Operation bottlenecks, cost tracking and other areas can be improved with construction management software
To ensure returns on their technology investments, contractors can complete thorough reviews of their processes, pinpoint indicators of profitability and follow through with a plan to manage the implementation of changes.
Steven Mulka is partner and SharePoint product manager at Strategic Industry Solutions LLC (SIS) in Duluth, Ga. Mulka has worked in the construction industry for about 30 years; his company is a consulting firm and Microsoft Dynamics provider. The first question Mulka asks contractors looking for software is, “What key processes drive your business and profit? Those are the areas that we want to help you evaluate and understand so any new software solution provides business improvement and a strong ROI.”
Oftentimes a company forms a steering committee to research and outline problems before choosing where to strategically invest in technology, Mulka says. “Ultimately, as you looked at your business processes, where are the bottlenecks, and where are you going to get a return on your investment? Validate that those are true problems and, more importantly, what would a solution look like in the sense of improving business processes.”
Russell Schulte, CEO at ABIS Inc. in Houston, started developing software for the construction industry 30 years ago. “The first thing we ask people is, what are the areas that take up most of your time?” he says. “We try to get people to share with us all the areas that become tedious, things that don’t take a lot of brainpower, but take a lot of work to accomplish. And when we find out the areas that take up most of their time, that’s where we try to correlate that in with automation.”
Software can streamline mundane tasks such as auto-emails and issuing purchase orders, and digitize contracts and other paper documents to improve efficiency. Schulte says, “When you go talk to someone and say, what are the things you love to do about your job? When you get that list, what you want to do is take away things that are not on that list. The things where [contractor employees] add the most value are usually things where [they] use their brain and they’re thinking about things. Let that creativity flow. All the things that slow them down, paperwork trails and accounting and numbers, let the computer handle all that. I think systems today need to be more automated, where if I’ve got the information in any part of the system, it should automatically flow it forward as I go through the business process automatically.”
Cory Davis, PSP, is CEO at Capital Construction Solutions LLC, a risk management software company based in Chicago. “It’s important to consider not the processes [contractors] have, but where the processes need to be,” he says. “You don’t want to take a bad process and put it in a software system to make a bad process electronic; that won’t work.”
If a process entails transferring a paper document among workers in an office, on a job site and at multiple companies, it should be restructured in software, Davis says. “You don’t want mirror that; you want to go from A to F directly now and change that process to get to a really good value generation.”
Precision for Profitability
To help determine which processes a contractor would benefit from changing, pinpointing costs of materials is essential, but challenging. This can be particularly impactful to metal fabricators, many of which complete lots of custom work. Such was the case at one of Mulka’s clients, where his firm helped implement a process to track material and labor costs that led to greater profitability. “The fabrication shop wasn’t properly capturing expense related items on time and materials, and they ended up putting five points to the bottom line that wasn’t getting captured during a billing phase; so that’s one area,” he says.
Mulka says fabricators should closely examine their processes, cost reporting and analysis, and key indicators of profitability. “The stellar contractors out there are down on a unit of production type basis. If you really get sophisticated and you start looking at units of production, how efficient are we? How much production did we do on a daily basis? These are the real metrics that drive the question, is my software helping me manage my business?”
The nature of fabricating metal for construction projects lends itself to software that can automate calculations and keep records. Schulte says about a third of his company’s customers are metal-specific businesses. “Steel is unique because you buy it by the ton, you stock it by the foot, but when you roll out like sheets, you have to count how many sheets, so it’s got all these multiple units of measure, and it has all this traceability from the material reports. So we’ve written a ton of very special routines within our software to handle everything that a metal building manufacturer, metal building company or really anyone who uses any type of metal needs to manage a project.”
Another consideration contractors have when looking at the precision of their systems is how data is collected, analyzed and acted on. Peter Billante, senior marketing manager for BIM 360 at Autodesk Inc.’s office in Boston, says in the ongoing trend of greater integration among construction management software, leveraging benefits from data collection plays a significant role. In an example of a general contractor managing quality control of different subcontractors, data collection can improve the process, he says.
“Right now the best information about project risk often lives in the head of the superintendent; it’s kind of anecdotal,” Billante says. “At the end of the day, that’s potentially affecting [contractors’] profitability on the job because unforeseen risks may be extending completion dates and negatively impacting project profitability. Contractors now can get a complete database of project performance data and machine learning algorithms to help analyze it. These kinds of things just weren’t available previously in the industry.”
In addition to completing process reviews and identifying key profitability indicators, contractors consider how a software change would be implemented and maintained. “Change management is usually far more important than just changing a process,” Davis says. “You can change a policy, you can have a meeting about how you’re going to do it, but unless you physically have a change management process to make that change go through, to help people, to train them, to validate them, to make and continue some proven loops, to make sure that process really works well, it’s really never going to work. You have to have a reporting structure that gives you feedback to let you know if it’s working.”