Your School Connected: E-Rate Updates for 2019
The filing window for the School and Libraries Universal Service Support Program—more commonly known as E-Rate—is nearly open. E-Rate has been a significant relief on school spending and helped districts stretch their already thin budgets.
Make certain your organization’s E-Rate Productivity Center (EPC) profile is correct and up to date. The administrative window to update profiles is open until the application filing window opens. Make certain your FCC Registration Number is correct, contact info is up to date, and if any entities under you are active and present. If you’re a school, make certain your student count is from the most recent information available, as that effects the discount rates the school is eligible for. For libraries, verify the square footage and the main library branch. If you’re independent, choose your library as the main branch.
Discount rates are in Figure 1, per the Universal Service Administrative Co. (USAC).
Figure 1: USAC Discount Matrix
A new FCC Form 470 might not be necessary, as an FCC Form 470 can be good for a few years because the equipment and services requested on it might be on a multi-year contract. However, the corresponding FCC Form 471 needs to be resubmitted each year with reference to the standing Form 470 to continue to receive discounts on those goods and services.
That time is upon us.
Funding Year 2019 (FY2019)
The Federal Communication Commission released the 2019 Eligible Service List (https://docs.fcc.gov/public/attachments/DA-18-1173A1.pdf) which reflects a few changes from previous years. We’ve broken it down further into plain language below.
E-Rate is divided into two categories, appropriately names Category One (C1) and Category Two (C2). We’ll address the changes in each one individually.
Category One (C1) Changes, Clarifications, and Updates
The first category of eligible supported services includes the equipment and services needed to support broadband connectivity to schools and libraries.
Maintenance and Operations
Previously this was referred to as ‘Maintenance and Technical Support’ and it was just a yes/no question. Now, Maintenance and Operations is an item in the C1 services drop down menu (see figure 2).
Dedicated voice channels on an ISDN circuit are no longer eligible. This follows the 2014 First E-Rate Order that declared it would phase down E-Rate program funding for VoIP services. FY2018 was the last year VoIP was eligible for discounts, and Voice Services will no longer appear on the FY2019 form. USAC shared what the new service drop down menu will look like in their “Preparing for Funding Year 2019” webinar on December 12, 2018:
Figure 2: FY2019 FCC Form 470 C1 Services Drop Down Menu
You’ll notice that while Voice Services is no longer there, Cellular Data Plan/Air Card Service is still available. For more of a breakdown of what each service entails, you can read about them in detail in USAC’s C1 Reference Table (https://www.usac.org/_res/documents/sl/pdf/handouts/FCC-Form-470-C1-Dropdown-Table.pdf).
While Voice Services has been removed from the FCC 470 C1 Services Drop-Down menu, VoIP is still considerably more affordable than landlines (https://business.frontier.com/blog/voip-vs-landline-phones/). Individual landlines can cost up to $120/month, versus individual VoIP lines can run as low as $28/month (although you might be left to your own phone support at that price). If your school or library already has VoIP enabled telephony equipment, Advance2000 offers SIP extensions for significantly less than the national average price listed here.
Choose Bids Wisely
Competitive bidding needs to be an essential consideration in the provider you go with. When schools are audited for managing the approved budget as efficiently as possible, healthy funds shows leadership competency. The E-Rate program recommends maintaining all bid quotes, not just the bid you go with, for 10 years.
A shining example of smart bidding is Rochester Community Schools. They received praise for running a tight ship when an unmodified audit opinion revealed their school district was in “great financial standing” (https://patch.com/michigan/rochester/rochester-school-district-praised-good-financial-standing). The audit from the previous year wasn’t as rosy, and an action plan to spend down in specific areas helped the Rochester, MI district correct course. The district currently receives 75% of their funding directly from the State, however leadership is well aware that number isn’t guaranteed year over year. Director of Financial Services Matthew McDaniel pointed out that “[w]ith a new political environment, we are uncertain as to the resources that will be made available to Michigan schools…If funding were to be cut, we have enough resources to continue operating our organization.” Make certain that any audit performed on your school will result in similar praise for management of funds.
Eligible Category One Network Equipment
Some of the language has been changed to help clarify eligibility of network equipment. Any additional equipment or modulating electronics necessary to make a school or library’s network equipment functional is eligible for E-Rate. The Order specifically reiterates that “all equipment and services …must be competitively bid” (page 2 https://docs.fcc.gov/public/attachments/DA-18-1173A1.pdf).
There is the option for schools and libraries to lease or rent network equipment. Incurred fees for rented equipment are also eligible for E-Rate support (page 2).
Category Two (C2) Changes, Clarifications, and Updates
Possibly the more confusing of the two categories, due to the scope of eligible items, C2 is dedicated to “the internal connections necessary to bring broadband into, and provide it throughout, schools and libraries” (page 10). Like C1, both equipment and services required to make this possible are eligible for E-Rate discounts.
Supporting Software for High-Speed Broadband Distribution
This isn’t new, but it is being clarified, as supporting software was previously thrown into the Miscellaneous section and there was confusion as to whether it was covered or not. If any software is needed to distribute broadband throughout the school and library, that software is eligible for E-Rate discounts.
Important to note: Software upgrades and patches are considered basic maintenance and are not eligible as supporting software. Whichever service provider you go with, make certain their basic maintenance packages include software upgrades and patches.
Eligibility of Category Two Equipment
Same as C1, equipment that makes high-speed broadband service functional is eligible. That includes, but is not limited to, leased or rented equipment. This means that “[f]unctionalities…that can be virtualized in the cloud, and equipment that combines eligible functionalities, like routing and switching, are also eligible” (page 10).
Cloud hosted services and support have been our bread and butter for the past 20 years here at Advance2000. We’ve saved schools, governments, and businesses tens of thousands of dollars a year virtualizing their IT departments. If your school or library is tight on space, concerned about vandalism, or is looking to upgrade equipment without the monstrous costs associated with updating, we can help determine if a cloud solution makes sense for your individual situation (http://www.advance2000.com/).
Basic Maintenance Contracts
E-Rate support is available for yearly basic maintenance services for broadband connectivity. Be certain to take advantage of Basic Maintenance support during the 2019 filing window, because as the Order restates, the Commission only extended broadband basic maintenance eligibility through the FY2019 (page 5, footnote 41).
Per the FY2019 Order, the Basic Maintenance eligible for discount under E-Rate is here in Figure 3:
Figure 3: FY2019 Order Eligible Basic Maintenance
Advance2000’s support plans include and hold to these restrictions to maintain our E-Rate partner standing.
Specific Eligible Category Two Equipment
Once again, the FCC has declined to provide a list of specific equipment and services eligible under C2 subcategories.
This isn’t a bad thing, as publishing a list could leave certain eligible services and equipment unnamed. If something isn’t listed, they’re concerned that an eligible product or service might be left off Form 470 or 471, which would put a school or library at a financial disadvantage. USAC prefers that requesting parties leave nothing off and they will approve Forms on a case-by-case basis so each district receives the support it needs.
E-Rate and Advance2000
Advance2000 has been a qualified E-Rate service provider for over a decade. We’ve bid and won dozens of FCC Form 470s and Requests for Proposals and our partners have been very happy with the results we’ve provided (http://www.advance2000.com/industries/education/). In collaboration with school IT departments, we’ve offered our expertise to our partners on an as-needed basis while they sought discounts for services via the Form 471.
Your Funding Year 2019 Partner
A seasoned partner will deliver and install the correct firewalls, supporting software, and provide basic support online and by phone for a smooth 2019.
As we’re experts in the IT service industry, have years of E-Rate experience under our belt, and have worked with enough schools to thoroughly understand the budget constraints districts encounter, you can feel confident in the solution we’ll deliver.
For more information about our role in E-Rate and how we can help your school and library get connected for a discount, contact us at 1-800-238-2621.
As you prepare for 2019 and beyond, Cloud Computing should be part of every technology discussion for your business. Today the “Cloud” means everything and anything. So, what is Cloud Computing and what does it really mean for you and your business?
What is Cloud Computing?
Let’s define Cloud Computing.
Cloud computing is the Delivery, using the Internet or a Direct data connection, of Network-Based Services hosted in a Multi-Tenant Environment.
What does this mean?
Network-Based Services – this is a service running on a network. Usually networked in a datacenter, not your own.
Using the Internet or another Direct data connection – You are accessing this service from a remote location from the source. You are using it over the Internet or another data link.
Hosted in a Multi-Tenant Environment – Hosted means it is running on someone else’s hardware and they are just making a service available to you. Multi-tenant means the provider is ‘hosting” many users at the same time. They serve multiple tenants.
For example, look at Gmail. The provider (Google) manages the software and the hardware running Gmail. You just use the service from a distance over the Internet. Cloud computing is just a form of outsourcing when you use Gmail, you outsource your email application to Google.
There are three major kinds of Cloud Computing Services
- SaaS – Software as a Service
- IaaS – Infrastructure as a Service
- PaaS – Platform as a Service
Software as a Service is probably the most common use for Cloud Computing. A company will run Cloud-based software similar (or identical) to a premise-based, boxed software solution. Some advantages of SaaS are
- No expensive hardware (server) needed to run the program
- No updates or patches to maintain
- Easier support
- Equal fixed monthly costs
SaaS works well for software applications you use all the time. You pay monthly (or annually) whether you use the product or not. On the downside, there are applications I use only a couple of times a year. It is tough to justify paying for them each month over and over. For these types of applications, I found the alternative open source or “buy once” substitutes.
Infrastructure as a Service – IaaS is using hosted hardware, usually virtualized, running in a datacenter to conduct business. If physical (not virtualized) hardware is used or needed, it is usually purchased and co-located in a datacenter to be used like IaaS. IaaS is a suitable alternative for most on-premise computing functions that can be virtualized.
Closely related to IaaS is Desktops as a Service (DaaS). With DaaS, a host vendor provides access to virtual desktops (VDI) from a Public or Private Cloud. DaaS can take the place of your local PC or workstation or supplement them. Instead of buying a computer for each employee, you can buy a cheap connection device (thin client) and provide access to a virtual desktop running in a datacenter to handle all your Desktop computing needs.
Platform as a Service is the least used of these three types of Cloud Computing. Businesses will deploy applications using programming languages, libraries, services, and tools managed and maintained by a hosting provider. The end user does not manage or control the underlying Cloud infrastructure but controls the deployed applications running on the Cloud Platform.
What is Private Cloud Computing and how is it different from the Public Cloud Computing?
There are many companies offering services over the public Internet; these are public Cloud providers. I am sure you are familiar with many of them, from social networking sites like Twitter and Facebook to strictly business applications like Office 365 and Salesforce CRM.
A Private Cloud solution is also accessed over the Internet or a dedicated private circuit. In contrast, a private Cloud usually connects two locations, the customer and the provider, and is housed in a private datacenter. A Private Cloud is generally dedicated to a single company. A Private Cloud can take the place of premised based servers and desktops. You can run just about any hardware or software in a Private Cloud. A Private Cloud is generally more flexible and customizable than a Public Cloud. You can run your entire business from a Private Cloud environment, not just a single application.
Most companies use a mix of traditional, Public, and Private Cloud services, a Hybrid Cloud. Keep in mind, with a Hybrid Cloud you must manage multiple Cloud vendors. There is no one best solution, do what makes the most sense for your business. Use the Cloud Services you need to support your business objectives and implement them as needed.
Why should I use Cloud Computing?
Cycle of Technology
All technology follows an adoption path according to the cycle of technology. With new technology adoption, there is a continuous cycle of value. New Technology provides a competitive advantage. As a technology grows older, the competitive advantage eventually diminishes to a point it becomes a competitive necessity, everyone has it and needs it and uses it. Finally, for those that continue to use older technology well past its useful life, technology becomes a competitive disadvantage. You are losing productivity by using outdated obsolete technology.
Don’t spend time, money and effort on technology that doesn’t give you a competitive advantage.
“Technology has reshaped Industry. Briefly, these technologies provided real advantages. But as their availability increased and their cost decreased, they all became ubiquitous commodities. From a strategic standpoint, they no longer mattered.” – Nicholas Carr
Conventional Technology has become a commodity and no longer provides a competitive advantage.
Technology is analogous to the electric grid. Companies used to own and maintain their own power generation facilities until they realized it was faster, cheaper and easier to simply buy their power from a utility company. They outsourced power generation. That is exactly what is happening to conventional technology today, it is being outsourced to the Cloud. We outsource many things, you drive a car, you don’t build one, some of us don’t even make coffee anymore, we outsource it to Starbucks.
There are advantages to outsourcing your technology needs to a Private Cloud Computing Provider.
- There are great “economies of scale”, especially in a multi-tenant environment. This can lead to lower costs.
- Business Critical Applications are being ‘Cloud Enabled’ at a rapid pace. You can run your entire business from the Cloud.
- Well managed datacenters offer greater flexibility to expand and contract quickly and offer services that are less expensive to rent rather than to own.
- You can focus on Business, not IT. Cloud Computing provides stable IT spending.
- You pay for ONLY what you use. You plan for today’s needs and scale up later as your needs grow. You don’t pay for extra capacity you don’t need today or may never need.
- Cloud Computing is infinitely scalable – not only can you easily scale up, but you can scale down as well. This is one of the most powerful advantages of Cloud computing. The ability to shrink as well as grow. You cannot do this with physical hardware. You buy it, you own it.
- Because it is multi-tenant, you can use Enterprise class hardware at a Small Business price.
Why Cloud Computing now?
Source: Gartner 2014
This chart is the 2014 Gartner Hype Cycle for Emerging technologies. We have been talking about the Cloud for several years. Why Cloud Computing now, what has changed?
- Bandwidth costs are still falling.
- Most major business functions have moved to the Cloud.
- You can run your entire business from the Cloud.
The hype is over, and Cloud Computing is ready for prime time.
According to the Gartner 2014 Hype Cycle, Cloud Computing will reach the Plateau of Productivity (mainstream adoption) by 2016-2019. Cloud Computing is poised to be the driving force for business productivity. It is here now and ready to use.
Is my Data Safe in the Cloud?
Is your data safe in your office? What happens if your data is in your physical office and there is a fire/flood/hurricane (Sandy)? If you’re worried about risk, buy insurance to protect against risk. Cloud computing has a lot of insurance built in.
- Your data is housed using redundant hardware. The hardware is designed to be risk tolerant. In most cases, you would not even notice a datacenter hardware failure.
- Your data is backed up at least daily, probably more often, and you can go back and retrieve any deleted files and projects.
- Your data is replicated to multiple datacenters (geo-redundant).
- Cloud computing providers are in the business of keeping their client’s data protected. Their systems and practices are more redundant and more secure than 99% of businesses doing it themselves.
How do I use the Cloud to Gain a Competitive Advantage?
Using the Cloud – Infrastructure as a Service / Desktops as a Service
Running your entire IT infrastructure including your desktops in the Cloud is a new way to think about technology. The future is using connected devices. You can run almost any application, perform almost any task in the Cloud. Software and hardware as we think of it today is going away. The Cloud is the future in desktop computing, delivered as a service.
Using the Cloud – Infrastructure as a Service / Servers and Networks
You can run your entire IT Infrastructure in the Cloud. You can run servers in the Cloud, switches, your entire network. Using Cloud Computing you don’t need premise-based servers or PCs any longer, you can connect to the Cloud Infrastructure using thin clients. Thin clients are small cheap connection devices that don’t break or wear out. You can eliminate nearly all your on-premise IT equipment.
Using the Cloud – Online Backup
You back up your files, right? Backup is a critical IT function. Unfortunately, everyone has a backup horror story. The best practice for backup is to copy your backup offsite. You should always have three copies of your data, the original, a local on-premise copy, and a copy offsite.
Whether you use tape, CD, or disk backup you need to get those backups OFFSITE. Backups are useless if they are destroyed along with the rest of your office. Cloud backup is a perfect way to easily get backups offsite. Obviously, if your whole IT infrastructure is already in Cloud then you don’t have any local data to back up.
To back up to the Cloud is easy, you install backup software onto the local hardware and it periodically and automatically copies your data to the Cloud.
Using the Cloud – Disaster Recovery and Business Continuity
The Ultimate Disaster Recovery (DR) solution is a Hot Site hosted in the Cloud. A Hot Site completely replicates all your on-premise hardware and data in the Cloud. It is ready to use and updated continuously. It is also less expensive than a premise-based DR solution.
We had clients in New York who lost everything when Hurricane Sandy hit. Their office buildings were closed, the power was out, but their technology was working and safe in the Cloud datacenter. They just worked from home until their office was usable again. They did not experience any downtime or a single problem. When things returned to normal, they moved back to their office and resumed work without missing a beat.
Using the Cloud – Consolidation / Centralization
For a company with multiple locations, it is easy to see how the Cloud changes the game. If you have three locations, chances are, you have 3 times the hardware and probably a lot of duplicate data. Scale this up, 5 locations, 10 locations, 100 locations. The numbers get big very quickly. A business can consolidate and greatly reduce the amount of hardware used to support their business.
Not only can a business reduce costs, but also complexity. By moving from distributed IT to centralized IT in the Cloud, a business reduces the amount of hardware needed while increasing hardware utilization. The savings are evident, by reducing the amount of hardware and maintenance, you reduce costs.
Using the Cloud – Cloud Collaboration Hub
Working on a big project with other firms? You can store all your project data in the Cloud and make it available to each firm. A Cloud Collaboration Hub allows multiple firms to work in real time on shared projects. This is accomplished using secure private connections to a Cloud Workspace hosted in a datacenter. This type of collaboration creates a robust and secure environment and allows firms to work together while keeping their intellectual property safe and secured.
Benefits of the Cloud Collaboration Hub:
- Privacy and security of Intellectual Property.
- Real-Time Collaboration and file sharing
- Reduced project “latency”, improved project productivity.
- Accelerated project information visibility
- Mobility, accessible from anywhere
Using the Cloud – Hosted Phones
Fire the phone company. You can have your phone system in the Cloud. You can save real money by moving your phone system to Cloud. In addition to saving money, you reduce maintenance costs. Your phone system works over your data connection. Office moves are a breeze, just unplug your phone, take it with you and plug it in at your new office and you are ready to go. You are completely location independent. A hosted phone system has all the typical phone options found in a premise PBX, call forwarding, find me follow me, voicemail, all features of a PBX without a PBX. The sound is HD quality. Your voicemail and faxes can be sent directly to email.
With hosted phones you have Built-in Business Continuity – if your Office is closed for a week, you can work from anywhere, take your phone with you or use a full-featured mobile phone app. Are you on the phone all day? You can use a softphone running on a PC and a headset to manage all your calls, you don’t need to buy phone handsets or wireless headsets.
Communication as a Service – You have free 4-digit dialing between all your offices, there are no charges between locations on the same system. Incoming calls are free as well. You only pay for outgoing and long distance but the price per minute is very competitive and you can buy prepaid minutes to save even more.
Using the Cloud – Hosted email / Office
Is there anyone who does not use Cloud-based email for your personal email? When it comes to email, individuals are ahead of business. Today, there is little reason why any business should be running their own email servers and managing their own email. Using Office 365 or G Suite, you have business productivity applications bundled with business email at a very competitive price. These are very compelling reasons to move your business applications and email to the Cloud without any downside. In most cases, you can reduce costs as well.
Using the Cloud – Helpdesk
Remote assistance technologies and the ability to time shift make Helpdesk an easy fit for the Cloud. You can get Helpdesk support from a Cloud-Based Provider 24/7/365. Outsourcing your helpdesk is an easy and low-risk way to move to the Cloud.
Using the Cloud – Mobility
Using the Cloud, you have complete mobility, connect from any device, from anywhere you have a data connection. (which is almost everywhere these days) Work sharing, hoteling and job sharing are all enabled by increased mobility.
But my boss says, “No way I am going to let my employees work from home!”
There have been numerous studies about telecommuting that show productivity increases the more mobile the workforce. Increased Mobility and Cloud Computing also support Bring Your Own Device (BYOD) and Choose Your Own Device (CYOD) further reducing IT expenses.
Using the Cloud – Software as a Service – SaaS
Run your software from the Cloud. Virtually any software that runs on a desktop will run on a Virtualized Cloud Desktop. Many major business applications now offer Cloud options. SaaS allows you to stabilize your software cost. You can increase and decrease the number of seats of each application. You reduce maintenance costs and are always running the latest version. You run your application from anywhere you have data connectivity. SaaS makes you more mobile and flexible.
Using the Cloud – Video Conferencing / Web Conferencing
Video conferencing works great for small meetings, up to 25 participants. There are several Cloud-based Video / Web Conferencing applications available. They offer many options for video, they interface with phone systems for participants that don’t have access to a web camera. Video conferencing works very well for smaller meetings up to about 25 participants. If you have more than 25 users, the advantage of seeing the participants gets lost in the quantity/quality of the interaction. But for small team meetings, it is ideal. You get more face time with your clients.
Using the Cloud – Hosted wireless
The Cloud is great for hosting wireless, centralized management of wireless resources. With the Cloud, you have one place to control and manage content, security, and access.
How is the Cloud Transforming Work?
The Cloud reduces the need for non-renewable energy. When businesses move IT from on-site facilities to consolidated Cloud datacenters, it saves energy and cuts pollution — just as relying on power companies is better for the environment than if everyone ran their own power plant.
As a vendor, we also make sure our datacenters are running as green as possible. We use renewable green energy sources – hydroelectric power and passive cooling whenever possible.
Cloud-based collaboration drives Innovation. Innovation creates a competitive advantage. The Cloud supports and promotes collaboration.
Data Storage needs are growing exponentially
As bandwidth improves more centralization is possible. Data Centralization reduces the need to duplicate data in multiple locations. It also allows you to deduplicate and reduce the total amount of storage needed. And storage in the cloud is infinitely scalable. (practically speaking)
Mobility – Remote access
Work from anywhere –home, hotel, airplane, client office, anywhere you have an Internet connection which is almost everywhere. Connect using any device, Smartphones, Android, IOS, Macs, PCs. You are device independent.
With security, the key is to assess risk. Are premise-based computers, networks and servers better protected than Cloud-based assets? In most cases, the answer is no. Cloud Providers invest far more on security than the average business can, it is their business. But what about Government / Cloud Provider snooping? Make sure you read and understand Privacy Policies and insist on absolute privacy for your business data. You will have more flexibility and more privacy using a Private Cloud rather than a Public Cloud. For example, as a Private Cloud Provider, we will not allow government access to your data without informing you first and not without proper legal authority. Your data belongs to you. Period.
Using the Cloud must make sense from a financial point of view. What is the return on your investment? Many factors affect your ROI, download our free white paper to determine your Cloud ROI. We’d love to have an opportunity to help you save money.
How do I Choose a Cloud Provider?
Ask a potential Cloud Provider these questions:
- Mature Services Offering – Are they “Full Service” or do you need to do most of the work?
- Data Center Operations Excellence – Do they own/operate their own Data Center?
- Committed Ownership – will they be around in years to come?
- Geographical reach – Can they service all my locations?
- Internal Engineering Expertise – Do they have the right people with the right knowledge?
- Established Client Base – Are they a healthy organization? Financially stable?
What is the next step after you have chosen a provider? This first step is assessing your needs. What are your needs? Where are you today? Where do you want to be? A good Cloud Provider can help you develop an assessment.
An Assessment is a deep dive into the current state of your technology with specific recommendations on improving your IT Infrastructure and Operations. Remember your Technology Initiatives must align and support your Business Goals.
During this assessment, look at all aspects of your technology and your business and identify ways to improve productivity, save money and protect your business.
Next, identify specific recommendations to improve your technology. Create a plan for improving PCs, your network, network servers, security, backups, email, wireless, printing, all things technology related.
Also, consider how you can use technology to build your business.
Once you have identified your initiatives, meet with your Cloud Provider and develop a plan for implementation. The plan takes into consideration your priorities, your time and your budget. Prioritize and budget and then develop a schedule to get it done. The faster you can implement, the faster you can realize the benefits and savings afforded by moving to the Cloud.
Service and Support
Finally, make sure you have on-going support. No technology is 100% foolproof, you will need help at some point.
Advance2000 provides a 24 / 7 /365 Help Desk and can provide your staff with any type of IT Support. We offer 4 different levels of support from Basic Support all the way up to full Managed IT services. You determine how much support you need and then buy what you need. We also provide Full Turnkey Support whether you are hosted in Cloud or still using equipment in your office.
Sounds Great, how do I get started in the Cloud?
We’ll leave you with ONE BIG IDEA. Centralizing and Outsourcing your Technology is called the “Cloud”.
Cloud = Scalability, Mobility, Agility and Speed
Is there anything you could do better in the Cloud?
- Identify your Business Objectives; is your technology supporting those objectives?
- Are you using old outdated technology?
- Is your technology putting your company at a Competitive Disadvantage?
Cloud Computing can help.
What’s next? Do you have questions? Contact us today.
We’re living in the digital era. From smartphones to smartwatches, we are constantly glued to our devices. Today, there are an estimated 8.4 million “things” on the internet, with the IoT growing every year.
With that said, it’s no surprise that businesses are realizing the tremendous impact digital transformation can have on their success.
What do we mean by digital transformation?
IScoop defines the term as “the profound and accelerating transformation of business activities, processes, competencies, and models to fully leverage the changes and opportunities of digital technologies and their impact across society in a strategic and prioritized way.” In other words, digital transformation is a journey that aims to constantly improve and innovate with the ever-evolving technologies.
Now it’s more important than ever that businesses have quality professionals (whether it’s in-house or outsourced) to help them understand what technologies are available and required to effectively run their business and provide the best possible customer experiences.
If you’re still not sure how crucial digital transformation is to long-term business success, here are 9 statistics that might persuade you. With technology continuing to evolve at a rapid pace, we can only expect these numbers to grow in the years to come.
Technology In Construction Benefits
Technology in construction isn’t discussed anywhere near as much as it deserves to be. Construction has a rosy outlook for the not-so-distant future, and here’s a look at the technology to help get us there faster and cheaper.
The Future of Construction
Construction is on the up and up. Statista (https://www.statista.com/statistics/226368/projected-value-of-total-us-construction/) has placed a monetary value of 1.23 trillion USD for new construction during 2017, and that number is expected to reach 1.5 trillion USD by 2022. The United States currently has strong bipartisan agreement that our infrastructure deserves our federal attention and funding (https://www.constructiondive.com/news/two-years-of-trump-where-are-we-and-whats-next-for-construction/542578/) and we’ve already seen that rhetoric transform into action with the recent signing of the America’s Water Infrastructure Act of 2018 (https://www.epw.senate.gov/public/index.cfm/addressing-americas-infrastructure-needs). This Act invests in, among other things, the maintenance and construction of water and wastewater infrastructure in the States. Just this December (https://www.constructiondive.com/news/dot-awards-15b-for-91-projects-across-49-states-and-dc/544268/) the USDOT awarded $1.5B USD for 91 road, rail, transit, and port infrastructure projects. This is all great news for construction firms booking up the coming years.
While the future is bright, both the Associated General Contractors and the American Institute of Architects have a few factors to keep in mind. Chief Economist Ken Simonson at the AGC of America expects (https://www.agc.org/sites/default/files/Files/Communications/Construction%20trends%20%26%20outlook.pdf) manufacturing construction to continue to recover in 2019, “tariffs, foreign retaliation, [and] rising construction costs are major concerns.” Rising inflation in building costs is a significant point of concern. From mid-year 2017 to mid-year 2018, steel prices are up 12 percent, aluminum is up 20 percent, and lumber/plywood is up 18 percent. Combine that with an aging workforce, a shortage of skilled labor to replace it, and concern about possible “federal immigration policies that threaten one of the most reliable sources of labor for the AEC industry,” and any contractor will begin to sweat (https://www.aia.org/articles/205181-despite-emerging-economic-concerns-construc). Essentially, what the evidence is saying: even though the outlook is optimistic, construction needs to be mindful of cost and labor.
Here’s where technology in construction comes into play.
Innovation and Improvement in Construction
The most well-known existing tech in AEC is Building Information Modeling (BIM) software, which has turned productivity in AEC around. When used to its fullest extent, BIM allows construction companies to take active roles in the pre-planning process rather than assume reactive roles later. Even though BIM software has been around for a while, the programs are constantly improving. Specifically benefiting construction, they’re increasing the processing power and cross-program integration. Add-In apps integrate construction programs like BIM 360 and Navisworks seamlessly with design programs like Revit. This enables early detection of conflicts, and building teams have been able to address schedule set-backs before they happen. The time-schedule savings alone has been monumental.
BIM software has influenced an expanding technology in North America: Off-Site Construction. This technology isn’t new, as it’s well established in Europe, Asia, and even making appearances in rapidly growing cities in Africa, but it’s just now getting it’s foothold in NA. As off-site construction (or as American’s generally refer to it, prefabrication) is based in integrated project delivery, the real-time collaboration among stakeholders easily identifies what can be prefabricated in off-site manufacturing factories immediately. Of course, the limitation here is how many construction companies have the facility space to add prefabrication into their company? For companies that have the warehouse or yard to take advantage of off-site, it reduces the need for on-site skilled workers–reducing labor costs–and prefabrication cuts down on material waste–reducing material costs. Construction companies embracing off-site construction are experiencing schedule savings, increased labor productivity, waste reduction, and all while using the same BIM software they were using for complex on-site projects.
Drones have been allowed on construction sites for a couple years now (https://connect.bim360.autodesk.com/construction-drones-fly-freely). Drones render the site landscape for a fast and accurate start to a building project, or scan existing structures to identify maintenance needs not always visible to the human eye. 3D scans from construction sites cut down on time spent checking measurements, project progress, material inventory, and general surveillance. While BIM Software allows for real-time collaboration between stakeholders, drones upload real-time progress. As the cost of drones decrease, the ROI they provide increase.
Realtime Capture LLC., Scott Cooper
Peoria, AZ Site Overview Drone Footage: https://vimeo.com/207677742
3D printing looks like it will offer some relief in regards to cost of materials at some point. Additive manufacturing of 3D printed concrete, polymeric foam, and steel offer solutions to existing construction problems: more efficient use of materials, more output with less man power, and project completion in rapid time. Of course, at the time of this writing, there are real world issues that prevent 3D construction printing from going into effect immediately. The first hurdle is whether or not 3D printing will comply with building codes and standards (https://www.3dnatives.com/en/3d-printing-construction-310120184/). The second major constraint is while 3D construction materials are affordable, the upfront cost of the 3D printer is prohibitive. The startups pioneering this tech team up with established large scale construction firms or public universities to sustain the R&D.
Increase Knowledge Transfer with AI
The World Economic Forum identified a few factors as to why when compared to other industries, technological benefits in construction are lagging on a global scale. Most of the shortfalls that prevent increased productivity is the failure to utilize the existing technology. Specific to construction, a few technological challenges are the lack of formal processes, insufficient knowledge transfer from project to project, and weak project monitoring (http://www3.weforum.org/docs/WEF_Shaping_the_Future_of_Construction_full_report__.pdf). Currently, the most efficient on-site processes, historical experience, and expert project monitoring are entirely dependent on companies’ best project managers.
Artificial Intelligence will take the human element of the industry and make it duplicable. But the human element won’t disappear entirely: contractors, project managers, and construction foremen are essential to the continual improvement of this tech with their creative touches from project to project. If we take away the human element completely, and there’s no more innovation.
Adam Ward of Space Group and BIM Technologies makes a case that machine learning is the way to make construction more efficient. In September of 2017, Ward wrote for AEC Magazine that “machines are very good at consuming and analyzing large amounts of seemingly unrelated data and finding patterns in the chaos” (13). Programs learn to recognize data from each project, they predict patterns and behaviors to detect productivity issues, and increase the efficiency of project monitoring and create formal processes. We’re already starting to see the early stages of this in current BIM software, as mentioned earlier. If AI can transfer this kind of knowledge from project to project, that would help increase project productivity in fiscally measurable ways.
In order to amass this information, machine learning will use astronomical amounts of data pulled from the cloud to simplify mundane project tasks and streamline the results. Ward explains “if a computer programme sees thousands of architects selecting a particular type of door handle—for use on a particular door type, in a particular building type, in a particular country—it can use this knowledge to make future recommendations to architects automatically about which door handle they might select” (15). AEC probably won’t be nostalgic about no longer assigning panic bars to emergency exits.
Innovation Begins in the Clouds
In order to take advantage of these emerging technologies to benefit construction directly, it’s vital to be connected to the cloud (http://www.advance2000.com/10-reasons-aec-firms-moving-cloud/). Project data, user patterns, and general industry progress will all depend on information stored and analyzed in the cloud. While this shared information sounds scary, Advance2000’s Compute and Collaboration Hub has been specifically engineered to protect each client’s intellectual property while sharing only the data the client wants shared. Most design software companies like Autodesk have access control functionality integrated into their programs for security purposes. In addition to that, the General Data Protection Regulation (GDPR) is another gatekeeper to keep your sensitive data safe.
For more information on how emerging technologies can benefit your construction company’s bottom line, contact us at (800) 238-2621. We can help you build an IT solution that’s crafted to support your BIM software and protect your IP.
“America’s Water Infrastructure Act of 2018.” U.S. Senate Committee on Environmental and Public Works. Accessed 14 Dec 2018. https://www.epw.senate.gov/public/index.cfm/addressing-americas-infrastructure-needs
Baker, Kermit. “Despite emerging economic concerns, construction spending projected to grow.” AIA.com, The American Institute of Architects, 20 July 2018. https://www.aia.org/articles/205181-despite-emerging-economic-concerns-construc
Brown, Kathleen. “Two years of Trump: Where are we and what’s next for construction?” Construction Dive, 20 Nov 2018. https://www.constructiondive.com/news/two-years-of-trump-where-are-we-and-whats-next-for-construction/542578/
D., Jamie. “3D Printing: The Future of Construction.” 3dnatives.com, 3Dnatives, 31 Jan 2018. https://www.3dnatives.com/en/3d-printing-construction-310120184/
“Forecast for new construction put in place in the U.S. from 2011 to 2022 (in billion U.S. dollars)*.” Statista.com, The Statistics Portal. Accessed 14 Dec 2018. https://www.statista.com/statistics/226368/projected-value-of-total-us-construction/
Higgins, Adam. “New FAA Regulations Allow Construction Drones to Fly Freely.” Connect&Construct, Autodesk, 21 Sept 2016. https://connect.bim360.autodesk.com/construction-drones-fly-freely
“Reference List of Software Products with Potential Application for Off-Site Construction.” Off-Site Construction Council, National Institute of Building Sciences. https://cdn.ymaws.com/www.nibs.org/resource/resmgr/OSCC/OSCC_Software_list.pdf
Shaping the Future of Construction: A Breakthrough in Mindset and Technology. World Economic Forum, May 2016. http://www3.weforum.org/docs/WEF_Shaping_the_Future_of_Construction_full_report__.pdf
Simonson, Ken. “US Construction Spending, Labor and Materials Outlook.” Agc.org, AGC of America, 4 Dec 2018. https://www.agc.org/sites/default/files/Files/Communications/Construction%20trends%20%26%20outlook.pdf
Slowey, Kim. “DOT awards $1.5B for 91 projects across 49 states and DC.” Construction Dive, 13 Dec 2018. https://www.constructiondive.com/news/dot-awards-15b-for-91-projects-across-49-states-and-dc/544268/
Smith, Ryan E. “Off-Site and Modular Construction Explained.” Off-Site Construction Council, National Institute of Building Sciences. https://cdn.ymaws.com/www.nibs.org/resource/resmgr/OSCC/OSMC_Explained.pdf
Ward, Adam. “Intelligent Design.” AEC Magazine, Vol. 92, Sept/Oct 2017. Pp. 13-15.