In general, the Engineering, Procure, and Construct (EPC) industry has struggled for years to find solutions that would enable integrated operations across the enterprise. Manufacturing firms found several software vendors developing innovative solutions that allow the planning of material purchases, scheduling of shop floor activities, and managing the distribution and logistic process, all in a single integrated system that provides enterprise-level reporting and drill down to the underlying transactions that support detail analysis. Part of this was due to pure numbers, with thousands of companies purchasing MRP and ERP systems but only hundreds of larger firms purchasing EPC systems. As a result, niche players developed to fill specific gaps, and larger firms formed in-house custom applications to support their business.
With the evolution of ERP systems, the major EPC players have started to see solutions being developed for the professional services industry, which can be directly used for much of the engineering and design activities found within an EPC. One area that the ERP packages have not addressed well involves the move from historic “standard cost” models used in manufacturing to the “actual cost” model used in some engineering and design work and most construction w k. Systems, such as JD Edwards, have offered an integrated solution between the ledger and payroll systems that allowed penetration into the smaller EPC firms but still relied on other niche and pointed solutions to provide the complete needs across the enterprise. By building so much functionality into the GL database, firms with a large number of projects or the need to provide detailed job costing conflicted with the firm’s financial reporting needs since there was no sub-ledger to offload the detail. Other niche firms, like Deltek, developed a comprehensive solution for smaller firms doing business with the Federal government, but it was not practical for most commercial applications. Firms like Niku and MPower targeted specific project-driven needs and build solutions that met that particular problem well. Still, they did not integrate well into the enterprise v ew. Other firms, like SAP, sought to build “integrated solutions” by designing certain aspects of the project management function but ran afoul of the large firm need for potent project management tools, such as Primavera, that were beyond the capacity they could reasonably afford to design in.
As engineering systems moved from the drafting board to the computer, systems evolved a more remarkable ability to speed up design by defining various recurring equipment and design elements and relating these elements to specific purchased it s. This allowed the development of automated take-off capability and the creation of buying systems integrated into the design elements and take-off li s. While this made the procurement process more efficient for some projects, such as heavy industrial projects, it did nothing for civil and less “item” intensive projects. Other point solutions were developed to aid these industries. Intergraph and other design tool companies developed solutions to fill specific gaps, such as Mar n. Project management companies either built out additional offerings, such as Expedition from Primavera or were acquired like Niku did with ABT or Primavera did with TeamP ay. Various niche players developed project-estimating tools, such as MC2 (MC squared), and others developed collaboration and document management solutions like Documentum and ERoom. Companies like Meridian have built up solutions such as Proliance, Prolog, and Project Talk for the industry.
As all these various solutions started appearing on the market, EPC, APC, and E&C firms were besieged with solutions that did not integrate, did not fill all their needs, were feature-poor, and were plagued with problems and expensive to implement and maintain. Many of these problems were driven by the segmented nature of the industry and the lack of critical mass to fund development and improve the solutions. As a result, the same large firms are shown as satisfied users of multiple competing systems designed to meet the same need.
In the last 2-3 years, Oracle Corporation has expanded the Oracle ERP applications into solutions that can better be utilized in the E&C sp e. However, as is true with all the various companies that have offered products in the past, the Oracle Applications have significant gaps that need to be still met by other solutions or custom development. One of the primary drivers behind the acceptance Oracle is finding in the E&C market is less how well it meets the specific needs of the industry and more the feature-rich functionality it offers firms that have been struggling with a limited user base and integration as the business expands, companies merge. In addition, government regulation reaches deeper into the company.
Historically, consulting firms did not find much traction in the E&C industry. Solutions were fragmented, and it was difficult to develop critical mass to support a consulting group. As a result, many solution companies either helped customers implement their software or clients were forced to self-implement using internal teams that were sent off to train g. However, a new model has started to appear with the sudden upturn in Oracle activity within the E&C industry. Because Oracle has been widely used across manufacturing firms and has thousands of clients across international firms, a significant consultant base exists worldwide. Most of these consultants have strong Oracle application knowledge and understand the complexity of international business transactions and the utilization of Oracle applications within a business process re-engineering implementation. However, very few consultants have worked across the ERP and E&C environments. Since several parts of the solution still require niche or point solutions, this creates a significant challenge for firms doing a truly global integrated solution n. This is further compounded by pent-up demand being met by a software solution marketed heavily by the solution company to justify continued development work for the industry.
In contrast to the historic implementation model, the Oracle solution requires consulting assistance to leverage the actual benefits and cost savings envisioned in the ROI model used to justify the expenditure. With limited experienced resources across the ERP and E&C worlds and multiple companies seeking to implement immediately, there is a very high demand for a limited number of specialized individuals. This is driving a need to team up across consulting companies to meet the implementation challenges in the E&C industry.
In the EPC and E&C world, very few firms can offer the complete services required to accomplish everything from initial design to the final punch list. Instead, what matters most is bringing together the right resources at the right time and place to keep a project on track, schedule, and time. This same model applies to the entry of Oracle Applications into the E&C space.
