A well known axiom in the construction software industry is that users often only utilize a small percentage of software capabilities. Other issues aside, you are much better off utilizing software that only has a limited number of features as long as it does the ones you need well. In other words, using 80% of a system that only does 100 things is far better than using 20% of a system that does 300 things.

Unfortunately buyers often get suckered into thinking they need more than they can really handle when vendors show off all their slick features on demos. That’s to be expected but does it make sense for a user to make a choice on those pop and sizzle items or do they need think a little more about what’s really important to them?

An example might be seeing fancy workflow functions for project management when that is not a particular concern for the contractor.

Cost of ownership issues:

Complex software requires more training and more training means greater implementation costs. More complex systems requires more competent employees so there is greater payroll expense. When there is staff turnover, you will need to spend more on training new employees. When there are new releases, changes are greater there will be more bugs and a break in period.

More applications mean more points of integration:

Let’s say you are -medium – large sized contractor and have a need for integrated estimating, project management, CRM, Human Resources and Bid Management. Indeed having a system with all these functions integrated is a great concept. Unfortunately, in many cases, the promise exceeds the results.

This is because the software vendor rarely covers all these applications and if they offer or claim to offer them, with some custom interfaces or 3rd party products, you are going to be responsible to make sure the integration points are appropriate to your business and that they work as advertised. For example some users may think tracking prospects with CRM and having it integrated with their construction system would really be cool.

But think about it. How big a deal is it to enter a prospect who turns into a customer to the job record? CRM is valuable when you are doing extensive sales pipeline analysis or have continuous contacts and transactions going back and forth between the main system and CRM. This is just not something that contractors often do.

Human resource accounting is another example. A true HR system is going to add considerable cost to a system and only very large contractors can justify the expense and complexities of managing a full blown HR application.

Summary

There are many potential applications a contractor may need including: estimating, job cost, document management, scheduling, purchasing, inventory control, payroll fixed assets, equipment and HR. Knowing precisely which are most important to your organization and how and when data is moved between each application is essential to both successful software selection as well as minimizing long term costs of ownership.

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.

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.

• When the search is initiated by an office crisis such as the old system crashing or executives raising hell about not being able to get the information they need at a particular time.  As soon as the crisis passes, everyone relaxes and drops the new software search.
• When management thinks their chaotic office processes will be straightened  out by getting a new system.  This common myth is simply untrue. Your office will remain chaotic because well understood procedures and disciplined staff must be in place to follow them.
• When records are out of date or inaccurate. Moving bad data from one system to another only complicates data conversion and guarantees you will start you new system  with a shaky foundation. The lesson is work on getting the information correct before you start looking for new software.
• The budget for new software is “as little as possible.” There is no such thing. Without some kind of expectation of what you need to spend depending on your needs and number of users, you will suffer sticker shock  at any amount the vendor quotes.
• Lack of staff support. The smartest manager in the world cannot be successful with new software without active support from his staff, whether that staff is a room full of people or a single bookkeeper. Qualified staff has  to be properly trained  in order to get value from  the new system.
• When everyone using the current system is unhappy and management fails to troubleshoot the problem.  What makes you think they will like a new one? Many a  “failed” software installation has been rescued  once the core problem is understood.

In summary,  while we are initially excited by  the prospect of a better way to manage our business, the fact is that  the vast majority of the companies who start a software selection search never complete it because they were never fully committed in the first place.

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.

High end CAD software is distinguished by its powerful analytic tools that make advanced structural analysis possible.  These features are used by engineers to calculate structural fatigue.  In addition, software models can often be paired with even more advanced data analysis systems to create dynamic structural analysis.  This sort of analysis is essential when building large buildings or bridges, or using any newer building medium.  Without this advanced software, it could take months to perform the same calculations.

Low end software is merely a reduced version of the high end software, meaning that is it the same software but it has limited ability. With this type of software, blueprints can be created. Some of the low-end versions even contain building feature libraries. These libraries help those with little training add accurate details. According to construction software reviews, the programs are user-friendly and easily learned by those with limited computer knowledge.

Most low-end CAD applications used in construction are graphics heavy. While they lack the structural analytical tools, many of the programs create realistic 3D renderings, allowing a builder to walk a client through a virtual building.  Feature libraries include furniture and accessories, allowing a builder to virtually “stage” a house or condo, or even a public building.

In some cases, CAD software is no longer optional.  It is becoming more common for municipalities to accept and review building permits online.  This requires the creation of CAD blue prints to be uploaded electronically in order to secure permits.

Another great feature of CAD is its mobility. Gone are the days of carrying around bulky blueprints that could become damaged at any step of the journey. Now, plans can be put directly on a jump drive and carried easily in a pocket or briefcase. You can even email your plans.

CAD as Building Software is just a natural extension of CAD programs and can enhance a business, large or small.

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.

Programming Languages
First, technology matters for the vendor in terms of maintaining and improving their system. For example, outdated programming language may require more machine horsepower to run and they are not as adaptable, or incompatible, with new operating platforms. Finding qualified programmers for those languages can also be a challenge.

Databases
Older databases are not as efficiently designed as newer ones (like MS SQL) for data queries and reporting. It may take much longer to run reports and be more difficult to access data due to outdated technology. File formats for importing and exporting may not even be available to work with office productivity products or estimating programs used by contractors. Furthermore, error recovery in case of power failures can be more difficult with older databases.

Project Management and Document Handling
More and more contractors are looking for robust platforms for managing projects. This means that functions like document scanning, storage and lookups need to be efficient, manageable and secure. It will easier to accomplish with modern programming and databases.

Financial Reporting, Drill Down and Auditing
The ease of creating financial reports, accessing specific transactions, and related documentation is enhanced with more current technology.

Vendor Commitment
Using more up to date technology is a statement by the vendor that they are serious about keeping up with improving their products and keeping their product competitive. There are a number of vendors who do not qualify on that front and it’s pretty easy to find out who by asking the technology questions.

Here are Some Questions you May Want to aAk:

• What database are you using?
• What office productivity programs can you export to and import from?
• What industry standard report writers do you work with?
• When was the last technology improvement you made to you program?

Of course, technology is not the only thing you want to ask about and newer technology can come with its own set of issues.

But when you are being asked to pay the typical annual maintenance fee of 18 – 22% a year of the current retail value of your software, you are entitled to know whether the vendor is earning it by improving their product and protecting you from software obsolescence.

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.

2. Shopping based on price
Following the intial search prospects will then ask for pricing and a demo of the product. Various websites offers demos and pricing information but you will get neither. Instead you will receive a marketing CD extolling the product and hear from a salesman.

The salesman will never give you an initial quote over the phone until he finds out whether you are a serious candidate for his product and your specific application requirements. Vendors rarely have list prices for their products. Even if they do, prices are subject to change based on many different variables.

3. Web demos
Showing you a demo is a little like watching a magic show. The salesman, like the magician, will show you the most capable parts of the product and conveniently leave out what it does not do well.

At most a demo will show you only 3% of what the construction accounting software can do. You may not be overly thrilled with some of the other 97%.

4. Failure to consider requirements against business goals
Most companies are focused on solving immediate operational pain such as the difficulty in finding documents or staying on top of estimates to budget. But there may be many other opportunities for impact such as improving customer service or reducing inventory shrinkage that are also available. In order to execute this kind of analysis all major departments should be participate.

5. Top down buying decision
Many small contractors manage autocratically and fail to include their staff in evaluating vendors and participating in the decision of what to buy. This is a serious mistake as staff whose opinion is not solicited before the software is purchased are likely to be resentful and not fully support the new installation, or even sabotage it in subtle ways.

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

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.

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.

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.