Are you still using spreadsheets and file folders filled with project documents to manage projects and track the incredible volume of details that make up a single job? Perhaps you’ve been using an older construction management software (CMS) application but find that it no longer provides the document and cost control you now need.
If it’s been a while since you considered CMS programs, you should know they have become much more customizable and adaptable to a wider variety of business types. With more software available than ever before, contractors no longer need to develop their own solutions. You can choose from a market that ranges from high-end enterprise resource planning (ERP) systems that manage all aspects of a construction business to single-function apps that simply track field labor or deliver work order information.
Trends and innovations
Cloud computing is the leading trend in CMS and, seemingly, all computer migrations today. According to Scott Hegrenes, product manager for Viewpoint Construction Software, Portland, Ore., more than 70 percent of respondents in a recent customer survey said that technology is the most important factor for success and making people efficient. Yet, when asked how many respondents understood cloud computing, half didn’t really know what it meant.
“The takeaway,” Hegrenes said, “is that the cloud is important in prioritizing company spending, but companies are still somewhat confused as to its meaning and importance to the business.”
As a concept, cloud computing means that data is hosted off site; files and software are generally accessed through a network using an Internet-connected device, such as a computer, a tablet or a smartphone. There is less local equipment to maintain, information is backed up reliably, and you can access your data from anywhere—you don’t need to be sitting at your desk at work. With less equipment on-site, cloud computing saves companies in information technology (IT) staff costs.
“The difference is between being able to spend time improving revenues and operations or spending time in expense-driven activities,” Hegrenes said.
The cloud, according to Wayne Newitts, director of marketing for Dexter + Chaney, Seattle, is a natural fit for the electrical construction industry.
“As a networked collection of computing resources accessible through an Internet connection, the cloud can take different shapes, and contractors can use it to operate more efficiently in the field,” he said.
The cloud enables personnel to use Internet protocols on any smart mobile device to access company applications and data and operate as if in the office. With those benefits, the Internet becomes a utility.
The perception once was that owning hardware and software was more secure; however, security issues have been addressed, companies still own the data that reside in the cloud, and shared hosting costs are less than maintaining an entire infrastructure.
“Companies no longer want to manage servers, and [they] see the benefit of providing personnel with a smart device and Internet connection to enable them to work efficiently from remote job sites,” said Daniel Cohen, director, of marketing for Procore Technologies, Santa Barbara, Calif.
Interoperability between systems is another trend gaining interest, according to Diane Haines, senior director, strategic marketing at Sage Construction and Real Estate, Irvine, Calif.
“Companies are becoming increasingly interested in learning how systems and software can be integrated so that contractors can exchange information with the rest of the design and construction team in a more collaborative environment,” she said.
Effect of mobile communications
Viewpoint’s survey indicated that close to 40 percent of respondents allocated money to invest in mobile communications for 2012.
“Where the cloud is relatively new and there is still some reluctance to migrate to it, mobile communications is a mature technology that has mainstream acceptance, [has] lowered costs and is almost becoming a competitive requirement and essential technology for retaining talent,” Hegrenes said.
For electrical construction companies, mobile communications enables paperless work orders and dispatching and provides real-time interoperability with the home office’s ERP system for immediate billing, payments and improved cash flow. For field personnel, mobile communications enables real-time access to the company’s CMS and to customer and project histories and equipment information. Field workers can take and upload pictures of the installation, and to get answers to questions immediately.
“Field personnel are now starting to ask for mobile communications, which have become easier to use and more intuitive,” Hegrenes said.
Smartphones and other mobile devices have become even more important as contractors have had to diversify both geographically and into other markets, such as green and security, to find more work.
“Mobile technology enables more far-flung personnel to communicate with the home office and to research new technologies, systems and products that will fulfill new customers’ needs,” he said.
Mobile communications also is inspiring other new technologies, according to Cohen. The iPad specifically, he said, has greatly changed the job site and is making the exchange of information so fast that implementing CMS can enhance returns on investment by eliminating project overruns alone.
“Mobile communications and the smart device mean field personnel no longer have to go to the site trailer or home office to research an issue. Instead, they have remote access to project timelines and inventory, can manage subcontractors and improve the overall efficiency of the project and prevent overruns,” he said.
Benefits and challenges
CMS makes the contractor more efficient and better able to respond quickly and cost-effectively to the customer. In addition, it enables the contractor to track opportunities and bid jobs faster and more accurately than competitors who do not have such a system.
“CMS manages all aspects of the project and enables the contractor to know, on a daily basis, how the job is tracking and performing and minimizes the impact of changes,” Hegrenes said, adding that the customer receives a more effectively performed job that is delivered on-time and on-budget, with faster service-call response, accurate dispatching and fewer call-backs.
“A full CMS system allows the contractor to manage projects by exception,” Newitts said.
That is, the system organizes, prioritizes and sets alerts based on customized thresholds, enabling the contractor to react immediately to project trends or specific issues or business problems.
“A CMS system connects all of the different groups of the electrical contractor together, moving the team away from a silo-based management approach to improved collaboration between all employees,” he said.
CMS’ ability to integrate the business and operational sides of the company also serves collaboration better.
“When a contractor has financial and operational information together in a single database, there is more visibility across the entire enterprise, helping the contractor to understand the real costs and profits of projects, to become more efficient through the elimination of multiple entries, and to become more accurate in bids and pricing,” Haines said.
And when the contractor extends that visibility to customers, allowing them access to project data from the contractor’s ERP system, the customer can have increased confidence in the project status and scheduled completion.
“Also, integration with the contractor’s ERP system enables the customer to receive, review and pay invoices more quickly,” Haines said.
There are, as with any change, implementation challenges. According to Hegrenes, one of the biggest hurdles is training.
“The team has to be acclimated to changing business processes, and management has to ensure employees are set up for success in making the switch,” he said.
A challenge may be working with the vendor and clearly communicating the contractor’s operational and business software, Newitts said.
“The contractor should be actively engaged in the implementation process and work with the vendor to set goals and expectations. The biggest reason for an implementation failure is mismatched expectations,” he said.
Another challenge is still common acceptance of the cloud.
“Regardless of the cloud’s security, many people still have questions about it, and some companies are just not comfortable with having financial information on the Internet,” Haines said.
According to Newitts, however, the reputable providers that offer at least 128-bit encryption have addressed cloud security.
“It is generally easier to hack into a single company’s server than the cloud,” he said.
Choosing your solution
“Pick a solution that enhances your business practices and not one to which your company must adjust,” Hegrenes said.
The solution, he said, should have a modern, open communications architecture, it should be adaptable to estimated growth and potential changes to the business and the industry, and it should integrate with the company’s existing ERP.
“The culture of the chosen vendor should be a good match to your own, so you can develop a long-term partnership to effectively deal with future upgrades or implementations,” he said.
Newitts advises contractors not to get lost in the features and functionality of the potential CMS applications but rather to start with a list of business problems that need fixing and look for the software that solves those problems.
“Once software from mainstream vendors with a history in the construction industry are identified, the contractor can examine peripheral aspects of the solution, such as support, maintenance, payment flexibility, customization and integration with other software applications,” he said.
Because there are a lot of stakeholders throughout the company who will use the software, choosing the right CMS solution requires that the whole organization understands the objectives and communicates what they feel is the ideal solution.
“Once the contractor begins working with a specific vendor, it should fully examine the services training and support the vendor offers after implementation,” Haines said.
Other factors to consider include whether the vendor offers frequent and free upgrades to ensure the software adapts to a rapidly changing industry and whether the software is intuitive and easy to use.
Moving forward, contractors will need to look at evolving CMS solutions that provide both internal and external collaboration and the ability to share information between and among the project team.
“Project managers and field personnel need to collaborate with the contractor’s office personnel, as well as with architects and general contractors, to efficiently manage drawings, correspondence, schedules and change orders,” Hegrenes said.
Such real-time information exchange will lead to improved project efficiencies and profitability.
BREMER, a freelance writer based in Solomons, Md., contributes frequently to ELECTRICAL CONTRACTOR. She can be reached at 410.394.6966 and email@example.com.