Modular architecture drives productivity and risk management at Gilbane

Gilbane is one of the largest privately-held real estate development and construction companies in the US. The $6.5 billion company has been family owned from its inception in 1870, with sixth-generation employees currently in the business. Karen Higgins-Carter, previously CIO of Webster Bank, joined Gilbane just over a year ago as CDIO with the responsibility of digitally transforming this 153-year-old business. “We’re in an industry that is ripe for transformation,” says Higgins-Carter, pictured above, center. “When you look at other industries like manufacturing and services, productivity has continually increased, whereas business productivity in construction has remained fairly flat.”

To Higgins-Carter, the construction business presents a great opportunity for digital disruption. The product — a building or bridge — might be physical but it can be represented digitally, through virtual design and construction, she says, with elements of automation that can optimize and streamline entire business processes for how physical products are delivered to clients.

Rather than divide IT, digital, and data into different functional leadership roles, Gilbane’s executive management decided, for the first time, to put all of these transformational teams under one leader. “My position was created to be the single accountable executive for innovation, digital technologies, AI, analytics, cybersecurity and IT,” she says. “In my view, companies that split up these functions are seeing second-order consequences around communication, costs, and conflict, and are bringing these roles back together. We believe this structure is the most effective to bring together our data and technology resources to drive transformation and get a real return on invested capital.”

Streamlining value

To provide a foundation for digital transformation, Higgins-Carter and her team are piloting four value streams across the organization: RFP to project award, pre-construction, construction, and then recruit-to-retire. “The first three are operational value streams, where our customer is the recipient of the value,” she says. “But we’ve also included recruit-to-retire because we’re in a people business. People build buildings.”

For example, in the construction value stream, Gilbane is increasing its investment in virtual design and construction, which creates a digital representation of a building, and can be used throughout the life cycle of a construction job, and even into ongoing facility operations.

Targets for investment

The team is investing in analytics and AI with large language mode experiments to help project teams find relevant information to perform well in their roles. “In construction, our teams are managing the construction of hundreds of projects happening at any one time,” she says. “Our analytics capabilities identify potentially unsafe conditions so we can manage projects more safely and mitigate risks.”

There’s also investment in robotics to automate data feeds into virtual models and business processes. “We’re piloting a way to do automated payments to subcontractors based on work in place that’s been identified with photo and video documentation,” Higgins-Carter says.

Since these technology solutions can’t scale without a modular, well-architected foundation of platform services, she’s set her sights on moving from a set of customized and packaged software to a more modern architecture.

“The art is being able to scale the benefits we see on one job across multiple jobs,” she says. “To that, we need to establish the right set of platform capabilities, which are largely based in data and integration.”

Higgins-Carter cites the Conway Rule: Any organization that designs a system will produce a design whose structure is a copy of the organization’s communication structure. Or as she puts it: “I walked into an architecture with a set of bespoke solutions that were selected based on whatever the need was at the time. This worked well enough for a while but eventually resulted in a lot of duplicity and customized workflows, which didn’t scale well.  My team is very proactive and customer-focused. We need our architecture to help deliver on that intent.”

Elevating IT

To modernize Gilbane’s architecture, Higgins-Carter and her peers had to elevate innovation and technology as a core strategy for the company. As any CIO knows, moving IT from cost to value is not an easy task. To get her executive committee to understand the importance of investing in a new architecture, she leveraged work done by the CISR group at MIT, in particular Stephanie Woerner’s work on the importance of a platform architecture.

“Stephanie’s research demonstrates that all companies — not just digitally-native businesses, but companies like Gilbane — that have a modular architecture and composable business processes outperform their industry peers, both in revenue and net income,” she says. “I wanted our executives to understand that while the functionality we deliver is important, so is the way we choose to build systems.

Higgins-Carter offers advice for technology leaders who need to build a modular architecture out of a legacy systems portfolio:

Make sure the Executive Leadership Team (ELT) understands the “why.” Why is it important the ELT understands the benefits of modular architecture? So they’ll be patient when it comes to ROI. “When you start building longer-term modular capabilities, it’ll feel slower and more expensive than the way you’ve done it in the past,” she says. “You have to forecast this to your executive team and continue to remind them of why we’ve chosen this strategy. If we make the choice for modular architecture, we have to live it.  And living with it will feel different than how we’ve operated technology in the past.”

Put your data strategy in business turns. “The art of being a technology leader is having a depth of architectural understanding, the ability to connect the architecture to a near-term problem, and the influence to convince your leadership it’s their idea,” she says. As a construction company, Gilbane is in the business of managing risk. The right analytics will help business unit leaders who have responsibility for multiple construction projects at the same time focus their attention on the highest risk jobs in their portfolio. “To help us manage risk, I need to understand the leading indicators of risk on a job, like attrition or high volumes of change orders,” she adds. “This tells me that need to normalize the domain of project data. I don’t go to the leadership team with a budget line item called ‘normalize project data.’ I suggest we give our business units a portal that helps them manage risk.”

Hire the right architects. “Good architects need both a development background and a business mindset,” she says. “They need to understand the importance of optionality and having agility down the road.”

But in the end, modern architecture starts with you. “We can’t deliver technology if we don’t understand our employees’ experience,” she says. “If I go out to a job site once a month, then my team will too. We have to put ourselves in our customer’s work boots if we’re going to make technology decisions that impact them.”