IT and the Electrical Contractor

The capabilities and availability of information technology (IT) are increasing rapidly for the electrical contracting firm. New IT products and services that promise to improve efficiency and increase profits are introduced daily. These include Web-enabled cell phones, high-speed satellite Internet service at project sites and many others. Electrical contracting firms need to keep pace with technology or become extinct.

Customers, both general contractors and owners, demand that electrical contracting firms have compatible technology and know how to interface efficiently.

There are five principles that should guide the electrical contracting firm in its adoption and use of IT:

1. Your Business Is Information

A firm must realize that its business is really about information. Having the right information when and where it is needed is the key to the electrical contracting firm's success. Project management, procurement, equipment management and other construction processes are dependent on information. Similarly, firm administration, accounting, payroll, billing, estimating and other back-office processes also rely on the efficient and effective flow of information. To be successful, upper management must understand the importance of information to the electrical contracting firm's success and the potential of IT to improve these critical day-to-day processes.

2. IT's Not Business as Usual

When adopting IT, the electrical contracting firm should thoroughly examine and analyze the process that will be automated and reengineer it to take advantage of capabilities of the technology. One of the biggest mistakes firms make is to simply automate existing processes, which does not take advantage of IT's capabilities. Since the legacy process undergoing the automation is often paper-based and has probably evolved over time, it has built-in inefficiencies that need to be eliminated.

3. Come Together with IT

Due to the nature of the business, the electrical contracting firm's operations are spread out across town or across the country depending on the type of work it does and its customer base. For the first time ever, the electrical contracting firm can economically integrate its field and office operations in real time to improve com-munication and increase operational efficiency. Branch offices, job sites, and service technicians can all be tied back to the home office using available communication networks and services.

4. People Make IT or Break IT

IT is not just about technology. Adopting IT requires change and that means people and IT's impact on them and their work needs to be considered. IT will not be successful without the support of the people who are using it. First and foremost, employees must understand why IT is being adopted and what the electrical contracting firm expects to achieve from its adoption. Without this knowledge, employees can't help the firm achieve improved productivity and reduced costs. In addition, employees must be trained and provided with the necessary technical support needed to use IT efficiently and effectively. Not having the necessary IT training and support will lead to frustration, while the system will never achieve its potential. In fact, failing to consider people in the adoption of IT and not providing the training and support they need can actually lead to productivity loss when compared to the way things were done before adopting IT.

5. Show Me the Money

Finally, IT is an investment just like the purchase of a piece of test equipment or new machine. It is not as easy to analyze the potential return from an IT investment as it is to analyze the potential return from the purchase of a new service truck. However, this evaluation must be done. Investing in IT just to be on the cutting edge and hoping for a payoff is not a viable IT strategy. Before investing, the electrical contracting firm needs to first estimate the costs of putting IT to work in the firm, which includes not only the investment in hardware and software, but also any physical modifications and installation costs required, training and support, and lost productivity while employees adapt to the new system, among other factors. Ongoing costs such as recurring service charges, technical support, upgrades and training also need to be considered in the analysis. The firm's accountant should help with this analysis and, if it is unlikely that the firm can earn its required return on investment from the IT investment, it should not make the purchase. EC

This article is the result of an ongoing research project investigating the future of the voice/data/video market that is being sponsored by The Electrical Contracting Foundation Inc. The author would like to thank the foundation for its continuing support.

GLAVINICH is an associate professor in the Department of Civil, Environmental and Architectural Engineering at The University of Kansas and is a frequent instructor for NECA’s Management Education Institute. He can be reached at 785.864.3435 or 

About the Author

Thomas E. Glavinich

Freelance Writer
Thomas E. Glavinich was an associate professor in the Department of Civil, Environmental and Architectural Engineering at the University of Kansas. His tenure as one of Electrical Contractor's most trusted and reliable source of industry research end...

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