Red sky thinking
Mike Aspinwall tells CW about the efficiency of being fully connected
The managing director tells all about the efficiency to a construction company of a fully linked-up computer system.
How did RedSky IT established itself in the Gulf?
RedSky IT had a number of customers in the region over the last ten years from a number of UK firms that had partnered with Emirati companies in joint ventures. The customers were using the software in the UK, and when they established themselves in this region they bought the software with them.
Five years ago we thought it was appropriate to have a presence in the region. Due to its British background construction is similar; for example, how a project gets commissioned, and the fact that architect works for the client rather than the contractor.
How do you assess the last year – and have we turned a corner?
I think in the first quarter of last year things ground to a halt. Up to about January 2009 there was the idea that Dubai ‘is the biggest and the best’ and would not be affected, and then there was a big crunch. A lot of projects went on hold, although I think we’ve seen that normalise over the last few months.
Tell us about the product.
The key focus is the project. Say with a piece of land you may have an idea for a tower. You work with architects and consultants to produce a design and then a document for the pricing of construction – this bill of quants can be big, detailed documents.
The system can import this document for the contractor to start pricing it. As a main contractor you will slice these details into perhaps 20 to 30 pieces for sub-contracting.
Then you will compare sub contractors’ prices and choose which bids to use in your tender response. Hopefully you win the contract and may have to restructure how the project will be performed. You’re placing orders, potentially driven from updated material needs and when you will need them onsite.
The system tracks ‘goods received’ information, so your cost reporting is as up to date as possible. The payroll feeds costs directly to the projects and Sub contractors valuations can be performed which drive their payments.
The client valuations then creates the application for payment to the client. The internal valuation gives the true picture of the project’s performance.
So RedSky IT’s software can provide a system that can manage all of the business process or just the part you need now.
How does this meet market needs today?
Until recently, when projects were sold off-plan and made money, perhaps the control of costs didn’t have to be as tight. I think what’s happening is that the smarter companies know they have to be accurate with their costs and must tightly track variations when billing clients.
I think the companies that will be making a profit over the next few years are those who know where exactly they are on projects.
This is a question of information, visibility, and low overheads. We’re going to see those companies that take this opportunity to invest in system, when the economy in the country recovers these companies can capitalise, and that even when margins on a project are still quite low they can still make a profit. This will allow them to bid for more contracts and make more profits.
What are prospective customers asking you?
They like the idea of a big-picture solution but often don’t know how it can be effectively installed in bite-size chunks. They can start, for example, with just the core accounting system in place, with a payroll system that best monitors all labourers.
Further, you can know if all machinery hired is working, has their use in fact finished and can be sent back rather than incurring a lot of money needlessly in weekly hiring charges.
Then there’s getting sub-contractors paid. In the past it has often been difficult to get this joined up, where in a typical company the estimating person will run his bit, and the commercial person will run his, and they don’t cross over.
What are your forecasts for the rest of the year and the company’s opportunities?
I actually think it will pick up this year, perhaps more government-related projects. I think we have established ourselves so that when companies expand into different markets they can have the same solid systems in place.
Up to recently we’ve sold into the top end of the market, partly due to our initial customers. One focus now is to address the small-to-medium players, as well as educational seminars in Dubai, Abu Dhabi and Saudi Arabia – the latter of which we’ve been in contact with a number of prospective clients.
A Cambridge graduate with an engineering and computer science degree, Mike Aspinwall was initially involved with running bespoke development projects for manufacturing and government before moving into the construction sector. As development director for Red Sky he led the design and development of the AXiM product. In January 2007 he was appointed MD.