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!

Larger companies rely on the segregation of employee duties as the backbone of their control systems.  This is more difficult to do in a smaller business, as there are often fewer employees who perform a broader range of job duties within the business.  Here are a few ideas of controls that can be easy to implement, yet result in stronger deterrents against fraud.

It is not unusual in a smaller business to have one person who is able to record cash transactions and reconcile the checkbook.  Sometimes this person can also either sign checks, or has access to the signature stamp.  Taking away the ability to sign checks, or custodianship of the signature stamp from the person that reconciles the cash accounts is a good first step.

Presenting the check signer with the vendor invoice, purchase order and receiving slip (if applicable) along with every check for the check signer to sign is another good procedure.

An additional control procedure would be to mail the bank statements with checks or check copies to the owner’s home, rather than to the Company’s place of business.  The owner would briefly review the returned checks or check copies prior to turning them over to the person that will reconcile them.  This will improve the chances of detecting someone writing an unauthorized check.  The owner reviewing the bank reconciliations and lists of outstanding and cleared checks and deposits is also a good procedure to implement.

Many accounting software programs, including QuickBooks, allow a user to change the vendor name on a check or delete a transaction after a check is issued.  Using a software program that requires transactions be reversed and not allowing them to be changed or deleted is much better.  Turning on the audit trail function in QuickBooks, while not nearly as strong, can help detect unauthorized changes to transactions if the owner will review the list of changed and deleted transactions each week or month.

More robust construction accounting software programs have stronger controls over user access to sensitive areas or functions.  If your company’s software will control access to vendor maintenance, consider implementing procedures to require all vendor changes and deletions to be signed off by the owner and to be made by a person or persons without any other accounts payable or check writing duties.  If your software isn’t able to do this, consider changing to one with better access controls.

Another good procedure that is not to hard to implement is to export both vendor and employee lists to Excel, and sort both lists by street address.  Compare the street addresses of the two files and investigate any vendor activity where there is a match.

These were a few relatively easy procedures to implement.  A good system of controls protects employees from unwarranted suspicion in the event of fraud.  Employers benefit from the reduction in exposure to fraud.

Special Thanks to John Reed, Principal, LarsonAllen LLP, Fort Myers, Florida for his help in writing this article.

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.

Much of the modern construction software is designed to help construction companies with keeping communications open with their customers; not only while construction projects are in progress, but after they are complete, as well.  Of course, good software is capable of keeping customers abreast of their ongoing project work; including cost, changes, problems, milestones, and more.

Communications features are always important, and software companies recognize this.  Most reputable software companies usually include solid customer account management in their products.

Some software customer account functionality helps with establishing periodic customer ticklers; such as scheduled mailers and other advertising instruments, to be sent to existing and potential customers.

Sometimes all it takes to pick up new work on construction projects is for a past customer to receive some type of reminder of previous work performed for them, coupled with an invitation to help with any new work on their planning horizon.

In addition, some construction companies use construction accounting software for automated billing of long-term and ongoing customer work-accounts.  For example, if a construction company is contracted to provide a particular repetitive construction service, the construction software can be used to keep track of charges, and for automatic billing and overall contract reconciliation.

Construction company customers, of course, come in many shapes and sizes; and each customer is unique in their own way. Construction software helps construction companies in their marketing strategies, with focused promotions and communications targeting customer profiles.  When construction companies decide to incorporate construction management software into their business practices, it is important that they remember to clean up the current customer account records, in order to start with a clean, fresh customer account database.

Construction software often allows for archiving out of date customer records; even if the customer is no longer a viable account.  Some states or jurisdictions require record retention for specific periods of time; thus, management of some of the older records becomes a necessary part of the new software functionality.

There is no magic about keeping good customer account records, but it is perhaps one of the most important records a company can keep track of, as explained earlier in this article.  Without accurate customer account records, and without the capability for automating some of the customer follow-up contact and marketing strategies, construction companies will be less effective, in the overall view, which can waste a lot of money over time.

“There is no substitute for quality”, it is often said.  And this is so true in this case, as well.  Construction companies need to treat their customers with quality services; and with quality follow-up; and with quality communications; and with quality marketing and advertising.  Remember; it is the customers that provide the butter for the bread!

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

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

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

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

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

Unfortunately, it is often more a case of an inadequate current system, inappropriate user input and interface, or changes in company practices, procedures and protocols which the current construction software is incapable of handling effectively.

Construction Management Software, like any software, becomes out of date and even obsolete, sometimes within just a few years.  In addition, business practices change frequently, whether through continuous improvement measures or outside influences like Federal, State or local regulations.   Consequently, construction management systems and construction companies alike need to keep abreast of all of the above.

In order for software development companies to keep up with the construction industry, they must stay in touch with construction companies and their needs.  Likewise, construction companies need to stay in touch with system providers, in an effort to help with improvements to construction management system functionality going forward.

I have seen many small companies in these situations not make as much money as they should because they didn’t really know the level of effort it took to be successful with a project of given size and type. They typically underestimated the number of labor hours necessary to maximize their profit.

How does software help avoid these issues? Imagine if you could track the costs (material and labor), hours, contract size, and profits for each of your past jobs by project type (e.g., apartment, office, hotel, etc.) and then automatically and instantly analyze this information by project type and contract size.

For example, you may find that your apartment-type projects with successful contracted bids ranging between $100,000 and $200,000 made a 7% profit.  You may also find that bids between $200,000 and $400,000 made a 13% profit. In contrast, you may find that office-based projects with bids between $200,000 and $400,000 made a profit of only 8%.

Suppose the analyses also showed that all apartment and office project bids between $200,000 and $400,000 were rejected when bid with built-in profit margins of 15%. Furthermore, suppose you were able to further analyze these results by project manager and customer type (e.g., mechanical and general contractors) to see who were your best performers and most profitable customers.

Knowing this kind of information would allow you to make more informed bids on new projects based on type and size, and turn down projects that are not in your sweet spot. Additionally, the analysis would tell you which projects left money on the table (e.g. for apartment projects you did not, whereas you did for office projects). Why waste time and effort on going after jobs that are not as profitable? I have seen two multi-million dollar businesses fail for these very reasons.

Special thanks to Larry Bookman (lbookman@tracall.com), President and Founder of TracALL Technologies for his assistance in writing this post.

Construction software can only provide so much in the area of data accuracy and usefulness; especially if software solutions are not carefully and thoughtfully evaluated, selected, customized, and implemented.  If a construction company’s current data is somehow flawed, no new software package will fix all the mistakes of the past.

It becomes imperative for construction companies looking to implement different software to ensure that their data to be interfaced with the new software is as accurate and up to date as possible.  That way, the new software program will be starting with a “clean slate” baseline without a lot of excess baggage and erroneous information.

The team that is responsible for evaluating and ultimately implementing the construction management software must also ensure there are resources available who can study and scrub current data, to eliminate, rework, revise and otherwise clean up anything that does not belong or does not add value to the construction company’s business plans, going forward.

However, doing some up-front homework can help to minimize risks and provide promise for a successful selection, design, and implementation process.

Selecting a good software system always means more than making random selections from local Yellow Pages!  Some of the most important aspects for making such a selection are as follows:

Do some online research into the topic of Construction Management Systems, so you understand what options and functionality are most commonly incorporated in the most common and most recognized software packages; i.e., those designed for enterprise-wide integration.

Talk with some of your acquaintances in the industry; even your competitors.  Learn what works for them, and what does not.

Once you select a particular company, invite someone from that company to visit and pitch their product, including a working demonstration.  Be sure to include representatives in your company who will ultimately be involved with selection, design, and implementation; and, be sure some potential end-users are involved as well.

Get to know the Sales representatives.

• Ask about their background in the Construction industry, and in construction accounting software functionality.
• Pay close attention to how questions are answered; i.e., do they come across as knowing their product inside-out, or do they fumble and stumble and make guesses?
• Pay close attention to how the sales people talk about their competition’s products and functionality.  Quality sales people tend to refrain from too much bashing; it only makes them appear less confident in their own products.
• Be careful not to let sales people become your “friends," as such a relationship can spell disaster in these circumstances.  You can perhaps have lunch with them, but the relationship should always remain one of seller and buyer, for obvious reasons.

Some construction companies, depending mostly on overall size and budget, will make feeble attempts at selecting and implementing new construction software without even thinking about their current “state of affairs.”  That is, they tend to think the software will fill any voids and make up for any lack of perfection in current business processes and procedures.

Unfortunately, construction management system software cannot fix all the imperfections; it’s that simple.  Thus, it is imperative that construction companies thoroughly examine, evaluate, redesign and improve upon current processes and protocols; in an effort to bring those up to date and into alignment with current best practices and construction management system software design parameters.

Rather than try to make the construction software fit old and outdated processes and procedures, Construction companies should always be looking to keep their business practices current with the latest Construction industry benchmarking and best practice philosophies.  That way, construction companies can keep their competitiveness keenly honed, and their proposals and project management endeavors will represent their attention and desire to being the best they can be.