Q:
I've been running my own concrete construction company for ten years now. Recently our job volume has grown considerably. The trouble is, I am losing track of what is happening in the field. I need to know when and where problems might be surfacing, but I can't possibly oversee every crew and every field activity.
I hear other contractors talk about how they are using software-like estimating, project management and job costing-but I have no clue which technology products would be right for my business. Currently, we use spreadsheets for estimating and a basic accounting system for the books. Where do you suggest I start?
Chuck
A:
Sounds as though you are suffering from classic contractor growing pains. You know how to run your jobs, but as your workload expands, you can't possibly keep track of all the information needed to run them effectively. And this is where technology can help.
Although your business could benefit from any number of technology products, your main problem appears to be a lack of detailed job data, such as labor productivity. Let's assume, using your estimating spreadsheets, that you have established certain productivity rates for your jobs. With a good construction-specific accounting system, your first step would be to import your estimated costs along with labor rates and quantities. The job cost data is then updated with every payroll and completed quantity entry. That's it. From there you will get instant access to numerous production reports as well as a projected cost analysis report.
For the sake of example, let's say that you estimated finishing 60 square feet of concrete per man hour for formwork. A week into the job, a Production Per Man Hour report shows that only 40 square feet per man hour has been accomplished. What's more, a Projected Cost Analysis report shows what the final overall cost will be if you continue on at that productivity level. The good news is: There is still time to make corrections. You now have the data on hand to ask more questions ("Why are we behind here?" "Which crew is under performing?" "Is weather a factor?") and make better decisions.
In addition, a good construction-specific accounting system gives you historical data for more accurate bidding on future jobs. Looking over similar projects, for instance, you may discover that you have been making assumptions about productivity that do not stand up to the data. Good job costing numbers simply don't lie.
Keeping track of labor productivity and other job data is key to managing your jobs and staying competitive. But don't underestimate what you will need to do make it happen. Technology products will work only if you have the people and the processes in place to take advantage of their time and cost-saving efficiencies.
Fred
Construction Business Owner, May 2008
