Michael Sheldon, CEO

Demystifying Technology, Enhancing Corporate Value &

Increasing the Bottom Line

Surviving Hysteria?

Facts & Hysteria

• GOLD– From1833 to 2001 the compound annual

growth rate was 1.54%– From 2001 to now, we’ve seen an annual

compound annual growth rate of 15.57%– Even with this surge, the lifetime annual

growth rate is only 2.4%

» www.kitco.com

Facts & Hysteria

• Foreclosures– 50% of US foreclosures in 2008 came from 35 counties in

12 states– 20% of the US population lives in these 35 counties– Eight counties in Arizona, California, Florida and Nevada

were the source of 25% of the foreclosures– Existing home sales rose to a seasonally adjusted annual

rate of 4.7 millions units in February 2009, and only 860,000 homes were repossessed all of 2008

» USA Today

Facts & Hysteria

– The Stock Market• Investors have made money 100% of the 15-

year periods in the stock markets history• Since 1974, the value of the S&P 500 has

grown 1,250% from 63 to 850 (5/15/09 = 882)

Facts & Hysteria

• The Great Depression and Recent Recessions:

– 1938 -40: Unemployment grew to over 17%, the Stock Market dropped 89%, and bread lines were real; executives didn’t fly Gulfstreams to Washington D.C. looking for bailouts (Historical Statistics of the United States, Colonial Times to 1970. US Bureau of the Census 1975)

– 1974: The Stock Market dropped 50%, gas lines snaked around the block, and inflation became stagflation, i.e. inflation in a stagnant economy

– 1982: Inflation was over 10%, unemployment was over 10%, and the interest rate reached 17% on home mortgages (www.miseryindex.com, Freddie Mac)

– 2009: Unemployment is at 8.5%, there is no inflation, and the home mortgage rate is 4 3/8%. The Stock Market dropped 57% but it has recently risen from a low of 6400 to over 8,200 (US Department of Labor, www.usinflationcalculator.com, Yahoo Finance)

Did You Know?

…we are living in exponential times

If you were one in a million in China…

….there are 1,300 people just like you.

…we are living in exponential times

China will soon become the #1English speaking country in the world

…we are living in exponential times

The 25% of India’s population with the highest IQ’s

…is greater than the total population of the United States.

Translation: India has more honors kids than America has kidsTranslation: India has more honors kids than America has kids

…we are living in exponential times

The top 10 in-demand jobs in 2010…did not exist in 2004

We are currently preparing students for jobs that don’t yet exist, using technologies that haven’t been invented, in order to solve problems we don’t know are problems yet

…we are living in exponential times

The U.S. Department of Labor estimates that today's learner will have 10-14 jobs

…by the age of 38

…we are living in exponential times

1 in 4 workers has been with their current employer less than one year

1 in 2 have been there less than 5 years

…we are living in exponential times

1 in 8 couples married in the U.S. last year met online

…we are living in exponential times

There are over 200 million registered users on MySpace

If MySpace were a country, it would be the 5th largest in the world.

(between Indonesia and Brazil)(between Indonesia and Brazil)

…we are living in exponential times

Estimated that a weeks worth of the New York Times contains more information than a person was likely to come across in a lifetime in the 18th century

…we are living in exponential times

It is estimated that 4 Exabytes (4.0x10^19)of unique information will be generated this year – that is more than the previous 5000 years

…we are living in exponential times

# of years to reach market audience of 50 MillionRadio 38 YearsTV 13 YearsInternet 4 YearsiPod 3 YearsFacebook 2 Years

…we are living in exponential times

The First commercial text message was sent in 1992

…we are living in exponential times

Today the number of text messages sent and received everyday exceeds the total population of the planet

…we are living in exponential times

There are 31 billion searches on Google every month…

…in 2006 the number was 2.7 billion

…we are living in exponential times

The number of Internet devices in 1984 was 1,000

The number of Internet devices in 1992 was 1,000,000

The number of Internet devices in 2008 was 1,000,000,000

…we are living in exponential times…we are living in exponential times

The amount of new technical information is doubling every 2 years.

…we are living in exponential times…we are living in exponential times

That means for students starting a 4 year technical degree, half of what they learn in their first year of study will be outdated by their third year of study

…we are living in exponential times…we are living in exponential times

NTT of Japan successfully tested a fiber optic cable that pushes 14 trillion bits per second down a single strand of fiber

…we are living in exponential times…we are living in exponential times

That is 2,660 CD’s or 210 million phone calls every second.

It is currently tripling every six months and is expected to do so for the next 20 years.

…we are living in exponential times…we are living in exponential times

By 2013, a super computer will be built that exceeds the computational capabilities of the human brain.

Predictions are that by 2049 a $1,000 computer will exceed the computational capabilities of the entire human species

…we are living in exponential times…we are living in exponential times

During the course of presenting these tidbits of information

67 babies were born in the U.S.274 babies were born in China395 babies were born in India

…and 694,000 songs were downloaded illegally

…we are living in exponential times

US population * (US Census estimates) 2010 estimates 310 million2030 estimates 380 million

For Construction:…Estimates that by 2030 more than 50% of all buildings will

have been erected post 2007

What does it all mean?

• Change is inevitable• Part of your responsibility…like it or

not, is change management• Technology is part of change…shaping

it, enabling it, forcing it• Therefore, part of your job requires you

to deal with technology

Reality

Reality

2 schools on Technology

• No way, no how, no technology…period• Been there, done that, doesn’t work!

…if you have bought into technology and it is working for you…

…why are you here?

No Way, No How!

Sometimes AKA: “I’ve got a guy who is doing something for us in EXCEL”

Managerial AnemiaNot actively looking to improve or evolve the success of the

organization through continuous improvement, exploration and adoption of best practices, etc., is irresponsible stewardship

Resistance to changeUnable to change

Been There, Done That…

Timing and trap of technology…Inadequate understanding the processes to be

automated The application did not fit the process(es) intended

to improveThe users were unwilling or unable to

accept/adopt/use the technology/applicationIncomplete due diligenceWhat was available at the time may not solve the

problems

Reality

Reality

Reducing costs• You have to know your processes, and have a critical

eye towards improvement• First focus on the before and after…not the technology• Be modular – review process and steps which are

duplicated elsewhere, are manual, inefficient, administrative and repetitive

– Bid Mgmt– RFI Mgmt– Payment Mgmt– Project Mgmt– Accounting Mgmt– Document Mgmt

…Then ask and seek what can be automated

Reducing costs

Typical bill paymentA.)Receive and review billB.)Write and sign checkC.)Stuff envelop and affix

stampD.)Take to mail boxE.)Wait for check to processF.)Wait for bank statementG.)Reconcile account

Steps A-D…5-10 minutesSteps E,F,G…30 days

ONLINE bill paymentA.)Receive and review billB.)Log on to bank/payee

websiteC.)Select PayeeD.)Type in amountE.)Press “send”F.)Wait for payment to clearG.)Reconcile account

Steps A-E…<5 minutesSteps F,G…<2 days

Don’t Lose Profits Because of Inefficiency

Don’t Lose Profits Because of Inefficiency

Don’t Lose Profits Because of Inefficiency

Empower the team with technological collaboration

Mitigate Risk

Business Challenges

All Related to Reducing Costs

Focus on Efficiency

• Due Diligence for the use of technology– What do I want to improve?– What can I automate?– Can technology and automation replicate

my current process or do I have to change the way I do things?

– Is the change going to have positive or negative impact on employees and productivity?

Business Challenge:Seeing and Responding to Change with Agility

Business Challenge:Optimizing Resources

Business Challenge:Reduce Complexity

Intelligent Use of Technology

“IT will only [continue] to be a differentiator for construction

companies that use it intelligently.”Mark White, Construction Executive