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Improving the information flow
Real-time data is a hot commodity in technology-for-business circles right now. The interest is mostly coming from big companies, but that doesn’t mean it’s not for you. Real-time data is useful to even the smallest contractor with employees.
Information on your company’s activities increases in value with the data’s freshness.
If information flowed faster, what would it mean to you? I’ve heard many stories from contractors who did not know a specific project was going bad—even though they were frequent job-site visitors—until it was too late to avoid catastrophe.
This is not unique to small or medium-sized contractors. EMCOR Group—the largest electrical contractor—had something similar happen to it in 2003. The company’s operation in England went bad. At first, the company thought leaders at the English subsidiary had things under control. By the time it learned that that was far from true, things got even more out of hand.
EMCOR had to clean house at the top of its English operations, but not soon enough to avoid lower profits that it would have had otherwise.
Where to start
Which software should you use to speed things up? It’s not necessarily relevant. Can your accounting, estimating and project management software cope with accepting info every day and spitting out reports more frequently? I hope so.
If that’s the case, your software will give you more control of your company—if data that’s put into it is accurate and fed into the machine regularly—daily would be best. What needs to happen to get this done?
o Job-site change: Perhaps your project managers and foremen do not consider inputting information part of their jobs. If so, you won’t have the data. Either hire someone to do it (a stay-at-home parent who works 11 to 1:30 every day?) or incentivize your key people to get you the information.
o Office possibilities—Daily information flow means nothing if you don’t use it. With accurate daily data updates, your office staff has to changes its routine. How about invoicing more frequently? With accurate daily data, you can do that. If weekly invoices come with updates, your customers will feel confident that you have control over the job. You’ll rise above the run-of-the-mill contractors in the customer’s eyes. Of course, other subcontractors may come to hate you; worry about that when the carpenter and plumber add to your family’s investments.
You, the contractor, have to change the way you react to data. How?
1. You may be used to saying, “If only I knew about that problem earlier.” That’s out. If daily info flows in and office staff uses it, you must pick up your pace.
2. Manage by exception. When you get a blood test, the results come back with an “exception report.” If the acceptable range for total cholesterol is 110 to 150 and yours comes back 225, the lab report reads so even a busy doctor can’t miss it. The printout or paper report might use red type or a series of asterisks, screaming for the doctor’s attention to your cholesterol level. Have employees earmark the anomalies, so they can’t be missed.
Not everyone seems to manage by exception. In becoming president of an operation several years ago, a friend of mine inherited a financial chief. “Every time I go to her office, no matter what, she’s sitting there—staring at numbers,” my friend told me, talking himself into making a change.
You shouldn’t have to unearth “hidden” problems—numbers should scream “out of range” at you! If by week 15 your estimator figured 35 percent of a project should be complete, but you’ve consumed only 15 percent of the materials—well, it could be nothing is wrong. But it’s worth a look. That figure “15” should print in big red digits.
3. As the boss, you’ll need to change how you manage. You can’t stop going to the job site. You can’t change the nature of job-site visits (“What the heck is going on out here?”) because of the data.
For one thing, if the reward for accurate data is snarling visitors, your job site people might well start monkeying with the data hoping to “make up for it” next month. Down this road lies ruin.
Over time, you’ll become accustomed to looking at numbers and using them to manage. Between this day and that, getting the info flowing and adapting how “we’ve always done it” to the way we can do it better might well be an interesting—and ultimately rewarding—challenge. EC
SALIMANDO is a Vienna, Va.-based freelance writer and frequent contributor to ELECTRICAL CONTRACTOR. He can be reached at [email protected].