Construction Project Management Software Controls Costs

More than ever, with tightening credit and downward cost pressures, it is important to control costs on construction projects.  Even government and municipal projects have greatly reduced budgets. What may also be important is payment timing has stretched out as well.  All of this combines to create an environment where controlled costs are the rule for survival.

One of the major functions of project management is cost control.  Along with materials, labor and timing, budget and cost are central to the project manager.  Construction software helps project managers control budget cost on a real time basis.  Companies looking to control costs should consult construction management software reviews for the futures we will be discussing.

All construction projects have budgets. The major components of the budgets are the funding and the disbursements. In most cases neither will be a lump sum, broken into parcels. This makes the construction budget dynamic in nature and underscores the importance of timing. A budget can’t have more go out than comes in.  Construction Project Management Software helps because like the actual project, the software can also be dynamic.  As goals and priorities constantly shift, the construction budget will constantly shift. With regular input the Construction Project Management Software will be able to help plan disbursements that are in line with the budget and actual cash on hand.

Another important aspect of budgeting is cost centers. Cost centers are costs that are broken into categories.  By using cost centers, various aspects can be micro managed with greater precision than if they were lumped together.  Many times on a large project, cost centers will have their own manager with budgetary responsibility.  Construction Software allows for the use of cost centers, which are actually an integrated part of the process.  There is no need for cost center data to be put together separately. It’s all part of the same package like having tabs on a spreadsheet program, and yet one tab contains data from all.

Financing is also an aspect of a budget that is important. As has been stated, funds are generally not available in a lump sum.  They may also not be in the form of case but credit or a credit line.   This is critical in project management budgets.  Money must be taken only as needed.  As money is taken, the interest meter begins to run, and the
construction project costs more.  This is probably factored to an extent in the quoting process, but the project manager needs to work to not exceed this budget.  Again this is where the tools in Construction Project Management Software come into play. By managing each task on the project, keeping the Construction Project Management Software input data up to date; the project manager can control the financing costs to a minimum in order to maximize profits.

With Construction Project Management Software all of the activities here can be accomplished in near real time.  This allows the project manager to response to changes and allow for the best and most profitable conclusion possible.

Selecting New Construction Software Tips

Any company that is beginning the process of selecting and implementing new construction software hopefully understands the need to have adequate leadership throughout the process.  An individual or team must be selected to lead the process of evaluating, selecting, implementing, customizing, and training end users to use the new software.  These people need to have a large amount of knowledge about how the company operates as a whole, including intimate knowledge of all processes, as well as a good understanding of construction management software functionality.  As such, I have compiled the following lists of individuals that should be included in this team, or should at the very least be consulted with if they cannot dedicate the proper time to the entire process.  Additionally, I have listed several factors that should be a part of any software evaluation.

Input that is “Nice to Have” (highly recommended)

The following individuals are recommended to be included in the software selection team.  They may not need to be permanent members, but their input should be taken in to consideration.  In most cases, the size of your company, more than anything, will dictate how involved each member needs to be.

• End users (anyone that will ultimately be using the new software)
• Management (all levels in large companies)
• Accounting (they need to provide input on how the new software will impact their operations)
• Payroll
• IT ( they will need to know the technical aspects of the software implementation, among other things)
• Sub-contractors (if necessary)
• Suppliers
• Vendors (once selected)
• Other members that are deemed necessary, which will vary depending on each unique company

Factors that Must be Considered in Any Evaluations

Smaller companies, especially, will probably not have the time and resources to justify dedicating an entire team to a full-time software evaluation.  Additionally, the benefits in terms of process improvement that a formal team may be able to identify and implement will likely be less significant in smaller companies.

Thus, smaller companies need to make the most out of what resources they do have.  They cannot afford to be lazy in evaluating software any more than larger operations can.  At a minimum, the following things need to be thoroughly evaluated for each construction accounting software package that they consider:

• The number of varieties of each product and what makes each version unique
• The number of available vendors
• The history of the product, including testimonials from current users
• The history of the vendor, including testimonials from current users
• The functionality of the product
• The product interface and any potential issues that it may create
• The necessary steps require to integrate the new system with current processes
• Other factors that are unique to your company

What Matters When Selecting Construction Management Software

When used properly, dedicated construction management software is capable of handling a number of tasks that may currently be bogging down your company’s resources, time, and money.  Many companies can benefit immensly from not only the software, but the associated improvements in processes and practices that are commonly associated with acquiring and implementing new software.

So what should you look for when you’re investigating possible solutions?  What really matters?  In the end, the software must be able to deliver on all the promises that the advertisements, promotions, and salespeople tell you.  Beyond that, what really matters the most in making the software work is ensuring that your company knows how to use it properly and that it “fits” your organization.

One factor that will go in to determining what size and level of functionality you need in construction software is the size and organizational structure of your company.  This is a fine line of balancing your need to streamline operations with the help of software without getting in over your head.  Plan carefully to ensure that all the functionality that you want is realized in your new construction software package.

Since most construction companies operate, at least on some level, in similar manners, most construction software is designed with ways to cover the most common denominators and industry best-practices.  This makes most systems relatively adaptable to most applications, but that is not to say the all software will work for all companies.

Examples of these common denominators are things like job costing, estimating, planning, payroll, project tracking, and so on.  Since just about every company needs these types of modules, they are pretty standard in most software packages.

The real trick, therefore, is to find the software that works best with the processes and activities that are unique to your company.

For example, if you operate a compnay that has a pretty unique way of handling project change-orders and believe that your current system is the best solution for your company, you’re going to need to find a software package that is customizable in a way that it can be made to work with what you do.

In this situation, you essentially have two options.  The first option is to buy a software package that is way more powerful and over the top (and expensive) than you really need.  The alternative is to find some sort of plugin that will allow a more basic software package to operate using your procedures.

The above example speaks to the need to thoroughly investigate and audit your internal processes before selecting new software.  If you select software that is incompatible with the way you operate, you’ll be forced to make drastic changes to your company processes or find another piece of software – neither of which is ideal.

Selecting new construction accounting software is certainly no easy task and the process of evaluating, integrating, customizing, implementing, training, and managing a new construction management software system should not be taken lightly.  In fact, it can be so difficult that some companies jump ship before they reach the end, which essentially turns the entire operation in to a waste of time and money.

Improve Communication With Customers with Construction Mangement Software

Having a robust and versatile account management module to track customer accounts is one of the most important features of a good construction management software package.  The software that your company uses should be able to automatically and effectively communicate with your customers about any number of project-related issues in real-time to ensure the best customer experience and service level.

These days, people are not satisfied with “old” information.  They want to know what is happening at the instant that it happens.  Information that is days or weeks old is no longer good enough.  If your company has the ability to provide customers with real time updates, this will not only provide them with the most satisfying customer service possible, but will also give you an advantage over your competition that may not be able to provide the same real time data.

Further, the tools that people use to get their information are constantly changing.  Most companies use the internet and its associated capabilities as much as possible, allowing them to access information from cell phones or PDAs while they are away from a computer, but do so in real time.  Having a construction management software application that supports these devices and functionality will improve your internal communication by allowing people to access information from job sites or while stuck in traffic.  It will also enhance the experience that your customers have as they will take comfort in knowing that they can view the progress of their projects at any time from any place.

Along with having the ability to access the construction software on the go comes increased needs for security measures.  While it is important that your software have these abilities, make sure that you invest in the proper security measures for your construction software package so as to not compromise the security of your organization or your clients.

If your construction company is in the market for a new software package or enterprise system, you would do yourself a huge disservice by purchasing a solution that does not include a user friendly account management module that operates in real time.  Check out construction software comparisons for more information to help you find the solution that is right for you and within your budget.

People often blame communication for a number of problems in the business world.  The truth is that communication isn’t the problem – a lack of proper communication is.  Purchasing a construction software package with the account management features discussed here will help you ensure that you stay ahead of the pack as communication methods continue to evolve and become more connected.

Executive Dashboards in Construction Software

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

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

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

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

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

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

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

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

Construction Software Causes for Change

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

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

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

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

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

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

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

Construction Accounting Software Payroll Feeds – Internal or External?

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

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

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

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

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

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

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

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

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

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

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.

How to Deal with Staff Reluctance to Change Construction Accounting Software

Deciding to switch to a new construction accounting software system is a big decision that affects almost everyone in your organization.  One group that is often overlooked in this process is the people that actually use the software on a daily basis.  Good software is useless if you have employees that use it improperly.  Often, these end-users do not see the point in switching software as the current software is something that they are comfortable with.  As such, they are often resistant to the change.  Here are some things you can do to make the transition smooth and encourage your end-users to quickly adopt the new system.

Everyone at the company must understand the benefits that the new software will provide for the company and themselves.  Before you make the transition to new software, speak with everyone in the company about what the new construction management software will accomplish for your company and how it will make things better for the company.  It is also important that employees see how the software will benefit them on a personal level in relation to doing their job more accurately, faster, etc.  Studies have proven time and again that new software is more successful in companies where all users understand the benefits.  Your worst nightmare is a group of employees who think the new software will only make their jobs more complicated and difficult.

It is also important that your company insists on everyone participating in a thorough training program.  Giving users the confidence to use the new software through training will reduce their reluctance to use the new software and will speed up the transition process.  If they still have questions and concerns with the new system, provide one-on-one training to ease their concerns.  Make sure things like phone numbers for support, manuals, and links to online resources are readily available.

Third, speak with employees about the new software and ask their opinions.  Get feedback on the good, the bad, and the ugly parts of the new software.  Not only will you be able to identify ways to improve current processes, but your employees will feel more valued as important pieces of the puzzle.

As your staff becomes more confident with the new technology, begin to recognize achievements.  Not only will people begin to realize some of the benefits that were discussed prior to the new construction software being implemented, but they will also be encouraged to expand their technological capabilities and confidence in using the new software.

Last, but certainly not least, it is important that management remains positive throughout the process.  Problems will arise and your staff will look to you to get cues on how to respond.  If you remain confident and encourage them to work with the new software to solve these problems, they will respond by doing so faster.  Remember to be a positive role model, no matter how difficult the implementation becomes.

Staying positive and making sure that everyone is clear about what is expected and how to do it are the best ways to ensure the smoothest transition to your new construction management software.  Given time, experience and confidence will grow among your end-users and sooner, rather than later, your company will begin to realize some of the benefits that prompted you to buy the new software in the first place.