I recently had the honor of presenting the keynote at the SAPSA (Swedish SAP User Group) VårImpuls Conference in Malmö, talking about how organizations are using the latest digital technologies to create the disruptive business models of the future. You can view and download the presentation here: “Enabling Digital Business in an Age of Disruption.”
While at the conference, I attended a great presentation by Peeter Pärna, Founder and CEO of Estonian services company IntelSys. He gave a concrete example of how modern technologies like S/4HANA can help with business model transformation.
Swiss Property is transforming the residential construction industry with a new disruptive business model based on the lean production techniques that have long been used in other industries.
Labour productivity in construction has been falling since 2000 across the EU, and residential projects are typically very complex, involving many different organizations and contractors. Each project is a one-off, starting everything from scratch each time.
Swiss Property believes they can pioneer a better approach using a vertically-integrated model. The company manages the entire property lifecycle for high-end residential properties.
The company searches for appropriate plots of land in Switzerland, assesses the opportunities, and structures a deal. It then creates digital 3D conceptual and detail designs, which are used to create prefabricated wooden structures in factories in Estonia. These structures are then shipped and assembled on-site, and the completed project sold or leased to customers.
The result is significant cumulative gains at every stage — gains in efficiency, time-scale, cost-savings, quality, service, overall end-product and client experience. And the company believes that it can benefit significantly from efficiency savings over time, leveraging reusable best-practice processes across multiple projects.
It is akin to the “mass customization” models of other industries — every property is uniquely designed for its environment, but uses the same construction system.
The latest digital technologies are core to the new business model. Although Swiss Property only has around 100 employees today, it has a relatively complex corporate structure, with multiple entities across two countries, and big plans for the future.
With the wide range of different activities implied by managing an end-to-end process, the company needed a comprehensive ERP system that could handle future growth.
After around a year of analyzing different possible solutions, Swiss Property chose S/4HANA Enterprise Management, and IntelSys provided a solution to integrate it with Autodesk Revit, an industry standard for 3D design and construction for collaborative Building Information Modeling.
Implementation of the software as a service took just 2 months — and that included an end of year holiday period!
The final solution provides a seamless, end-to-end workflow. SAP ERP provides a single source of truth for the Revit system, with all the master data centrally managed in ERP. Any changes in product design are managed with predefined workflows and automatically communicated to related projects.
The result is faster, more efficient project delivery, with “push button” integration between the systems: S/4HANA creates a bill of materials and organizes the purchasing and manufacturing through to the final assembly, directly from the 3D digital plans.
One particularly important selling point of the new system was the new SAP Fiori user experience across desktops, tablets, and phones. Many of the staff are based on projects or in factories, so mobile usage is important, and office staff use MacOS computers, so the ability to use ERP functionality via browser-based interfaces was essential.
Thanks to new technology, Swiss Property has created a more streamlined, simpler, and more scalable approach to construction, allowing it to create high-quality residential projects faster and at lower cost than the competition.
The result is the first step towards “construction as a platform” and there is a huge potential to take the concept well beyond existing market boundaries and find new ways of creating value with an ecosystem of new partners.
For more information about the implementation, you can view this video of SAP’s Rob Enslin interviewing Jaan Saar, Swiss Property’s Head of Process and IT: