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.

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.

When discussing software requirements issues for contractors, it is important to consider the size and scope of operations.

A small – medium sized contractor ($2M – 50M) may get along fine with a basic job cost program, and the essential financial accounting modules of accounts payable, accounts receivable, estimating, general ledger, purchase orders, inventory, basic service management, simple document management and payroll. But a larger contractor $50M+ often will need either more depth in their accounting applications (e.g. multicompany, complex consolidations) and/or require other applications such as Human Resources, Fixed Assets, Equipment Management, collaborative project management, document scanning and vaulting, etc.

A really large contractor ($250M+) may require any or all of the following:

• interfacing to corporation financial reporting systems
• portfolio management of several entities
• integrating with specific industry applications like Primavera P6 for scheduling and cost tracking
• integration with industry specific estimating programs (like Hard Dollar for heavy contractors)
• supply chain management for inventory control and ordering
• quality assurance tracking for materials
• engineering control for bills of material
• greater security features by entity user and application
• strong integration with Outlook for tracing emails and creating alerts
• document imaging and workflow features
• earned value computations
• contract management
• user definable workflows
• realtime key performance indicator dashboards for management

With more applications come more complications as to how each vendor handles all the requirements and what, if any, third party vendors must be brought in to provide everything necessary.

With applications like project management, it is typical that the project management vendor will need to spend time studying the precise requirements (and even help advise on industry best practices) and to then provide a time and cost estimate to modify their software to meet the specific company processes. A typical scenario for creating a custom interface for a project management system to a construction accounting system can involve several months of work and $25-50k or more of expense.

Data can be a two way street

Work Breakdown Structures (WBS) are a way of describing and tagging specific costs assigned to jobs. Depending on which application captures those cost transactions, data may need to be moved between two different systems. For example, if Primavera is used to capture transaction costs it may use an entirely different set ofcost codes than the codes used by the construction application program (Timberline, Viewpoint, Dexter Chaney,Maxwell, Computer Guidance, etc.) . It then becomes necessary to set up a mapping translation between the systems so that data reporting is consistent between the two systems. This is critical for things like earned value computations which companies with government contracts must comply with (as well as others where the contract requires it).

Working with WBS codes and earned value according to job cost schedule budgets requires a higher degree of competence than just performing simple job to complete reports in a typical job cost accounting system.

Summary

Given the scope of applications, more sophisticated accounting requirements and potential multiple points of integration, evaluating construction software for larger contractors can be exponentially more complex than evaluating the needs of smaller ones.

To do the job right often requires expertise in accounting, financial management, project management, supply chain/inventory control, engineering, HR, and risk management. To execute the evaluation and selection of construction software for this category requires a well led committee of experts in each area who have the absolute confidence of management and are fully committed to the project.