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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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.

Executive Dashboards in Construction Software

Most construction software systems are designed to be used in “Enterprise” configurations, meaning they usually include executive dashboard modules aimed at giving executives a quick view of every area of operations.  Typically, this can be done in real time.

These dashboards serve a very specific purpose – top level execs do not have the time to spend looking at reports full of numerous confusing details.  Instead, they need a report or module that can be their “one stop shop” for all primary business indicators.  If they notice any problems with the key indicators (which can be customized for each business or kept at software presets) they will then have the ability to “drill down” to the real data and identify the problem if they feel the need.

For example, C-Level executives may only need to see the basics of the P&L and other reports – things like sales figures, monthly comparisons, current market data, and maybe even competitor positions.  In other words, the things most pertinent towards making the most effective high level decisions.

Moving down the chain of command, executives and managers at mid levels may need to see the data in a bit more detail, such as which projects are impacting the particular indicators.  They may also benefit from dashboards that break the data down to each business segment that reports to them so they can choose where their time and expertise is best spent.

Suffice it to say, different levels of management will want different sets of reports.  In each case, the report should have the indicators that each manager is most concerned about without having so much information that the crucial data is difficult to discern.

Just because a construction company makes money by digging in the dirt, they should not be limited in their ability to have a clear overview of their entire business operations at all time.  This is the benefit of the customizable, real-time executive dashboards available in many construction management software packages.

If the software that you are currently using does not have a dashboard feature, rest assured that there are numerous third party applications that will interface with most construction accounting software packages on the market.  In fact, some can be so seamlessly integrated that they appear to be standard equipment.

Finally, it is worth noting that these dashboards and the decision making that they facilitate are only as good as the data that is put in to the system by the end users.  If garbage is put in to the system, garbage will come out.  Therefore, as always, I stress the importance of thorough and frequent end-user training for all companies that use industry-specific construction software.

Construction Software Causes for Change

At some point in time, every construction company begins to realize that their current construction software isn’t keeping up with their needs.  Over time, new processes are developed, new technology is implemented, and companies begin to have needs that their current software cannot meet.  As such, they begin to shop around for something newer, more powerful, and easier to use.

To help make the most out of your next purchase, I’ve composed this article that discusses the most common problems that companies experience that lead to changing software.  When looking at new construction management softare, make sure you keep these things in mind so that you don’t find yourself needing new software again in 6 months.

Functionality Problems: Perhaps the construction management software doesn’t offer the functions that are needed or the company has dramatically changed their processes and procedures such that new functionality is needed.  If the software you have or are considering is very rigid and not capable of adapting to changes, you’ll be forced to either find new software or delay making the necessary procedural changes.

Maintenance Costs: Improper or inappropriate data input can create all kinds of problems in a software system.  Sketchy reports, inaccurate statistics, and unnecessary frustration will result.  This leads to a need for continuous maintenance that can get expensive over time, or a sketchy workaround and manual manipulation of data that takes power from the system and takes valuable time.  Therefore, be sure to look in to how much it will cost to keep your system up to speed.  If it is too expensive, you’ll be shopping around for new software sooner than you’d like.

Impatience on the Part of Staff: When companies have to wait for accurate information (which can be a result of numerous factors), they often become impatient and feel that new software is needed.  When researching and installing new software, take the time to ensure that those issues are dealt with proactively.

Level of Vendor Support: It would be great if all construction accounting software performed perfectly from the instant that it is implemented to the day that it is replaced, but we all know this is not the case.  Therefore, the amount of support available from the vendor becomes extremely important.  If you buy software from a vendor with lackluster support, you may quickly find yourself searching for a new solution where you will get the support you need.  As such, researching the vendor becomes as important as researching the software itself.

On the other hand, there are countless examples of companies that think they need new software when the reality is that they simply aren’t using their current software properly.  End-users (those responsible for data input) must be thoroughly trained and constantly reminded about the importance of inputting accurate and honest data in to the system at all times.  If they begin to cut corners, your system will quickly become less functional and more troublesome to use, adding less value to your ongoing operations.

Construction Accounting Software Payroll Feeds – Internal or External?

The question about whether to receive data from an internal or external source is a good one, although there is no rule of thumb to determine what is best for each company.  However, the bottom line is that your data in your construction software needs to be accurate and stable since it will have a dramatic impact on your overall success or failure.

The truth is that the optimal solution will be different for every company.  Some construction companies will benefit from tracking payroll internally while others will be better off having this task outsourced.  The following factors will weight heavily in to that decision:

• The size of your company
• The number of employees you have on payroll
• The business acumen of employees
• The number of departments in your organization
• Your overall budget
• How available other alternatives are
• Business-specific parameters

Construction companies, more so than most companies, must keep a close eye on payroll impacts on projects and profits.  Decision makers need up to the minute and real time project data to make informed decisions, and this is only possible with a stable and powerful piece of software that has accurate data collection methods.

To put it another way, the more accurate and up to date your software is, the better you’ll be able to make decisions that will enable you to maximize your labor force and profit margins.

However, we all know that no business or part of a business will ever operate perfectly.  That is not to say that you should not strive for perfection, though, especially when it comes to maximizing the use and beneftis of your construction software.

With the right software, properly implemented, you will be able to constantly improve your processes and procedures with the constant goal of maximizing efficiency and working smarter, not harder.  This can be done regardless of where payroll data is collected, so long as all systems are integrated properly.

Since the software will only be as good as those that use it, it is imperative that you invest in quality training for all users when you purchase new construction management software.  Users need to understand their specific tasks and interactions with the software as well as how their input impacts the overall system.  In short, they need to be able to see the forest from the trees.

Concerning payroll, users need to understand the importance of accurate payroll tracking as well as any important federal, state, or local regulations that will impact their reporting.  They need to be able to see how their input has a “butterfly effect” on the entire operations of the business, and good software should be able to show this quickly and easily.

Finally, before investing in new software, construction companies are urged to ensure that their operations and standards are up to speed with current best-practices.  New construction accounting software will be designed with those in mind, so taking care of these modifications before installing new software will make the transition much easier, faster, and more effective in the short term.