Learn why adopting construction-specific software should be at the top of your to-do list.
There's nothing like a well-tailored suit to make you feel confident-conversely, ill-fitting clothes can be uncomfortable and tedious.
Your software should fit like a well-tailored suit. According to Brad Mathews, the vice president of marketing for software provider Dexter + Chaney, the single largest advantage of using construction software can be summed up with one word: fit. "It should work the way your company works," he says.
By definition, construction software includes a wide-range of industry issues. A partial list includes job costing, estimating, change orders, progress billings, revenue recognition, construction payroll, equipment management, purchasing and subcontract management. In other words, software that is specific to the industry can manage all of your information, allowing you to focus on running your business.
Consider this: Every building you construct is a prototype. "Our clients may specialize in commercial office buildings, but each project has a different owner, a different team of architects, subcontractors and certainly a different location. That puts the burden on software companies to have systems in place that bring consistency to the processes so that contractors can reach their goals on budget," Mathews says.
The "New Normal" Requires New Thinking
You may be wondering why-in a down economy-you need to consider purchasing software. Changing how you manage data requires time that is not often available when you are slammed with new jobs. "When you have less work, it's the best time to make changes," says Mathews. "It's like changing the fan belt while your motor is running. When it's running at idle, it's easier to make the change."
Implementing new software is about focusing on long-term goals. Since you are probably not focused on hiring or moving into a new facility, consider how software can help you better position your company to succeed when the industry rebounds.
Need more incentive? If you use construction software, you will stay on top of the numbers. In the current climate, bonding companies want to know the financials are accurate, Mathews says.
Gain the Edge with Construction Software
The construction industry is notoriously slow for adopting new software technology. Steve McGough, chief operating officer at construction software developer HCSS, says, "In a highly competitive market that is continually short of cash, software providers must do a great job of demonstrating the value a product can bring to a contractor and how that value translates into profits."
Sometimes contractors who do not recognize the value of construction software try to get by with generic options like QuickBooks. "They're worrying about how to get the first, third or fifth job ... At that size, recordkeeping looks pretty easy. They end up tracking on many different spreadsheets for workers' comp, change orders, etc.,
" says Mathews. "If, fortunately, success strikes, then they often grow into the need for construction-specific software."
The need often becomes apparent when growth is restrained. "A generic software package may require a work-around to accomplish certain tasks, which, in turn, diminishes the value of a product to the contractor," McGough says. (Think multiple spreadsheets piling up.)
In contrast, construction software can track millions of details in one system and provide an accurate, real-time analysis of your performance, with no risk of double-entry. "Good software is a productivity tool," says Mathews. It allows you to see if the job goes off track as soon as possible and get it back on track.
How Construction Software Works
Construction-specific software tracks information that is unique to the industry.
"The rate for workers' comp can change on a single worker once or twice a day-sometimes three times in a single day. For example, if a roofer is on the ground part of the day, we need to record that so we have workers' comp information to keep the costs down," says Mathews.
Another advantage is how the software can help you handle change orders. These orders are managed from the very beginning and followed all the way through the job. "They flow right along with the job-a perfect example of a good fit," Mathews says.
The accounts payable process is also unique to construction. In manufacturing, you might issue APs only to personnel in the office, but this process is much more complex in construction. "It's a management information process in construction because those invoices need to be approved by the person who is managing the job," Mathews says. Construction software prevents invoices from piling up-a dangerous habit that can delay cost reporting and cause inaccurate financials.
Getting Started
Request that the software company provide references, and ask specific questions of these references, including: Is the system working well? What was the implementation like? Did you get the training you needed? Are you getting support?
Having the support you need will make the transition smooth. Be sure to ask about how the company handles customer calls. For instance, J. Elder II, president of the Elder Corporation a site development contractor says, "When I call HCSS with a question, the guy who answers the phone will help me-and I usually get him in three rings."
Finally, think about which company will best complement your business. "If a software provider truly understands the business problems of a construction company, then it will be immediately obvious in the construction-specific features of a product and the customer service provided," McGough says.
Is there a circumstance when a contractor would be better off not using construction specific software? Mathews believes the only time that would make sense is with a brand new strapped-for-cash company employing only a handful of people. "As soon as you're at the point that you have staff, then software costs are put into perspective."
Don't Skimp on Training
A company would never forego training on heavy equipment, but do people really take software training to the level they should?
According Dexter + Chaney's vice president of marketing, Brad Mathews, who is currently researching the leading cause of technology failure in the construction industry, the reasons for technology failure are usually related to people. "It relates to the implementation, such as support of senior management. If senior management is not on board with technological innovations, chances go up the new technology will fail."
Be a savvy consumer
Not a techie? No problem. Take these questions to a construction software company and hold them accountable.
When was the last time your company had a major upgrade?
Dig Deeper: Sometimes software companies distribute release notes-look at these. Ask yourself: Was the last upgrade five years ago? Find out what is in those updates: "Look for upgrades on major functionality. Was it just a couple of bug fixes, or did the customer actually get something new," Mathews says.
Are these upgrades included in my fee?
Dig Deeper: With some companies, updates come as part of an annual support fee that incorporates all upgrades. But with others, you have to buy the forthcoming software upgrades. This is worth investigating, as you should plan on keeping your software company for 10 years or longer.
Can you provide statistics that measure your support service?
Dig Deeper: "Every company tracks this. Some companies offer support within minutes, others hours, others days," Mathews says.
Is the underlying technology of your database based on SQL (structured query language)?
Dig Deeper: If it is not on SQL, that's a deal breaker. Modern systems have been on SQL for years-they are more secure and powerful and more open in terms of connectivity. "If your software is not on SQL, it's like buying software for your computer that won't run on Windows," Mathews says.
Does your system have powerful integrated document imaging?
Dig Deeper: By scanning a document, it is possible to file the physical record right into the software. "If you have an invoice from a vendor, that invoice should be tied to the job phase," Mathews says. Being able to quickly locate and reproduce documents supports sound financial practices and also provides peace of mind should emergencies arise. In the case of New Orleans-based Frischhertz Electric Company, this feature made the difference during Hurricane Katrina. Frischhertz's accounting manager, Jerry Larriviere, who has been using Dexter +Chaney's Spectrum software for eight years, recalls how the first floor files were under about four feet of water. "Using the document imaging system, we had enough to get up and moving...We started working the following week," Larriviere says.
Construction Business Owner, October 2010
