Collaborative Project Management Considerations

More and more contractors are involved with construction project management as part of what they do.  Some will be heavily involved in pre-construction doing design or engineering work or helping oversee  these functions. They may also be soliciting and comparing bids from prospective subcontractors.

Once construction actually begins, they will monitor progress on the schedule and costs to date versus expected costs at completion based on the percentage of work that has been done. This may result in over or under billing the job to date which, of course, can have a major impact on working capital. If government work is involved they will have to keep tabs on “earned value” which is measured by comparing costs to date to the total contract amount to assure that they are not going to release funds that have not been “earned” by the contractor based on actual progress.

In addition to tracking actual costs to estimates by time, phase and cost type, phase, construction managers have to deal with documents such as change orders to the job, RFIs and submittals which must be routed for approval.  Ideally software should allow for a specific work-flow process that routes documents from one individual to another via email alerts or reports. Furthermore,  the software  will need to keep track of meeting minutes and comments from various stakeholders in the process as subcontractors, the GC, etc.

Collaborative project management involves more parties and is more complex. In this case, an owner may commission one or more construction projects and contracts with general contractors to deal with hiring subcontractors and taking full responsibility for actual construction.  Since owners are funding the project they are very concerned about things like job progress and tracking costs to date. They also want to provide a platform for end to end project management  where various stakeholders such as with design engineers, architects, mechanical contractors, etc.  will use one software solution  that supports  entering labor and materials cost  data, along with relevant documentation,  on a real time basis and tracking these costs  to budget. A construction software application that includes document vaulting is also desirable to allow scanning and storing documents associated with specific transactions with some kind of indexed subject lookup. This goes toward the paperless office concept that many people want.

An intelligent work-flow process will be needed in these situations such as tracking how many change order dollars were approved for a contract as well as how many are pending along with how many punch list items are unresolved to date and those responsible for it.

The owner will want to allow specific access rights to stakeholders based on their roles but not allow them to see data that is outside their area of responsibility. In this case the software has to support very sophisticated security configurations for various users.

Well designed construction project management software will continue to serve owners for  capital projects, maintenance and preventative maintenance well beyond the initial construction. Sometimes owners want to monitor multiple projects at multiple facilities (e.g. universities or multi-location retailers) and track post construction costs like maintenance or simple renovation costs.

When you should NOT be looking for new software

What could more apple pie than searching for a new construction accounting software solution for your company.

After all, it’s something you think you need and that would help your office get organized, run more productively as well as provide needed management information on a timely basis.

All this is certainly achievable. The problem is most users are not seriously looking. They just don’t realize it until the time comes to write the check   and go through the inevitable pain that comes with converting their data and learning a  new system.

Yes, it is a major commitment even for a small company.

Here are the some of the signposts that companies should keep in mind to find out if they are truly serious about acquiring new construction software.

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Computer Aided Design (CAD) Software in the Construction Industry

In the “old days,” central in most sizable construction companies was a drafting table.  On the drafting table, you drew, by hand, and made blueprints. This was a tedious endeavor requiring at least some training, either schooled or on the job, and some talent.  It was time consuming and you made original drawings often two by three feet or larger that required significant storage space.

Not long ago, Computer Aided Design, or CAD became available.  However, only the most elite construction companies could use this technology.  Not only did the software itself cost thousands of dollars, but the computers necessary to run it could cost well over a hundred thousand dollars.

Eventually, though, the software became affordable to even the smallest companies. Today, CAD software can be purchased for as little as $50 and added to your construction software arsenal. And with computers being so cheap, an additional $500 is all that is needed to set everything up and start using computer software to design construction projects.

It’s not all about cost; it’s about productivity, portability and enhancing the abilities of a builder. CAD software can be considered building software because many companies produce CAD programs that are enhanced for builders. There are two relative classes of CAD programs, which we will generically call high end and low end.  As we will see, high applications tend to be focued on analytical tools. Low-end applications focus on basic blueprints and visual renderings.

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Technology and You When Shopping for a New Construction Software Solution

It’s always been a curiosity to me that prospective buyers of new construction software pay almost no attention to the technology of the program they are about to buy.

They usually have a laser like focus on how the software looks on the screen, what the salesman says about it, and what it costs. While those issues may be important, asking the right questions about technology will tell you an awful lot about the vendor and their commitment to their product and, ultimately, their long term commitment to you as a satisfied customer.

You might ask – does what’s under the hood really matter as long as the car gets me to where I want to go? That’s a legitimate question. Now lets do a little exploring.

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Five Gotchas in Choosing Construction Software

There are five significant areas where users can go off track when evaluating new software options.

Many contractors realize they need help with their office record keeping and paperwork so they start poking around for an upgrade to their office systems.

1. Web searching for the best solution
The first thing just about everyone does today to find information is do a web search for new construction software.

They will type in something like “compare construction software” or “construction accounting” or “project management software,” etc. This will result in pages and pages of links and they will select a couple that catch their eye, based on a slick marketing message or nice logo, and then contact those vendors or search services for information.

This may help them identify some vendors but it has little or nothing to do with qualifying them for their business based on their needs and budget. It’s strictly pot luck if you wind up looking at the right products.

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Construction Accounting Software Meets Builder Needs

Today’s construction projects often involve a multitude of expenditures to a variety of different sources.  There is the cost of labor, supplies, and subcontractors to consider.  Keeping track of costs and being careful not to exceed the project budget is necessary to ensure a profitable outcome.  Construction Management Software makes it possible to keep track of the many expenses, and allows you to successfully complete even a large project without exceeding your bid.

Construction accounting software makes it easier to keep track of direct material purchases.  Direct materials consist of basic building supplies like drywall, wire, pipes, and wood.  Essentially, direct materials are everything purchased for a project.  Sometimes these materials are purchased tax-free or with a builder’s discount.  These items are generally recorded separate of labor costs to ensure accurate profit and loss statements.

Direct labor is another variable that must be kept track of separately.  Labor comes in different forms, each requiring special treatment with regard to taxes.  Some employees are on the payroll while others may be hired on a contractual basis.  Other work might be performed by subcontractors.  Construction software really comes in handy when keeping track of direct labor spending.  Often this software integrates with payroll software to streamline wage calculation and tax withholding.

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Construction Software Buyer Alert – Separating Fact from Sales Hype

If you have spent any time surfing the web for information on construction software, you may have noticed that all the vendors appear to be a good solution for just about anything you want to do.

In fact, most of them are probably are a pretty good solution for 97% of what you want to do. But it’s the last 3% that might just do you in. And that is where buyers can take a big hit.

When it comes to entering job cost transactions and running essential reports, most products are just fine. However, if you have to deal with any of the following, straighten-up and pay attention because these are items that separate the average vendors from the stronger ones. And these are areas that sales literature (or so called “Demo” CDs) will never call to your attention:

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Construction Project Management Software Controls Costs

More than ever, with tightening credit and downward cost pressures, it is important to control costs on construction projects.  Even government and municipal projects have greatly reduced budgets. What may also be important is payment timing has stretched out as well.  All of this combines to create an environment where controlled costs are the rule for survival.

One of the major functions of project management is cost control.  Along with materials, labor and timing, budget and cost are central to the project manager.  Construction software helps project managers control budget cost on a real time basis.  Companies looking to control costs should consult construction management software reviews for the futures we will be discussing.

All construction projects have budgets. The major components of the budgets are the funding and the disbursements. In most cases neither will be a lump sum, broken into parcels. This makes the construction budget dynamic in nature and underscores the importance of timing. A budget can’t have more go out than comes in.  Construction Project Management Software helps because like the actual project, the software can also be dynamic.  As goals and priorities constantly shift, the construction budget will constantly shift. With regular input the Construction Project Management Software will be able to help plan disbursements that are in line with the budget and actual cash on hand.

Another important aspect of budgeting is cost centers. Cost centers are costs that are broken into categories.  By using cost centers, various aspects can be micro managed with greater precision than if they were lumped together.  Many times on a large project, cost centers will have their own manager with budgetary responsibility.  Construction Software allows for the use of cost centers, which are actually an integrated part of the process.  There is no need for cost center data to be put together separately. It’s all part of the same package like having tabs on a spreadsheet program, and yet one tab contains data from all.

Financing is also an aspect of a budget that is important. As has been stated, funds are generally not available in a lump sum.  They may also not be in the form of case but credit or a credit line.   This is critical in project management budgets.  Money must be taken only as needed.  As money is taken, the interest meter begins to run, and the
construction project costs more.  This is probably factored to an extent in the quoting process, but the project manager needs to work to not exceed this budget.  Again this is where the tools in Construction Project Management Software come into play. By managing each task on the project, keeping the Construction Project Management Software input data up to date; the project manager can control the financing costs to a minimum in order to maximize profits.

With Construction Project Management Software all of the activities here can be accomplished in near real time.  This allows the project manager to response to changes and allow for the best and most profitable conclusion possible.

Selecting New Construction Software Tips

Any company that is beginning the process of selecting and implementing new construction software hopefully understands the need to have adequate leadership throughout the process.  An individual or team must be selected to lead the process of evaluating, selecting, implementing, customizing, and training end users to use the new software.  These people need to have a large amount of knowledge about how the company operates as a whole, including intimate knowledge of all processes, as well as a good understanding of construction management software functionality.  As such, I have compiled the following lists of individuals that should be included in this team, or should at the very least be consulted with if they cannot dedicate the proper time to the entire process.  Additionally, I have listed several factors that should be a part of any software evaluation.

Input that is “Nice to Have” (highly recommended)

The following individuals are recommended to be included in the software selection team.  They may not need to be permanent members, but their input should be taken in to consideration.  In most cases, the size of your company, more than anything, will dictate how involved each member needs to be.

• End users (anyone that will ultimately be using the new software)
• Management (all levels in large companies)
• Accounting (they need to provide input on how the new software will impact their operations)
• Payroll
• IT ( they will need to know the technical aspects of the software implementation, among other things)
• Sub-contractors (if necessary)
• Suppliers
• Vendors (once selected)
• Other members that are deemed necessary, which will vary depending on each unique company

Factors that Must be Considered in Any Evaluations

Smaller companies, especially, will probably not have the time and resources to justify dedicating an entire team to a full-time software evaluation.  Additionally, the benefits in terms of process improvement that a formal team may be able to identify and implement will likely be less significant in smaller companies.

Thus, smaller companies need to make the most out of what resources they do have.  They cannot afford to be lazy in evaluating software any more than larger operations can.  At a minimum, the following things need to be thoroughly evaluated for each construction accounting software package that they consider:

• The number of varieties of each product and what makes each version unique
• The number of available vendors
• The history of the product, including testimonials from current users
• The history of the vendor, including testimonials from current users
• The functionality of the product
• The product interface and any potential issues that it may create
• The necessary steps require to integrate the new system with current processes
• Other factors that are unique to your company

What Matters When Selecting Construction Management Software

When used properly, dedicated construction management software is capable of handling a number of tasks that may currently be bogging down your company’s resources, time, and money.  Many companies can benefit immensly from not only the software, but the associated improvements in processes and practices that are commonly associated with acquiring and implementing new software.

So what should you look for when you’re investigating possible solutions?  What really matters?  In the end, the software must be able to deliver on all the promises that the advertisements, promotions, and salespeople tell you.  Beyond that, what really matters the most in making the software work is ensuring that your company knows how to use it properly and that it “fits” your organization.

One factor that will go in to determining what size and level of functionality you need in construction software is the size and organizational structure of your company.  This is a fine line of balancing your need to streamline operations with the help of software without getting in over your head.  Plan carefully to ensure that all the functionality that you want is realized in your new construction software package.

Since most construction companies operate, at least on some level, in similar manners, most construction software is designed with ways to cover the most common denominators and industry best-practices.  This makes most systems relatively adaptable to most applications, but that is not to say the all software will work for all companies.

Examples of these common denominators are things like job costing, estimating, planning, payroll, project tracking, and so on.  Since just about every company needs these types of modules, they are pretty standard in most software packages.

The real trick, therefore, is to find the software that works best with the processes and activities that are unique to your company.

For example, if you operate a compnay that has a pretty unique way of handling project change-orders and believe that your current system is the best solution for your company, you’re going to need to find a software package that is customizable in a way that it can be made to work with what you do.

In this situation, you essentially have two options.  The first option is to buy a software package that is way more powerful and over the top (and expensive) than you really need.  The alternative is to find some sort of plugin that will allow a more basic software package to operate using your procedures.

The above example speaks to the need to thoroughly investigate and audit your internal processes before selecting new software.  If you select software that is incompatible with the way you operate, you’ll be forced to make drastic changes to your company processes or find another piece of software – neither of which is ideal.

Selecting new construction accounting software is certainly no easy task and the process of evaluating, integrating, customizing, implementing, training, and managing a new construction management software system should not be taken lightly.  In fact, it can be so difficult that some companies jump ship before they reach the end, which essentially turns the entire operation in to a waste of time and money.