The slowing economy may be challenging the construction industry, but technology vendors say they can help electrical contractors ride it out by making their work more efficient, allowing them to accomplish more estimates, spend less staff time looking for documents, and keep up with a world that is becoming more electronic.
Contractors have choices in learning about myriad software options and how to use them.
Most of the electrical contractors that call Steven Carr, estimating instructor and owner of Carr Consulting Services, Ventura City, Calif., are small to medium-sized businesses trying to move out of the residential market and learn the basics in the commercial building industry, including creating estimates.
“I teach a lot of electricians starting up,” Carr said, adding that he also teaches estimating to beginners, including office secretaries required to learn the estimating business. He helps contractors that repeatedly lose money on their estimates.
Carr uses a Planswift estimation system because he said it is less expensive than other solutions and fairly easy to use.
“It has the right price and feature set,” he said.
Carr uses the software to teach estimating online. People come to Planswift with different levels of experience, some using Excel spreadsheets, others drawing their estimates out on paper.
“The days of doing takeoffs on paper have come to an end,” said James Purpura, vice president of Planswift. “It’s no longer cost-effective to print 36 copies and drive them all over town. The construction industry has been so archaic for a long time, but we are seeing a huge shift.”
“We know that electrical contractors are not computer guys,” Carr said. “The industry is going digital, and we want to be able to carry them into the digital age. If you can do an estimate on paper, you can do it on your computer.”
“There were several reasons why I was looking for an on-screen estimating system. Storage got to be a huge problem. We do a lot of large projects, and it gets unwieldy,” Carr said, adding that the electronic process solved that. “I don’t need to haul papers around, just my laptop.”
Carr guesses that about 20 percent of the industry is using estimation software, while in urban areas, the number is closer to 60 percent.
Stephen Young, president of Oklahoma Electrical Supply Co. Inc., (OESCO) Oklahoma City, said the company replaced its software accounting system in 1999 due to Y2K computer-failure fears and since then has been using the Dexter + Chaney Spectrum system, originally known as Forefront.
“Our existing system had been cobbled together and just wasn’t seamless,” he said.
Young said his company wanted everything from purchasing to accounting on one system that would be easy to use for all the company’s departments.
“Job cost was our biggest issue. When you have a fairly large business, it isn’t easy,” he said.
Using the system has required some thought process changes, he said.
“Probably the most radical thing we’ve done is document imaging. Now we have the ability to invoice by e-mail,” he said.
Prior to implementing the current system, a document came in, was photocopied and distributed to all those who might need to see it. The documents could include change orders, invoices and any other paperwork.
By comparison, today, a document is scanned into the system and immediately made available to accounts payable, project managers and anyone else who might be interested. Documents can be approved electronically, and project managers can pull up data about any job he or she is working on and determine what paperwork or correspondence has recently come into the office.
“We don’t end up with a file on someone’s desk that no one can find,” Young said. “It’s radically changed the way we operate and increased accuracy.”
In addition, when a contract comes in, any correspondence related to that contract is electronically filed.
“If someone wants to see the contract, they can look it up. It’s speeded things up a lot,” he said.
Young speculated that, for smaller companies that may have devised their own office management system, a software accounting or estimating system could force the company to run its office the standard way.
“I think it would force them to do things properly. It’s been great for us,” he said.
Young said his project managers initially were skeptical about the new system.
“We’re project managers, not clerical people,” he said.
But as they got comfortable with the system, they found the software increased their knowledge about a project and reduced time looking for paperwork, he said.
OESCO uses Accubid for estimating, Young said. The Spectrum system takes data from Accubid to help staff follow a project from estimation through construction. The office can download information from the estimates to the job-costing portion of the system, for example, saving duplicate work.
Similarly, all estimation software, such as those made by ConEst Software Systems, McCormick, Maxwell Systems, etc., should integrate with accounting and/or project-management software systems.
McCormick Systems estimation software can do that, said Todd McCormick, company president.
“By integrating to accounting and project management software, the contractor doesn’t have to double input their data,” he said.
In addition, an estimating software system often can feature a scanned drawing and provide electronic CAD accuracy, saving the contractor from carrying piles of paper to a customer or general contractor.
Carr said he sees a growing number of paper drawings that are not true to scale and inaccurate, a problem McCormick said software can solve.
“With margins today, it is harder to recover from mistakes,” he said.
Brad Mathews, vice president of marketing, Dexter + Chaney, said the world is becoming less face-to-face and more electronic.
“We’re seeing it really come home to roost in construction,” Mathews said.
Customers expect fast responses to their needs, and electrical contractors are becoming increasing agile at providing quick—and often electronic—responses in part due to their software systems. The way companies work has changed, the needs of the customer have changed, and the whole organization needs to work together with visibility across departments and functions, he said.
Whether software needs to be designed specifically for electrical contractors varies depending on whom you ask. Mathews—whose company offers a specifically targeted electrical package—said a software system unequivocally must cater directly to electricians. After all, he said, there is little resemblance between the demands on electrical contractors and those on, say, steel providers. About 40 percent of an electrical contractor’s costs are in purchasing, and they can choose from about 1 million part numbers, Mathews said.
“That’s an enormous volume. It’s pretty easy when you’re buying concrete,” he said, adding that it’s not so easy for the typical electrical job.
The software system needs to be able to sort through that volume and itemize appropriately. In addition, electrical contractors are usually responsible for purchasing and for providing their own labor, which is not common for many other kinds of contractors.
The software system should be nimble enough to allow contractors to sub out assembly work as well, a growing practice. Spectrum, Mathews said, accomplishes this by carrying assembly work expenses, creating purchase orders and attaching specifications to those purchase orders.
In addition, top management needs to be involved before purchasing a software system, Mathews said.
“When we see an implementation that goes well, it’s because management was involved,” he said.
Implementation of new systems takes time, and the company needs to have an overall view of its capabilities and benefits, which management can provide. If just one department is involved, such as payroll, little is accomplished.
“The folks in payroll learn the system and run payroll on it. They’ve achieved their goal, but are they working with billing? They have to all work together as a team, which takes a concerted effort across multiple departments, and you need that oversight from the managers,” he said.
Mathews said there is no one solution for every company.
“Companies need to know themselves, looking at their unique critical needs,” he said.
For contractors, those needs could include solving problems in purchasing or improving change orders or workflow.
“Pick a partner, not just a piece of software,” Mathews said. “It’s going to be a process. Find someone who can provide a strong working relationship.”
The economy is forcing contractors to seek every possible cost savings, including reducing the time to prepare estimates. The price of materials makes accuracy and detail during estimation of paramount importance, as well.
“With [software], you can estimate more jobs, and ultimately get more jobs,” McCormick said.
SWEDBERG is a freelance writer based in western Washington. She can be reached at email@example.com.