Put yourself in the shoes of your human capital manager. A project has just come in for a hotel, and you need to hire or allocate 200 people in a month. Many of these people are finishing other projects, and the most qualified people, while willing to relocate, need as much advance notice as possible. If you are lucky, the project is in a city where you already have substantial activity, and you can shift people over to the new project. If not, an even larger than usual recruiting effort is already late.
Now imagine you found out business development has been working on signing up this project for a year.
The culprit is running more than one pool of information on projects. Most companies in this industry run some form of human capital management system, some form of customer relationship management (CRM) and some form of cost and budget management. These applications are commonly seen as imperative software for the continued and successful operations of a company.
However, despite that in many cases, they have been viewed as point solutions, a staffing manager needs to know the demands of the client from the CRM system, as well as the timing and budgeting for each project. Point solutions can miss the point. People or technology need to connect this information to eliminate surprise data, such as a new project, for a business to run as it should.
The stakes are likely familiar enough. The wrong person hired for the wrong job at the wrong time, or any combination of the three, can be a costly headache at best and at worst, can sidetrack an entire project. Construction companies, maybe more than companies in any other industry, need to build these paths between the financial, business development, project management and human resource functions.
Through our findings, we discovered that the vast majority of construction companies have no less than three customer databases for accounting, project management and marketing. From the perspective of the IT department, they are ensuring that the needs of each of those individual departments have been met, to the detriment of the whole. The companies appear to be running fine, but at the cost of potentially millions of dollars because there is no link between opportunities and human resource requirements, no link between opportunities and project management responsibilities and no link between opportunities and estimating.
Connecting these data pools is not impossible. First and foremost, you need to consolidate the data into one database. Believe it or not, that's the easy part. You simply have to enforce a single system. With one data element to track, the information can now be properly indexed.
Second, build a regularly administered customer satisfaction questionnaire that is automatically sent to your owners on a regular basis. This is to accurately reflect the success of projects in process, but also to create an information backlog to track qualitative information about experience, expertise and success levels of the staff on each project.
Finally, do something with the data. One of the primary goals is to avoid or insure replication of a specific outcome, and one of the primary contributors to the success of that endeavor is proper staffing. Does the experience in a person's work history equal success for the company, the client and the person themselves? Has this person's talents been matched accurately with the assignments? What kind of work history tends to indicate success in the future? Finding answers to these questions is the starting point for a data-powered business.
Even as you accumulate this richer data for future use, you can use existing information to improve recruiting and staffing by synchronizing human capital management with the other data users in the organization. Every company in this industry has potential projects or opportunities to be tracked. Revenue is going to be achieved by these projects, but how much and when? You need to track the potential revenue flows of these opportunities by project type, revenue and time.
Then, on the most basic level, someone is going to have to work on these jobs-who is the correct person and where are they now? The challenge of staffing a project should begin as soon as possible, in other words, when the prospective client is identified. Once the staffing and other costs are allocated, schedules and time-phased budgets need to be created in order to validate the business development professionals' revenue forecasts, identify recruiting needs and begin tracking profitability once the project is won.
This could be done in spreadsheets or standalone systems, but the further ahead you can plan staffing, the less room you leave for error or talent gaps. When the information is consolidated and human capital management is on the same page as business development and accounting, talent can be provisionally matched with projected needs based on forecasts, and there will be far fewer staffing problems.
Again, let's walk in the human capital manager's shoes. Once the project has begun, there is still the need to manage resources and prioritize staffing needs. Staying informed of the project's progress and the customer's satisfaction not only helps the staffing manager keep the staff engaged in the work that will keep everyone happy, but it also helps him or her plan the best people for upcoming projects. The single data base for customers and business intelligence again helps to automate this process.
The costs of failure are great: incurring the cost of recruiting the wrong person, misallocating someone and losing them because the work does not match their skill set, or project delivery or performance issues.
Again, this can be done with any system at your disposal, but there are benefits to choosing an ERP system with time-phased planning, staffing and budgeting. They include interoperability so the human resource department is in full communication with business development and project execution, time management through the elimination of time costly searches, as well as managing several spreadsheets and increased, easily shared knowledge.
Construction Business Owner, December 2006
