Many people who design things for a living are familiar with software configuration tools that work with libraries of objects that graphically come together according to rules. The results might be a walk-through model of a building, a modular office system, or a fantasy world like what everyone under 20 knows about, thanks to Minecraft. ICE from DIRTT Environmental Systems is different: this tool is both disruptive and catalyzing, and it’s just beginning to penetrate the construction market.
There are other software configurator tools that will spit-out a bill of materials, but this ICE software is many levels deep, managing the middle office (logistics, labor rates, etc.), all the way to manufacturing (production queues, shipping). It's the most exciting software platform in the building materials industry I have seen, blending a conventional-enough looking sales tool with enterprise software.
DIRTT* Environmental Systems’ (TSE:DRT) CEO, Mogens Smed was the guy who saw the benefit that a comprehensive software approach could bring to his business, which started with custom interior walls decades ago. His father was a cabinet maker from Denmark who infused Mogens with the spare wooden beauty of the Danish Modern movement. This design POV came from the same roots as the company my father worked for, Knoll International, namely Germany’s Bauhaus School. This early 20th century design movement brought the strength of the new materials for building like steel, and steel-reinforced concrete to enable the clean long, unadorned lines of modern buildings.
I think his paternal lineage in this field accounts for why I liked Mogens right away. On that note, I have done business with DIRTT in the form of selling some of my company’s lighting and control products, as well as to some of their dealers, but I don’t own any of their equity at this time.
When I first sat down with an ICE software jock, I distinctly remember my initial amazement. I had felt the same way when I learned the basics of Lotus 1,2,3 around 1990 when I was introduced to the magical power of spreadsheets. Like then, I saw past what I had previously known, and started to imagine what could be, and it was exhilarating.
The ICE software package excels beyond anything I have seen in the real world is in its comprehensive inclusion of manufacturing, variable inputs like regional labor rates, building materials from others, modular office furniture, every door, window and surface into a beautiful, virtual finished product. The richly compounded presentation had everything a customer might want to know behind it: how long to deliver, how long to install, how much it would cost. But it also had more; the presentation also had what the manufacturer needed to know, underneath the graphics, like the fabrication time and locations available to manufacture, including their queue, shipping estimates, installation crews’ availability, etc.
I checked my enthusiasm with an ICE user, Rod Graham, CEO of Horizon North, one of the leading modular construction operations in North America. He says they find DIRTT's platform "disruptive” and that it gives them a competitive edge to deliver highly engineered, quality product on time on budget". Adding, "It’s the moat we are putting around our business" protecting them from competitors.
In a few hours, one operator can use this software to provide an actionable proposal for most of what you would find inside the building envelope, replacing what otherwise would take months and involve many different salespeople, technicians and estimators. It’s bringing previously unimaginable efficiencies to the detailed proposal process, making it a real representation of the company’s capabilities. The platform yields a ream of back-up along with its slick conclusions, engaging everyone from the CEO to the Facilities Manager. This is transcendent energy efficiency, owing to all the avoided activity it enables.
“This is fantastic”, Mogens says, referring to a new materials technology he just came across with potential to bring into his reconfigurable interior products for building. Minutes later, with great focus he turned to me and our appointment to discuss another technology. He liked what he heard, pulling-in nearby colleagues to listen. “And get your hands out of your pockets”, he said. Appearances matter very much to Mogens, in every sense.
The palpable energy he throws off – even while standing still – motivates the people around him. And the marriage he’s pulled-off between the ICE software platform and his building operation is breathtaking to me. The development dollars for this software (>$35 million) was managed by the ICE originator and architect, Barrie Loberg who has delivered on the vision for what ICE software would become. This investment was made before the company went public in 2014. ICE is a wholly owned subsidiary that doesn’t separately report revenue, but the entirety of DIRTT’s C$188 million ($142 million) of 2016 revenue through Q3 has been thanks to ICE’s front-end sales presentation, all-the-way to its back-end fulfillment. This sets the stage for rapid scaling-up that competing manufacturers won’t easily match.
Mogens has since used this platform to move farther and more quickly into the adjacent markets of pre-engineered wiring, ceilings, and even homes. “You know how it is”, he says, “if it’s not already in the market, most people don’t believe it should be! It’s madness.” His certainty about what should be has extended recently to purchasing some very expensive timber-forming equipment, untried in North America. The first project to benefit: the off-grid Casa Smed, which they say was built in one-third of the time of a comparable conventionally built house.
At the home site, near Calgary (courtesy DIRTT Environmental Solutions)
He’s melded the high fit and finish design he was steeped in as a boy with the greatest force of business productivity of our generation: software. In that regard, it may not be too hyperbolic to say that ICE is analogous to the advent of structural steel a century ago in what was known as the New Architecture: it’s a new core element in building design that strips-away a lot of what’s unnecessary.
*”DIRTT” stands for “Doing it right this time”, a reference to this second major outing in business after he sold SMED International to Haworth, Inc. in 2000.
