Dr. William T Bersing, DM, PE, CCM
The Impact of Technology on Global Engineering Service Corporations
Technologies allow engineering service corporations to work globally between time zones, among multiple languages and cultures, and across political boundaries. They have also allowed for innovative business solutions and unique organizational structures. This report gives executive leaders an understanding of core technologies and an insight on future organization performance.
Technology in Practice
Examining the impact of technologies on organizational performance is extremely important because, “studies show that information technology usually reinforces an organization’s norms about documenting, sharing information, and using the ideas of others” (Katz, 2003, p. 325). The advent of enabling technologies such as corporate intranets, customized online databases, email web-servers, secure websites, web-collaboration technologies, and mobile applications have significantly improved organizational processes and performance.
Future technological innovation will expand on these enabling technologies in order to transform them into core business approaches. Additionally, global virtual teams (GVT) are quickly being created due to globalization, increased cooperation within organizations, and advanced communication technologies (Kankanhalli, Tan, & Wei., 2006; Arnison, & Miller, 2002). New technologies may significantly increase organizational performance but, “there is much potential for conflict in GVTs as members work across cultural, geographical, and time boundaries” (Kankanhalli et al., 2006, p. 238). Transformational leadership is needed in multinational organizations to understand distinctive technological innovation paradigm shifts, knowledge workers, and the affects technologies have on his or her organization.
This paper examines the impact of technology on Global Engineering Service organizational performance to give transformational organizational leaders insight on how to improve organizational performance through technology. AECOM, Jacobs, Louis Berger, HDR, CH2M and Hill International are examples of major US publicly and privately owned Multinational Engineering Design and Construction Service (MEDCS) corporation with tens of thousands of employees worldwide. The technology impacting these corporations is revealed by examining their core and enabling technologies and organizational structures, behavior, and relationships.
Professional global engineering service corporation technologies are not significantly different from each other but there are a few technologies that do set them apart from their rivals. The backbone of most is their secure corporate Internet / intranet and email communication system. The web-portal system is the central area for submitting timecards, accessing pay statements, downloading standard forms, business management processes and procedures and also accessing organizational community forums, portals and databases. The core information system is not unique to MEDCS corporations and does not necessarily make the technology different from their competitors. What is core to most Global Engineering Service corporation and to their global network are the unique business processes and procedures, distinctive use of the community-wide portals, and customized databases for markets, practices and sales.
The enabling technologies used are the Internet, customized intranets, email systems and database systems. MEDSC use email but also use LinkedIn, Microsoft Lync, and other online communication tools. Additionally, they use diverse enabling technologies depending on the situation. Again, the core technologies used by Global Engineering Service companies are their uniquely integrated web-portals, and customized on-line database systems. These interlinked core technologies standardize business practices across multiple offices worldwide. Additionally the core technologies allow employees and managers to address the core value of innovation while maximizing the benefits of the enabling technologies.
Peter Drucker stated that, “Core competencies are different for every organization; they are, so to speak, part of an organization's personality. But every organization-not just businesses- needs one core competence: innovation” (Drucker, 1999). Most Global Engineering Service corporations are duel hierarchical matrix structures. The core technologies serve as an integral system in distributing human resource management, client account management and relationships, project and program management, and financial accounting. Core technologies are typically developed to give employees and managers corporate technological tools and a common information technology structure.
Organizational Structure and Technology Performance
Scott and Davis (2007) described Global Engineering Service organizational structures as a duel hierarchical matrix structure, “that organizes work simultaneously by functional and project criteria. Workers associated with diverse functional departments are regularly assigned to project teams organized to produce particular products or services” (Scott and Davis, 2007, p. 131).
For example, employees based in Milan may work in the cost control branch in Milan on various teams within the Milan Office but there is also a formal cost control structure branch formed laterally throughout Europe and the world. Based on both the branch and the individual user work category, each employee is assigned unique access to their corporate intranet system. In other words, an employee working in Milan in cost control will see MEDSC Italy and cost control portal references throughout the world. The sales, quality, engineering and other work sectors are only seen if needed. VINCI Grands Projets, SOGEA-SATOM, and VIINCI Construction, a large publicly traded French based MEDCS and construction corporation, have similar technologies.
Specific internal practice or industry based communities usually meet twice a year face-to-face and share information usually through email but the intranet is also seen as a core technological tool. The latest movements in, “modern information technology and the proliferation of alliances among organizations may facilitate the self-generating process that launches many hot groups” (Katz, 2003, p. 148). The use of SharePoint internal/external or similar systems are also becoming popular.
Based on group generated activities, team leaders can pick their internal processes and procedures at the beginning of their project and tap into communities associated with particular community for expert advice and resources as needed. The MEDCS usually have unique corporate wide best practices developed to implement on projects in-order to ensure best performance. They use a vast amount of technologies depending on the project being managed, the customer and team, the budget and time to completion.
The life-cycle model described by Katz (2002) depicts three phases of organizational technological integration. MEDCS technology in practice can be explained by describing their approach to the fluid, transition, and mature phases. The fluid phase is characterized as the high growth stage, whereby “customers seek functionality and quality instead” of brand loyalty (Katz, 2002, p. 702). The fluid stage occurs when “direct competition among existing companies is relatively low, so profit margins are high” (Katz, 2002, p. 702).
Organizational priorities are to build upon the existing technologies developed within the global corporation and to also establish alliances with companies specializing in the area of concern. Global engineering service corporations work on numerous highly technical design-build and construction service programs. The alliances with established technical firms allows them to stay ahead of the market and quickly adapt to changing technologies.
Under the fluid phase Global Engineering Service companies concentrate on their established internal quality system. They also focused on establishing themselves as the technical experts and will patent processes and procedures as needed. The priority is to establish relationships with market leaders in additional to allowing regional organizational offices to use a variety of technical solutions.
A good example of this would be the current software design tools and construction management information systems (CMIS). Many of these companies have developed internal software solutions in alliance with Oracle in relation to CAD and CMIS databases. Many offices are also allowed to use open-source applications or CMIS databases developed by Primavera Prime Contract, Meridian and others. The alliance allows them to be seen as global market leaders while still being fluid to adapt to other technical solutions.
Organizational priorities quickly change under the transitions phase. “The transitional phase of a technology life cycle starts with the emergence of a dominant design. As product and market uncertainty lessens and R&D efforts become focused on improving the dominant technology, design cycles shrink” (Katz, 2002, p. 702). Priorities change to become more aggressive technical expert market leaders. The alliances become more formalized, and the priorities are exactly what are stated by Katz (2002). The priorities are for a strong “cost control throughout the value chain, strong customer focus, [and] lean and efficient organization” (Katz, 2002, p. 703)
In general, these global corporations fall within the mature phase under Katz’s chart (TABLE 58.1) on page 703 of the Characteristics of the Four Technology Phases. Core technologies used fall under the mature phase and are mostly what they use in the development of information technologies. They have a “strong pressure on profit margin, more similarities than differences in final products, [and] convergence of product and process innovations” (Katz, 2002, p. 703). The development of building information modeling (BIM) developed by Autodesk, and specialized information systems developed in partnership with Oracle are examples of how some use strategic alliances in the “formation of joint R&D ventures to share risks and costs of technology development” (Katz, 2002, p. 703).
Global Engineering Service processes and procedures are based on MEDCS industry best practices. By mixing these processes and procedures project managers team leaders throughout the global offices create a unique customer focused atmosphere and culture. Industry processes and procedures are not created solely by the MEDCS Corporation but by the specific industries and user groups specializing in those sectors. They create them over time with the business core values in mind. Employees do not have to be experts or even familiar with these processes and procedures. Employees and managers just need to know they exist and can mix and match them to their customer’s needs.
If done properly, the unique corporate processes and procedures leave the company and employees with the core competency of innovation. The core technology of these processes allows offices around the world to team or work on projects using standard global process to ensure both quality and team integration.
A good example of this would be how they work on Design project in the US from Virginia (USA) office. Engineers in Virginia develop the conceptual design and send to team members at the India New Delhi office. The team is headed by one project manager in the US or India and design work is conducted around the clock, due to the time differences between the countries. When the office in India is finished they submit using custom designed collaboration tools and the US office picks up where they left off. The advantage is that they are capable of providing highly specialized and complicated designs in a fraction of the time as their competitors.
Using unique corporate processes and procedures allows for faster team integration and higher quality as well. Customized MESCS portals, unique processes and procedures, and standardized databases are core to all offices worldwide. Core technologies allow organizational members and teams to work together more fluently and provide a unique corporate culture.
What differentiates core technologies from their competitors is the way the technology communicates their unique core values. Core technologies serves as tools for the internal communities to share information based on their lateral fields. Additionally, the integrated core technologies with quality performance measurements allows employees and teams to consistently monitor performance globally throughout the organization.
MEDCS Core and Enabling Technologies Discussion
The construction programs are becoming larger and more complex based on new technology, new regulations and the complexity of organization structure (Banik, 2002). The problem with JEG core technologies examined is that most offices are setup to address in-country project management needs and do not officially consider the multinational program management aspect of the organization.
GVT are quickly being created due to globalization, and advanced communication technologies (Kankanhalli et al., 2006, p. 238). MEDCS frequently compete for global projects and must work out interoffice agreements in-order be successful on these large-scale pursuits. Global Engineering Service corporations use new technologies to increase office performance by integrating resources in offices around the world using GVT concepts.
Intuit QuickBooks online database applications, OneDrive, Dropbox, SharePoint, Alfresco, Huddle, and even Yahoo’s Flickr online sharing sites are perfect examples of how information technologies are transformation organization and even individual thinking. The examples reinforce how, “studies show that information technology usually reinforces an organization’s norms about documenting, sharing information, and using the ideas of others” (Katz, 2003, p. 325).
Katz (2003) stated that, “most companies use information technology to support individual work, leaving it to each individual to sort through the information that comes their way, decide what is important, clean, and organize it” (Katz, 2003, p. 333). Katz also pointed out that “… if communities own knowledge, then the community can organize, maintain, and distribute it to members” (Katz, 2003).
Technologies will evolve as people and organizations find new ways to organize and develop new ways to process information electronically with very few boundaries. Global Engineering Service companies often use technologies to establish lateral communities across the organization. The performance is increased by the sharing of knowledge between offices and individuals with similar interests and talents.
Organizations in the MEDCS industry must also take into account how to successfully use emerging technologies in-order to properly staff programs and projects and to manage or eliminate chaos. Huy (2002) wrote an interesting article which explained that much of the chaos that breaks out is due to managers wanting to change to quickly and not taking into consideration the emotional responses of the organization. He described much of the chaos that breaks out is due to the human/emotional dimensions of the organization.
He suggested that when organization“…evolved to include significant human/emotional dimensions thanks to later actions that reduced chaos, such as group meetings to share and discuss feelings about change, mourning, and personal counseling” (Huy, 2002, p. 27). Technologies should also consider the human aspect in-order to manage or eliminate chaos.
Scott and Davis (2007) stated that, “…not all environments place the same demands on organizations and their participants for information processing. Since individual participants are limited in their capacity to process complex information, organization designers endeavor to construct structures” (p. 102). Organizations change structure based on many constructs that affect their operations.
One of the constructs that have been shown in recent years to change organizational structure is the internal and external virtual organizational communities. The new organizational paradigm is not the virtual communities, but the enabling technology making them possible. “Advances in communication and information technology have created new opportunities for organizations to build and manage virtual teams” (Kirkman et al., 2004, p.175).
Global Engineering Service corporate core technologies take this into consideration by standardizing the processes and technological tools used by virtual team’s in-order to assist in managing conflict. Global virtual team (GVT) conflicts have been shown to have a direct impact on organizational performance. (Kankanhalli et al.., 2006, p. 238)
The communication and information system technologies are enabling information technologies and are becoming more advanced every year. For example, putting together obscure proposals based on difficult customer requirements used to take weeks and in some cases months to develop. Today with the advent of corporate intranets, customized online databases, email web-servers, secure websites, mobile applications, and web-collaboration technologies the proposal take only days, if not hours, to develop.
In addition, if trained properly a less experienced employee could also provide proposal to customer, at little or no cost to the corporation. “In particular, new technologies are providing the means for work that is dispersed (carried out in different place) and asynchronous (carried out at different times). Establishing links and connections is no longer a question of technical feasibility” (Montoya- Weiss et al., 2001, p. 1251).
Organizational leaders must understand the difference between long-linked and mediating technologies and be successful in combining the two. Organizational working within a long-linked technology environment are more bureaucratic while people working in a mediating technology environment tend to behave like lawyers and are quick and detailed oriented problem solvers.
For example, there is a major difference between technologies used by Engineers managing large construction projects and those used by Environmental Engineers who work on small tasked based projects. Leaders who work with long-linked technologies are usually working on project which have a long duration, added risk and need a process of long-link technologies to keep the going in the right direction. Program and construction management on large multi-million or billion dollar programs, for example, incorporate long-linked technologies. These technologies “… involves a single prescribed and serially interdependent set of tasks, activities, or processes with discretion allowed only in the timing or speed of the processes” (Hitt & Middlemist, 1978, p.53).
Those organizations that work in a mediating or reciprocal technology may understand the big picture but the smaller tasks at hand, although much less in value, are very important to complete. “The mediating technology involves a number of standardized operating procedures forming the repertoire of the unit with discretion existing in the selection of the most appropriate strategy for a given task from standardized alternatives” (Hitt & Middlemist, 1978, p.53). Both long-linked and meditating technologies have distanced advantages for different types of organizations.
By discovering the differences organizational leaders may discover new paradigms. Leaders should look to other industries to successfully implement new technologies in there industry and organization. For example, the construction service industry sector, which typically implements long-linked technologies, has a great deal to learn from the on-line information system support and the Knowledge Management System (KMS) of the financial service industries.
Organizational Performance and the Impact of Technology on MEDCS
MEDCS incorporate technologies which enable team leaders to design teams which are “consistent with the organization's mission, vision, value, content and strategy” (von Ber, 2007). Jones and Shilling (2000), measuring team performance, stated that the “… function of team-performance measurement is to connect teams to the vision and strategy of the business” (p. 2). Jones and Shelling (2000) used Xerox Team 47 as an example of how a team can succeed if they take complete ownership in the performance measurement. “This team has complete ownership in its measurement system and its improvement processes.” (Jones & Shelling, 2000).
MEDCS use their core technologies in-order to help organizational leaders to design a team with ownership in the performance measurement process. Done properly MEDCS teams will naturally want to see continuous improvement. Teams usually do not see the value in what is being measured if they are directed to respond to mandatory top down performance measurements. Therefore, core technologies should be to assist teams in establishing their own performance measurements. MEDCS organizational members should own the process and feel as if they are an integral part of the organization as knowledge workers. MEDCS intranet portals, unique processes and procedures and customized databases are core technologies are should be integral to both organizational team members and leaders. The impact of technology on MEDCS has allowed for deeper understanding of team sponsored performance measurement tools.
Management trust, problem solving, accountability, and constantly improving processes are the key constructs in designing a team with ownership in the performance management process. Management must trust in their employees and team to do the right thing and develop a system which measures constant improvement. Jones and Shelling (2000) stated that the leader should make sure the team performance measurement processes are aligned with the organization’s mission, vision, values, content and strategy but should give the team the freedom to adopt their own processes.
Teams need guidance, because as the team grows into their own identity they will become more innovative and energetic. MEDCS integrated core technologies give teams the guidance needed to consistently perform.
The leader should be the content figure to channel the innovation and energy in the right direction for the organization as a whole. Teams within Construction Management industry are perfect examples of how teams can go off course. The team on a large construction site usually consists of a one or more Project Engineers, Quality Assurance members, schedulers, estimators, and contracting agents. The challenges are immense but the team needs to stick to the core ideas of Construction Services and not Engineering Design services. The team will do design work on occasion because the Project Engineers are registered Professional Engineers but they are not designers. Their performance and performance measurements should not be based on an entirely different industry of Architectural-Engineering Design. The focus of their mission, vision, and strategy should be the responsibility of the leader.
Using the corporate technologies MEDCS team members take ownership in both the process and performance measurements. The impact of technology on the construction service sector has been immense and has allowed multinational projects to become enormous. MEDCS Corporation have expanded on these technologies with practice and market specific best practices in conjunctions with corporate portals and customized databases to ensure the performance increases are maintained.
Examining the impact of technologies on organizational performance is extremely important because, “studies show that information technology usually reinforces an organization’s norms about documenting, sharing information, and using the ideas of others” (Katz, 2003, p. 325). The advent of enabling technologies such as; corporate intranets, customized online databases, email web-servers, secure websites and web-collaboration technologies, have significantly improved organizational processes and performance. Future technological innovation will expand on these enabling technologies in-order to transform them into core information technology business approaches.
Additionally, global virtual teams (GVT) are quickly being created due to globalization, increased cooperation within organizations, and advanced communication technologies. (Kankanhalli, Tan, & Wei., 2006; Arnison, & Miller, 2002). New technologies may significantly increase organizational performance but, “there is much potential for conflict in GVTs as members work across cultural, geographical, and time boundaries” (Kankanhalli et al., 2006, p. 238). Transformational leadership is needed in multinational organizations to understand distinctive technological innovation paradigm shifts, knowledge workers, and the affects technologies have on his or her organization.
Day et al. (2003) stated the importance of leading technology performance by stating that, “managing a creative and visionary technology assessment process requires balancing the capabilities and constraints of the firm (its financial and technical resources and its ability to adapt to emerging technologies) with its intellectual openness to new technologies and ambitions for growth” (Day et al., 2000, p. 80).
This paper examined the impact of technology on Multinational Engineering Design and Construction Service (MEDCS) organizational performance to give transformational organizational leaders insight on how to improve organizational performance through technology. The technology impact on US-based MEDCS corporations is revealed by examining their core and enabling technologies and organizational structures, behavior, and relationships.
MEDCS corporations use several diverse enabling technologies depending on the situation but the core technologies of unique process and procedures, distinctive use of the community-wide portals, and customized databases allow for innovations, and effective team building performance. Organizational performance is enhanced by core technologies with employees and team leaders taking ownership in their performance measurements. The core technologies increase performance by establishing performance management measurement best practices in addition to providing lateral team communities, and customized global database solutions.
BY: Dr. William T. Bersing, DM, CCM, PE
Printed: July 2016 © William Tennent Bersing
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