Professional Studies Booklet - Alex Gaul by Alex Gaul

PROJECT MANAGEMENT

BUSINESS MANAGEMENT

SWOT ANALYSIS

The potential for Blockchain/ IoT and other emerging technologies to disrupt the construction industry.

How a R&D focused architectural business can break into predesign strategic and post-occupancy management.

What am I going to do with my life? Strengths, Weaknesses, Opportunities, and Threats.

The Profession MArch Professional Studies Submission: January 2018

The Construction Industry in the 4th Urban Revolution

Alexander Gaul alexanderstgaul@gmail.com +447981038491 linkedin.com/in/alexander-gaul

Professional Studies

The Content Project Management 02 Business Management 18 SWOT Analysis 40

Alexander Gaul

Professional Studies

Project Management Emerging technologies in building procurement

Disconnect Between Design and Construction

Slown to adopt new technology Bureaucratic planning process

Fragmented Value Chain

Lack of Investment in Innovation

Current Issues with the Process

Slow BIM adoption Lack of Trust

Low use of Post Occupancy Evaluation

Lack of design team collaboration

Each project is treated as bespoke

Problematic Payment Exchange

Project Management

Construction £

Design £

Fig 1. (Bottom left) Diagram overview of some of the problems in the construction industry. [Author’s own]

M ai n t

“Critically appraise the current processes followed in the UK and make recommendations for improvements that would make these processes more efficient and the overall operation of building procurement more effective.

nce

Some of the proposals in this section focus on making the ‘in use’ stage more efficient. This stage is often overlooked as the design team and contractors are rarely engaged with the project at this stage. However, this is a short-sighted attitude and the greatest savings (and potential value) are to be had at this stage.

Fig 2. (Top right) Diagram illustrating a building’s life cycle cost ratio. [Author’s own]

The aim of this report it to identify potential for the process of building procurement to be improved by the merging of digital and physical realms which makes up the basis of The Fourth Industrial/ Urban Revolution. This includes the emergence of technologies and applications like Smart Cities, AI, ubiquitous data collection and the Internet of Things (IoT). This report will explore how these technologies will improve or disrupt the existing systems of project procurement (design, construction, operation) and the potential for them to make the whole process more efficient and effective. Blockchain technology is the primary focus of this report and its use and potential to be combined with other emerging technologies the IoT and more established technologies like BIM will be explored. The aim of this report is to identify potential changes to building procurement that would make the process more efficient and effective. Improving efficiency in businesses is primarily for financial reasons, so if we begin by looking at the stages of building procurement that are the costliest, we can identify the areas that will benefit the most from an improved process.

Where is the industry at the moment in terms of BIM? BIM Level 3 is currently heralded as the ‘holy grail’ in terms of creating a truly collaborative and efficient design and construction processes. Many of the proposals in this section rely on adoption of BIM Level 3 as a base, but it is fairly safe to assume that Level 3 will be adopted by architecture practices before most of the other technologies in this report. The different levels of BIM represent increasing ability for the supply chain to exchange information digitally and collaboratively. Level 3 BIM represents full collaboration between all disciplines by means of using a single, shared project model. All parties can access and modify that same model, and the model flags up any conflicting information. Naturally this is going to be extremely beneficial to the efficiency of the process. Unfortunately, we are not there yet, BIM Level 2 was mandated for public projects by 2016 but many practices are still working at Level 1. (McPartland, 2017) This represents the industry’s notoriously slow application of new technology and current barriers to BIM Level 3 are issues around copyright and liability.

Alexander Gaul

Professional Studies

the-same, it is important to be able to detach blockchain from Bitcoin so that its potential for other applications can be fully explored.

“Blockchain is a technology that looks set to disrupt every industry in which there is any sort of information transaction over the coming years.

What is blockchain? ‘Buzzword of 2017’ and mechanism behind the cryptographic digital currency Bitcoin; blockchain is a technology that looks set to disrupt every industry in which there is any sort of information transaction over the coming years.

The global financial crisis of 2007-2008 had demonstrated the fallibilities of ‘trusted third parties’, like financial institutions. Bitcoin was designed, in response, as a way of eliminating these intermediaries from financial transactions by creating a peer-to-peer system for sending payments digitally. As pioneering as this was, the most significant technical innovation was not the digital currency itself, but the mechanism that lay behind it - blockchain. Bitcoin was just the first use of the of blockchain technology. (Nichol, 2016; Thompson, 2017) Blockchain is often described as a ‘distributed ledger’ or a ‘decentralised database’. What this means is, it is the opposite of a traditional database that is run by a central administrator, like the one behind a Google Drive account, which is owned by Google. By comparison, a blockchain database is coordinated across every

member of the network; there is no ‘primary’ copy, rather each member maintains copies of the same database. (Storus, 2017) Simply put, blockchain is a peer-to-peer time stamping technology that contains a record of all transactions that have occurred on the network in chronological order, which is coordinated across a decentralised network. These transactions can be any movement of money, goods or data - a purchase at the supermarket or the assignment of a passport number, for example. Each node (computer) in this network work together to come to a consensus about the system-wide order of events, and simultaneously publishes this information within a cryptographic block - which is then linked to all previous blocks to form a chain. (FOAM, 2015) The information stored on the blockchain cannot be changed, deleted or added to without every other member of the network knowing.

Before going into exactly how this disruption could take place within the construction industry, it is important to have a clear understanding of what this technology is and how it works. There are an increasing amount of companies using terms like Bitcoin and blockchain to excite investors, but without really understanding how they would benefit them. Although commonly misconstrued as one-andProject Management

Fig 3. (Bottom left) Diagram explaining the peer-to-peer concept behind blockchain [BTC]

There is a much more technical explanation as to exactly how a blockchain works than the one given here, but for the purpose of this report the key things to remember are: 1. No one entity owns a blockchain, anyone on the network can interact with it (networks can be private like an intranet or public like the Internet). 2. Blockchain can replace today’s centralised systems with decentralised ones. Rather than transactions being verified by a central authority, verification on a blockchain comes from the consensus of multiple users.

“It can be understood as ‘a programmable distributed trust infrastructure’. (Turka and Klincb, 2017)

3. It can be understood as ‘a programmable distributed trust infrastructure’. (Turka and Klincb, 2017) The decentralised and cryptographic nature of blockchain allow peer-topeer transactions without intermediaries. Trust in the transaction is established by consensus and complex computer code. This will disrupt any industry that uses ‘middlemen’ or thirdparties. 4. Unlike a centralised database it has no single point of failure. If someone wanted to hack into a particular block in a blockchain, they would need to hack into every single block through the entire history of the blockchain and Alexander Gaul

they would need to do it on every single computer in the network simultaneously. 5. It has many applications beyond cryptocurrency (including smart contracts which will be explored in the following section). It is part of a wider move towards a decentralised global economy where big intermediaries no longer play a major role. Several, if not all, of these can apply in some regard to the construction industry. The industry is an inherently risky one, it is a divisive, untrusting environment which has become notoriously litigious. The potential blockchain (and blockchain enabled technologies) has is to create an environment where trust is established by code, to the extent that the notion of trust essentially becomes obsolete. Likewise, it would allow the removal of ‘middlemen’ and third parties that would open up opportunities for more direct relationships between members of the building process, which could reduce costs and increase productivity. The following section outlines some of the potential applications for blockchain and blockchain enabled technologies to disrupt and advance the process of building procurement.

CONTRACT

1 2 3 4 5 6 7

19 20

</contract>

“A smart contract is a piece of computer code that describes a transaction step by step and can execute automatically and transparently.

Fig 4. (Left) The code behind an Ethereum contract [BTC] and comparison of a smart contract with a typical contract [Author’s own]

Blockchain: Smart Contracts & The Supply Chain Ethereum is a protocol that has developed blockchains that are able to be programmed for the application of smart contracts. A smart contract is a piece of computer code that describes a transaction step by step and can execute automatically and transparently. A traditional contract usually outlines terms that are enforceable by law, while a smart contract enforces the terms with cryptographic code. Smart contracts open up the opportunity to execute peer-to-peer contracts, without the requirement for trusted third-parties.

audit trails. However, blockchain would make the record more trustworthy than what can be derived from the usual project database. The fact that all actions are recorded to the blockchain that every member of the network has access to should create an environment where team members are more transparent about their errors. (Saxon, 2017) While blockchain may encourage greater honesty, groups of smart contracts that cover multiple actions, across the breadth of the building process, would reduce the need for dispute resolution. Theoretically, if all actions are recorded on the blockchain, the triggering of an action would cause the contract to the execute the agreed terms of the deal. The interpretation of law in dispute resolution becomes obsolete as the law (and the lawyers) is replaced by the coded terms.

Payment benefits They work on the if/then premise, i.e. if you don’t Often, architects find themselves chasing pay your rent by a certain date, then your flat is payments from their clients for work they put on the market, and other nice things like that.

have already completed, and the same applies for contractors and subcontractors. Ethereum are also working on developing new This may be down to ineptitude rather than blockchain verification protocols that are less malice but it can have an adverse effect on energy intensive than Bitcoin for example to a company’s cash flow and can cause costly allow it to scale into industries less lucrative than delays to a project and potentially insolvency. finance. (FOAM, 2015) Dispute Resolution One of the initial benefits of introducing this technology to the construction industry is the simplification and reduction of dispute resolution. There is already algorithm based services that manage disputes by looking at

The answer would be to use smart contracts to automatically pay the service provider when a certain deliverable is complete. (Storus, 2017) Essentially it would be an ‘auto-pay’ function written into the smart contract for when it validates that a specific criteria is met. Alexander Gaul

Professional Studies

For example, if the architect issues revised construction drawings by a specific date to a specific location then the client issues a certain payment. A similar process could be applied on site; if the bricklayer has built a brick wall then they request an inspection. If the person responsible for inspecting agrees that the wall meets the requirements then the bricklayer automatically gets paid. This all happens securely and is recorded on the blockchain. As well as preventing the possibility of payment dispute and projects stalling, this would add extra incentives to complete work on time with the assurance that payment will immediately follow. Construction Supply Chain A similar construct could be applied to the supply chain of materials and components to the construction site. Employing GPS-tracking and radio-frequency identification (RFID) tags would allow smart contracts to execute payment to a supplier on goods arriving on site. (Storus, 2017) Because of the trust that blockchain based smart contracts assume, clients could buy directly from the supplier. The payments could be staggered and liability transferred to different parties. (Hughes, 2017) For example, the client could purchase the aforementioned bricklayerâ&#x20AC;&#x2122;s bricks directly from the supplier and pay a percentage of the cost once it is verified to have left the supplierâ&#x20AC;&#x2122;s yard, transferring liability to the haulage company, and release additional payment when the bricks arrive on site. The process would happen automatically according to the terms of the smart contracts and the whole process stored on the blockchain. (Hughes, 2017)

â&#x20AC;&#x153;An inventory tracking system can trigger a request to the smart contracts when stock reaches a certain point and the smart contract can automatically execute a new order.

The process can be further optimised by enabling the technology to automatically replenish supplies. Should the pallets of bricks be labelled with RFID tags, an inventory tracking system can trigger a request to the smart contracts when stock reaches a certain point and the smart contract can automatically execute a new order. As well as reducing a significant amount of administration on site, the overall process would reduce idle time and costs would be contained as there would be no need to buy more stock than is needed at any one time. Just-in-time provision would be available automatically. (Burger, 2017)

Project Management

Decentralized Autonomous Organizations (DAO) The development of smart contract technology foreshadows the creation of decentralised autonomous organisations (DAO). These organisations use bundles of interconnected smart contracts to maintain operation autonomously, in accordance with the rules encoded in those contracts. A DAO’s financial transactions and program rules would be maintained on a blockchain. (Vigna and Casey, 2015; FOAM, 2015) Essentially, a DAO is a self running company, with no directors, managers or conventional employees. A DAO is not governed from a central point and no one can technically

Fig 5. Illustration of a network of DAOs [Primavera De Filippi]

where a self-driving car owns itself, collects cab fare from its passengers and uses the profit to maintain its services and distributes the surplus to its stakeholders. (FOAM, 2015; King, 2017)

2017) Current crowdfunding platforms like Kickstarter have no mechanisms in place for donors to remain involved with the project or receive fair compensation. A DAO would allow a mesh of investors, clients, designers, consultants, What DAOs present is not so contractors, tradespeople, and much the potential to make the companies to invest in tangible process of building procurement and tradable assets in the more effective, but to change it built environment, which can entirely. be ‘initiated by architects and brought to scale and fruition What if a building could own while consciously distributing itself? the financial stake in the Today’s model of building built environment’. (FOAM, procurement is propped up 2015:online; King, 2017) by debt based financing from centralised institutions. A Expanding this beyond a decentralised autonomous single project could lead to a organisation (DAO), on the huge digital and completely own it. A DAO can be initiated other hand, provides a platform decentralized financial system via the sale of crypto ‘DAO for anyone with an interest in for construction made up of tokens’ during a crowdfunding the industry (an architect, for one, or many, DAOs. It has period. These tokens (similar example) to initiate their own the potential to democratise to company equity) would then projects and distribute equity in construction and particularly empower whoever holds them finance bottom-up rather (similar to shareholders) to vote the built environment. The DAO than top-down approaches on what the organisation will do. enables equity crowdfunding coupled with decision making by supporting ‘peer-to-peer (Dingle, 2016) tools to allocate funds and scale activities of small-scale actors’. the projects with interested (Financing — CBC:online) An common example of a parties. (FOAM, 2015; Storus, DAO is an adaptation of Uber

“What DAOs present is not so much the potential to make the process of building procurement more effective, but to change it entirely.

Alexander Gaul

Professional Studies

captured and maintained on a Blockchain.

“A financial construct like the one described here would dissolve the traditional clientconsultant model and potentially rearrange the incumbent models of contractual relationships.

Procedural reputations of the members would be built up over time and recorded on the blockchain and tied to each member’s digital ID. The verification process1 of blockchain means that relevant professional information can be confirmed to be authentic, such as proof of membership to professional bodies or qualifications. These would be stored on the blockchain, together with a record of work their other interactions with the DAO. This identification and reputation system would allow for people who do not know or trust each other to be able to work together. (Hughes, 2017)

Imagine, for example, an automated Gantt chart set up for a typical construction job. Specialist contractors could bid to take on a specific section or job and the DAO members can vote to approve their involvement based on their digital ID, which includes their job history and reputation. The Gantt chart, built out of smart contracts using the if/then principle, would execute the work package and continuously update the chart in accordance with the progress of the job and then pay the contractor from the DAO’s account automatically - as described earlier in the report.

Essentially, the DAO would administer a continuous flow of contractual arrangements This system very much feeds throughout the construction into the burgeoning gig process autonomously - the Collaboration, Reputation and economy, which certainly has its only human involvement would the Gig Economy flaws. But due to construction be the undertaking of the job A financial construct like the being a project-based and the person confirming one described here would industry, made up of a vast the completion of non-digital dissolve the traditional and varied team of different jobs. The system would take client-consultant model specialities, it does lend itself control of hiring labour and and potentially rearrange to this freelance model. This materials on an as needed basis the incumbent models of could see direct contractual and capture all transactions contractual relationships. relationships set up between on the blockchain which the client (the DAO) and all could potentially reduce the Over time, contributors to the sub-traders and consultants administrative load, governance, DAO would work on separate in a similar format to the monitoring responsibilities and projects, where they would Construction Management form transfer of risk. (Hughes, 2017) obtain equity in the completed works and build up a procedural of procurement. The difference reputation. This could engender would be, rather than employing a more collaborative approach, a Construction Manager as a ‘middleman’, the system of possibly through diverse or smart contracts within the DAO shifting forms of collective automate the administration of practices. Furthermore, with the sub contractors and deliver equity in completed projects, the members would build up an the project in accordance with the predefined process. ‘It would investment portfolio, aligning build an auditable record of all members’ interests. All transactions and certifications transaction records or money, insurance, voting and ownership of events in the life cycle of the (Hughes, 2017) building’. within the DAO would be

“One of the strengths of blockchain is automating business logic.

Project Management

“Technology could get to a point in the near future where the ‘generation of a building’s realtime digital twin is an integral part of the construction process’.

This involves running documents or data through a hashing algorithm called SHA-256 which gives it a unique has/ signature - like a digital fingerprint - which confirms the validity of the document. If the document were to be slightly changed it would generate a different hash and identify that the document is different. A SHA-256 hash looks like this: d88c1962f7bbdc12a5e23c18f5c233d74feb eaa77a1129cd5fea579f30acd707

(Berntsen and Koutsogiannis, 2017:online)

The Era of Connection

Connected BIM and The Internet of Things An era of connected BIM is being slowly ushered in to the construction industry and promises to redefine collaboration. But it is the Internet of Things (IoT) that holds the key to truly unlock the performance potential of BIM, the construction process and building lifecycle management - all in one.

Technology could get to a point in the near future where the ‘generation of a building’s real-time digital twin is an integral part of the construction process’. (Berntsen and Koutsogiannis, 2017:online) Connecting drone technology, 3D scanning and real-time data from sensors to the proposed BIM model and inspection management is beyond our reach at the moment. But this could become a tool for smart contracts Without going too far into the specifics, the (DAO) to manage the program of the construction Internet of Things (IoT) consists of internetprocess autonomously before taking over the connected sensors, actuators and devices that management of the occupancy period as well collect and communicate data to computing - thus optimising the process in line with the systems for aggregation and analysis - in realblockchain’s automated business logic and time. It has generated a lot of hype in recent years removing a significant amount of administration and McKinsey & Company estimate that IoT’s and ‘middlemen’. global economic impact will be between $4 and $11 trillion a year by 2025. (Manyika et al., 2015) What does this mean for Facilities Management? BIM brings all parts of a building design This combination of BIM and IoT is set to disrupt together into one complete system. As well as the Facilities Management (FM) market, and a full 3D spatial representation of the building, introduce a new appreciation of the operation BIM models should contain asset information and in use stage of the building lifecycle - by far like cost, location, carbon impact, service life, the most costly stage. maintenance, spares, re-ordering, substitution, serial number, warranty details. (SWG, 2016) This In terms of Building Management Systems (BMS), data on the BIM model can be combined and this will mean the convergence of all disparate integrated with the continuous flow of real time and separate siloed building subsystems such as: data provided by a building’s IoT ecosystem. This sensors; lighting; HVAC; security; and audio-video would create a more holistic interpretation of the equipment into one integrated network. This building, which is being continuously updated, in integration of systems within the IoT network will essence, a building’s digital twin. create an ecosystem that will provide the tools Alexander Gaul

Professional Studies

to continuously monitor and manage the building. Enhanced customer experience, more efficient energy use, improved staff productivity and wellbeing, increased convenience, effective maintenance, and improved asset management are just some of the benefits of a holistic BMS. Essentially, the data derived from the IoT enabled BMS in the in use stage will generate its own post occupancy evaluation (POE). POE is often disregarded by clients as they fail to see the benefits, and even when it is done it only provides a snapshot in time of how the building was performing at the time of the evaluation. With the ubiquitous data collection and continuous monitoring that IoT facilities management enables, the

â&#x20AC;&#x153;With the ubiquitous data collection and continuous monitoring that IoT facilities management enables, the building can be continuously analysed and evaluated, with the results feeding back into how that building is operated and adapted.

building can be continuously analysed and evaluated, with the results feeding back into how that building is operated and adapted. This will have a significant impact on how building are designed. The value derived from an efficient, IoT enabled BMS built off BIM data is easy to quantify and validate. Designing an effective BMS and FM strategy will begin to take place in the early design stages of the project, thus promoting a mentality of truly life-cycle thinking in construction industry. The construction industry is very slow to take up new technologies and there are currently some lingering reservations around BIM Level 3. However, because the value of these systems is so quantifiable and the costs of building operation are so great, it seems inevitable that clients will identify the benefits for themselves and request that BIM Level 3 is used and BMS is designed from the beginning of the design process.

data will allow performance to be predicted and problems diagnosed with greater accuracy. In increasingly digitised and mechanised environments that can mean fixing costly errors before they happen. Maintenance engineers will also be able to view the 3D model of the job and its location, together with all service history and specification, and contract information in advance of a maintenance visit. Thus reducing repeat visits and improving response times. (SWG, 2016)

In terms of facility maintenance specifically, a BIM model that is continuously updated by IoT

Does blockchain have a role? Of course blockchain has a potentially significant role to play in IoT enabled FM. More â&#x20AC;&#x2DC;thingsâ&#x20AC;&#x2122; using the internet to talk to each other means potentially more devastation, should the system be hacked. Furthermore, as the IoT networks expand, cloud servers will create a bottleneck as well as providing a single point of failure that can disrupt the entire network. As blockchain records each information transaction across a decentralised network, a failure at a single point will not disrupt the network and the devices can

Project Management

Fig 6. (Left) Illustration of real time IoT data analysis. [Carlos Monteiro - edited by author]

â&#x20AC;&#x153;Smart thermometers could buy data from environmental sensors to improve their operation or a network of batteries could dynamically buy and sell electricity from one another depending on their needs. (Storus, 2017)

be accepted or rejected by the system. The Internet of Things requires a ledger of things. And as more services and systems become interconnected, belonging to multiple different players (for example, transportation, infrastructure, energy, waste or water) there will need to be a trusted system for transactions between these autonomously provided services and information sources. Blockchain makes trustless, peer-topeer messaging possible, as demonstrated by the DAO model for the construction industry in the previous section. An industry wide blockchain for IoT devices and systems could play a similar role. (Geipel, 2017)

collection, fees and insurance from. A system that predicts itself, monitors itself and repairs itself completely autonomously - perhaps even owns itself. A similar system could create a marketplace for IoT devices to autonomously trade data with each other, within one DAO or across multiple different distinct DAOs. The automated blockchain supply chain would not only make this extremely efficient, but its verification process would mean that DAOs can trade autonomously without any risk of foul play. (SWG, 2016)

IoT & DAOs Should the project be set up as a decentralised autonomous organisation (DAO), as described in the previous section, IoT systems opens up further opportunities for automating and optimising the facilities management stage. Writing the BMS into the blockchain based bundles of smart contracts (that make up the DAO) would create a BMS that operates autonomously as well. For example, the sensor on a light could communicate to the DAO controlled BMS system that the bulb will need changing shortly. The DAO could place an order for a new bulb (accepting delivery and liability for it) and call out someone to install it, paying both the supplier and installer out of the DAOâ&#x20AC;&#x2122;s bank account. The same bank account that the DAO would manage the rent Alexander Gaul

Professional Studies

A Data-driven Planning Process

Local planning authorities, rife with inefficiencies, Firstly, local councils and cities need to hold are facing serious resource challenges and are their relevant data in one place, where it can desperate for innovation and optimisation. be used and reused for multiple applications

In the age of big data analytics, machine learning and automated services, data is extremely useful and extremely valuable. Local planners knows this because they pay an awful lot of money for consultants, or their officers, to generate and retrieve data about sites, proposals from developers, or through engagement with citizens. This data is required to provide the grounding for planning applications, masterplans and Local Plans. The problem is this data is often stored in multiple interoperable document management systems and locked inside PDFs which are difficult for machines to analyse. (Webb, 2016; 2017) This lack of accessibility means that councils are continuously repeating the process of generating and analysing the same data to obtain the same evidence. This data is then sunk into a series of analogue reports and planning applications which are not used to beyond the short sighted needs of that report. For example, much of the same data is used in housing market assessments, strategic housing land availability assessments and infrastructure capacity assessments. Inexcusably the data for these studies is all procured separately and any coalition between them is managed on a case-by-case basis and mixed up in bureaucracy. (Webb, 2016)

and across multiple departments. This would eliminate the repeated work issue and ensure there is parity across the council departments.

Future Cities Catapult together with the Greater Manchester Infrastructure Advisory Group have indicated what this could start to look like with their Open Data Infrastructure Map. The map draws together data sets from local and national councils and presents an interactive map of infrastructure, demographic, economic and housing data across the region. It has used the platform to seek suggestions for development and has developed an automated process for short listing potential sites. They are in the process of developing it into a tool which can be used to replace infrastructure viability studies and allow planners and utility companies to better understand the infrastructure networks and plan them more collaboratively. (Webb, 2016; GMCA, 2018) This is a good start as it takes the wealth of data out of inaccessibly PDFs and presents them in a reusable manner that allows cross comparison of proposals and collaboration. It can be taken further, however. At the heart of this premise is a centralised and open city model as a platform for planners and developers to develop a data sharing collaborative approach to the

Project Management

creation of Local Plans and granting planning consent. The local councils could feed policy data, real-time land and property values, local affordable housing quotas, etc into the model. This would give the developer an indicative picture of the policy and likelihood of planning permission for a site and generate financial feasibility assessments before buying the site. They could test multiple proposals against an automated rules based system before progressing to officer negotiation. updating the model on the system which will flag up the In return the developers changes and eliminate time would be expected to submit spent evaluating the same their planning application in information.

â&#x20AC;&#x153;Cities are sitting on a wealth of valuable data locked away in planning documents. (Webb, 2016)

the format of a BIM model - in line with new minimum data provision rules. A BIM model of the proposal which can be continuously updated throughout the planning process will allow planners to evaluate the project against their local plan as well as its physical impact (Visual Impact Assessment, Rights to Light, etc). Any issues can be dealt with by

Fig 7. The Greater Manchester Open Data Infrastructure Map [GMODIN]

policy data the platform would grow into a digital twin of the region. It would not be much more of a stretch to suggest that a city or council-wide system like this The BIM proposal can can tap into the IoT based be shared on the digital ecosystem of autonomous platform with the appropriate smart networks that have agencies (neighbourhood been described earlier in level authorities, and this report. Cooperation organisations like and collaboration is key to Historic England and the both IoT infrastructure and Environmental Agency) who an effective and efficient could all contribute feedback planning process. for approval instantaneously. This holistic approach would certainly streamline the process and reduce the strain on planning officers by eliminating paperwork and PDFs. It may also reduce much of the role of planning consultants. It would also grow stronger as a system over time. As developers continuously update the platform with their proposals and â&#x20AC;&#x2DC;as builtâ&#x20AC;&#x2122; BIM model and the local authorities update the market, weather and Alexander Gaul

Professional Studies

Conclusion

Fig 8. Carillion crane [BBC]

This report has presented a selection of possible applications of emerging technology that have the potential to make the building procurement process more efficient, less labour intensive and less risky. Some of the strongest elements are in blockchain’s ability to assume trust between players who would have no reason to trust each other otherwise, which can have a positive impact on the way the industry does business. Also, the emergence of decentralised autonomous organisations present a feasible method of democratising building ownership and eliminating the reliance on financial institutions. These proposals are still hypothetical at the moment and there are some significant barriers to their adoption at this time. The industry’s generally closed mind to innovation and slow implementation of new

Project Management

systems is evident in the current usage of BIM. Furthermore, failures in coding and setting these systems up could have catastrophic results and lead to a loss of faith in the technology before they can be properly implemented. Whether or not these proposals are even totally desirable is a question that will have to be asked by researchers and the industry over the next few years. The replacement of ‘middlemen’ and administrative workers would lead to job losses and, even though many new jobs would be created in software, this would have serious repercussions. Ultimately, it is both an exciting and daunting time to be involved in the construction industry. There is hope and opportunities that the industry need to make the most of them if they are going to survive.

References Berntsen, N. and Koutsogiannis, A. (2017) Blockchain and construction: the how, why and when. People. Bim plus: [Online] [Accessed on 20th January 2018] www.bimplus.co.uk/people/ blockchain-and-construction-how-why-andwhen/ Burger, R. (2017) How “The Internet of Things” is Affecting the Construction Industry. The Balance. [Online] [Accessed on 18th January 2018] www. thebalance.com/how-internet-affects-theconstruction-industry-845320

[Online] [Accessed on 13th December 2017] https://www.thenbs.com/knowledge/bim-levelsexplained Nichol, P. B. (2016) If I only had 5 minutes to explain blockchain. CIO. [Online] [Accessed on 18th January 2018] https://www.cio.com/ article/3112773/it-industry/if-i-only-had-5minutes-to-explain-blockchain.html Saxon, R. (2017) Is there a blockchain in our future? : The Joint Contracts Tribunal. [Online] [Accessed on 18th January 2018] corporate. jctltd.co.uk/is-there-a-blockchain-in-our-future/

Dingle, S. (2016) The company of the future: a beginner’s guide to the DAO. Medium. [Online] [Accessed on 19th January 2018] medium. Storus, M. (2017) Matt Storus, Architectural com/@simondingle/the-company-of-the-future- Designer Turned Digital Designer. In: Goldberg, M. a-beginners-guide-to-the-dao-112b8855d9ca Working out of the Box. Archinect. Financing — CBC. Financing — CBC. Construction Blockchain. [Online] [Accessed on 19th January 2018] https://www. constructionblockchain.org/theme-f/

SWG. (2016) How Does BIM Benefit Facilities Managers? : SWG. [Online] [Accessed on 20th January 2018] www.swg.com/blog/how-doesbim-benefit-facilities-managers/

FOAM. (2015) Towards a decentralized architecture with FOAM + the Blockchain. In: Korody, N.: Archinect.

Thompson, C. (2017) How does the Blockchain Work? : Medium. [Online] [Accessed on 18th January 2018] medium.com/blockchain-review/ how-does-the-blockchain-work-for-dummiesexplained-simply-9f94d386e093

Geipel, M. (2017) Blockchains will change construction. Connectivity. Arup. [Online] [Accessed on 20th January 2018] thoughts.arup. com/post/details/612 GMCA. (2018) MappingGM. [Online] [Accessed on 18th January 2018] mappinggm.org.uk/about/ Hughes, D. (2017) The Impact of Blockchain Technology on the Construction Industry. Animal Media: Medium. [Online] [Accessed on 18th January 2018] medium.com/the-basics-ofblockchain King, R. J. (2017) ‘Decentralized Architecture Office.’ Due, 12 Manyika, J., Chui, M., Bisson, P., Woetzel, J., Dobbs, R., Bughin, J. and Aharon, D. (2015) The Internet of Things: Mapping the Value Beyond the Hype. McKinsey Global Institute. McPartland, R. (2017) BIM Levels explained. NBS.

Turka, Ž. and Klincb, R. (2017) Potentials of Blockchain Technology for Construction Management. Primosten: Procedia Engineering. Vigna, P. and Casey, M. J. (2015) The Age of Cryptocurrency: How Bitcoin and Digital Money Are Challenging the Global Economic Order. London: Macmillan. Webb, S. (2016) Why Cities Need to Unlock Their Planning Data. Future of Planning. Future Cities Catapult. [Online] [Accessed on 20th January 2018] futurecities.catapult.org.uk/2016/11/03/ future-planning-cities-need-unlock-planningdata/ Webb, S. (2017) Why Planning is Ripe for Innovation. Future Cities Catapult. [Online] [Accessed on 20th January 2018] futurecities. catapult.org.uk/2017/11/07/blog-planning-ripeinnovation/

Alexander Gaul

Average

50+ staff

10 to <20 staff 3 to <5 staff

Professional Studies

37%

61%

24%

59%

12%

56%

Profits

17%

32%

Salaries

Overheads

Business Management Architecture and the Profession

The following is a commentary on the architect and the business of architecture. It focuses on the current condition of fees and barriers to change, before identifying potential avenues for architects to expand their businesses into more lucrative markets.

A reflective commentary on alternative roles of the architect and architectural services; ways in which the business of architecture has been structured in the past and how it could be in the future.

The general consensus within the architecture community is that fees, and therefore salaries, are unfairly low. This represents the architectâ&#x20AC;&#x2122;s diminishing role within the construction industry, which this report argues architects are complicit in causing. There needs to be a change to architectsâ&#x20AC;&#x2122; collective mentality and a general broadening of an architectâ&#x20AC;&#x2122;s scope for them to be able to reaffirm a solid grounding within the construction industry or beyond.

Business Management

Fee Analysis 1

Using the average salaries of each type of fee-earning staff can only go so far in determining the fee to salary ratio as a company that employs primarily architectural assistants will have a much lower average 2 salary than one that employs This refers to the gross revenue per member of technical primarily experienced architects, and will subsequently see a staff as this information is more readily available across a much smaller percentage of revenue go to salaries. However larger selection of companies this information is not freely and resources. However a available. more accurate reflection of a company’s efficiency would be to measure net revenue against all 5 The exception being small members of staff as this would practices of 3 to <5 employees where profits are around37%, factor in the different ways companies engage consultants as this would likely include the dividends paid to the Directors and other non-salary direct or Sole Principals. Based on expenses. (AIA, 2008) average revenues per head in 3 practices of this size, these Although overheads may be profits would be around £70,000 lower and salaries higher in the service sector and this rule per annum and would possibly should definitely not be taken as also include any investment back into the business. gospel. Whether in the form of a fixed fee per stage or percentage of construction, the practice should always calculate the time required for the job and set their fees accordingly.

Fig 2. (Bottom right) Average practice revenue per fee earning staff. [RIBA Benchmarking]

50+ staff 10 to <20 staff 3 to <5 staff

r empl

ee oy

nu eve e

Most architects currently operate within the service economy: wherein their time is exchanged for fees and the rate at which those fees are charged directly influences that architect’s salary (and their company’s profits).1 It would be fair to say that the perceived mismanagement and inadequate balance of this time and salary (and by extension - fees) is the most commonly cited topic of disparagement within the context of architectural business management. Fees earned per member of fee-earning staff is, consequently, a key criterion against which the successes and failures of architectural business operations will be measured in this report. This reflects the efficiency of the company, the effectiveness of their fee structure, and determines the salaries of their staff.2 Of course, overheads and profits are other factors, on top of salaries, that have to be incorporated into these fees. The ‘rule of thirds’ (one third salary/ one third overheads/ one third profits) is often heralded as a suitable benchmark for determining fee rates to ensure a sustainable business.3

Fig 1. (Top left) Salary, profit, overheads summary chart. Based on RIBA benchmarking and appointments data.

The following section analyses fee and income data, for both UK and global firms operating in the construction industry, in order to frame the current financial situation of architecture practices and contextualise the generally low salaries of architects. This analysis also enables the most financially successful architecture firms to be identified and their strategies and markets can be scrutinized.

£47,000

R £95,000

£67,000

The graphics (left) compares the breakdown of revenues into profits, salaries and overheads for small, medium and large RIBA Charted practices using revenue per fee-earning staff, profit and average salary data.4 Significantly, the percentage of revenue that goes on salaries is around 60% - double the rule of thirds - and profits are generally quite low. 5 Profits per fee-earning staff in medium and large practices are around £16,000 p.a. and £11,000 p.a. respectively. This illustrates a particularly inefficient and unsuccessful business model across UK architecture firms and suggests that Alexander Gaul

Professional Studies

for salaries to be increased, and businesses to become more profitable, revenue per capita needs to be increased quite significantly; either by working more resourcefully or increasing fees. This analysis confirms the validity of the criticisms levelled at architecture’s generally low salaries and points to a specialism in decline. But what’s happening at the top? Analysis of the UK’s 150 largest consultants in the construction industry (see full table in appendix) also shows that architects are generally less financially resourceful than other building consultants in the UK, even at the highest level. The 50 largest architecture practices in the country command an average of £165,000 in fees per chartered member compared to the other building consultancies in the survey (project managers, engineers, surveyors, etc) which average over £192,000 per chartered member. These per capita fees are considerably higher than the average for large practices in the UK, however most still fall short of being able to pay the going salaries for their technical staff without spending more than one

third of their fee revenue.6 Furthermore, of the largest employers of architects in the UK, the strongest businesses are those that only allocate a small percentage of their overall business operation to architectural services. The likes of Mace, Arcadis, NPS and Atkins are huge multidisciplinary/ interdisciplinary companies that operate on a wholly different level to most architectural companies. They offer building services and consultancy that span the length and breadth of a project’s life cycle, where the built environment becomes delivery orientated and superefficient. The rise of these types of companies has seen a shift in the profession away from design-led practices towards a process-driven consultancies that can offer more cost effective, business oriented packages. (Jamieson, 2011) 6

Based on an average salary for all fee earning staff of approx. £40,000 - see salary analysis in appendix.

Fig 4. (Bottom left) Top 10 Global Practices Ranked by Fee per Architect [WA100 2017]

Fig 3. (Bottom left) Top 10 UK Practices Ranked by Fee per Member of Staff [Building Magazine]

Fig 5. (Top right) The scope of Mace’s services through a project’s lifecycle [Author’s own]

UK LARGEST PRACTICES Firm

Total UK chartered staff 2016

Total UK staff 2016

Number of Chartered Architects

% of Charted Staff are Architects

Annual UK Fees (£m)

Fee per Char- Fee per memtered Member ber of staff (£) (£)

Mace

1,260

3650

1.9%

£1,559

£1,237,302

£427,123

Foster + Partners

450

1,261

418

92.9%

£172

£382,222

£136,400

NPS

320

988

18.1%

£125

£390,625

£126,518

Arcadis

1,940

3,676

2.2%

£463

£238,660

£125,952

Hunters

57.6%

£7

£200,000

£106,452

Atkins

4,260

8,873

274

6.4%

£944

£221,502

£106,345

Assael Architecture

100.0%

£8

£213,889

£101,316

Broadway Malyan

296

100.0%

£30

£319,355

£100,338

BDP*

368

777

281

76.4%

£73

£197,554

£93,565

Fletcher Priest

105

100.0%

£10

£160,000

£91,429

WORLD’s LARGEST [WA100 2017] Country Firm

Number of Chartered Architects

Annual Global Fees (£m)

Fee per Architect (£)

Jacobs

USA

636

£1,110

£1,745,283

KEO

Kuwait

290

£206

£711,931

Page

USA

147

£95

£649,388

Leo A Daly

USA

214

£125

£584,393

Henn

Germany

101

£51

£505,545

Corgan

USA

147

£73

£498,367

CallisonRTKL (Arcadis)

USA

419

£206

£492,745

Stantec

Canada

530

£258

£487,283

Tabanlioglu Architects

Turkey

177

£81

£455,706

Gensler

USA

2,570

£1,110

£431,907

Bjarke Ingels Group

Denmark

119

£51

£429,076

Foster + Partners

457

£190

£416,149

Populous

USA

207

£81

£389,662

Business Management

Develop

Consult

Construct

Operate

Development and development management

Project and programme management, cost consultancy, architectural, engineering and design services

Contracting, construction management, fit out, specialist services

Facilities management consultancy, helpdesk services, managed services

“Businesses built primarily around the provision of architectural services do not perform as well financially, compared to those with a wider catalogue of services.

Case Study: Mace Mace have internal departments that will: develop a project; provide all design; consultancy and project management; complete construction; and then provide facilities management. The economies of scale of these ‘one-stop-shops’ also mean that they have been able to enter into more lucrative markets like infrastructure, transport, health, energy, defence and large-scale master planning – across both public and private sectors. Maximising their engagement with a client’s project opens doors to strategic consultation much earlier in the process and more frictionless post occupancy evaluations later in the process - as well as providing more feasible opportunities for ‘skin-in-the-game’ and their own developments. The accumulation of these factors creates particularly scalable businesses with ever-expanding client bases and an increasingly greater impression on the built environment. It borders on irony that these companies would not be described as

architecture companies when you consider their contributions to the built environment. Maybe if architects were to see the value in properly engaging with the other disciplines involved in the built environment (rather than inconveniences incapable of understanding the poetry of their designs) they might be able to make a similar contribution themselves.

Alexander Gaul

The data does show that businesses built primarily around the provision of architectural services do not perform as well financially, compared to those with a wider catalogue of services – which likely translates to lower salaries for their employees. There are some clear exceptions to this, however, in Foster + Partners, Assael Architecture and Broadway Malyan who all rank highly in fees per capita despite operating primarily in architectural services.

Professional Studies

“Large multidisciplinary companies working in valuable sectors and on big government contracts make up the world’s most profitable companies.

Worldwide? It is a similar picture on the global scale, according to data provided by WA100 2017, with large multidisciplinary companies working in valuable sectors and on big government contracts making up the top most profitable companies.7 The difference being that the fees and fees per capita are much larger as the firms at the top of the list operate in the much larger construction markets of the USA and China. Of the companies on the WA100 2017 list: the average fee per architect for a UK based company is $268,739 compared to $349,000 worldwide or $456,000 in the USA – thus illustrating the importance of global expansion into more lucrative markets. The impact of this on salaries is also clear: the average pay for qualified architects in American companies is £58,000 compared to around £38-40,000 in the UK. (Dunton, 2015) Like Foster + Partners, there are several practices that perform

very well on the global stage financially, despite staying relatively close to a traditional model of architecture practice and concentrating the bulk of their business around the provision of architectural services: namely Bjarke Ingels Group (BIG) from Denmark and Henn from Germany.

This refers to fee income per architect as provided by WA100. This is a fairly crude way of measuring the strength of these companies as it does not factor in other fee earning staff like engineers or planners but unfortunately this data is not available in this particular survey. Fig 6. (Left) Foster + Partners, Norman Foster [Timeout.com] Fig 7. (Right) BIG, Bjarke Ingels [independent.com]

Foster + Partners Case Study As well as carrying the ‘starchitect’ tag Foster + Partners have developed a very profitable business model by expanding their portfolio of high profile projects across the world, in particular the Middle East and North America. Also, in 2007 they brought in a private equity firm as a minority shareholder in the business which allowed them to enter into new large scale infrastructure markets. (2007)

Business Management

“ BIG changed their fee model from one of charging for hours worked, to charging for value created. They did this by documenting proof of their value creation.

particularly strong. Although it is important to not be hyperbolic, as architects are still paid fairly well in comparison to the national average. Also, there are plenty of opinion articles that focuses on whether fees and salaries are going up or down, however this distracts from the potential architects have to change the way they currently operate, rather than trying to charge more for operating the same way. There is significant potential for architects to do much better within the construction industry; the following sections outline some of the barriers to change that architects must overcome if they wish to ever receive greater financial rewards, before presenting opportunities for architects to change the way they do business.

BIG Case Study Like Fosters, BIG also carry the ‘starchitect’ title. However their success is as much down to their focus on business operation as their architecture. In 2008 Sheela Maini Søgaard was brought in from a business background and made partner and CEO; since then they have grown from an office of 45 to over 400. Crucially they changed their fee model from one of charging for hours worked to charging for value created. They did this by documenting proof of their value creation by showing how they provide more value per square foot sold, more program to any given site, and better value for the users - which results in better design fees. They have also developed a hard uncompromising stance on being paid in full and on time. They also use software to plan their resources and manage their workload which prevents them from running over budget on resource expenditure. And, perhaps most significantly, they have developed their brand through marketing their designs, as much as their company. Each design has a narrative as to exactly how it came about and is communicated in easily digestible and original manner. (Søgaard, 2017) Fees, what have we found out? Despite a few success stories and the global interdisciplinary consultancies, the general picture for architects financially is not Alexander Gaul

Professional Studies

Risk & Value

Business Management

‘Trapped in an obsession with title, while the services they supply are fragmented and outsourced, architects forget that they have no natural right to exist as the discrete profession that was invented in the Victorian era.’

Fig 8. Photo by D. Phillips Fig 9. What Clients Think of Architects Survey Findings

played a part in establishing this stereotype. While this is all very much a generalisation of Sean Griffiths architects, the RIBA survey What Clients Think of Architects (2016) indicated that a majority of clients think architects need to improve their understanding of commercial drivers. Although clients are generally pleased with architects’ The low fees, documented in the previous section, design abilities, their process management skills are indicative of the architects’ diminishing role in are seemingly not as highly valued. In particular, the construction industry which, in turn, is related ‘commercial understanding’ and ‘adding value’ to their lack of ability to demonstrate the value of as they were the only two areas rated for their services. satisfaction in the survey where more clients are dissatisfied than satisfied. What Sean Griffiths (formerly of FAT Architecture) is illustrating, is how architects have been complicit in their own increasing irrelevance. developing the brief Architects have developed an almost paradoxical explaining design proposals attitude of fondly imagining themselves in the pre-modern concept of the ‘master builder’, communicating with client while simultaneously outsourcing vital building understanding client needs services to a design team that they ultimately have little interest in communicating or properly collaborating with the project team collaborating with. managing their work

Architects are also generally perceived as having little interest in their clients’ commercial pressures and of having ‘narrow interests and expertise, limited primarily to matters of aesthetics’. (Lewis, 2013:26) It is this lack of regard for their client’s desires and budget that has pushed architects to the edge of the building process; and they have subsequently developed a reputation for having insufficient understanding of commercial issues. The perception that the architect serves the wider society as much as they do their client, and the, less commendable, belief developed in architecture schools that the lone-wolf architect knows best, might have Alexander Gaul

technical design spec. managing the handover efficiency of admin adhering to programme data management approach commercial understanding value adding activities

dissatisfied

satisfied 25

Professional Studies

There are certainly examples of developers maximising their value/ profits beyond the pale, which architects and society should not have to tolerate (forcing local councils into scrapping affordable housing quotas on their ‘buyto-leave’ developments, for example) however this does not diminish the need for greater demonstration of understanding a client’s market drivers.

What can they do then? It seems unlikely that architecture practices will be able to compete with

Fig 10. (Bottom left) Average architect’s salary ranked by experience and sector [Architects’ Journal]

Experience Business Management

Government

Developer

Contractor

Client side

In practice

Government

Developer

Contractor

Client side

In practice

Government

Developer

Contractor

Client side

In practice

Risk = Value Architects, simply, do not sit comfortably in this hardedged commercial world, and may point a finger of blame at the market economy for marginalising the social values they bring. There is most definitely value in having this push-back from architects to champion a better built environment for future generations. However, clients and developers who have more skin in the game are much more concerned with mitigating their much larger financial risks and engaging with market drivers that will increase value.8 Construction is both expensive and risky and clients are becoming increasingly risk averse. Architects’ have slipped down the pecking order because of their reluctance to engage with a project on a risk

Contractors, working under design & build contracts have also become more prevalent. Contracting is all about risk management, as they operate essentially in a boombust industry, so are ideally structured to take the risk out of the client’s investment. Naturally, whoever is carrying the risk will drive the design. Architects’ disengagement with managing the risks of the client has seen them lose ground to contractors - ground it is unlikely they will make up without a greater understanding of how they can bring value to their clients’ projects.

contractors and global multidisciplinary consultancies for full project management service. Although it is important to remember that these companies often employ their own in-house architectural team and evidence suggests that architects are better paid working for a contractor, developer, or client than in an architectural practice. (Waite, 2016)

Salary

“Architects, simply, do not sit comfortably in this hard-edged commercial world.

management basis. The onestop-shop multidisciplinary global practices, mentioned earlier, have flourished in this risk-averse environment as they are able to carry the risk on behalf of the client. (Jamieson, 2011)

“What architects need to do is, discover an alternative role in shaping the built environment that better suits their expertise and enthusiasm and then ensures that they can quantify their value within emerging markets. Fig 11. (Right) The Future for Architects – Emerging Infrastructure Markets [edited by Author]

128% EMERGING MARKETS

18% DEVELOPED MARKETS

Infrastructure Growth 2010 - 2020

Clients are unlikely to become any less risk averse and architecture practices are unlikely to develop better project management skills than contractors and interdisciplinary consultancies – even if significant changes are made to architecture’s education system. Furthermore, emerging infrastructure markets look set to accelerate the growth of these global interdisciplinary consultancies (Crossrail 2 - £31bn, HS2 - £56bn, etc.) as they can carry large projects through to completion and operation. It has been predicted, in the past, that these changes to the industry will cause medium sized practices to die out: unable to provide the commercial sensibilities, project management or share risk with their clients as a large practice may. Subsequently seeing dwindling opportunities, a reduced market share, and architects transferring to larger practices. (Jamieson, 2011)

What architects need to do is, discover an alternative role in shaping the built environment that better suits their expertise and enthusiasm and then ensures that they can quantify their value within emerging markets. Alexander Gaul

55% EMERGING MARKETS

45% DEVELOPED MARKETS

Share of Global Construction by 2020

Education

communication and understanding of processes and priorities for both sides, and will ideally nullify the development of egos and resentment. This has been described as ‘the multidisciplinary model’ and it is much more closely aligned to the current configuration of practice than the traditional model of architectural education. The University of Bath’s architecture undergraduates share a design module with the civil engineering students, however this is currently one of the few examples of multidisciplinary collaboration in architecture schools.

More time needs to be allocated to developing skills and an understanding of business management, economics, marketing and communication. This would involve a general shift from an academic mentality, towards a business centric one. Undoubtedly this would not prove universally popular as the market economy is often subject of condemnation in Criticism architecture schools. However this rejection only Architecture’s general lack of capacity to evolve puts architecture students at a disadvantage and adapt to the conditions illustrated in the compared to schools in other sectors, that previous sections, certainly has some roots in the are more comfortable with developments in structuring of its relatively antiquated education today’s market economy. Of course, it does not system. mean architecture students should become unconditionally profit driven, but it they want The gearing of architectural education towards to retain influence within the built environment producing the solitary genius, independent of and sector (and possibly disrupt it from within) then superior to the construction industry, is preparing they need to be able to develop the ability to students for a reality that does not exist. Peter translate their conceptual ideas into business Buchanan wrote about this in 1989 in What is concepts. wrong with architectural education? and again in AJ’s The Big Rethink in 2012, and yet the issue MIT’s DesignX accelerator is a great example remains. Students are inflating their egos in the of a where this is starting to happen. Launched isolation of their design studio, before discovering last year, DesignX offers a for-credit workshop of the scope of their own irrelevance within a wider classes, seed funding, research, and a platform and better prepared multidisciplinary design for architecture students to develop business team. models and pitch their ideas to outside investors. (Grozdanic, 2017; DesignX - Accelerating There needs to be a greater impetus on Innovation in the Built Environment, 2018) collaborating with other future members of the The course offers students the opportunity design team. Students need to understand the to take their ideas and turn them in to reality value in collaborating with, and learning from, and themselves into entrepreneurs. One of the those on engineering, planning, surveying, and startups developed last year, called Nesterly, construction management courses. Not only will ‘aims to connect people with unused real estate this encourage students to understand the roles and extra space with long-term renters at other design team members play, they will be affordable rates in exchange for help around the able to seek out and maximise the potential of house.’ (Grozdanic, 2017:online) their own role within that team. Shared design modules across the design team will benefit Fig 12. An architecture school’s studio [Syracuse University]

Alexander Gaul

Potential Beyond its flaws, however, is a thoroughly demanding education that produces idealists and enthusiasts, adept at lateral thinking, with creative and inquisitive minds, capable of ‘thinking alternatively at the big and small scale.’ (Turner, 2017:online) These qualities may have become undervalued in the construction industry and architectural practice but they are very much valued in other industries at a higher strategic level. (Turner, 2017) To those that argue universities are failing to prepare student for practice, one might argue that practices (and the wider construction industry) are failing the ambitions of students. Careers expert Matthew Turner argues that the practice of architecture is not aligned to an architecture student’s core motivations. He finds it ironic that those with greater ambition to design cities generally apply to do architecture; while those seeking a more comfortable public sector job chose to study planning - despite the latter ultimately having the most influence on our built environment. (2017)

For every architecture practice languishing in postmodern obscurity there are multiple students eagerly proposing novel design solutions involving augmented and virtual reality; connected devices and services; digitally enhanced spaces; or digital interfaces for building customisation. It has been said that practice dwindles about ten years behind academia as it takes about that long for ideas to penetrate up the ladder. (Jefferies, 2011) The issue now appears to be that students are turning to technology companies for inspiration, as their products increasingly penetrate the physical world. Students have identified technology companies as the great innovators of urban design, not architecture practices. This can only mean that practices will fall further into obscurity as technology companies shape direct urban life, and hoover up some architecture graduates while they are at it. While it may sound nonsensical, there is a valid claim that architectural practice (in its existing form) is not the best place for those with an architectural education.

The skills developed by architecture students and their areas of interest are increasingly more progressive than the generally entrenched construction industry. Consequently, graduate architects are becoming increasingly more suited to roles outside of traditional architecture practice. Our mentality is better aligned with more optimistic design roles in sectors that value design and creativity - beyond purely designing buildings. Architect’s design buildings, right? If architecture’s remit could be understood in a wider sense of solving problems through designing spaces, systems, environments (and the way we interact with them), then there are multiple superior avenues to achieve this than our limited role in construction industry. Design consultancies, like IDEO, Frog Design and Goodd, tackle design solutions on a wider variety of issues (many of which are related to our physical environment) - working on everything from Urban Farming to breast pumps. In general, we are living in a predominantly design-led world

Fig 13. Architecture student, Steven McCloy’s re imagining of European Union as a nomadic organisation. [Dezeen] 30

Professional Studies

“[Architectural education is] a great education and should be protected at all costs, particularly from those who moan about it failing to prepare students for practice – a complaint that is never heard from the best architects. It provides practical, imaginative and critical skills applicable to many things – a fact that is not lost on the present generation of students, some of whom are eschewing normative practice and applying their learning to product design, animation, writing computer code and working in VR – technologies tailor-made for those equipped with an architectural education. Sean Griffiths

Business Management

Professional Studies

The Future

â&#x20AC;&#x153;The 3 largest startups in the US (with a combined market cap of $100b) are based on design briefs that architects and urban designers have worked on for decadesâ&#x20AC;&#x201D;Uber, which re-imagined vehicle ownership; Airbnb, which re-imagined shared living space; and, WeWork, which re-imagined work spaces.â&#x20AC;&#x2122; (Storus, 2017)

Business Management

The following section explores in more detail possible avenues, beyond traditional practice, for architects to maximise their potential on design-led projects and bring value to the shaping of our experiences and environments. This is not just examples of alternative employment for architects. This is an exploration of roles that are actually better suited to those with the mentality and skills developed in architecture schools than just the design of buildings, and how these roles can be structured to engender greater value. A design-led world Beyond architecture, there has never been a better time to be a designer. Design and user experience is at the forefront of the world’s most valuable companies and there is evidence that design-led companies perform significantly better financially than those that are not. (Rae, 2015) Apple is the obvious example, with their top-down design approach which has become part of their company culture and propelled them to the most valuable company in the world. Beyond products however, we have seen the rise of a new type of company based around design-led service provision, with business models built around the design detail of customer and user experiences. They are part of an era of disruptive technology companies emerging from a sector traditionally concerned with building software and hardware, into one focused on disrupting and reinventing the services industry. Technological

development over the last decade, and the increasing ease of sharing information, has changed communications culture by merging digital and physical experiences, to the extent that users no longer distinguish between the two. These technology companies, that are tapping into this most effectively, are those that are designing the intersection between the technology and the service. (Edson et al., 2017) ‘Our experience with the world is being increasingly modulated by our interaction with technology’. (Storus, 2017:online) But it is not the technology itself that draws us it its platforms, rather the continuous dialogue, connections and experiences that we have while we are on them. User Experience design This has created a demand for design minds in technology that architects can take advantage of. The role of a User Experience (UX) designer has become increasingly sought of as technology companies try to bridge the gap between their platform and the user. The role of the UX designer carries a similar design-based mentality as the architect. They are tasked with ‘giving form to culture’ and ‘calling on all the senses’ to understand how people interact with their environment. (Johns, 2016:online) The process is similar also, following concept designs right through to construction drawings. The differences being that they have a much quicker turn around period, they design through iterations and never stop Alexander Gaul

iterating, they can play with their product and continuously improve it. As opposed to designing fixed buildings where the design has to stop at a point and several years later the product is finished and the designer can experience its use. As digital technologies increasingly merge into the physical world, the role of the UX designer gets progressively closer to that of the architect. This also means that UX designers will become increasingly more relevant to the design of our environments - carrying out the role of the architect in shaping the interface between technology and humanity. To those that can separate the role of the architect from purely designing the aesthetics of a building, there is potential to have a greater impact on society as a User Experience designer.

Fig 14. Waymo selfdriving car technology [Waymo] 33

Professional Studies

â&#x20AC;&#x153;As technology transcends the screen and increasingly dictates the physical world on a macro as well as a micro level, a greater impetus will be put on strategic design.

Strategy As technology transcends the screen and increasingly dictates the physical world on a macro as well as a micro level, a greater impetus will be put on strategic design, beyond the current role of the UX designer. The previous report talks about Smart Cities, big data collection, Internet of Things and other imminent advancements that make up the Fourth Industrial/ Urban Revolution. This is all being driven by technology companies, often companies who, in the past, specialised in developing software or hardware. But what they are presenting now is a new level of digital infrastructure which demands a rethinking of our physical infrastructure. This all presents an opportunity for architects to get involved with the design

of this intersection between technology and physical space, at a different scale to UX design. UX designers tend to focus specifically on the immediate interaction and experience of a product. Architects can see and design the big and the small picture simultaneously. Future infrastructure markets The problem in the past has been that architects have not been involved enough in the development of big infrastructure projects. They are often designed by planners and civil engineers, which has meant that engineering has driven the user experience - rather than the other way around. This is also bad news for architects as they are missing out on lucrative markets. Infrastructure projects have great capital expenditure and effect large numbers of people; the potential value that architectural thinking could bring to issues of efficiency and experience are clear to see. The shift to design-led/ data-

Business Management

driven digital infrastructure, invested in by technology companies intent on disrupting current systems, and focused on enhanced user experience, presents possibly the best avenue for architects to enter future infrastructure markets. We are starting to see some architects take advantage of these developments already. BIG, for example, are designing the Hyperloop high-speed transportation system for Elon Muskâ&#x20AC;&#x2122;s Hyperloop One company. Closer to home, Sadie Morgan was announced, in 2015, as the first architect to be named a commissioner at the National Infrastructure Commission. What this means is, Sadie Morgan has influence over more capital than any other architect in the country - by advising on over ÂŁ200bn of government investment in infrastructure. (Winston, 2015; Hopkirk, 2017) Making her arguably the most powerful architect in the UK.

Research Based Strategic Consultancies Architects share an optimism and design ethos that is needed for the success of these new infrastructure markets, but in what capacity can they make the transition and offer the greatest value? Architecture training makes them well placed to move into new fields of strategic consulting at higher levels, where they can take advantage of the skills they have developed and have a greater influence on society. (Jamieson, 2011)

“[Architects should not always think] in the form of buildings but in the form of knowledge or organization and structure and society that we can offer’ Koolhaus

So, the opportunity is there, but how can a design-led strategic consultancy be structured to create and demonstrate value within these new markets? The answer may be in reversing architects’ usual scope on projects, namely, one of starting too late then leaving too early - missing out on both the predesign research and production stages of the project. Architecture has a weak research culture, despite there usually being some form of

Fig 15. (Bottom left) BIG’s collaboration with the Hyperloop project. BIG Fig 16. BIG IDEAS’ smoke ring blowing chimney, as a result of their research department. [BIG IDEAS]

research in most things they do, and designs produced in practice is a body of research in itself. They are bad at doing post occupancy research and subsequently failing to quantify return on investment (ROI). Architects, in a strategic capacity or not, need to become proactive, rather than reactive: as a way to muscle in to projects before they begin. Data-driven research is the tool they can use to do that, using their findings to predict trends and get ahead of the curve. Developing a research strategy will allow them to ask challenging, proactive and unorthodox questions, beyond the ones their clients ask of them. Idea Incubators and Research Labs are starting to popup at some of the world’s most innovative architecture companies, who have recognised the opportunities to break into earlier strategic roles through research. HOK’s research feeds into their Alexander Gaul

pre-design consulting and workplace solutions; BIG have developed a BIG IDEAS branch to their company; and CallisonRTKL (Arcadis) are working on a project called ‘Predict’, a research/ datadriven project on possible applications of emerging technology on urban design. What could a research driven design consultancy’s business model look like? The business could follow a process of ‘project research’ focused on a particular area of digital infrastructure (probably at a macro scale), undertaken outside of a live project to progress the field of knowledge in a specific area. This could then be followed by ‘design research’ undertaken to solve a design aspect of a live project, and the research teams should operate across all design teams throughout the project. This can provide an avenue for the strategic consultant to take on a more ‘interdisciplinary leadership’ type of role throughout the project development. 35

Professional Studies

“ The answer may be in reversing architects’ usual scope on projects, namely, one of starting too late then leaving too early.

Income from BMS and Post-occupancy The business function of the pre-design strategic research is to be able to enter into projects earlier in the process, and indeed dictate and initiate the projects. The design research during project development is an avenue for maintaining the strategic consultancy throughout the design and implementation of the project in an ‘interdisciplinary leadership’ role. The point of this is to be able to develop iterations and respond to continuous design research that will need to be maintained, in a senior role.

This approach creates a greater scope for collaborating with clients and investors, (or even act as developer) rather than taking up a purely consultancy role. This skin-in-the-game approach means that we can profit from the value that has been designed-in during the predesign stages. It would be a missed opportunity to just collect a consultant’s fee for the valuable The project research informs the design research, research done in the early stages but leave the helps write the briefs and garners investment project before that value is gained. 9 from clients by unearthing and presenting opportunities and methods to tackle them. It Tapping into the operational value is proactive as it identifies projects that do not The previous ‘Project Management’ report already exist; rather than reactive - waiting for documents the potential for Internet of Things clients to initiate the engagement. (IoT) technology and data analysis to inform a new era of smart Building Management Systems Entering the project at this stage, backed up (BMS). The conclusions were that, ubiquitous by a portfolio of data analysis and quantitative and qualitative research, makes it much easier to demonstrate value to prospective clients. It is also the considerably cheaper stage of the project and any value that can be identified in the pre-design stage will prove very much worth it in the more expensive construction and in use phases. There are additional benefits for research-driven consultancies such as R&D tax credits, the equivalent of up to 33p for every £1 of qualifying expenditure and other research grants are available to get the business off the ground. (Williams, 2016) Furthermore, opportunities to collaborate and develop cross-disciplinary partnerships are emerging for architecture research departments which will allow practices to expand their breadth of knowledge and strengthen their proposals.

‘With the rise of embedded sensor infrastructure, smart cities, social networks, and ubiquity of smartphones that are becoming increasingly more powerful and sophisticated every year, the ability to gain real-time continuous 24/7 quantitative monitoring of data is now a reality. (Phelps, 2017)

Business Management

data collection can feed into a BMS and the facility can be managed more efficiently and continuously updated. This would, essentially, be a form of post occupancy evaluation (POE), except in real time, and continuously - rather than a snapshot from a site visit or test. The value of enhanced BMS is clear when the overall cost of the occupation stage of a building is considered, and benefits to the efficiency and effectiveness of a project were outlined in the other report. This also presents an opportunity for the architect, in this interdisciplinary strategic role, to maintain involved in the project in an active capacity thus profiting from the most valuable stage or the process. The design research, conducted by the architect, during the project conception and implementation should feed into creating a smart BMS in line with the project’s development. The BMS will provide a continuous post occupancy evaluation that continues to fuel research during the project’s operation. As well as using the BMS to manage the facility on a day to day basis the analysis derived from the POE by the architect can be fed back into the project and inform operational development and advise the client (if there is one) on how to increase efficiency and also on adaption and extension. The architect, in their interdisciplinary consultancy role, can both manage the facility and build up a growing body of research that will benefit both their portfolio of

clients, their own investment portfolio and their future clients. The result of this is, fundamentally, an economic resilience strategy, built around taking a slice of the value they have created (rather than a % construction cost or purely based on the sale of consultancy hours which is finite). The aim is to generate a constant stream of income derived from the occupancy and maintenance stage of the project - essentially a percentage fee of the profits on top of the consultancy fees earned in the earlier stages of the project. This could come in the form of a long-term service agreement (or subscription service), generating predictable revenue, building strong customer relationships, and the ability to offer competitive upfront costs in exchange for a management role post occupancy.

This is especially applicable in designing the digital infrastructure for smart cities, for example, where the interfaces and experiences are much more fluid that an infrastructure that is ‘fixed’.

This is only available because of being able to identify potential value through the quantitative and qualitative based research in the early stages and then demonstrating methods for deriving additional value (savings) during the project’s lifespan.

Alexander Gaul

Professional Studies

Conclusion

This report began with a fairly glib view of the current state of the profession. There are some significant barriers to change within the architecture culture and architectsâ&#x20AC;&#x2122; collective mentality. However, it has also presented a great deal of potential that is emerging from architecture schools in the UK with open minds and capabilities to disrupt the industry. The second section identified the potential for architects to break into new territories. A research-based strategic consultancy was presented as the vehicle to allow them to do this. Research being the key ingredient as it ties into a long term economically resilient business plan and breaks down barriers to the pre and post design stages of a project that architects currently miss out on. Rather than entering the project too late, they develop strategic research

Operation: Facilities Management and POE research

Construction: Interdisciplinary consultancy

departments to analyse and understand trends then initiate projects themselves. And rather than leaving the projects too soon, and missing out on the valuable operation stage, they can design building management systems, tapping in to facilities management markets with the aid of ubiquitous data collection technologies. It seems unlikely that the profession of architecture can continue for too much longer in its current regressive form. But the advances in communications technology and the disruptions that it promises to bring to our towns and cities is creating a lot to be excited about. It is down to us now to embrace these changes and approach the business of architecture with an open mind, not constrained to just the design of buildings, and maximise our diverse and lateral skill set by developing a profession that is truly valued.

Pre-design: strategic/ project research

Design Development: â&#x20AC;&#x2DC;designâ&#x20AC;&#x2122; research and consultancy

References 2018 predictions: Will architects change the way they work? (2017) 2018 predictions: Will architects change the way they work? : The Architects’ Journal. [Online] [Accessed on 10th January 2018] https://www.architectsjournal. co.uk/news/2018-predictions-will-architectschange-the-way-they-work/10026345.article AIA. (2008) The Architect’s Handbook of Professional Practice. Demkin, J. A. (ed.) 14th ed., New Jersey: Wiley & Sons. Buchanan, P. (1989) ‘What is wrong with architectural education?’ The Architectural Review, (July 1989) Buchanan, P. (2012) The Big Rethink Part 9: Rethinking Architectural Education. The Architectural Review. [Online] [Accessed on 11th January 2018] https://www.architectural-review. com/rethink/campaigns/the-big-rethink/thebig-rethink-part-9-rethinking-architecturaleducation/8636035.article DesignX - Accelerating Innovation in the Built Environment. (2018) DesignX - Accelerating Innovation in the Built Environment. [Online] [Accessed on 11th January 2018] http://www. designx.mit.edu Dunton, J. (2015) Sluggish pay growth for US architects - but wages still higher than UK. The Architects’ Journal [Online] [Accessed on 24th August 2015] Edson, J., Kouyoumjian, G. and Sheppard, B. (2017) More than a feeling: Ten design practices to deliver business value. McKinsey. [Online] [Accessed on 11th January 2018] mckinsey. com/business-functions/mckinsey-design/ our-insights/more-than-a-feeling-ten-designpractices-to-deliver-business-value Grozdanic, L. (2017) How Startup Accelerator DesignX Turns Architecture Students into Entrepreneurs. Archipreneur. [Online] [Accessed on 11th January 2018] archipreneur.com/ startup-accelerator-designx-turns-architecturestudents-entrepreneurs/ Hopkirk, E. (2017) Architects must muscle in on infrastructure, says Sadie Morgan. BD Online. [Online] [Accessed on 13th December 2017] bdonline.co.uk/news/architects-mustmuscle-in-on-infrastructure-says-sadiemorgan-/5090718.article Jamieson, C. (2011) The Future For Architects? London: Building Futures. Jefferies, T. (2011) RIBA Building Futures debate ‘The Future for Architects?’. In: Robinson, D.: RIBA Building Futures. Johns, G. (2016) Architects, stop everything and pursue a career in UX. Medium. [Online] [Accessed on 13th December 2017] medium.

com/tradecraft-traction/architects-stopeverything-and-pursue-a-career-in-uxfcaee117a31d#.wao0ruin8 Koolhaus, R. (2016) 2016 AIA Convention. In: Mostafavi, M. AIA. Lewis, R. K. (2013) Architect?: A Candid Guide to the Profession. Third ed., Cambridge, Massachusetts: The MIT Press. Partners, F. (2007) Foster + Partners announces plans for its future. [Online] [Accessed on 20th January 2018] fosterandpartners.com/news/ archive/2007/05 Phelps, B. (2017) The Future of Public Space Analytics. Smart Cities Dive. [Online] [Accessed on 20th January 2018] https://www.smartcitiesdive. com/ex/sustainablecitiescollective/futurepublic-space-analytics/1048426/ Rae, J. (2015) Good Design Drives Shareholder Value. 2014 Design Value Index Results and Commentary. Design Management Institute. [Online] [Accessed on 20th January 2018] dmi. org/?page=DesignDrivesValue RIBA. (2016) What Clients Think of Architects. London: RIBA. Storus, M. (2017) Matt Storus, Architectural Designer Turned Digital Designer. In: Goldberg, M. Working out of the Box. Archinect. Søgaard, S. (2017) 8 Lessons On Succeeding as a Firm, From the Business Mind Behind BIG. Archdaily. [Online] [Accessed on 11th January 2018] archdaily.com/869049/8-lessons-onsucceeding-as-a-firm-from-the-business-mindbehind-big Turner, M. (2017) The coach: Architects’ biggest career concerns in 2017. The Architects’ Journal. [Online] [Accessed on 11th January 2018] www.architectsjournal.co.uk/opinion/thecoach-architects-biggest-career-concernsin-2017/10026316.article Waite, R. (2016) Want to earn more? Go clientside. The Architects’ Journal. [Online] [Accessed on 13th December 2017] architectsjournal.co.uk/ news/want-to-earn-more-go-client-side Williams, E. (2016) Architecture and R&D tax credits – the challenge for architects. Forrest Brown. [Online] [Accessed on 20th January 2018] https://forrestbrown.co.uk/news/architectureand-rd-tax-credits-the-challenge-for-architects/ Winston, A. (2015) Sadie Morgan to fight for design in UK infrastructure review. Dezeen. [Online] [Accessed on 13th December 2017] dezeen.com/2015/10/30/sadie-morganarchitect-appointment-uk-nationalinfrastructure-commission-100-billioninvestment/

Alexander Gaul

Professional Studies

Over the past few years I have developed a good understanding of how the profession operates, and this Professional Studies course has enabled me to recognise, not only the pitfalls of the profession, but the opportunities that are out there for dissatisfied architects. I had a good Part 1 experience, in the sense that I was given plenty of responsibility and worked in areas above my pay grade. But it also gave me a very good idea of what sort of practice I do not want to end up at in the tail-end of my career. This experience pushed me and a colleague (now also a fellow MSA student) to begin working on our own projects, with the long-term aim of starting a practice once we had graduated. Over the last two years, amongst the university work and our jobs we have worked together on two international competitions, and delivered several small domestic jobs for a variety of clients (who we arenâ&#x20AC;&#x2122;t related to believe it or not). We have also recently put together a website to allow us to generate future work and plan to expand that to social media. We are ambitious and recognise that these are only small steps so far but intend to continue to grow our portfolio of competition entries and develop a more thorough business plan, as well as branching out into furniture and product design, once university is finished. In the long run I want to explore my options outside the profession of architecture. I am keen to do more research into strategic design consultancies, and I am not held back by an antiquated view of the profession.

S W

An immediate weakness is that, in the eyes of many professionals, I am ideally qualified to go into an architectural assistant role within a traditional practice. I have no wish to be constrained by traditional practice in the long term but accept that it can still be a good stepping-stone into areas of the profession more aligned with my interests. I intend to apply for work in practices that have an active research lab which they utilise to inform their projects, and are thoughtfully operating at the hard edge of emerging technologies. Practices like White Arkitekter, Callison RTKL, BIG, Perkins+Will are high on my list at the moment but I recognise that this pickiness will make finding employment more difficult.

Fig 18. Screen shot of our website - HVAD 40

SWOT Analysis As I said in the reports, it is an exciting time to have a vested interest in the built environment. As a society we are facing serious challenges as to how to deal with a rapidly urbanising population while living sustainably. Fortunately, we also have the tools to meet these challenges head on. Technology companies are disrupting industries previously held by urban designers and planners and this trend looks set to continue, especially when you consider the ambitions of companies like Sidewalk Labs who are attempting to build their own smart cities. I can see technology companies being heralded as the urban designers of the future and I think there are some real opportunities for architecture graduates who can see beyond the practice of architecture as â&#x20AC;&#x2DC;just designing buildingsâ&#x20AC;&#x2122;. I am currently exploring opportunities for architecture graduates to break into the design of technology, including UX design which I wrote about in this report.

O Almost all of the practices mentioned above, and in the reports, have their headquarters outside of the UK. I think there are some great opportunities to be had abroad and the UKâ&#x20AC;&#x2122;s AEC industry is being left behind, in some respects, by more forward-thinking parts of the world. Ultimately this makes Brexit and the anti-globalisation movement a threat, as freedom of movement and freedom to work in the EU is currently under review. This only means that I will have to work harder to make myself more employable for foreign companies to want to take the risk, and I am more than dedicated to doing this. In the short term, an immediate threat is that I am about to enter into quite a saturated jobs market. This is very much a market where, rightly or wrongly, proficiency in a certain software gets you through the door. I have subsequently began learning Revit as my previous practice only began bringing it in as I was leaving. I recognise that there will be candidates with more experience in certain software but I am confident that I possess other attributes that will make me a valuable employee as I enter the job market this summer.

Alexander Gaul

alexgaul Part 2 Architectural Assistant alexanderstgaul@gmail.com +447981038491 linkedin.com/in/alexander-gaul 2018