The Construction Contractor's Digest

The development of integrated software information systems in recent years, much of financial, estimating and project management process has been automated for contractors. Available from a number of software vendors, these systems combine accounting, estimating, project management, purchasing, equipment management, on-site labor management, and other critical functions.

This integration features include such things as software's automatic updating of job costs when purchase orders or subcontracts are created. Committed costs in the job-cost module are automatically converted to actual costs when a vendor is paid through the accounts payable module. In addition, invoices are automatically created when the project manager updates the percentage completed on a project.

From a management perspective, the advantage of such integrated systems is that companies may continuously update project information. A side benefit from the use of such software is a more standardized approach to management when compared with other manual systems. In other words, the management process can be "hardwired".

Some of these systems incorporate remote job entry, which allows job-cost information to be entered from job sites. Thus, labor productivity and accurate job costs are available to on-site personnel instantaneously. Conversely, some companies have found that using common suites of software and integrating them is an effective course.

Two prime examples are Microsoft's Office or Intuit's QuickBooks. Both are dominant in market share. Some clear benefits are 1) Most people who have used computers have used them. Many new hires today are competent users. They are ready to use the software now. No training is needed. 2) These software packages integrate with other construction related software. Especially important when communicating with your clients, or suppliers. 3) Since many people use them, you won't need to call customer support; you just call someone you know in town. No long distance phone call needed.

Some older contractors are still not using email. This is a missed opportunity. Net profit before tax margins are single digits (versus decades ago). Competition is greater, cost pressures are more and uncertainty is the highest it’s been in some time. Small efficiency improvements such as technology are the only opportunities left. There are no great windfalls remaining.

Again, anyone would be wise to start using a computer to begin organizing, transferring, and analyzing information. Certainly, construction is not immune from technology’s power nor is competition unobservant of its utility.

Software

What software makes sense? A great question which is loaded with all sorts of controversy. As you well know, there is some very good technology in our industry. Contractors mostly swear by it (although, some swear at it). All contractors are unique and there is no one software that covers each person’s needs.

As an aside, I don’t work in the software industry nor sell that product. As a client from Texas says, “I don’t have a dog in this fight”. Our firm does not benefit from the sales, service, maintenance contracts or upgrades.

We will answer this question, but first let us tell you our reasons:

We live in a world where there is constant change and innovation. Software companies come and go. Some stop supporting certain software while developing others. This has left a few contractors in a bind. Microsoft is a viable company, financially and otherwise. I feel that we won’t see Bill Gate’s company go away in our lifetime. When the company does fold, the new software leader will have to make his program bridge to Microsoft’s (since there are millions of users).

We use less than 10% of the available utilities. From several studies, it has been concluded that the average is 6%. We buy the bells and whistles but, use the basic functions. All software looks great in the sales presentation, but loses its luster in the contractor’s office.

People have to use the computer software, it doesn’t run by itself. Excel is straightforward and simple software helps new hires and tenured employees to use it effectively. Software that is common has a wide user base. Your new hire might have used it in a previous job. The more common, the more likely they will have used it.

For several reasons listed above, we recommend Microsoft’s Office Suite which includes Excel, Word, Outlook, and Access among other software packages.

We know of several situations where a contractors has integrated Microsoft Office as their main management software package.

Specialized software has to be used sometimes. For scheduling, there are only a couple viable software packages made for construction. For serious accounting, there are more packages available than that. However for most day to day applications, you will find this software does have value.

If you are a young in age, think about using MS Office and integrating it. The benefits and the reduced cost over your career at too great to ignore.

Matt Stevens is a management consultant who works only with construction contractors. He has performed training and business consultation for the contracting community since 1994. Matt can be reached at mstevens@stevensci.com.

Search Terms: Time management, effective management, efficient management, leadership, productivity, Best Practice