It won't hurt to wait

The past six months have seen a relentless stream of new and exciting internet launches for the construction industry. Those who watched technology stocks fall through the floor in the spring must be wondering where all the money is coming from to finance such intense activity. It certainly is not from the end users because most of the industry remains firmly on the sidelines. But is this a sustainable stance? Or will the bystanders soon be left regretting their timidity as they lose opportunities to their more dynamic competitors?

Two of the fastest developing areas of internet-related activity are project collaboration and e-procurement. Although some suppliers believe that they can provide the best solution in both areas (and more), all in one perfectly formed package, the evidence suggests that it is still possible to "pick and mix" a solution. For example: Construction Plus or The Builder Group's new barbourexpert site as a first-stop information portal; BIW's Project Information Channel as a project collaboration tool; and Build-Online for materials procurement and tendering. This approach also allows you to reduce the risk of becoming dependent on any one supplier.

Contractors keen on project tools

"Project collaboration" is the internet-related service that has made the deepest impression on the industry (apart from e-mail); at least as far as larger projects are concerned. So should you, as a proactive and dynamic manager, start to build up your experience in this area? Yes. There are many effective systems on the market that are priced competitively, particularly for first-time users.

For example, Cadweb, one of the more experienced players, is offering a service that remains free of charge until the project goes on site. Cephren's typical charge for ProjectNet, another collaboration tool, is reported to be about £800 per month per project. By comparison, I-scraper assesses each project individually but prefers to charge a fully inclusive price, about £2000 per month for a mid-range project.

A more difficult issue is how to ensure that you are using a system that will still be around in years to come – VHS rather than Betamax. There is no doubt there will be a shakeout. As the functionality of these systems grows, it costs a great deal of money to stay in the race. Meanwhile, the downward pressure on charges continues in what is a worldwide market. US-based prices are already significantly lower than those available in Europe. One supplier (Viecon.com backed by Bentley) recently advertised a price of just $2000 per year for smaller US construction projects.

A handful of companies will survive to dominate the medium and large project market

A handful of companies will survive to dominate the medium and large project market. And at the lower end, niche players will emerge, offering simpler functionality and free services supported by advertising. But remember that system evaluation must address not only technical functionality but also your supplier's funding arrangements. The finest system is no use when the staff that operate it stop being paid.

When considering e-procurement systems, you can be more relaxed because the savings to be had are, as yet, limited and unproven. But there are opportunities. For example, participation in the equity of the developing exchanges. Each exchange knows that its best chance of survival is to get to critical mass by recruiting as many other significant players as possible, and equity participation is a major lever. This process is well under way in the retail sector where the Worldwide Retail Exchange battles the equally powerfully named GlobalNetExchange for the membership of massive retail players such as Radioshack.

In European construction the process is still in its early stages but industry groupings are emerging. For example, Mercadium is backed by well known blue chips including RMC, Aggregate Industries, Alfred McAlpine, Pilkington and BPB.

To establish itself as the major neutral trading hub that it aspires to be, Mercadium will need to allow others in. In the heavy building materials sector, Blue Circle has already allowed Italcementi to share equity in e-cement.com, while Build-Online says equity participation remains available. Backing the winners is complicated by venture capital-backed start-ups which offer completely independent solutions, for example eu-supply.com and b2build.

Time to start exploring