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.

Construction Management Software can Help Smaller Companies as Well

Although you’ll likely see a bigger percentage of large construction companies using an advanced construction software package, this kind of software is not strictly limited to applications in gigantic companies.  In fact, most smaller construction companies and contractors can benefit as much, or even more, from implementing and using a construction management software system.

However, for many smaller companies, the concern isn’t whether or not they can benefit from construction software but rather whether the investment is worth it.  Of course, there is not general rule of thumb that can be used to make this decision. Companies interested in pursuing a new software solution should conduct a thorough review of their options and make a decision about whether they will get the return they need to make the investment a sound one.  A similar concern arises in smaller companies who fear that they simply don’t have as much to gain from a new software package.  But, the bottom line is that today’s software can help automate key processes that can save any company, large or small, both time and money.

To begin, companies must determine if their current business model will work with the software that they’re interested in using.  If a complete revamp of the business will be required to make processes, etc. compatible with the software, chances are that purchasing new software is not the first thing that the business should do.  Instead, they should make sure that their business is structured to be in line with industry best practices so that when they do decide to purchase software, they will be “prepped.”

Most smaller construction companies and contractors do well managing their business on their own, using whatever computer applications make sense.  Perhaps they rely on office software or generic database software to keep tabs on things.  These programs are generally inexpensive, user friendly, and relatively powerful, especially for a smaller business.

As such, these little companies likely won’t benefit from high tech features available in some construction management software packages, such as RFID tagging and advanced real-time reporting.  Most small construction companies manage just fine using their own software or smaller construction software packages.

However, some small companies do benefit from advanced software.  If you find yourself considering a construction software package for your company, the first question you should ask is whether or not the investment in a dedicated construction software package is worth the money.  Will the improved operations cover the cost of the software and the cost to implement and train your staff to use it?  Of course, the answer to this question will depend on a number of things, such as what improvements you expect the software to give you as well as what kind of time frame you are considering for your success/failure cutoff point.  Review construction software comparisons to find the software that has the features that you need without extra bells and whistles that you’ll never use.

In either case, something good will come out of this investigation.  Even if the company does not decide to invest in new software, they will benefit from looking closely at their current processes, procudures, communication, record keeping, and so on.  Chances are that they will find some way to improve their business in this process, even if it isn’t buying new software.

Preventing Construction Software Integration Issues

In any business, you’ll find people that get so caught up in the day-to-day action that they often work inefficiently.  In the case of a construction company, this often means that they do not put their construction management software package to proper use.  Frequently it is not until after the system is implemented that the fruits of improper preparation come to the forefront.

After a period of time in which new users learn the new system, clogging from inferior, inaccurage data is inevitable.  This leads to inaccurate reports, which lead to poor decisions.  A snowball effect follows shortly.

In order to prevent some of the more commonly experienced integration nightmares, it is imperative that a construction company can ensure that its operational procedures, processes and practices readily adapt to a software package’s functionality; or, the company needs to seek out construction software which is fully customizable, and can be designed for just about any business model.  Of course, we like to think either solution is acceptable; however, it is still widely variable in that regard, since all business models are not alike.

Construction software execuctives do a lot of research to make their product the “best” for a number of applications.  However, it is nearly impossible to design a “solution in a box” for most construction companies due to the diverse processes and procedures that different companies follow to complete similar tasks.  Since it is often easier to find software that adapts to your processes than adapt your processes to fit a software package, doing research up front will pay huge dividends in the long run and will help avoid integration issues down the road.

Additionally, the company should focus on end-user training and involvement.  A significant amount of “up-front” work may be necessary to ensure a smooth transition, but the end result will be worth it.  Many companies do a thorough analysis of the software solutions available externally but fail to do a thorough internal analysis – which leads to problems.

Some questions construction companies sould ask before they settle on any one package:

1. Are company processes, procedures, protocols and other operational parameters where they need to be for current construction industry best-practices?

2.  Is old data structure compatable with the new software?

3.  Are our data collection methods and analytics in line with new software functionality?

Of course, there are a lot more similar questions construction companies should ask themselves before jumping in too deeply.  And, part of the difficulty with construction project management software selection is based in this very paradox – that of knowing all the right solutions from both angles: the construction company’s and the software system provider’s.   The real secret, of course, is to know all the right answers before you begin.

Focus on the Details When Selecting New Construction Software

Selecting new construction software can be both rewarding and trying.  Choosing the right software for your applications requires you to consider numerous details about how to integrate your current business processes with software that has, to some extent, been designed for a generic scenario.  On the other hand, you may have a difficult time figuring out how to change existing processes to take advantage of the new software’s functionality.

The bottom line is that you must remain committed to the aforementioned details throughout the process of selecting new software.  Only by remaining committed will you find the right software and implement it correctly.  If you fail to consider every detail, chances are that you will end up with a less than optimal solution.

However, when you do get frustrated, remind yourself that the rewards will come in time.  Your organization will benefit from being able to create and carry out new strategies using a software solution that will serve you well for many years to come.

Try thinking of selecting new construction software in similar terms as buying a new car.  In both cases there are more possibilities out there than are practical to “test drive.”  Therefore, the best strategy is to determine what you need from the investment and move forward from there.  Every person has preferences in car style, driveability, etc. just like every construction company will have processes or ways of doing things that are unique to themselves.  Finding the optimal solution can take time and can get frustrating.  In the same way that you would read performance reviews for a new car, check construction software reviews to get feedback and ideas on new software packages for your company.

Another thing to consider are your familiarity with the technical jargon that will be used as you speak with software vendors and review potential software solutions.  If you feel like your subject matter expertise is lacking in this area, make sure you enlist the help of somebody who will understand and will be able to explain your options to you.

More than likely, you will be soliciting input from various individuals at your company during the new software selction process.  Their feedback not only brings concerns to light that you may not have considered, but it also ensures that your entire business structure and the various ways that different sectors of your business interface with the software are considered in the selection process.

Again, the key to making the most out of selecting new construction accounting software and getting the maximum benefit from the new software is staying focused on the details.  Remember that you are in control.  If the details get confusing, take a step back and get other opinions before moving forward.  A vendor’s goal is to sell you software, regardless of whether or not it is the optimal solution for your organization.  Staying committed to your plan and addressing all of your concerns before making a purchase will ensure you end up with the best possible construction software for your applications.

Tips for Choosing your Next Construction Software Package

Once the decision has been made to implement new construction software, the goal is to make the process of selecting new software as easy and successful as possible.  A number of factors will need to be considered when you review potential software solutions.

Every company will come to the table with existing processes in place, regardless of whether or not those processes are the most efficient or are best practices.

However, in most cases, companies are better off looking for new construction software that fits their specific business models.  There are a number of commonalities in nearly all construction businesses that are accounted for in most software, so being aware of how well a piece of software matches with your unique business models is the key.

Construction projects all require manpower, materials, equipment, vendors, and other components that are similar for most projects.  Therefore, when selecting new construction software, make sure your new solution includes a user-friendly workflow module that will give you the ability to monitor and manage resources in real time with a certain degree of flexibility.

Workflow processes in the construction industry are pretty similar from company to company and many projects need the same resources to be executed effectively and efficiently.  Thus, although the workflow module is important to have, rest assured that most construction management software packages have a workflow module.

Additionally, construction software should be flexible enough to change orders when confronted with inevitable unforeseen circumstances.

Also important is to ensure that the new construction software has an integrated accounting module.  Construction accounting software gives companies the ability to track and control costs in real time.

Finally, consider the new software’s functionality in relation to field operators.  Many field supervisors use wireless devices to keep projects up to date and manage data.  If your company uses field operates to this degree, make sure that your next construction software package has web-based applications that will allow these activities to take place.

In searching for the next software for your company, make sure that you begin by mapping out the busineeses processes.  Once you can see how things are done within your organization, you can check to ensure that any new software will align well with your processes to provide your company the greatest benefit.

Selecting New Construction Software with End-User Input

When selecting a new construction software package, one of the most important things you can do is make sure that you involve an entire team in the selection process.  We’ve already talked about the importance of having a software champion, but more individuals need to be involved in the process from multiple departments within the company.

One group that is extremely to include in this group is the end-user community – those that will eventually be using the construction software on a daily basis.  They need to be represented in the software selection team and consulted with as they are the ones that will be using the software the most and will eventually have a key role in whether or not the new software “works.”

Depending on the size of the company and the size of the system, “end-users” could be a very large or small group.  If they span a variety of disciplines and have varying degrees of system privileges, you should do your best to ensure that all sub groups of the end-user group are represented and/or consulted with.  The bottom line is that anyone in the company involved with data creation, input, manipulation, or system maintenance needs to have a voice in the selection process through a single or multiple end-user representatives in the software selection group.

When soliciting input from the end-user community, be sure that all groups are considered.  Each company will be unique in regards to who uses the software and who does not, but in every case it is important to consider all involved with the software since everyone that interacts with the software will play a role in the eventual success or failure of the new system.

If proper care is taken in establishing the initial protocols of the new construction software functionality, the impact on the end-users should be on par with the latest best practices.  The other side of the coin to this statement is that all company procedures and practices must also be up to date with industry best practices for the software to do all that it can.

Keeping a new system healthy is also a concern.  In general, the more automation that a software system offers, the easier it will be to keep the system healthy, provided the end-users are using the new software properly.

Thus, if end-users are not consulted when new software is selected and instead are forced to deal with a change in which they had no ability for their voice to be heard, the chances for maintaining a healthy system will decrease.  End-users will likely take longer to learn a new system that they had no input selecting and may even resist change to the new system to show their resentment towards management for not valuing their opinion.

In the end, the end-user community is probably the most important part in whether or not the transition to new construction accounting software is smooth or not.  If they are not happy with the new system or are not involved in selecting it, the implementation of new software will likely not be a smooth process.

Additionally, the importance of training cannot be understated.  It is extremely unlikely that all end-users will be directly involved in selecting new software, so it is important to beging training end users on the new system as soon as possible.

Training can be the most critical aspect of how well and fast your company implements a new software system.  See previous posts for more information about the importance of training – here and here.

New Construction Software Success Depends Largely on Training

Success with software depends, of course, on what the  software can potentially do for your business. Notice I said potentially because the truth is that construction software is only as good as the people who use it and the people who use it are only good as the training they have received from the software vendor.

Whether you are talking about job cost, project management or financial accounting or more specialized applications like purchase and inventory control, there are literally  hundreds of ways of entering, editing and processing transactions in  most construction management software systems.

I don’t think it’s an exaggeration to say that the quality of training and implementation may actually be more important than the software itself!

So once users understand the critical function that training plays in software successes, the next question is how is that training going to be  delivered?

There are three primary models that vendors offer for training:
* On site
* At vendor headquarters
* On-line  or a blend of the first two

On-site (user location)

The main argument for on-site is simply that your company location is where the software is going to be used and it makes most sense to train people in their home environment. You can also “read” people better as to how they are catching on to the new software as well as their openness to new software.   There is total focus on you and communications between staff is optimal when questions come up as they always do. You can also have hands on access to old reports, information, etc that is needed for setup and training.    If you are away at a vendor’s location and only certain staff is there for training, it’s a lot more difficult to get answers from executive management on how certain things must be done, for example.

It is during software setup that key decisions must be made on how to go about configuring the software to accomplish certain tasks.  Examples might be how configure job and phase codes, the way purchase orders and inventory transactions will be accepted, and deciding how to handle month-end payroll accruals. When specific information is required, it is much easier to access when staff is on-site.

One major  disadvantage of on-site training is that, due to travel time and cost, on-site training usually needs to cover several consecutive days.   This can be overwhelming and when the session is done the employee(s) may not have time to do their “assigned tasks” since they just lost a day or two working on the new software.  They can also suffer from “burn out” and not absorb everything over multi-day intensive sessions.

Vendor headquarters

There are some vendors who do not offer the option for on-site training and  require that you go to their headquarters for training. This can be successful if all key personnel are involved in the training and the company can afford to pay for all their travel expenses.  The vendor’s technical staff will be available if and when difficult questions come up.

It may  also be helpful in terms of avoiding distractions by being away from their regular work place.

On-line Training

The major advantage of on-line training is the flexibility of scheduling training sessions – both in terms of when they are scheduled and for how long.   For example, it could just take an  hour or two to show a client how to enter customer, vendor, and general ledger accounts in new construction accounting software.   Trainees could then complete their assigned task of entering this information and then schedule another on-line session.   A strong  argument  can be made for numerous, shorter training sessions in implementing new software for smaller, less formal companies.

Summary

There are a number of approaches to training, all of which can be useful ways of preparing company personnel for software success. They key to making it all work is employee and management commitment based on realistic expectations of what has to be done and allocating the necessary resources to do it.

Implementing New Construction Software and the Importance of Training

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.

I speak with various users of construction software on a daily basis. The vast majority 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 need a functionally richer and technologically more advanced solution. However, about 20% of the time they are going to be just as disappointed in new software 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. I’ve found this to be true regardless of industry or company size.

A few years ago I worked with a medium-sized electrical contractor that had many jobs to complete in a short time frame. They were using very old software that lacked any of the niceties of new Windows software.  Even things as simple as having multiple users access an application at the same time were not possible with their software. 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 more than adequate for 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 try out the software to see if they really liked it. This, however, meant burning some midnight oil because there was not enough time during the day for the testing.

No one in management volunteered to work with her, and due to the difficulty of the assignment, absolutely no progress had been made within nearly a year.  Finally, after two years, they acquired the new construction accounting software, completed some initial training and started to use it. The staff, who was not very technologically sophisticated, entered all the necessary data in the new system (job cost, work orders, and progress billings, etc.) but insisted on continuing to use the old system in parallel mode for an entire year. 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 vendor trainers to give them an overview of the implementation process, all the strategies involved, and the time-frame.  Second, managers must buy in to the new software.  When the manager doesn’t fully buy in to the process and understand the tasks and time-frame, they may not choose an employee who is the most qualified to learn the system and to train other people.  Instead, they often choose the employee they can most do without for the ”train-the-trainer” sessions.  Without the supervising manager’s 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. 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, software is only as good as the people that use it and that means proper training and motivation.

Implementing New Construction Software & Change Management

Corporate management and software resellers alike tend to view implementing  new construction software as strictly an IT and technical process.  That approach sometimes leads to failure, particularly with extensive systems involving  accounting,  equipment, inventory and project management. A significant number of IT projects fail, with failure ranging anywhere from not meeting initial goals to having to abandon a new system outright.  Certainly many elements of such failure relate to technology issues, but a number have been traced to failure to provide change management.

The reasons are simple: most people and organizations resist change and change generates conflict.  Without specific countermeasures, this resistance and conflict erodes the organization’s ability to make the requisite adaptation to a new IT system where some changes behavior is needed.  In other words, system change is a disruption, which management is rarely equipped to handle.

Most simply, change management involves analysis, communication and leadership to ensure that an organization can effectively adapt to a required course of change.  Following are some of the key issues to consider when that change includes a major new software system:

Hire a Change Management Consultant:  Probably the most important issue is engaging a suitable consultant, as few mid-sized firms have the requisite skills internally.  And software resellers are likewise not equipped to handle this aspect of new systems implementation.  More importantly, they will almost never mention it.  The reasons are that it is:

• Not relevant to them, and outside the scope of their thinking
• A diversion of funds from their project
• A wild card third party that they may have to deal with

An experienced consultant can forestall major problems, some of which can be virtually unfixable if not addressed up front.  The appropriate consultant should be able to lay out specifically what the problem areas and risks are, based on an assessment of the organization and type of system under review.

Employee Involvement & Communication:  Involvement of effected employees should begin early, and not as an afterthought.  Communication needs to be a two-way process, starting with a forthright discussion of:

• What will happen
• When will it happen
• Why it is being done
• What is the expected outcome
• Who it will effect
• How it will effect them

Without this communication, management should expect everything from people not understanding priorities to outright opposition (frequently covert).  In addition to telling employees about the changing environment, they need to solicit specifications and suggestions about the system, alternatives and other issues.  This is called buy-in and also helps to prevent mistakes and oversights throughout the process.

A good way to execute on the necessary communication is have interdepartmental workshops where the data needs of each business area (project managers, field supervisors,  accountants, equipment managers, payroll, etc.)  are discussed in detail along with flow charts mapping the movement, and justification,  of data between each department.

When Management is Not Leadership:  Most organizations are management-led, not leadership led.  That is, they rule by fiat, simply issuing memos to obtain their objectives.  That rarely works when complex systems are involved.  There are several reasons, but probably the most important is that if the new system and change management are not seen as having an unequivocal CEO mandate, both employees and senior executives will feel free to virtually ignore them.  Thus the needed integration, cooperation and participation may never materialize.

Companies often have the idea that complex new construction management software systems are plug-and-play, not realizing that leadership may be required to make them fully work, organizationally.  Although large enterprises often, but not always, have both the understanding and resources required, that is often not the case with mid-sized organizations.

Sell the New System:  Selling the system means informing employees of why and how the new system will benefit them.  Unless they have a stake in its success, they may be indifferent or downright hostile, for a variety of reasons.  This is a serious element of success and assuming that it is unimportant has caused some implementations to fail.

Dealing with Fear:  Fear is a natural byproduct of implementing a new system.  These are some of the main manifestations of such fear:

• Are they going to eliminate my job – or me?
• What if I can’t learn the new system?
• What if my position isn’t as dependent on my years of skill?
• What if I lose power?  (This is a management fear)

The problem with fear is that it leads to behavior that in some way is oppositional to the new system.  Or it may lead to departures, from employees who can’t deal with the uncertainties.

Be Prepared to Resolve Conflict:  Conflict can easily arise with a new system, as gateways are opened up between different departments and divisions, and turf battles erupt.  Often it is based on the last fear noted above, but there may be other motivations as well, most specifically a drive for personal power at the expense of the organization.

Most organizations prefer to ignore conflict and send signals that it should remain hidden.  Unless specific steps are undertaken in order to first identify and then resolve conflict, it will just fester and the system performance will simply degrade.  Often an honest broker is the only participant who can take these two steps, but only if granted an unwavering charter to do so by the CEO.  Conflict can include anything from refusing to attend project meetings (too busy) to not allowing employees time to work on conversion issues.

While  the scope of this  article is referring to mid to larger sized organizations, ($20M and up), the principles involved effect companies of all sizes. Leadership and motivation carry the day even in small offices. All it takes is one or two uncooperative employees with  key operational jobs to sabotage new software!

The Need for Speed in Construction Software

I don’t think anyone would argue against the claim that ANY software must be fast!  Of course, software speed is relative to the computer hardware and other devices being used to express that need for speed!

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.