"We spot the way the industry will go and attack the key players," he explains. "We then set up forums." The forums consist of four or five representatives from a construction industry sector such as roads or utilities and a Siteman representative. This group then works together for six months or so to develop a Siteman product tailored to that industry – with investment from the firms concerned.
Brown, a former Shepherd Construction production cost engineer, founded and is now managing director of Siteman, which turned over £1.3m in 1998 – its first year of business. So, why did he defect to IT? "I wanted to get involved in making money," he says coolly. And, as his customers are contractors such as Sir Robert McAlpine and Balfour Beatty and construction clients Transco and the Highways Agency, it looks as though Siteman will help Brown realise his ambition.
Brown would not divulge the amount of investment each member of the forum contributes, but he said the parties do a commercial deal, which usually means the contributors receive a reduction on the user licence fee. The product is licensed on a sliding scale: the more users there are, the cheaper the rate. The rates are £220 a year each for 400 users, rising to £1000 each for five users. This includes the software, licence and user support. The price is only a guide as, more often than not, Brown will do a deal.
What can Siteman do for contractors?
The software works by capturing costs on site and integrating them with the main contractor's central accounts.
For example, on many sites, if the contractor has ordered 500 m3 of concrete but is only invoiced for 300 m3, the 200 m3 difference appears, misleadingly, as profit. To keep tabs on how much the job is costing, a quantity surveyor has to sit down with a spreadsheet at the end of the week to calculate what has been delivered and what has been invoiced.
Siteman allows the contractor's central accounts department to access delivery details on the site computer, and to compare them with its own invoices. This means it can get an accurate picture of how much the job is costing each month, compared with the estimated cost when it was tendered.
Tracking deliveries is not the only way Siteman can facilitate cost control. It allows the QS to monitor how much has been spent on each component of a project compared with the allowance estimated at the tender stage. The screen shows, in table format, the components of a building, which can then be broken down into labour, plant and materials, with detailed costs for each. "The surveyor spends less time compiling information and more time analysing," says Brown.
Following the success of the roads and utilities forums, Brown is now in discussions with a number of major contractors interested in participating in a forum for private finance initiative contracts. The PFI product will take six to 12 months to develop. Says Brown: "The benefit of being in the forum is that they [the contractors] get the product they want. The alternative is they write it themselves or pay a software house on a day rate." With PFI projects, accurate whole-life costing is key to making the project work, and any help from technology is welcome. A version of Siteman is in use on the Edinburgh Royal Infirmary PFI project. This £210m scheme is being built by a joint venture between Morrison, Balfour Beatty and Haden Young.
David MacBrayne is the joint venture's commercial director on the project. He says Siteman stood out because it could integrate cost and value. "I have divided the contract into 13 subcontracts, and to control all these is very complex," he explains.
"Siteman means I can see into each package. We also have a project accountant who provides cost information. I can do comparisons to see how the cost of the job is going and the actual value of the work." MacBrayne has bought 30 Siteman licences, but is not willing to reveal the price.
What's the catch?
"It is quite complex," says MacBrayne. "I have been using it for a year and a quarter, and the more I use it, the more I understand. It is difficult to grasp what is going on, but you do go through a threshold where it starts falling into place." At the Edinburgh Royal Infirmary, each user had a week's training, which MacBrayne says is enough "to get the basics".
Apart from developing a tailored PFI system, what is Brown's ultimate goal? "We want to be the number one software house in the world, which is probably a bit ambitious, but we might as well aim for the top."
