In recent months we have seen a surge of interest in our Digital specification solutions.
A specification solution is used to put together a collection of products which together meet a high level requirement. It could be an electrical installation for an airport, a painting and coatings system for a new school, or the walls of a new house. What these examples have in common is that the specification describes an entire system which meets a high level requirement through the grouping together of many individual products. Until quite recently these specifications would be produced by industry experts often using paper based systems or isolated software. Now cloud based digital solutions make the process more efficient and unlock new revenue models and opportunities for industrial companies.
Many of the organisations which Hack and Craft works with are adopting these solution for the following 6 reasons.
Regulation is creating extra pressure to guarantee standards. Since Grenfell it has become clear that large projects should not leave key safety and compliance decisions to subcontractors . In the past, final specification would often consist of a mish mash of products chosen by different subcontractors largely on the basis of price. Now that guarantees must be at a solution level, responsibility for compliance has been pushed back up the value chain to the main supplier and manufacturers. This is driving many key industry players to seek digital solutions which can ensure compliance at a system, rather than component, level.
Specification systems can also be used to produce tender documents. This enables suppliers to bake the unique features of their products into the proposed solution. As a result substantial added value is delivered at a system level by adherence to an entire set of products from a specific supplier. This not only increases the likelihood of a sale, but also generates a bill of materials which, because each item is justified as contributing to a systems overall performance, is resistant to price challenges at a line item level.
3. Service models
Many industrial companies are making a strategic move away from commodity sales towards service based revenue models. Service based models have been pioneered by companies like Rolls Royce and Otis elevators . They have proven that these models are very popular with customers and are substantially more profitable. They also provide a platform for future value add services and protect organisations from commodity price competition. Specification systems are a gateway to these models because they create a solution level relationship with the customer and capture the data needed to facilitate subscription based services.
4. Offsite construction
Recent recommendations from the government Select Committee report on Modern Methods of Construction recommend an increase in offsite construction. The government aims to limit the size of sites in urban areas and reduce the amount of traffic going to and from them . This has created demand for prefabricated modular components which are built offsite and transported as finished systems to be bolted on as a single piece. The need for system level suppliers is another reason why specification platforms are becoming the de facto route to market for the most innovative companies in the sector.
Large manufacturers and distributors are looking to ‘platformise’ their market position. This means they aim to provide the infrastructure which the other players in the value chain depend upon. They aim to support the smaller firms further down the supply chain by providing them with digital specification tools which simplify their work and provide a more efficient route to market . Many specfication companies across the UK are now using the tool of partner suppliers to create efficiencies throughout the value stream.
In the technology sector Data has long been seen as a primary asset. The industrial sector is now following suit. The government’s recent paper on contracting public works states “While the volume of data relating to UK construction is rapidly increasing, it is often fragmented or not easily accessible. Improving the consistency and quality of data will be transformational in how we can deliver projects and programmes by improving safety, enabling innovation, reducing costs, and supporting more sustainable outcomes. ”. Moreover, from an industry perspective ownership of data is the key to building service based models and retaining long term customer relationships. Specification systems capture crucial data on industrial projects which can then be passed on to maintenance and service teams once the solution has been constructed. We have seen several examples where data initially captured in a specification process was used post construction to provide analytics and maintenance services. The data itself can also be monetised as part of an ecosystem of other solution providers.