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TechnologyAdvice Guide to Construction SoftwareUpdated: Jan. 16th, 2019
The architecture, engineering, and construction industry (AEC) is known for creating incredible structures: the Golden Gate Bridge, the International Space Station, the Empire State Building. Projects such as these are astounding— and in the case of the ISS, literally out of this world.
Admittedly, not many AEC businesses require space technology to create impressive structures.
But a digital toolbelt is becoming an integral part of a construction firm’s success. Without the proper technology in place, managing all the moving parts of a successful AEC business might as well be rocket science.
And you’re not a rocket scientist, are you?
Unfortunately, construction companies spend less on IT than any other industry. Given this trend, it’s unsurprising the AEC field is infamous for finishing projects over budget, after deadline, and out of scope. Many firms continually struggle to both manage project data and use it to their advantage— yet construction software was created to overcome these specific hurdles, as well as allay the undesirable outcomes above.
Sometimes referred to as capital program management software, or CPMS, construction software is the fusion of accounting, project and document management, process automation, and cost-control technologies— with advanced reporting capabilities woven throughout. This catch-all system was designed to fill the gaps that ERP software and other internal systems of record overlook.
Essentially, construction software is the bread and butter of an AEC operation. It goes beyond construction project management software— which tracks job progress — by helping businesses aggregate, control, manage, and most importantly, use the valuable data that multiple construction projects generate.
Because of these benefits, more and more companies are investing in construction technology. Analysts forecast the global AEC software and services market will experience a growth rate of 7.84 percent through 2018. Like many other software verticals, AEC software’s market growth is partially fueled by increasing cloud-based construction management software adoption. However, interoperability issues among various AEC vendors threaten the growth of this market.
Do You Need Construction Software?
Managing an AEC operation presents many unique challenges. Without the automated processes, streamlined workflows, and analytics that construction software offers, these challenges are exacerbated.
Do the following issues sound familiar?
- You have trouble balancing multiple jobs and seeing the “big picture” view across a wide portfolio of projects.
- You lack reporting capabilities which create summary data on project status and risks.
- You lose profits through errors, inefficiencies, incomplete information, and redundancies.
- Your current system is a tapestry of several subpar software programs.
- You often re-enter data or duplicate work between systems.
- You battle mistakes from miscommunication, out-of-date documents, and the inability to access information from the field.
- Your projects suffer from inefficient communication and changing schedules.
- You lack a methodical approach to client communication, data entry, process management, and information retrieval.
If you’re nodding in agreement, then your job is much harder than it should be.
You owe it to yourself and your business to find a solution that doesn’t drive up costs and complicate relationships with customers and employees. You need modern construction software.
But with so many construction software categories and options available, choosing the best solution for your business can be an overwhelming process— especially since vendors constantly update and advance their offerings. It’s even possible that you’ve been down this road before, but your first system isn’t cutting it anymore. Don’t worry. This guide will teach you how to compare systems like an expert and find the best construction software for your business.
How to Compare Construction Software
When it comes to construction software, there is no one-size-fits-all solution. Your specific business goals and needs will determine the construction software you choose.
While looking for a modern system, it’s best to think of construction software as a Swiss Army knife. Though it offers many useful tools to manage several business processes, sometimes you’ll need additional specialty gadgets. For example, you may already have a CPMS system in place that you love, but the accounting tool just doesn’t fit your needs. Rather than abandon the whole suite, get a sharper knife: look for a best-of-breed accounting system with features tailored to your niche, then integrate it with the existing system.
Additionally, keep in mind the opposite is true— your business may not need a multi-tool.
Though a comprehensive system should include each module below, touchpoint solutions that excel at one business aspect are available. For example, it can be tempting to “go big!” and buy a complete CPMS suite. But if your biggest business issues stem from the inability to manage client relationships, then it’s better to find a specialty gadget— such as standalone CRM software tailored to the construction industry. Why buy a Swiss Army knife when you really need a left-handed can opener?
Clearly defining the issues you need a new system to solve will help you choose the right tool for the job. Let’s take a look at what’s inside the construction software toolbox:
- Accounting, budgeting, billing and invoicing, bid management, job costing
- Client communication, supplier, subcontractor, and lead management* Daily work logs, timesheets, incident reporting, job scheduling, task management* Document, photo, change order, permit, purchase order, submittals, warranty, and contract management
- Budget management, bid management and submittals, jobsite logs, and estimations
- Email Integration, collaboration, file sharing, document tracking and management
- Planning, scheduling, resource allocation, milestone tracking, time tracking, task management, visual task tracking (Gantt Charts, Kanban boards, progress bars)
- Accounts payable and receivable, general ledger, cash management
- Payroll, billing and invoicing, purchase order management* Job costing, budgeting, forecasting, and construction breakdowns, bid management
Customer Relationship Management:
- Contact management, customer interaction tracking, contract and quote management
- Integration with accounting, marketing, or project management systems
- Product and cost database, pricing books, construction calculators
- Billing and invoicing, job costing, quote and bid management, and subcontractor data
Tool and Asset Management:
- Fixed asset management and budgeting, inventory tracking, maintenance scheduling, issue and warranty management
- Depreciation calculations, audit trail, and tax management
Field Service Management:
- Customer and work order management, complex scheduling and dispatch, remote inventory management
- Field worker activity tracking and performance management (driver logs, time tracking, job status updates)
- Integration with inventory, accounting, and other back-office systems
As you can see, construction software can become very granular. You can buy a powerful CPMS system with all the vast functionality listed above, or you can buy construction project management software to keep your endeavors on track. Or just a document management system to help your firm go paperless. And thanks to cloud deployment and à la carte suites, one vendor often offers each of them.
So how do you decide which one you need?
Once you’ve identified your business goals and used them to make a list of must-have features, the next step is to determine how you’ll be using the software.
Common Construction Software Applications
With construction management software, everyone with access stays up to date on each job process— bids, contractor forms, order processing — without skipping a beat. But depending on the size or type of AEC business you manage, there are special considerations to make. Let’s explore some of those differences.
Large firms need end-to-end construction software that encompasses all aspects of a project-based business— from concept to asset. Enterprise CPMS systems are known for their security, efficiency, and customization.
The biggest concern when choosing an enterprise solution is complete system integration.
These solutions are designed specifically to help firms lower project costs, increase resource productivity, reduce duplicate data entry, and enhance operational efficiency. Synthesis between systems is beneficial because it increases communication by allowing information to flow seamlessly through the enterprise: from the field, to main office, and back again. This integration also provides decision-makers with a clear picture of each project’s status and performance of the organization as a whole.
Midsized firms have specific characteristics and challenges that can lead to diminished profits without the right tools. It’s likely that you’re:
- Fighting the steady creep of corporate overhead
- Expanding your single service offerings to a one stop shop to pacify increasing client demands
- Serving a mix of public and private sector clients
- Opening multiple branch offices and augmenting your regional footprint
- Adopting formal management structures, governance policies, and IT systems
- Struggling with slower decision making as teams grow and your responsibilities are delegated
Overall, your midsized firm’s technology needs can be summarized in two words: growing pains. As the awkward Jan Brady of the bunch, enterprise vendors are too complex for your business, but you’ve outgrown your smaller system— or collection of touchpoint systems.
So what’s an awkward middle child to do?
Most importantly, you need a vendor that helps you consolidate multiple systems. This means finding construction software with strong core functionality and tailored add-ons. A centralized hub will help you do two things:
- Avoid the overly complex pricing and customization of enterprise solutions
- Stay competitive against smaller, agile firms with lower costs and niche markets
A centralized database will also provide customizable reports and easy access to information to help you identify issues before they become a problem.
Small firms expanding staff from a one or two person business can use construction management software to help scale gracefully. At your growing firm, you likely wear a lot of hats. Your day isn’t predictable; you are reactive rather than proactive, and you spend a lot of time putting out fires. To combat these issues, you need a system that helps you automate processes, delegate responsibilities, and increase transparency.
For example, you may be accustomed to doing job estimates by hand for a few projects every week. But as you land larger projects, this process becomes inefficient. Additionally, the spreadsheets you use for tracking projects aren’t best for collaboration and locating information quickly. Construction estimating software can help you— or another employee — complete the bid process swiftly and accurately. As far as collaboration goes, construction project management software is your answer. It provides a central place to track projects, assign tasks, and view progress at a glance.
Cloud-based systems are deployed quickly and without an IT department, and often provide a powerful solution at an affordable price. Many large vendors provide construction management software suites tailored to small firms. These systems cover basic construction management functionality, but you may find that a robust accounting or project management module includes all the tools you need.
BY CONSTRUCTION TYPE
In addition to selecting software based on your business size, it’s also important to consider the services you offer. For example, a home remodeling job will need vastly different tools than large industrial projects. Since general, residential, and commercial contractors have varying needs, many vendors have tailored suites for each type.
Additionally, many vendors offer software specifically for niche firms:
- Subcontractors: Electrical, Carpentry, Plumbing, etc.
- Specialty Construction Projects: Healthcare, Industrial, Heavy civil, etc.
Investing in technology created for your exact needs will ensure you meet the unique challenges of your industry. For example, let’s say you are an HVAC subcontractor. Every time you work on a new project, you have the potential to do the service work for that client when the job is complete— a huge opportunity to create a customer for life. By choosing HVAC specific software, you know you’ll have the customer relationship and field service management functionality you need to track clients and provide exceptional customer service.
How to Create Executive Buy-in
Construction software allows you to monitor multiple projects, eliminate unnecessary paper processes, and gain insight with advanced analytics. This all sounds great, but how do you actually convince the C-Suite it’s time to graduate from manual workflows, spreadsheets, and QuickBooks? Let’s take a look at some of the company-wide benefits that you can use as talking points to create software buy-in.
Founder, President, CEO— no matter their title, the leader of your organization constantly works to minimize risk. Construction software helps by providing easy access to information in a single place, which leads to increased visibility, better communication, and process standardization.
Increased visibility means back-office and field data is available from anywhere. Performance and project metrics derived from this data is beneficial since it allows companies to shine a light on bottlenecks. Once inefficiencies are identified, it’s possible to address them before they cause major project delays or other issues.
This naturally leads to process standardization, which is important because it creates a clear division of responsibilities, methods to communicate information to each team member, and provides a basis to estimate task length. Most importantly, a fine-tuned process minimizes risk because it can be repeated to obtain consistent, successful results.
The CFO is concerned with managing the financial risks of the firm, including financial planning, record-keeping, and reporting. The biggest benefit of construction software for them is greater control of cash management. Gaining control over project costs is a major key to protecting profit. Since construction technology allows constant access to project data, accounting, and payroll systems, you’ll always know where finances stand. Modern systems allow you to access real-time budgets, contracts, invoices, and change orders all with a few mouse clicks for instant assessment. This leads to early detection of cost overruns and scheduling issues that can be corrected before they get out of hand. With advancements in modern technology, spreadsheets are simply not the most profitable method for managing projects and business data.
Your CIO and IT department are invested in helping the company eliminate technology-related obstacles and achieve greater levels of efficiency. Nowadays, this means choosing, building, deploying, and managing systems that promote high levels of integration throughout the entire AEC firm— such as modern construction software. Your technology leaders want to provide simple cost-effective information sharing across the organization, so they’re likely to support software with benefits like less infrastructure and seamless integration. Most importantly, your CIO can help you make the most of a construction software investment. They’re interested in systems that fit within the company’s 3-5 year growth projections. Involve them early on and they will be able to help you choose a system that enables precise project execution, fewer errors, and less wasteful practices.
Case Study: Dexter + Chaney and Active Construction
Active Construction is a utility and site-prep contractor in Gig Harbor, Washington with over 40 years of experience. The company needed a way to manage their people, time, and equipment efficiently and accurately. To do this, they implemented Dexter + Chaney’s construction software. Now they’ve been using the technology for nearly 16 years, and Active Construction attributes their continued profitability to the technology, which helps them improve communication between accounting, operations, and field work.
After choosing Dexter + Chaney, Active worked slowly and tested the technology with a single project manager before allowing company-wide adoption. The beta test was successful, and now all project managers have access to their budgets and productivity reports. They can see each day and week how close to budget they are, and are more conscious of how their jobs are performing.
Integration with estimating software allowed Active to eliminate manual data entry and duplication. The firm also eliminated their paper payroll process, where hand-written hours and equipment information were received, entered by hand, and then processed. Field foremen now log their own payroll hours and equipment usage daily from laptops.
Active now effectively manages equipment costs and monitors usage for informed decision-making. Hours and maintenance costs are an important aspect of heavy construction profitability:
“If we have a piece of equipment that sits out on the job and it’s not being reported to that job, then we have one of two problems: One, the job is being understated, or two, no one else knows the equipment is there or whether it’s being used properly.” —Rose Garms, co-owner
The asset manager makes sure neither of these things happen by using Dexter + Chaney’s equipment modules to monitor equipment maintenance, hours, parts, repair history, and more. The system gives him a day-to-day activity report per piece of equipment so he can determine if the equipment is being used properly on the job. This insight also allows Active to evaluate when a piece of equipment costs more in repairs than it’s actually worth. Equipment reports from the software allow Active to make a value decision based on fact. When a piece of equipment is being repaired too much, there’s proof to present to the owners.
The construction software allows Active to track how much profit the company makes per field man-hour. When profits are down, they reference their bid offer and focus on better management of field workers’ time. Dexter + Chaney helps the company evaluate job time and analyze productivity and waste so they can take corrective action. It reports man hours and materials costs by phase, so if they are above or below their target day-by-day, the company can make changes on the job as needed.
With less time spent entering data, the company can spend more time analyzing job data to optimize processes. If they don’t bring a job in for the hours bid, they can determine why. Is it missed change orders? Was the bid wrong? They can analyze the data to learn why, which helps them grow as a company.
- Electronically importing data that was previously entered manually, cuts overhead expenses and saved the company $75,000- $100,000 per year.
- Reduced job setup time from 2-3 days to one hour.
- Reduced payroll processing from three days a week to 8 hours per week.
- Eliminated manual reconciliation of cancelled checks and $140 monthly bank fee
Market-Leading Construction Software Solutions
While Dexter + Chaney was a great fit for Active Construction, it may not be the best solution for your company’s unique needs. The following systems are among the top solutions available on the construction software market today. Depending on your company’s niche, one or more of these systems should satisfy the technology needs of your AEC firm.
- Sage Construction and Real Estate
Choosing the Best Construction Software
Finding the best construction software isn’t rocket science. But it is a complex, important process. At TechnologyAdvice we understand that keeping up with software isn’t your business — construction is.
So don’t be afraid to seek third-party help. Every day, we help companies just like yours find the technology that best fits their business. From guides, to reviews, to product information and research articles— we’ve done the hard work for you. If you need guidance choosing a solution, free personalized product recommendations are available by phone or online via our Product Selection Tool.