All projects are predictable and contribute to our profit
Risk awareness and therefore risk management has improved significantly within Heijmans in recent years. It has now become an integral part of the organisation and our way of working. The result of these efforts is clearly visible. Attitudes towards risks have changed. Risks are part of our work, but we only accept those risks that we can control, influence, mitigate or bear. In addition, these risks should be in appropriate proportion to their earning potential. This enables us to take manageable risks while continuing to grow profitably.
At the same time, we also have to deal with external factors. In the first half of 2023, the war in Ukraine had an undiminished impact on the price of energy and thus on products produced using a large amount of energy. Furthermore, the scarcity of people and materials persists, prices remain high and legal and regulatory frameworks are increasing. The nitrogen issue also remains a concern in the sector. All these factors lead to uncertainties in our operations and for our employees.
In all sectors, we are alert to accepting risks in large and/or complex projects and entering into cooperation with a risk-bearing partner. We assess the culture, competencies and level of solidity of a partner in advance and are reluctant to take on too many large projects simultaneously. Larger projects are only acceptable if they fit within our competencies and our risk appetite. When we work with partners, we only work with the right partners with an appropriate contract form and risk allocation. We only want to bear risks that we can control and influence, and if the project is profitable. As in previous years, last year we continued to focus on the ratio of risk acceptance to earning potential. We remain committed to margin over volume and we can see that thanks to this approach, our order book is growing, both in terms of size and in quality. Almost 40% of our revenue is recurring and not project-based. This increases predictability, helps lower our risk profile and makes a significant contribution to the company’s stability. It enables us to deal with the consequences of external developments in the shorter term while looking further ahead.
Process improvement
At Heijmans, we devote a lot of attention to quality and quality assurance. Our processes are not just about how we organise our work, but also about quality control. Internal quality assurance on our products and projects provides insight into what is going well and where there is room for improvement. So we make good products with a high quality standard. And we are good at translating customer requirements into offers. In 2023, we started registering improvement issues in our Sharepoint improvement list. This list registers all reports of things that are going well, along with those that are not going well. When a report comes in, it is linked to an employee, so the report is followed up but also monitored. When a problem is solved, it is automatically reported to the employees involved. We also use machine learning to examine common threads in notifications and solutions to arrive at lessons learned. And we monitor successes and carry these over to the next tender, improving quality even further.
Established processes guarantee a uniform way of working but can be perceived as ballast, as they are sometimes cumbersome or inefficient. So Heijmans still sees process maturity as a high priority. By continuously streamlining and simplifying mandatory processes, we avoid unnecessary processes and procedures. As a result, employees increasingly feel that they are truly supported by these processes and can therefore do their work better and more easily.
Furthermore, we devote a lot of attention to the onboarding of new colleagues, and this involves more than their immediate supervisor. Other people, including those from the likes of the Safety and Quality department, are also involved in this process. And devoting attention to ‘This is how we work’ is not confined to new employees. Teams that work on one large project with other partners for a long time and then return to the Heijmans organisation are given a kickstart, if required, to bring them back up to speed with all our standards, tools and processes that have been improved in the meantime. Employees really appreciate this, plus it contributes to the continuity of the quality of work and the products they deliver. In addition, we use e-learning courses to continuously train our employees in areas such as contract management, risk management and cyber security.
User-friendly tools
In 2023, we once again initiated and successfully completed several initiatives to continuously improve and renew our tools. The aim is to provide our colleagues and clients with optimal support in the performance of their work.
User-friendliness is essential here, also in view of the tight labour market. An employee enjoys their work more if they have good support tools. Our clients can also see this and it contributes to the image they have of Heijmans.
This includes both the tools for supporting Heijmans’ primary processes (project preparation and execution, service and maintenance, home sales and production) and the tools for supporting processes (including HR and finance). In addition, we are increasingly linking various tools to each other when this is necessary. This means that employees can do their work from one integrated environment as much as possible and information from clients enters Heijmans’ systems directly and without extra processing time and manual work. Furthermore, we are increasingly developing data models to enable further analysis (operational and financial) and as a basis for integrated company-wide reports. In 2023, employees gave IT services within Heijmans a score of 7.9.
Reliable and safe technology and systems
Cyber attacks are a serious threat to organisations worldwide, including Heijmans. We take the risks of phishing, ransomware and other types of attacks very seriously. At Heijmans, a lot of information passes through our hands every single day, both digitally and on paper. Information about our colleagues, our construction projects and our clients. They not only build with us, but also on us. On the basis of the ‘Secure@Heijmans’ cybersecurity roadmap, we are continuously working on the integration of cybersecurity into our business operations, products, services and projects. Awareness and knowledge of our own actions and responsibilities are equally important. In the past year, we once again took steps to further increase our resilience in terms of cybersecurity.
For one, we provided employees with training in information security with the aim of ensuring that everyone at Heijmans knows how to act, how to identify risks, prevent cyber incidents and thus keep Heijmans safe. Employees also received various training courses on a range of topics, including social engineering, using secure passwords and responding to risks. We also launched an internal campaign to further increase awareness among our employees. And we highlighted the topic of security technology in various interactive meetings.
Safer and renewed digital workstations
In 2023, we replaced the laptops of 3,500 Heijmans colleagues with new, modern laptops with the latest programs. The laptops have been equipped with maximum security via the use of facial recognition and/or fingerprint sensors. We also introduced a stricter installation policy. As a result, it is no longer possible for employees to install software themselves. We created a separate procedure for employees who need specialised software. Thanks to this comprehensive action, we have ensured a more secure and updated digital workplace in one fell swoop and we are now even better equipped to prevent incidents. We will replace the laptops of other employees in the first half of 2024.
The rise of artificial intelligence
In view of the rapid technological advances in artificial intelligence, the world is facing a major transformation. Artificial intelligence (AI) is a science that creates systems that exhibit some form of intelligence. The current technological revolution is due to the large amount of data, the computing power of today’s computers and machine learning. Heijmans is responding to these developments in a number of ways.
For example, we are already investing heavily in smart technology such as machine learning. Computers use machine learning to learn the formulas that we used to programme a computer with in the past, and now do it themselves using pattern recognition. This technology is used, among other things, to make analyses that enable us to respond more effectively to an environment in an urban development plan, for example, or for calculations that help us take certain decisions.
In addition, the Heijmans Analytics team, which specialises in data science, helps the organisation work in a more data-driven and efficient way. This includes using different forms of AI, such as generative AI, which saw significant growth in 2023. Generative AI is a form of artificial intelligence that can use machine learning algorithms to produce text, images and varied content based on the data it is trained on. We carried out a broad exploration of potential applications in this field in 2023. We have now started a number of ‘proof of concepts’ within Heijmans, in which we are looking at how the technology can contribute to our acquisition process, or in which we are taking steps in the area of processing data analysis more effectively and more quickly. But we are also looking at how this technology could, for example, support our technicians. The first results are promising and we will continue to explore these ideas in 2024. In line with our new strategy, we will then also use the technology to streamline business processes.
Heijmans organised a two-day housing hackathon in November 2023. During an extensive simulation of an area development, we looked at parametric and generative design at Heijmans using as many digital tools as possible. How do we use data, computing power and AI in an optimal way?
AI also entails certain risks. To limit risks for Heijmans, we have drawn up ground rules for the use of AI applications. Meanwhile, we also launched an AI working group that is following developments in various disciplines and is also exploring the opportunities and risks for Heijmans.