Benefits of Hiring a Consultant
In most cases, contractors think that they know their business processes but there are many things that they don’t really understand. A business consultant has the time and vision to force contractors to think through their business processes. When companies are busy running their day to day operation, documenting business processes is usually pretty low on the list. There is tremendous value in having an outside person understand and document current processes, weaknesses and areas where software support is needed. As a result of this analysis, the company might decide to re-engineer the business processes in order to get the most from the new construction job accounting and/or construction management software system. Another benefit to this exercise is forcing staff to justify each work activity performed as necessary to meet the information needs of the company.
 
Many small companies simply don’t have someone that knows how to put an effective project plan together. With a new construction software implementation this resource is critical! Such a person provides company management with an understanding and vision of a full Job Accounting and Construction Management implementation. The success of the project will be highly dependent on company leadership.  The sooner all managers have a common understanding and vision of the project the greater the likelihood of success. A business consultant can help create an effective project plan.
 
Let’s look at understanding and managing data conversion. It takes someone with an IT system background who has "on the job" operations experience ( estimating, bidding, job management, cost tracking, etc.) to think through data conversion issues. Data cleanup and process discipline need to be in place BEFORE the software implementers come on site. Again, here is a role for your business consultant!
 
When it’s time for construction software implementation, the vendor will provide staff to assist you, but the expertise provided could be limited when it comes time to marrying the contractor’s environment with the new construction software. A business consultant can be a good resource to connect company information requirements and software set up. At this stage there will be many opportunities to make constructive improvements in the design of the information system, i.e. job accounting and links to project management and other applications. Software implementers may not fully understand and lead these changes. A qualified business process consultant will.
 
Summary
Using an independent outside construction software/business expert can often spell the difference between software success and failure. The key is to find someone who has the relevant experience, is competent and independent. By independent I mean the person has no financial relationships with software vendors and is able to objectively evaluate alternatives without bringing strong biases to his/her recommendations.

Consulting is pretty strong right now. Consultants are sending out a lot of proposals and getting new business. My associates report that there is a high level of interest in upgrading their clients’ systems. This is supported by improved demand for their services whether they are a General contractor, highway heavy or specialty contractors doing commercial and/or residential work.

Contractors who invest in consultants
When contractors retain a consultant, they are serious prospects. It is also a statement that they are willing to invest in their success.   One current observation is that now that contractors have come most part way through a business downturn, they now have a much better idea of how valuable software (or lack of) is to their business and the future of their company. Consequently, more of them are willing to spend for a consultant in order to help insure they make the right decision.

Flat organizations, limited resources
Due to downsizing over the past few years, many contractors no longer have the staff to do what the construction software should be doing by using Excel/Access or a basic software product like Quickbooks for Contractors.  They now understand they must either have a better solution or get more from what they have through more training on their current construction software solution. Many are realizing that in order to work effectively with their suppliers and customers they need to be in the sweet spot of software technology and connectivity through the Internet.

Enough with the Excel worksheets!
One of the easiest ways to justify a software purchase is to eliminate all the ancillary Excel worksheets used to supplement inadequate systems. One consultant did a revealing exercise with a client recently.  They run legacy software with a lot of Excel worksheets.  It is a $30M mechanical contractor that now has 5 people whose primary/secondary role is to just track purchases, inventory and do custom reports.  Once they implement a new ERP, he estimates all these tasks can be handled by just 2 people with much greater accuracy.  

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Of all of the products one can buy, purchasing construction software is possibly the most complex and problematic.

Think about it. When it comes to purchasing construction project management software for your construction company you have to truly understand the requirements for all phases of your business. Not only do you need to understand them, ideally you should also understand how the various applications tie together both from a business operations perspective as well as an accounting perspective. Exactly what data should be sent to what applications beginning with an estimate, a bid, then creating a job ledger with the specific cost details needed for the customer, and how and when data should be updated as a result of change orders pending and approved.

Beyond that users must think about how to properly set up their system with respond to their chart of accounts, cost codes, divisions and how they want to be able to access records and data in their system.

Some of the challenging questions that must be answered are:

• What are my priorities in order to meet essential business goals?
• Will staff support putting in new software?
• Will new staff need to be hired with better skills?
• What cost tracking conventions will be used?
• What will be the long term costs of maintaining the system?

All this may be roughly understood but translating the details of that into the ability to evaluate prospective construction software vendors requires a lot more than perusing sales literature and listening to a salesman.

Here are some of the hurdles you can run into along the way.

One size fits all. Some sales people see all prospects as the same. “They are contractors, we sell contractor software so what’s the problem? We have hundreds or thousands of customers. We can make them happy!”

How well does the salesperson know his or her product? How much experience do they have in the industry? Turnover of sales people is high in the software business. They come and go and many of them never really learn their product well enough to answer your questions properly. At the same time, a salesperson who is able to master a slick demo can come across as knowledgeable. It is not unusual to find companies who base their buying decision more on how much they like the salesperson instead of product capabilities. Conversely, an incompetent or inexperienced salesperson can make good construction software look terrible.

Ideally on a sales call, there should be both a person who is assigned to your account and the sales representative and another person who is the technical representative there to answer product specific questions. But that won’t happen if you are a small company because the vendor will not want to invest two people for a small prospect.

Project managers. Once you buy the software it has to be set up and installed. You could purchase a pretty good system and still have it fail if the project manager does not know his product well or understand your type of business. Setting up a General Design-Build Contractor can be greatly different than setting up a specialty contractor with a service department. Be sure the project manager has experience implementing systems for your type of operation.

Pricing games. Prospective buyers often waste a lot of time looking at software that ultimately will be too expensive for them. Salespeople often don’t want to be upfront with the total system cost because they might scare you off. So they will low ball the price and gradually move it up in hopes that you will fall in love with their system by then. In the meantime, there can be dozens of sales calls and back and forth when that the product was never a realistic candidate for you to begin with.

Are you worth their time? I sometimes hear from buying prospects that certain vendors are not responsive to them and show no interest in them a buyer. In those cases, the vendor has likely decided that they are not going to spend enough to make it worth their while servicing them. Or they may think they lack the profile of a serious buying prospect. What are those characteristics?

• Has set a budget
• Have a committee working on the project
• Management is involved
• A “software champion” is present to guide the project on the buyer side
• Is coming off software that is not too far removed from what they are looking at buying
• Has adequate resources to train, implement and operate the system properly.

Assuming all these criteria are in place, things can still go awry when software decisions are put off indefinitely due to indecisive managers or failure to justify the purchase to management.

Summary
The more a construction software buying prospect understands about the software sales process and possible pitfalls, the better able they are to avoid wasting their time and the vendor’s time, by thoroughly evaluating their requirements and their company’s commitment to buying a better software solution.

Based on a conversation I recently had with a very experienced ERP consultant who works with a variety of contractors, here are some timely observations about some of the most common challenges faced by prospective buyers of integrated job accounting and construction project management solutions.

Challenge #1: Getting straight answers on price
One of the first things many prospective buyers of construction software want to know is what will it cost them.
But vendors don’t like to talk about price until late in the evaluation process. A frequent technique is to lowball the software price up front on basic applications and then have price creep once you start adding applications. In fact one well known construction software vendor represented that he could sell his software to a single user prospect for $3,500. When the prospective buyer said he needed their estimating and document management applications he was charged for $1,300 for the estimating, $500 for document management, $1,000 for first year maintenance and $1,080 for 8 hours of job accounting training. But who knows whether that would be enough? When he said he needed 2 users instead of one, they added on another $1,595.

Bottom line, what started out as $3,500 product, quickly escalated to almost $10,000.

Challenge #2: Industry FUD
When vendors start slamming one other using the class FUD (fear, uncertainty and doubt) approach they may bring up that the vendor does not support the product, that the product is unstable or that the product will shortly be replaced by something new. But how do you separate fact from trash talk? The fact is that sometimes these accusations may be largely true. But it’s practically impossible for the buying prospect to determine the truth.

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Everyone recognizes that one of the main steps in due diligence for a Construction accounting or project management software purchase is asking for and contacting references for that product.

And yet, it can also be one of the most useless, or even misleading, items on the due diligence checklist. Why is this the case for a seemingly simple and straightforward activity? After all, all you need is a checklist of questions to ask about the product and how the vendor handles it, right?

I’m afraid it’s much more than that if you really want to dig deeply into what the software can or cannot do for your operation.

Here are nine critical issues to keep in mind when checking references for a new system for your General or Specialty Contractor operation:

1. Who are you talking to? – was that person intimately involved in the planning and project management? Are they familiar with the details of all the bumps and curves involved or at a higher level and unfamiliar with some of the knotty issues that came up and how the vendor may have helped or hurt them during training and implementation.
2. Ask all the pertinent questions, not just are you happy with the system? Cover such things as do you think the vendor was honest and forthright in their dealings with you. Did the final cost come anywhere near the initial projections from the salesperson? Was the final contract fair to both parties. Did you miss covering any important items?
3. Ask open ended questions, not yes/no’s. For example, rather than say “are you satisfied with the work in process report for that system, “ ask how do you feel about the work in process report?  You will learn much more from open ended questions than yes/no’s

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I speak with various users of construction software on a daily basis. Many are very disappointed with the software they now have and want to look for new options. In most cases, their reasons are legitimate and they do, indeed, need a functional richer and technologically more advanced solution. But users who change software will be just as disappointed in the new system as they are with what they have. The reason is very basic. The users of the software simply are not properly trained to get the most out of it. This is a fact regardless of industry or company size. This article will explore a true life case of why a new software installation can fail despite the best intentions of management. The company name is not revealed for reasons of privacy.

A few years ago I worked with a medium-sized print electrical contractor that had many jobs to complete in a short time frame. Their major challenges were managing scheduling, tracking all costs to the job and being able to respond to job status when customers called. They were using very old software that lacked any of the niceties of new Windows software even as basic as having multiple users access an application at the same time. Needless to say the software was a serious hindrance to office productivity.

Of course, the simple answer was to get new software. After months of research I came across a system which, while not state of the art, was adequate to the task. I sat in on several demos and everyone concluded it looked like a good possibility. The next step was to have the primary accounting person to try out the software herself and see if she really liked it. This, however, meant burning some midnight oil because she did not have the time to test it during regular work hours, a common situation with many companies who are bringing in new software.

No one in management volunteered to work with her, on that difficult assignment so after a year, absolutely no progress had been made in evaluating that solution . Finally after 2 years, they finally acquired the software, had some initial training and started to use it. The staff, not being very sophisticated, entered all the necessary data in the new system (job cost, work orders, and progress billings, etc.) but insisted in continuing to use the old system in parallel mode for an entire year because they were afraid to let go of it. Essentially, out of needless fear, they did double work for an entire year! Why? Because no one with experience was there to manage the process.

Several important lessons were learned as a result of this wasteful process. First, key managers should be brought in to initial meetings with the vendor trainers to give them an overview of the implementation process, all strategies involved and the expected time-frame.  Second, when the manager doesn’t fully buy into the process and understand the tasks and time-frame, they may not choose the employee most qualified to learn the system and to train other people, but the employee they can most do without for the ”train-the-trainer” sessions.  Without the supervising managers involvement, classes were routinely skipped by staff employees and the entire training process broke down.

What the company learned was that the direct managers must be involved in the initial training sessions as well as be active participants in managing the implementation. (In a small company this means the CEO or owner.) They need to know what resources will be required to get the system up and running successfully and be prepared to commit qualified people to learn the system and to train other staff as necessary. Everyone must be motivated so they are fully committed to the success of the new system.

Bottom line, construction project management software is only as good as the people who use it and that means proper training and motivation.

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.

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.

Without the proper network and other interface hardware and devices, construction software might as well be left in the box.  After all, software is just that; it is the “soft” part of a partnership that must include equally capable “hard” parts as well.

Depending on the size and scope of a particular construction company, some companies might utilize such technologies as RFID (Radio Frequency Identification) tagging, GPS devices, data loggers, scanners, and other high-tech time and money saving devices.  Smaller companies can also benefit from software that is similarly suited with such capabilities.

We know that using RFID tagging helps crews locate kitted materials and supplies; we also know that GPS devices help crews save time and productivity through effective travel routing; we also know that real-time project data-logging saves schedules, budgets, manpower allocations, and much more.  Such benefits, made possible in large part by good construction project management software functionality, helps to keep construction project costs in control, as well as to keep the bottom line in the black!  So when considering your next software package, remember to consider what kind of hardware the software will working with.

It is clear that not all construction companies will be looking to the same vendor bases for their construction software solutions, since construction businesses vary by overall capacity and scope of the particular construction company.  America’s largest home-building company surely uses a software package that is quite different than the local home-builder.

Large construction companies will want to get in touch with vendors who provide enterprise type systems, which more readily incorporate and interface with all business functions typical to the large construction industry.

Small construction companies will want to get in touch with vendors who specialize in small business software systems; many of those include useful options and configurations to fit most any business model, including small construction company models.

No two construction companies operate identically; therefore the more unique processes, procedures, record-keeping, and other practices a business utilizes, the more difficult it is to find an off-the-shelf construction project software package.

Thus, it is important to keep an open mind toward re-designing some of the existing business practices to more readily fit with up to date best-practices in the construction industry.  Additionally, this speaks to the benefits that a construction company can receive if they speak with construction software guides during their search for new software.