Even in a town where almost nothing is smaller than huge, the joint $8 billion-plus CityCenter venture between MGM Mirage and Dubai World has to be considered grandiose.
The nine-building, 76-acre complex being developed at the heart of the Strip between the Bellagio and Monte Carlo hotels includes a soaring 61-story, 4,000-room hotel-casino and a 500,000-square-foot retail district. Residential units planned at the exclusive Harmon Hotel, Spa & Residences in the complex are setting new price-per-square-foot records for condos sold on the Strip. The sprawling effort employs 7,000 construction workers.
So when CityCenter project leaders had to select a project management system to help monitor what is believed to be the largest private development in U.S. history, they naturally settled on a proven software package that they were sure could support such a massive undertaking, right?
Think again.
Prior to clearing the former Bellagio employee parking lot in 2005 to open up 66 acres for the site (10 adjacent acres from MGM’s Monte Carlo site were later added), CityCenter managers had selected project accounting and document management systems to support the effort, says Mark Bodner, a vice president at Tishman Construction Corp., the lead construction manager for the project.
But the four principal players in the project — Tishman, MGM Mirage Design Group, Perini Building Co. (the lead contractor) and Gensler (the lead architect) — still needed construction management software to handle critical change-management and cost-reporting activities. And they wanted a system that was flexible enough to meet the different work styles of the four primary constituents.
“We recognized we were bringing in four different cultures and four different approaches to this kind of project,” says Bodner, who is manager of audit and controls for the CityCenter effort.
By August 2005, Bodner and other project leaders were reviewing proposals from four software vendors, including Skire Inc., a little-known company in Menlo Park, Calif., that was pitching a hosted Web-based system.
Bodner was impressed with the functionality of Skire’s Unifier capital project and program management system. “With Skire’s product, there wasn’t any preconceived notion about how to do change management and cost reporting,” says Bodner, who has 34 years of project management experience. Skire users “can dictate how [they] want this information recorded and reported,” he adds.
Other systems the project group evaluated have “great canned reports” but can’t be used to create custom reports or forms from scratch, says Jo Tampas, who started out as a Skire consultant and later became a systems administrator in MGM Mirage’s IT organization. In contrast, changes to workflows or forms can be done easily in the Skire Unifier system, she says.
Also, says Bodner, none of the other systems could configure workflow processes to meet the project’s requirements for reports and data queries.
Bodner says he had one initial concern with Skire. “What I was really looking for was a system that was focused on construction management. They were new to the marketplace, and they were actually at a disadvantage because of that,” he says.
But Skire’s impressive client and project list helped allay that concern. Moreover, Bodner was sold on Unifier’s functionality and flexibility. He didn’t care whether the system was hosted or based in-house. “Whether or not Skire was an application service provider was not a primary driver,” he recalls.
But it did matter to other CityCenter stakeholders. Some had concerns about using a hosted project management system from an unknown vendor that would be storing sensitive financial information off-site.
“We were initially reluctant” to consider the Skire system “because the core information would be stored on servers outside our company,” says Bill Smith, president of MGM Mirage Design Group.
Such reluctance is not unusual. Many executives object to using hosted project management software, primarily because of connectivity and data security concerns. “Most of my clients like having the software on the premises,” says Robert Charette, director of the enterprise risk management service at Cutter Consortium and president of advisory firm Itabhi Corp.
Bodner’s push to sell his partners on Skire began with MGM Mirage’s IT organization, which he invited to grill Skire executives regarding the company’s financial background and security provisions. After Skire completed a 20-page questionnaire, a team of MGM Mirage security experts tried unsuccessfully to hack into the hosted system. That exercise, along with supportive references from Skire customers who were using the change-control and cost-reporting functions, helped clinch the deal between the CityCenter project team and Skire in October 2005. (Bodner and MGM Mirage officials declined to quantify the value of the agreement.)
MGM Mirage’s IT organization also used an existing firewall and other security systems to help protect the Skire system, Tampas says.
So far, everyone is satisfied. “To date, we have not encountered any problems with off-site storage and have received backups of our data on a regular basis,” says Smith.
From the Ground Up
Getting executives of the four companies to sign off on Skire was just the first hurdle for Bodner and his team. He and other project team members next had to gain buy-in from 30 top executives at the four companies on the configuration of the project flowcharts.
Once the executives agreed to the plans, Tampas created the flowcharts. From March through June 2006, Tampas entered flowcharts into the Unifier system with descriptions for each cost-reporting process being supported, including requests for information and submittals for material costs, she says.
The Unifier system is easy to use “because the user interface is consistent across whatever custom [business processes] are developed for a particular company,” says Tampas. With an hour or two of training, users are prepared to enter project data, she adds.
The 350 users of the Skire software include all lines of CityCenter managers from the four companies, including the various cost-controls groups, and MGM Mirage’s project accountants and chief financial officer, says Bodner.
The system’s flexibility impressed users. Administrators such as Tampas can design workflows and data entry forms from scratch, says Bodner. And project leaders can grant team members access to functionality based on their roles and can “swap people in and out of those roles easily,” he says.
The Unifier system went into production in July 2006. In the following weeks, Bodner’s team received more than 100 phone calls from users with requests to make minor modifications to the system, “since they knew by then how flexible the system was,” he says.
“We recommended to them that we hold off on making any changes until we’d gotten some results from using the system and began producing reports,” Bodner adds. Ultimately, some modifications were made, including incorporating additional departments and people into the system, adding fields to the system’s forms, and adjusting the workflow as processes were changed or simplified, says Bodner.
Although the members of the CityCenter project group didn’t encounter any major technical glitches with the system after they began using it, some functionality issues had to be addressed, says Bodner. For instance, entering construction cost estimates into the system was time-consuming because users had to enter line items one at a time. If a contractor had to enter 60 line items, for example, the process could take more than an hour.
The Unifier product team got moving on the problem, and by October, it had created an enhancement to the system that enabled contractors to enter multiple line items at once.
Use It or Lose
One strength of the system was the audit trail it provided, but for that to be effective, everyone had to be using it. With the support of senior management, Bodner and his team required all contractors to use the Unifier system to submit cost estimates for the CityCenter job. “We told them, ‘If it doesn’t come through Skire, it doesn’t exist,'” says Bodner.
Nearly 100,000 items have been date- and time-stamped so far.
Bodner says there have been a few instances where contractors claimed that their requests to purchase construction materials hadn’t been approved by CityCenter project leaders. But because Unifier keeps a complete electronic audit trail of each request and the subsequent action and approval, contractors, project managers, accountants and other stakeholders have no one but themselves to blame if a request isn’t in the system.
The system’s electronic audit trail has also helped to keep what Bodner refers to as a “hyper, fast-track project” on course. Because Unifier is primarily functioning as a change control and cost-reporting system, the project team has a current and “very explicit” record of project costs, changes and reasons for changes, he says. “Consequently, we have a robust system to proactively control change.”
Moreover, he adds, “the system has demonstrated where the organization needs improvement and enabled us to implement these improvements.”
Any incremental improvement can go right to the bottom line when you’re building on 76 acres of prime Las Vegas Strip real estate valued at $30 million an acre. Shaving even a single day off the deadline would represent a big savings in interest costs alone, Charette says.
Time will tell whether that happens, but so far, the project has remained on schedule. CityCenter is slated to open in November 2009.
