Make your construction software purchase a success by first creating an implementation plan.
You looked at various construction software systems, selected a vendor, negotiated a sweet contract and are eager to install and begin using this new tool. Now, it is time to call in the vendor's trainers and consultants to start your system implementation, right? Well, perhaps not.
Did you consider how important it is to treat your new construction software implementation as a business initiative rather than an accounting software project? Too often companies launch themselves onto the technical implementation track without first defining how the new software will support the business decision process. Why not keep the tail from wagging the dog? The key to making your construction software acquisition a success for your business is to create a well-defined, organic business plan for the software implementation process.
It is vital that you involve your entire management team as early as possible to create a comprehensive roadmap for your new construction software implementation. There are a large number of initial steps that need to be decided up front so your team will not spin its wheels and lose valuable time. The cost in dollars and time later when you have to perform fixes can be daunting. Much like an architect first designs the building before calling in his general contractor, framers, electricians and plumbers to start building, a construction software system business plan helps you establish the direction for the project.
To create your roadmap, focus on what business and project management information you expect from your new system. Assuming you selected a real- time based software product, your information accessibility will be instant, comprehensive and global to all areas of your company. In other words, you have the ability to monitor key performance indicators on demand 24/7.
You need to clearly define your business processes in finite detail. While you may have defined your company's business requirements during the evaluation phase, prior to purchasing the software system, those were probably rather high level and certainly did not take into account the functionality of the chosen software since you had not yet decided which system to purchase.
Your pre-implementation roadmap phase should take those processes and requirements to the next level of detail by identifying specific workflows by job and function, process improvements to be added (possibly even independently of the software), and roles and responsibilities within the new business processes. These findings will serve as the source for your installation path, including testing scenarios and information quality control.
Here are few examples of the key performance indicators your business may want to plan for as part of a new company-wide software installation:
Liquidity and Cash flow: Know whether individual projects are generating or consuming cash. Determine how much cash your work-in-progress is generating or consuming by monitoring key current asset and liability balance sheet accounts.
Schedule discrepancies: Project owners mandate clear communication regarding project progress and timely completion. With increasingly multifaceted project specifications and scheduling demands, you must be able to identify and monitor schedule variance to deliver projects on a timeline that meets the owners' demands.
Labor productivity: Labor productivity is especially important for subcontractors, as productivity problems can break labor budgets and eat away at profit margins. Managers can isolate jobs within a project to identify inconsistencies between actual labor expenditures and estimates. This information helps managers and field supervisors predict cost-to-complete, establish daily performance goals, address problems and improve future estimating and bidding precision.
Margin discrepancy: Compare your gross margins to business plan goals by monitoring overall margin variance. Similarly, investigate the gross margins on individual projects, relative to the project estimate, to determine whether the project is achieving expected profitability.
Committed cost: With rising material costs, construction firms face financial exposure when suppliers and subcontractors are not yet committed contractually-particularly on longer-duration projects. It is imperative for your firm to track uncommitted prices to increase the proportion of committed costs where possible.
These are just a few examples of what you can gain from a well-implemented software system. Your new software's customer report writing features should provide you with a flexible structure to extract this information. However, remember, you will not be able to do so, unless you have decided what questions to ask. Using this information in an environment of disciplined management can assist you in pursuing opportunities or solving problems.
The new software should allow you to implement beneficial changes to your company's organizational structure. Implementing a new software system always entails a great deal of adjustment to most, if not all, of your employee team functions. Companies often use a new software tool as a means to standardize business processes across locations, establish shared responsibilities like purchasing, finance or HR and by redefining roles and duties, to benefit from the new system. It is imperative that you spend time defining the scope of any new business, operational and organizational models.
Data migration is often delayed until the end of the implementation. After all, how difficult can it be once the system is designed and tested? But it can actually be quite problematic. Data does not always chart correctly, the system does not always handle the volumes of data it needs to and project decision makers are not always realistic enough at the end of a project to decide what and how much data to bring over to the new system.
Data input and report output definitions are a task too often put off until the end of the project. In real life, what good is a new software system if you cannot input or extract the information needed to run your business? It is never too early to start this activity-in fact, you need to make this your first step of the implementation process.
By focusing on these and many other step-by-step tasks of your well-defined roadmap, you get a secure sense of scope, timelines, durations, milestones, resource projections, and costs. Once you now have laid the foundation for a successful installation, training program and company-wide implementation of this exciting new management tool, you can use it to achieve your very business' objectives.
Construction Business Owner, January 2011
