees [tech-first] as a necessary way to conduct business, as well as developers and [teams that] are providing the O&M services.”
Welch has his sights set firmly on the future, and is optimistic about Parsons’ tech-first business strategy as well as the Middle East’s appetite for smart construction and building practices. Since 2016, his BE division has gained close to 1,000 new employees, including influential architecture and design experts that have formerly worked with Martha Schwartz Partners, Foster + Partners, and Zaha Hadid Architects.
It is Parsons’ technology and people, Welch says, that hold the key to the success of its business priorities: “Having a mindset focused on efficient delivery […] is a great value proposition for us with clients.”
NEXT PAGE: Quick five with Welch
WELCH ON OMAN
“We’ve been a mainstay in Oman when it comes to infrastructure projects. Going forward, I think the most robust [growth will be] related to leisure and tourism, with foreign investment coming in for hotels, resorts, and those sorts of developments. Oman has done a great job of building its infrastructure, and [with that in place], there’s an opportunity to develop it into a real tourist destination.”
WELCH ON KUWAIT
“Decades of underspend has resulted in urgent needs to improve the country’s primary assets, driven by a growing population. The depressed oil prices should not pose a significant hurdle. Another sector that I think is extremely encouraging is the municipal housing market. The government is planning to provide housing for a large number of Kuwaitis, so I think we’re going to see additional packages in the sector.”
WELCH ON EXPO 2020 DUBAI
“Expo 2020 Dubai’s leadership has developed systems and teams that can optimise the integration of all the contractors and designers that happen to be on site at the same time. The expo must be applauded for its procurement system, It’s a cutting-edge system and has made great strides in opening the procurement to an international standard. It’s a very transparent system, [which is apt] for an event of Expo 2020’s calibre.”
WELCH ON CASH FLOW
“One of the biggest hurdles for all players in our industry is the payment of their dues. If you put yourself in the shoes of constructors, and they’re not getting payment, cash flow, that’s a huge hurdle for them. The same is true for consultants and everybody else. Timely payments are a big [consideration, and] I think it’s important that there’s an understanding that funding [must be] available for every project.”
WELCH ON TEAM CULTURE
“Parsons is focused on end-to-end service provision, and we can deliver work across the project life cycle. We bring people from all walks of life together to look at a problem. So, you don’t really need carrot and stick with this think tank approach, because people are invigorated to help, and they race after that necessary solution. When you get to that one, [finding] the next one becomes even more exciting, and they build upon each other.”