An Enlightened Perspective for Contractor Software Acquisition

By Guest Blogger Chaim Yudkowsky

Choosing construction software today is different than it used to be. Depending on the function for which software is designed, there is an abundance of off-the-shelf choices. Construction accounting software today has become much more customizable and adaptable to a wide variety of business types. More than ever before, developing your own solution makes no sense except for extreme situations that cannot be met by off-the-shelf solutions. And software is generally more reliable than ever before.

Still, despite software evolution and buyer maturity, many small and midsize contractors grapple with defining the best approach to a software acquisition. Have key selection criteria changed as other expectations and value elements have changed? Are there contemporary insights that converge age-old truths with modern-day technologies and system capabilities?

To answer these questions and to help you walk through an acquisition framework, let’s review a purchase decision in the context of three categories:

longstanding truths, what is new today, and what should no longer matter.

Longstanding truths:

• Decisions are made at moments in time. While construction software projects may take time to implement and complete, the decision to proceed is made based on your circumstances with the best information available from a vendor(s) at a single point in time. As time passes beyond that decision point, the facts sometimes change in ways that can be significant to the success of the project or the appropriateness of the choice made. For example, if after the choice was made a new business unit was acquired, the business software project plan may need to be reevaluated. The result is change orders, workarounds, and sometimes even the need to reconsider proceeding with that solution. Expecting your vendor or your software to deliver 100% in the face of emergent or unknown events is unreasonable.
• Vendor references matter. One way of assuring the best possible decision at a moment in time is to perform due diligence. A construction application “working” for a competitor does not indicate that it is a good match for you, that the company that publishes it is financially stable, or that the deployment consultant you are intending to use for the project is any good. You need to spend time researching and understanding vendor and consultant strengths and weaknesses based on publicly available, customer, Internet, and industry analyst perspectives. Therefore, due diligence combined with functionality and feature sets, help support an optimum buying decision.
• Reliability of vendor. Most projects have at least two essential vendors involved – a software publisher and a deployment consultant / value added reseller It is necessary to check financial viability and references of both vendors. Are the vendors committed to their customers? Are updates or upgrades smooth? Is support helpful and timely? What type of support prioritization is there?
• Security. Security risks that new software may expose you to should be on your radar screen. This is not limited to Sarbanes Oxley, PCI, HIPAA, or other legal compliance. Depending on the system, this may include protecting trade secrets and both substantive and perceived security for your customer.
• What happens if things go bad? Critical systems take time to install and may have a use lifetime of many more years than initially planned. Therefore, as you enter a relationship with a software product and vendors, you should do some preplanning of your choices for secondary and tertiary support sources and other plans to keep the system going in case the initial support services are lost.
• Standards. As part of the technology evolution, standards have been established for the management of data and user interface protocols. Clearly not every product for every niche industry is fully compliant with all standards, but some sense about how the software does or does not meet current industry standards will be helpful in the decision process. The more you and your vendors can articulate the surrounding ecosystem, the better.
• Every project has a risk of failure. Your job as the decision maker is to mitigate and reduce decision risk by planning and evaluating all common risks methodically.
• Cross-disciplinary input. Never make the purchase decision unilaterally within an organization. Even the most aware IT, finance, marketing staff will never be able to speak for everyone in their organization. Understandably, organizational dynamics often discourages group decision making, but the input and perspective from all stakeholders is essential to making a great match. In addition, this involvement will usually result in better justification for the new system in terms of return on investment.

Read the complete article CTSGuides.com.

Top 10 User Friendly Features of Construction Software

by Sheldon Needle

In the broadest sense, user friendly software is something you might find appealing in terms of how a particular software for construction looks and the ease of navigating the menus, entering data and accessing information.

But behind this simple explanation lie many subtleties that escape most users when evaluating construction software, including construction accounting software and project management software, for its user friendly characteristics. Keep in mind that user friendly is something that can vary from person to person.

Here are 10 issues to look at in determining whether the construction software you are considering for your construction company is really designed to be user friendly. Once you have nailed down this aspect of the software for construction you are considering, you have performed a very important component of the construction software selection evaluation process.

1. You are a universe of one. No two people are going to rate everything they see the same. What one person may find an easy to understand a cost to complete report , another may find confusing or counterintuitive.
2. User interface – Does the screen seem to flow logically from step to step and focus on what’s important to you or is it cluttered with a lot of information not relevant to you?
3. Number of clicks – How many mouse clicks are needed to see all relevant data information screens for, say, inventory information? It’s nice to have lots of detail to look at but only if it can be accessed efficiently.

Read the remaining 7 at CTSGuides.com.

Importance of Equipment Management Software Applications for Mid-Market Contractors

Larger organizations of virtually any type now have risk management departments. Their role is to look at all matters of corporate governance in order to minimize exposure to errors which can lead to lawsuits or accusations of mismanagement. This involves an ongoing evaluation of any and all company activities in order to protect shareholders and management in the execution of their duties. Risk management can involve everything from contract reviews, auditing and control standards, human resource management, insurance coverage and more.

It might seem that only larger organizations need be concerned with this but, in truth, contractors of all sizes must be aware of their legal and fiduciary responsibilities.

For contractors, risk management is particular sensitive since its agents are out doing work under contract that involves people skills and the tools and  equipment used in carry out out the work being performed.

In particular tragic accidents sometimes occur at construction sites which can involve the use of onsite heavy equipment.

This article focuses on the use of construction software to manage and mitigate risk exposure associated with equipment service and associated record keeping along with financial record keeping for financial reporting purposes.

To read the complete post, go to CTSGuides.com.

Mike Rowe Is No Expert, But He Knows Where to Find Them

Welcome to Mike Rowe's Trades Hub

We’re happy to announce that Mike Rowe and Construction Software Guides are now partners in providing great information to contractors and construction companies around the country. In 2008, Mike launched mikeroweWORKS, a website dedicated to championing the cause of hard workers and reinvigorating the skilled trades. Since then, Mike has provided resources, news, and a community forum for folks from all kinds of trades. Now, with the launch of the Trades Hub, the goals of mikeroweWORKS can be expanded even further and across many more website portals.

Think of Trade Hubs as a “first cousin” to mikeroweWorks. With this new platform, we’ll be able to pull together even more experts from such diverse trade fields as construction, plumbing, landscaping, manufacturing, machinery and HVAC just to name a few.

Construction Software Guides is proud to be part of the Mike Rowe family of websites dedicated to helping builders and contractors.

The Software Buying Process for Contractors – One step forward, two steps backward

This article is based on my many conversations with prospective buyers of construction software designed for contractors. Depending on the particular operation and the applications required, many CIO’s, CFO’s and Operations Managers are totally confused about how to go about sorting out and selecting new software for their operation. They know they need better job cost accounting, project document control, equipment management and costing, inventory control, time and materials billing, prospect tracking, progress billing, subcontractor control and tracking earned value. Yet each vendor may describe and explain it differently. They can easily become victims of the FUD (fear uncertainly and doubt) factor which is right where some salespeople want them to be. This article discusses why selling and buying business application software is so fraught with confusion, delay and indecision.

One of the most inefficient and frustrating challenges in business is purchasing a complex software product. Certainly this may be doubly true of business application software which involves a mysterious confluence of function, technology, human engineering, selling technique and last, but not least, the limited attention span and lack of skills of many prospective buyers.

Read More.

Construction Software Maintenance Fees – What Will You Get for Your Money?

As someone who talks to various users of construction software every day, I often hear from users of various programs who are fed up with paying annual maintenance fees because they feel they are not getting value for the expense. This article discusses this issue.

A key factor in choosing Job Cost Accounting and/or Project Management Software for your Construction organization, is looking at the Total Cost of Ownership (TCO). This refers to such areas as ongoing cost for your organization to use and maintain the system after initial training and implementation. After a few years, the TCO can easily exceed the initial cost of the system.

The more powerful and complex the system, the greater the TCO. Needless to say, the annual maintenance fees that the vendors charge for support and “no cost” upgrades are a major component of the ongoing costs. The underlying theory is this underwrites software improvements and the vendor support services.

(more…)

Why Companies Choose New Construction Software: Software Selection Survey Reveals Surprising Results

Many business reasons drive companies to select new software, including the need for greater efficiency and the desire to gain a competitive advantage. If your company is in the market for new software, it is helpful to understand why other companies chose various solutions, and the positive or negative outcomes of those choices.

This report summarizes the results of a recent CTS Software Selection Survey, and reflects the opinions of 150 survey participants who visited www.CTSGuides.com, and registered for our free distribution, construction or manufacturing Software Selection Kits. Each kit includes software reviews, ratings and selection tools, along with a 10-minute Smart Shortlist™ consult with software expert and CTS President, Sheldon Needle, designed to help identify the best software options for the registrant’s shortlist. Under Needle’s leadership, CTS has been publishing business software evaluation materials since l983.

The results of the CTS Software Selection Survey are surprising at times and reaffirm that, despite the challenges in our economy, many companies are implementing new software. A summary of the survey results follows.

Why Software Buyers Choose a Particular Product

In the CTS Survey, 78% of respondents bought new software in 2010. When asking respondents why they chose a particular product, our survey listed four possibilities: Best Function, Best Price, Brand Recognition and Sales Presentation.

As Exhibit A illustrates, 60% of the respondents cited Best Functionality as a reason for choosing a particular product. (We were extremely happy to discover this because our CTS comparative ratings charts help direct buyers toward the products that have the best functionality for their needs.)

Price was the second most mentioned reason for choosing a solution. However, while 44% of the respondents cited Best Price as one of their software selection factors, only 9% chose a solution based on price alone. These price-driven buyers were generally less happy with their purchase than other software buyers we surveyed. In fact, one-third of the price-alone respondents reported being Very Dissatisfied with their software choice. This finding demonstrates that, while it’s important to consider price when choosing software, buying on price alone is certainly not the best approach.

Our survey indicates that a solid sales presentation was often an important factor in the buyer’s decision:  27% of respondents cited this as a factor in their decision-making process. Interestingly, 19% of respondents claimed that their choice was made based on Sales Presentation alone – and every one of these respondents report that they are generally happy with their decision. The takeaway here is that a well-informed sales presenter carries a lot of weight with buyers. Brand Recognition only played a role in 9% of the software selection decisions.

Exhibit A

What’s to Like (and not Like) About New Software

While pre-defined response choices, such as Somewhat Helpful and Very Happy, helped us spot trends and establish percentages, the free-form pick-list comments gave us a deeper understanding of why a company was happy or unhappy with their software purchase.

Comments like “flexibility” and “user friendly” were fairly common among happy buyers. Good support and training, and the ability to customize the software, were other factors that routinely lead to happy buyers. Also on the positive side, integration capabilities and technology platform were mentioned as reasons for choosing a solution and reasons why a company reported being happy with their choice.

Some of the happy software buyers reported struggling with complex implementation or functionality issues. But with strong vendor support, these issues seemed to get resolved over time.
Among the unhappy buyers, “We should have done more research,” was a fairly common response. In addition, poor training and support were contributors to overall dissatisfaction. Also on the minus side, a number of respondents were surprised by the complexity of setup and use of the system they chose, and felt that more testing should have been done before the purchase. Several respondents commented that having an internal champion to manage the evaluation process and software implementation would have improved their company’s outcome.

Exhibit B

A Note about the Non-Buyers

Our survey revealed that 22% of the respondents haven’t purchased software. While 15% of these respondents reported that economic reasons put their purchases on hold, 40% indicated that lack of interest or lost momentum among upper management stalled their technology initiative.  This confirms that buy-in from top management is vital to the successful execution of a technology initiative.

CTS: A Valuable Software Selection Resource

A cautious and thorough approach to evaluating software products and vendors is the best recipe for a successful software purchase. While it is the software buyer’s responsibility to perform the necessary due diligence to make an intelligent purchase, expert guidance and quality research materials are valuable tools that lessen the chance of choosing a solution that doesn’t fit your organization’s needs and expectations. Utilizing CTS’ free published information and Smart Shortlist consult to narrow your company’s choices is an excellent step toward a positive outcome.

The Inside Perspective:“My experience selling construction software.”

By Guest Blogger – Tim Ricketts

Selling software over the past 28 years has given me a unique perspective on the successes and failures of purchasing, installation and use of software for a construction company. Let me share with you some of the common misconceptions and blunders along with the similarities a software purchase has to a typical construction job.

First, success in software selection like any other aspect of life begins with a plan. I call it “Plan your work-work your plan” The companies who plan and document what they want to accomplish have a much higher chance of success at finding software that best fits their needs. Make sure you ask questions and survey every department and aspect of your business to determine what works and what doesn’t. One of my customers held a meeting with all employees of the company for the sole purpose of discussing what software features could help them improve the way they did their job. They wrote all suggestions on a white board and it remained in the break room for a period of time to let employees add to it. Besides the obvious of gathering critical information for the plan, it also rallied the troops and allowed them to be a part of the process and take ownership in the project.

I have seen my share of good software purchases end up as mediocre installations because management forced construction software on the masses without consideration of the those who are most likely doing all the work. Sure, the attitude of the construction company management may be that it’s their job and they should do it. The reality is they are human and work much better as a team when they feel like they are a part of the team. “Plan your work-work your plan” and get buy-in from your employees by making them a part of the plan.

Next, make salespeople part of your team. Now, you may be thinking this guy is just another self-serving salesman. Let me tell you why this is so important. Sales is a profession and the great majority of software salespeople are honest and professional. I have seen plenty of companies make poor decisions because they did not have enough or all critical information. Salespeople have an abundance of information and can compare and contrast features of the programs they sell versus those of their competitors. Take advantage of that knowledge and use it to your advantage.

It is my belief that most salespeople do not intentionally mislead buyers but they may say or represent something incorrectly because they do not know the product well enough. This is a good reason for sharing information with all sales people. If something is not accurate the other sales people may provide useful information helping you to better determine accuracy of all representations. Look at the most successful salespeople and you will find that they are the ones with the most product knowledge. The customer will find out the truth sooner or later. Therefore, if you are dealing with a reputable software vendor they will only allow so many mistakes by a salesperson because the mistakes add to support costs of additional time spent with the customer attempting to make the software do something it was not designed to do. In extreme cases it can lead to refunds or lawsuits.

The point is that by sharing information with salespeople, you put yourself in a better position to find out what is real and what is vapor-ware with regard to a particular feature or service. This really is no different than the way you manage your jobs. You talk and share information with other contractors and subs, architects, engineers etc. allowing you to benefit by what you have learned. Thus you should manage your software evaluation project the way you do your job, as efficiently as possible through open communication.

Communication goes both ways: share and communicate to learn more

Share with salespeople what you have learned from their competitors. Tell them what you like and dislike about their software and why. The good salesperson should be able to compare feature and functionality of their software to the competition. You need someone to help distinguish the various programs. No one can do this better than your salespeople. It is not just about what it does but how it does it that counts. Everyone does Accounts Payable but each vendor does it somewhat differently. This is why you should share everything with all salespeople because they will point out how the features of their product work compared to the competition. You benefit by having a better understanding of each program under consideration. The more you know the better decision you will make.

Don’t settle for the sizzle

Everyone has the special feature they want you to see. We all have them. Just make sure you don’t get caught up in the flash and sizzle. Make sure the functionality you require is there. Stick to your plan. Don’t let the emotion of a cool new technology distract you from the goals you originally set for yourself. Leading edge technology is okay when tested and proven. Bleeding edge technology can leave scars. Be careful!

Let me give you an example. Document Imaging has been a hot item for the last couple of years. The reality is most of the document imaging (DI) products in construction today do nothing more than your multipurpose printer/copier/scanner. It takes years for new programs to mature and work efficiently. A program like this has to be carefully integrated into all appropriate modules. The few that do work well are ones that the vendor has had in release for some time. Compare a mature DI product that allows drill down into job cost, payroll, AR, PO. or GL to get to the same document compared to the bleeding edge product that has a flashy screen but simply puts all job documents by themselves into one file in a stand-alone program that is written by a third party vendor. You can do this with your multifunction copier. The point is stick to your original functionality goals and features. Don’t get blinded by the flash and sizzle.

I have personally been involved in the release of two completely rewritten construction software programs from highly respected and recognized national vendors. The design and layout was superb. But I caution you that in reality it took years until the products worked as designed. Bugs, glitches, blue screens, posting errors were prevalent and added considerable time in going live adding considerable cost to implementation as well as increased stress levels. New technology is good for all of us. Just make sure you understand that there is a cost associated with it. Sizzle must have substance.

Keys to success – training and consulting

Lastly, make sure you allocate the necessary time, dollars and human resources to implement your software. Software is just like any other tool your company uses to complete a job. It requires someone who is well trained to operate it effectively. Would you send someone out to a job to weld an important structure or operate a crane without the proper training? Of course not. But time after time companies expect their software and the people operating it to perform at a high level without the proper degree of training. In my 25+ years of experience if I had to pick one item that contributes most to the success and failure of software, it is training and consulting.

Let’s distinguish between the two. Training is showing you the screen where you setup phases/cost codes. Consulting is when you use your industry and accounting experience to the customer’s benefit. For example, you don’t just show the screen to setup cost codes. Rather, you explain that setting up phases in a particular format will allow them to track both shop labor and field labor separately. The shop may be non-union and exempt from prevailing wages so they need an easy way to track that. The skilled consultant would likely have found this item early on in the discovery process so when the system is set up it is designed to provide critical or time saving information. Consulting goes beyond basic software training and includes developing internal systems and work flows so the customer can manage the business more effectively and efficiently.

Successful Installations

A successful implementation eliminates redundancy and the use of spreadsheets and reports outside of the system. For example, most construction companies create and use a WIP report that is outside of the primary system. The detail in WIP reporting can vary by company. Some companies use cost to complete, others cost at completion, some use dollars, some units etc. The issue generally is that field personal and the accounting system use different methods of measurement. Why? Because their accounting/job cost software was not set up in a way that accommodates field personnel to report completions the way they need to. Software vendors with experienced implementation skills go beyond showing how to setup a job or phase. They have an implementation strategy that includes a course of action. In this example, making sure field personal have meaningful data in the system allowing them to project cost in a way that makes sense to them while still maintaining the data integrity required by accounting is a good example of a sound implementation practice.

By the way don’t expect your training to be of the same quality for inexpensive systems as it would for higher end products. Like anything else, you get what you pay for.

To summarize

1. “Plan your work, work your plan” Without a well thought out plan, your risk of failure goes up considerably.
2. Utilize your salesperson as much as possible. They have an abundance of information and experience. Use it.
3. Don’t get burned by the “Flash and Sizzle.” Make sure there is substance to go along with it.
4. Allocate time, dollars and resources to implement the software successfully.

About the Author

Timothy D. Ricketts has 28 years in sales and development of construction software. He began his career with Contel/Versyss in the early 80’s and was involved in the design, development and release of their construction software. He has experience with J.D. Edwards, Concord, Geac and Dexter+Chaney. For the last 15 years, Mr. Ricketts has held the position of president of his own business, T. Daniels Consulting in Fenton, Michigan, where he oversees software sales, development and training of many of the construction industry’s premier software applications. He can be reached at tim@tdaniels.com or by phone at 810-629-0131.

The Key to Contractor Profit in the 21st Century

Integrating Project Management and Accounting In Construction Software to Improve Productivity and Profitability

By William Klein

What does it take to maintain a competitive edge? Customers are becoming increasingly cost conscious and competition is getting tougher. It is becoming harder to stay profitable. Contractors must deliver more for less. Margins are more important more than ever.

Competition forces contractors to focus on lower costs and higher efficiency to bring a job in under budget and ahead of schedule. Traditionally job cost reports produced at the end of the monthly accounting cycle were sufficient to manage job performance. But these reports, by their nature, are reactive rather than proactive, showing what has already happened up to thirty days ago Fast response time in recognizing variances and reacting to changing conditions is critical in order to control costs. This requires real time information, which in turn requires greater efficiency in managing that information.

In construction companies using self performing project management, project and accounting staffs have traditionally operated as independent disciplines. This was based on the belief that information was used differently by each discipline and, therefore, it was appropriate to permit each to record and store its information as it saw fit. However, information in different formats and systems cannot be easily shared. This causes information to flow too slowly and at different rates in different systems reducing efficiency and productivity. In order to achieve effective cost control project management and accounting must work together seamlessly to exchange accurate real time information.

Project Manager Responsibilities

Project managers typically are responsible for overseeing an installation from the time of sale until final delivery so that cost and delivery targets are met together with insuring the job remains profitable. To do this, they must be able to react to unexpected overruns, which means they must have easy and quick access to accurate and timely labor and material cost distribution reports. Organization and documentation are critical. ¹

Construction accounting staff is expected to know the status of work in process and change orders. Accounting must know whether the contract amount has changed so the billing department can prepare accurate invoices to the customer. Job cost information must be accessible within the accounting system so accounting can provide management and auditors with complete financial reporting.

As a natural step toward improving effective decision-making and controlling growth, almost all contractors use some form of construction accounting software, and most use project management software.² But, in these multi-system environments all information isn’t entered into the same system if it is entered at all. In many cases it is entered separately into both systems.

Emerging Applications

Project management information logs, spreadsheets, notes and correspondence are a good reflection of job performance because they are created at or near the time of an event and contain the thoughts and impressions of the PM and others working on the project. PMs must communicate critical information to engineers, subcontractors, installers, salespeople, the customer and the customer’s representatives. To meet these needs, they should have a system rich in communication and document control, such as a CRM or Extended CRM (XRM) System.

The concept of using a customer service solution as the backbone of construction project management is relatively new. Construction software have not offered CRM because the emphasis has been on scheduling, procurement and job costs, not so much on communication and customer service, and few project management systems have had meaningful accounting functionality. Although many higher end products will track costs to date by cost type that is all the accounting they do.

While many single source accounting applications appear to have project management functionality, they have historically fallen short of providing a satisfactory management system that a PM will actually use. Given that PMs generally will stay away from anything that looks like accounting, a key element of any integrated system is that it has to look, feel and behave like it is made for the user, whoever the user is. If users cannot see their own productivity improve by using the system, they are less likely to use it to its potential.

With a wide variety of software solutions available that perform different parts of the project management function including CRM, it is difficult to select the best solution for any particular business.³ Meridian and Oracle offer good project management solutions. Meridian’s Prolog comes in two different versions: Manager has in-depth construction project management features including document management, collaboration, and communication; and web-based Proliance is designed for large capital projects and facilities, has fully integrated project portfolio management, facility management and business intelligence.

Oracle’s Primavera P6 Enterprise Project Portfolio Management is a robust scalable solution for managing large construction projects, although it has to be separately integrated with financial management and accounting software, even with Oracle products such as JD Edwards and E-Business Suite.

Traditionally strong accounting systems (Timberline, Viewpoint, Dexter Chaney, Maxwell, etc.) have improved ERP/XRM integration features. All are constantly improving their project management functionality and user friendliness for PMs but remain essentially accounting systems.

The ultimate solution is a system that fully integrates the best of both worlds – one that does complete accounting and project costing along with full project management and customer relations tasks. A fully integrated system, on the order of what is needed by most $100M+ plus operations, has all job data in one place easily accessible by everyone. Full integration would include project management, CRM, scheduling, imaging, estimating, job costing, change order tracking, procurement, inventory and fixed assets, payroll, HR and all core accounting functions from general ledger to corporate level financial reporting. Such a solution combines the flexibility of a main stream ERP system with the rich environment of an XRM solution. The ERP system does the accounting and project costing and XRM does the project management. Examples are IPM by IPM Global, which uses the Microsoft XRM Development platform and has a powerful project management module that integrates with most estimating applications. In addition to all the core accounting features, it incorporates document control, has a powerful report writer and is compatible with Microsoft applications.

Other mid-market products which have come out with extensive enhancements to their integrated project management-accounting solutions include Viewpoint, Dexter & Chaney (Spectrum), Penta and Computer Guidance.⁴

Also, many companies that have deep pockets and strong internal IT resources start with a good ERP system like Microsoft Dynamics GP and modify it to handle all their PM needs. Other companies elect to start with a PM system like Primavera P6 and connect it to their accounting system using a BI (business intelligence) application.

The list goes on. There are good PM systems that have expanded to include job cost accounting. There are accounting systems that have expanded to include some project management functions and there are a few that appear to have successfully bridged the gap and provide it all. Once you are ready to make the move to full integration you have to define the business requirements for each discipline then do a side by side comparison of software features that are compatible with your internal processes. This is where vendor reps who have a deep understanding of both project management and construction cost accounting can recognize how your particular internal processes will interact with their software. Since no one system will work the same for everyone you have to select the features that are most closely compatible with your internal processes. A source such as CTS Guides (www.ctsguides.com) offers free side by side comparison of different ERP/XRM features of many popular construction software packages.

Summary

Finance and project teams tend to see things from different points of view, but it has never been more important for construction companies that expect to increase profit and gain market share in an ever more demanding environment, to recognize the importance of fully integrating project management and accounting functions. With a properly implemented system you can expect a smoother operating and more profitable company.

About the Author

Bill Klein, JD/MBA, has over 25 years experience in construction and is an accounting and finance consultant in the San Francisco Bay Area. He can be reached at bill@kleinbusinesstools.com.

Notes

Expensive Lessons in Construction Software Training

By Sheldon Needle

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.