Meridian Systems’ “Catch Up” Challenge in the Capital Infrastructure Industry - Part 1

Claiming the “Catch us if you can” movie mantra, the quiet Infrastructure Lifecycle Management (ILM) leader Meridian Systems, based in Folsom, California (US), and now owned by the billion-dollar global positioning system (GPS) giant Trimble (NASDAQ: TRMB), is going on the offensive with competitors and industry analysts in its newest round of marketing announcements.  To the large bastion of technology vendors, reporters, and research analysts reporting on market requirements for what once was simply the realm of Project Portfolio Management (PPM) and Integrated Workplace Management Systems (IWMS)  – the company’s somewhat shy, but technology-precocious, management is issuing a hearty challenge: “Catch up (with us)!”

For long-time followers of the building and construction industry, Meridian has steadily amassed (at a Compound Annual Growth Rate [CAGR] of 15 percent) some 5,000 small, medium, and (more recently) large customers that are in charge of capital building/infrastructure projects.  Letting its enterprise software be its calling card, and a highly referenceable install base be its voice, the company grew stealthily against industry-standard PPM competitors like Primavera (recently acquired by Oracle)  and Autodesk Constructware.

Today, while the company still maintains market leadership in its original arenas of architecture/engineering/construction (A/E/C) solutions, in order to outflank the market, Meridian has, right after the turn of the millennium, begun appending and building on the feature/benefits/technology of its forerunner Prolog product.
“The capital infrastructure market buyers were telegraphing if not talking about their changing needs at least five to eight years ago – but people analyzing and reporting on this space remain wed to writing about things like PPM,” asserts Meridian Systems' President and Co-Founder John Bodrozic.  “Meridian realized that technology vendors in those solution categories were losing touch with their buyers, and today I’d go so far as to say their relevance might even be teetering on obsolescence. Oracle’s acquisition of Primavera just reinforces that they still don’t get it.”

ILM Defined

In 2004, backed by its then recently launched Proliance native Web solution, Meridian founded the ILM market space to define the larger Plan-Build-Operate (PBO) hat-trick set of solutions demanded by both private and public sector organizations responsible for major capital projects.  Today, Meridian has a large customer base of 5,000 companies and over 100,000 users. My estimate of the company’s 2007 revenues is at nearly US$ 30 million.

While I am not too keen on acronyms and buzzwords (and TEC is not in the business of inventing these), some definitions would still be in order here. To that end, ILM would denote the ongoing cycle, which consists of the following three components or phases of any kind of capital infrastructure:

  1. Planning -- i.e., managing project pipelines, site development, entitlements, etc.;

  2. Building -- i.e., tracking budgets, contracts, changes, schedules, scopes, and quality; and

  3. Operating -- i.e., direct asset management, work orders, and maintenance management.

Meridian has long realized that none of its competitors cover all three ILM bases in this tightly integrated, never ending cycle. The market observers’ sticking with much narrower terms like PPM (which mainly takes care of the real estate-oriented planning and building phases) or IWMS (Gartner’s coined term, which mainly takes care of things like property leasing).

Needless to say, the scopes of PPM or IWMS are minor and insignificant components of the ongoing operational needs inherent to capital infrastructure. Namely, they don’t apply to hardly anything outside of the real estate segment, i.e., the things like oil rigs, bridges, cell towers, healthcare infrastructure buildings, and so on. In a nutshell, these acronyms’ footprints fall too short when it comes to capital infrastructure.

Sensing a New Direction – Meridian’s Bold Bet on Proliance

Since its founding in 1993, Meridian’s industry play began with a goal to become the system of record for combining capital expansion budgets, integrated project workflow, and schedules, and all of that in a single integrated system. While Meridian initially carved out its identity within the PPM market space (via the classic planning and building spectrum), the company has since introduced advanced Business Intelligence (BI) capabilities to provide senior executives and mid-level managers visibility into the entire portfolio of projects, programs, and facilities through pertinent role-based key performance indicators (KPI), dashboards, scorecards, alerts, trends analyses, and roll-up reporting.

Since the early 2000s, with Proliance, Meridian has expanded on its initial PPM solution footprint by bringing together the complete "Plan, Build, and Operate" spectrum for "Project-Based Organizations"–- hence its self-applied label of "PBO squared."  By adding Business Process Management (BPM) capabilities  and taking an early bet on Microsoft .NET Framework technologies (Meridian is a Microsoft Gold Partner), the vendor has assembled a set of best practices to

  • prevent schedule/cost overruns;

  • gain global project spend management advantages;

  • leverage/optimize/plan around multiple projects;

  • reduce costs by consolidating multiple information technology (IT) solutions;

  • centralize documentation to establish or refute vendor claims;

  • optimize investments in building reconfiguration and retooling;

  • improve time to market for new goods/services; and

  • respond more quickly to competitive trends and market opportunities.

The Proliance solution aggressively targets the ILM buyer category by adding the “Operate” category to the classic "Plan" and "Build" ones, which it has enriched as well.  The Operate capabilities extend Proliance into the following areas: Asset Management, Preventative Maintenance, Predictive Maintenance, and Service Requests.  The full combination is suitable for several verticals, such as: A/E/C, Energy, Healthcare, Real Estate, Retail, Education, Government, Transportation, etc.

Why Do the Competitors Largely Miss the ILM Game?

Despite recent market consolidation like Oracle’s acquisition of Primavera, the combination of PPM and enterprise resource planning (ERP)  still misses key ILM market needs and falls short of a tightly integrated, web-based PBO triple-solution combination.  Specifically, Proliance has a substantial edge over most of its competitors in this category in its combination of the following three areas:

  1. It is a native, built from the ground-up service oriented architecture (SOA)-based platform application that already integrates PPM, scheduling, and facilities management on the same platform;

  2. It has a well-developed Microsoft Office Business Application (OBA) strategy; and

  3. It has made an early bet on Building Information Modeling (BIM).

While the first two advantages are debatable (i.e., many competitors can claim similar traits and strategies), it is the latter one that is truly differentiating. Namely, designing buildings and facilities using data-rich BIM is taking hold in the marketplace. BIM can be described as a design methodology that results in a digital three-dimensional (3D) model.

This model represents the following three key facets: 1) a facility’s geometrical and spatial relationships, 2) building systems and components, and 3) properties of specified equipment and materials.  To visualize BIM as part of a technology solution, imagine a 3D visual interface that sits on top of a database of information that describes all of the elements within a building.

In other words, BIM is the new digitized way to gather necessary models. It starts with the conceptual design, iterative designs, architectural BIM, structural BIM and mechanical, engineering & plumbing (MEP) BIM in the "Plan" phase, to end with the as-built model, as-built equipment, and the complete virtual building in the "Operate" phase.

Still, BIM also provides value on the “Build” phase in PBO – and brings a host of analytic, reporting, view (visualization), and modeling capabilities (e.g., construction sequencing, 4D modeling, clash detection, fabrication BIM, spatial BIM installation, etc.). This allows companies to view potential problems, issues, challenges, and plan for unique circumstances before building any infrastructure.

How Do BIM and ILM Relate to Each Other?

Diving deeper into the PBO project lifecycle, one can see many synergistic opportunities for ILM technology and BIM models to come together. For example, during the Plan phase, the building owner determines the financial feasibility of a project and hires architects and engineers to design the project. Corresponding ILM operational processes and business data in the Plan phase are: project pipelines, budget development, scope development, budget approvals, and funding approvals.

During the Build phase, a general contractor is selected to construct the facility, while the owner and design teams provide oversight. ILM operational processes and business data in the Build phase are: contracts & changes, scheduling, bidding and buyout, design distribution, and requests for information (RFIs) & submittals.

And finally, during the Operate phase, the owner takes over the newly completed facility and manages this new asset through preventative, predictive, and corrective maintenance. ILM operational processes and business data in this phase are: asset management, equipment assets, location assets, maintenance management, and work orders.

Currently, BIM is most prevalent in the Plan phase as architects and engineers can digitally design BIM models that create huge efficiencies in the iterative design process. But once rich BIM models have been designed, significant downstream value can be created for both the contractor and owner through cost reductions, and by providing a more accurate model of the final finished building. For more details on the integration between ILM and BIM, see Meridian's white paper entitled “BIM and Project Management - Advancing Integrated Project Delivery on Capital Building Programs."

Given that no one can accomplish everything on its own, Meridian is supporting BIM through a partnership with Horizontal LLC, a leader in implementing BIM methodology.  Horizontal Glue Server  is a Web-based BIM solution that allows bi-directional data flow between BIM models and Meridian ILM solutions.  Support of BIM, combined with the complete PBO spectrum, OBA interface, and aggressive anywhere/anytime/any device SOA deployment have combined to give Meridian the advantage in staking out the ILM space. This holistic approach  seems to be lost on much of the rest of the market.

Part 2 of this blog series will focus on the Meridian’s original Prolog PPM product, a desktop solution for the small-to-medium business (SMB) market, and the soon to be launched Prolog Connect PPM Web services-enabled product for the mid-market. Your views, comments, opinions, etc. about any above-mentioned solution and abut the PPM, ILM and BIM software categories per se are welcome in the meantime.

As always, we would also be interested in hearing about your experiences with these software solutions (if you are an existing user) or your general interest to evaluate these solutions as prospective customers.
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