CEO view: IBI Group’s Scott Stewart
IBI Group has become known for its tech-led projects and strategy and has even acquired tech companies. In September, IBI acquired Aspyr Engineering, a four-year-old information technology provider that it has worked with on major projects in Canada.
In 2018, IBI purchased GreenOwl Mobile, which created mobile technologies for smart cities and developed and deployed solutions for transport authorities and cities.
What’s next on the firm’s list to acquire?
Scott Stewart explained: “The direction that we would be heading in is continuing to strengthen in areas that are material for the operation of buildings, and the users of those buildings. It could be into areas of electric vehicles or charging, car sharing, mobility and energy pricing.”
IBI was first a customer of GreenOwl before acquiring the company, and as the relationship grew IBI accounted for a very high percentage of their revenue, and it “made sense” that they then joined the firm.
“We don’t have a specific budget set aside; it really depends on the value proposition of the company that we’re looking at. We tend to look to what the future revenue stream could be and how we can then justify as a public company making that investment.”
Founded in 1974 in Toronto, Canada, IBI Group has grown to become the largest architecture firm in its home country, and the sixth largest in the world with over 60 global offices and 2,500 employees. In 2018, IBI reported revenue of $368.3m and a profit of $20.5m. Stewart has been with IBI since 1983, working his way up from transport engineer to taking his current role as CEO in 2013.
Playing in the sandbox
In 2018, IBI launched its own accelerator called Smart City Sandbox, alongside partners EllisDon, Ontario Power Generation, The Weather Network, and Slate Asset Management, as well as technology giant Microsoft.
The sandbox is focused on bringing innovative products and systems to urban environments that improve the quality of life for residents.
Stewart gave an update: “We are about to complete the physical incubator space in our offices here in Toronto, and we have a similar engaging space in Vancouver.
“We just ran our second hackathon related to the Sandbox. We had over 350 people involved across the firm from San Jose, India, Vancouver, Toronto, New York, Boston, UK and more. We had 54 teams coming forward, all their initiatives were curated and reviewed and mentored, they identified a need or a business opportunity and a solution, before making a pitch.
“We identified 10 preferred initiatives and we are proceeding with the funding of one of them, which we see as a natural extension into our digital twin environment and changing how property is managed and operated.”
Experts in agility
On IBI’s website, the firm has a quote which states “we are experts in integrating tech with the built environment”, something which everyone in the property industry appears to be trying to crack at the moment. Stewart sees its tech-led approach as one of the reasons for the company’s success. “I could give a quick response to say we’re smarter and faster, but that wouldn’t be a very nice way to go. We firmly believe that we’re agile. We also believe that because of our direct engagement with clients, we’re right at the forefront, that’s why they’re making major capital investments.
“We’re at the forefront of helping them to distinguish that which they’re making investments in, why they’re making the investments, and how they can ensure a return on the investment. I say return because it’s not always a direct financial return, it may be because a product for a building is more marketable because it engages more of the tenants.”
He continued: “One of the key things that we have is our smart city platform which we launched last year, it’s an open technology framework allowing cities to connect their own existing systems with our onboard tools. Every city has smart systems. What we believe defines a smart city is that you’re able to take the data from these systems, put them into a bigger data lake and then apply analytics and use machine learning or artificial intelligence to be able to see how the data from these systems can be used in a much more compelling way. To create benefits and opportunities for the citizens and for the government in the delivery of services.
“We have been able to deploy this in India with great success and we are seeing traction more in the developing world to be able to do something strategic. In the developed world, it tends to be ‘we’re a smart city because we have a computerised control system’ or ‘we have computerised traffic signals’, or because ‘we provide travel information to our transit commuters’. However, it’s really not integrated in the way we see it as being the definition of a smart city.”
The changing role
Stewart reflected on how the architecture and design world has changed in the past four decades. “Since the ’80s, we have been involved in the application of technology in transportation because we saw the tremendous growth in demand, and the impact in terms of the safety, energy consumption and efficiency was a huge opportunity. We then not only designed the solutions but also developed them, and that’s a fundamental difference with IBI – we actually create solutions.”
He adds: “When we updated our strategic plan a couple of years ago, we looked at the impact of technology in various sectors. In almost every sector – agriculture, mining, manufacturing, transportation, logistics – they all have realised huge benefits as a result of adapting technology to their needs. What has not been realised are any benefits in construction.”
“There has been virtually zero productivity improvement. Therefore, we saw and still see that, because so much of our work is related to design that then leads to construction, we need to be at the forefront of how we can adapt technology, not only in the design but also in the construction and then in the operations.
“One of the greatest limitations that we’re seeing is that cities are the economic engines of most developed and developing countries. An individual working in a city creates 80% more GDP than someone living in the non-urban environment. The cities are vitally important but one thing that’s now constraining cities is their ability to cost-effectively accommodate the needs of the citizens. The cost of a place to live is so high that you basically live in a closet or a very small condo.
“We see technology has a huge potential upside in creating those engaging urban environments that recognises the high cost of those urban environments, so it’s still a compelling and wonderful place to live.”
The architects of tomorrow
IBI’s strategic plan is all about disruptors in the world that the firm operates in, and one of the biggest disruptors is the next generation, according to Stewart.
He explained: “We have young people that join IBI and their experience has been working in a collaborative environment with something like Minecraft, so when they come into the organisation, you have to be able to satisfy that inquisitiveness, energy and expectation of how you work.
“We see that our investment in the environment for staff is vital. We’re applying all forms of automation to remove the mundane, such as ‘oh where did I file that?’.”
Stewart revealed the firm uses software bots to allow people more time to really focus on how they can add value. “We have a major effort under way to improve the productivity internally for all staff. We have about 40 robots that we have applied, but to give you one example that’s directly relevant in the design world. We have developed something called a BIMBot.
“As architects, we oversee the work that is done by a variety of consultants and designers, structural engineers, mechanical, electrical and so on. In the case of our rail transit work, especially here in Toronto, we have over 29 different companies working on a project.
“We have to deliver something called Coordinated Design, which deals with any clashes of design. The traditional method of dealing with those clashes, is you would review them in their three-dimensional form, identify these clashes and put together a spreadsheet. You’d bring together all of the related parties, and you would have a spreadsheet that you would then review on a conference call every Friday to see what the clashes are, what’s been added, what’s been solved.”
He continued: “Our BIMBot takes that mundane process, creates a worksheet for everybody who is involved so that when we identify a clash, we know that it’s mechanical, electrical, structural or architectural. We know who’s responsible for that particular drawing. When they open up their computers in the morning, and they sign into this one bot that we have created, they have a list of the clashes that they then have to work on.
“As they solve those clashes, they simply confirm that as being solved and now we have a running list of not only the outstanding items, but we also have a running dynamic real-time list of what clashes have been resolved. Now that sounds pretty prosaic.
“The impact on our project was what looked like a two-year effort, we were able to complete in four months.”
In bed with Microsoft
As big tech begins to focus its eyes on the built environment, forming relationships with them is important for many property companies. IBI has formed a relationship with one of the biggest giants of all, Microsoft. The firm is selling several of its products through Microsoft’s Azure platform, to enable IBI to service a much larger market.
Two of the platforms are Travel-IQ and InForm. Travel-IQ is about building a travel information and metric system across North America. InForm creates visual plans of buildings from design through construction and implementation to provide an asset management service. This also feeds directly into IoT devices, to monitor and manage the environment within the building.
Travel-IQ has already launched and is due to be updated in October. InForm is in final beta testing with a launch due before the end of this year.
Evolution of clients
The tide is shifting for what clients expect from IBI, explained Stewart: “We’re now starting to see our private sector developers coming to us and instead of asking us to just design a building, they’re asking us to tell a story about how people live or work in these buildings.
“It’s such a different attitude about the built form, and that for me has been one of the most profound things that I have seen. It’s maybe a culmination of clients getting younger and staff who have grown up with technology and tools.
“They don’t know anything else but smartphones and all the benefits they can provide. They’re wanting to see how technology in all its forms can create this much more compelling, efficient, safe, environmentally responsive environment. The private sector is moving very quickly, and I would say in the last year, it has been an absolute sea change.”
From architects to facilitators
Looking ahead, Stewart revealed the next big trend he’s expecting to see in the built environment. “For IBI, I would anticipate in 2020 and beyond, that more of our revenues will be as a result of us providing a continuous recurring service to our clients. I see us being facilitators for creating whole neighbourhood communities for people in our buildings, a continuum from the design environment, right through to continuing service, to both the client as well as the people who then buy or use the facilities that our clients provide to them.”