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Trends in Information Technology

There is a common saying “Work smarter, not harder”. This saying was never more true than in the use of computers (or Information Technology) in your everyday business. The title of this article could be named “Trends in Information Technology Which You Can Use to Improve Your Business”. This article is not so much about technology, as it is about key ideas of how to best use information technology. I wanted to share some of my experiences using computer hardware and software – Information Technology – and how current trends can be used to improve your business’s bottom line.

I am not a construction business expert. On this topic I have only a working knowledge. Rather, my background is in Information Technology (IT). Even so I have something in common with the construction industry; I use computers and software to get my job done. I have to buy and manage a great deal of IT in order to serve my customers. Also, I face similar problems many of you have.

Before talking about technology trends, I want to start by summarizing the ways that information technology can be of strategic benefit in running your business. Most of this is common sense, but it will serve as a yardstick for judging the various trends. Information technology is not a goal, but a tool. And like any tool, its proper use can be a benefit, and its improper use can be a risk.

BENEFITS THAT IT CAN BRING TO BUSINESS

Controlling Costs

An important priority of contractors is to pay the correct amount to vendors for services and materials. In principle this seems simple, but in daily operations, it’s all too easy to pay a bill for services you didn’t receive. Computers are well suited for identifying and measuring costs associated with a project. They can record each hour worked and every truckload of material. This vendor record keeping will help you verify the validity and accuracy of each vendor invoice, ensuring that you are paying for only those goods and services that you received. In some cases you will need to verify back-charges levied against you. In these cases you might identify events that did not even happen, for example back-charges for damage to a silt fence at a site you were not present (on the day the damage occurred). Since all work efforts can be recorded and stored on a computer, those records can be a powerful tool in resolving those challenges.

Maximizing Revenues

Tight margins resulting from the current housing market have made accurate customer billing even more important. Getting paid for the work you perform is critical. However, with many simultaneous projects it would be easy to overlook portions of work performed. Easier still is to overlook the numerous changes that happen in the field, which if lost or forgotten mean that you are not being paid for all your work. And, you can’t rely on the customer to let you know they owe you money. Again, computers can make it easy to record and accurately report estimates and change orders. If actual values from the field don’t agree with estimates, the discrepancy can alert you to an unrecorded field change or extra work performed. Not collecting all the revenues you’re due can also occur from not pricing items correctly. In many cases you may be pricing items based upon incomplete information, overcharging for some items and literally giving away others. Computer systems can give you historical cost/revenue information helping you to be on target and consistent with your pricing.

Improving Efficiency of Operations

I was once told by an industry expert: “You’ve worked out the best deals you can with your vendors, and the price of your product is set by the market place. So where are you going to improve your profitability now? In your operational efficiency, that’s where!” Efficiency in operations can impact many areas. One area is the management of crew schedules to avoid conflicts and downtime. Every time you send a crew to a non-workable site (failed inspection, crew already on-site, site not ready…), you waste valuable and expensive work time. The same scenario is true for dispatching of materials (concrete and gravel) to work sites. In some cases, this mistake can be even more costly.

Since computers handle information at their core, letting them be the central point for operational information is a natural. This is where computers can really improve communications. It’s a mathematical certainty that the need for communication will increase exponentially with the growth of a business. As people are added to a business, the need for cross communication soon attains a level that is almost impossible to manage. And the cost of failed or incomplete communications is too expensive to bear. Information technology can help improve the speed and accuracy of communications in a business. Its speed and multi-user interfaces can be an information hub; letting people share information immediately with others who need that information. And since a computer can operate very quickly, that information is available real-time as soon as it’s entered. Computer systems also enforce consistency by implementing business process rules, for instance maintaining agreed upon pricing and discounting policies.

In summary, computers can help your business’s profitability, communications and consistency. It’s important to note again what computers are good at: handling large amounts of information and data; not for making judgments (that’s what human do best). You will get the greatest impact by focusing their impact on those aspects of your business. Consider the cost and value of your staff and what improvement information technology can bring to their performance.

INFORMATION TECHNOLOGY TRENDS

Software that helps you manage your entire operation

In business today there are many complex operations. In the poured wall foundation business, there is estimating, project tracking, dispatching of equipment and materials, scheduling of crews and tasks, and billing, just to name a few. Mixed in with this is the management of customers, vendors, and pricing information. Even from this limited list of issues you can see the complexity. So how can computers help? A relatively new type of software known as Enterprise Resource Planning or ERP can help you manage the many parts of your business as one cohesive unit. Many other businesses have already embraced this need and made profitable use of it. Consider the last time you went to the bank. When you asked for a withdrawal from your account, did the teller open up a spreadsheet and start making some entries? No, they used specialized banking software that helped them accurately and systematically perform your withdrawal request. By using ERP systems they are able to manage the critical aspects of their business operations, while at the same time improving customer service.

The same is true for poured wall foundation contractors. Your business is no less needy than the banking industry. Furthermore, software you use as your ERP platform should be focused on your specific business. There is a great deal of project management construction software available, but most are designed for large general contractors who manage a limited number of large and complex projects. These systems are often ill suited to take on the production management needs of a residential and commercial foundation contractor, which include managing a series of production processes on many simultaneous projects. This is an important distinction when considering software for your business. The correct ERP software platform will help you manage many parts of your business operation and gain efficiency throughout. Since it will serve as an information hub, everyone will gain use and benefit from it. The communication benefits can be profound. For example, estimators can record and communicate the needs of a job which crews will then take to a site. Crews will then communicate what was actually done on the site. The business office can then bill customers knowing the estimates, change orders, worksheets, and purchase orders that were related to this job, and make savvy, informed decision.

This is just one example of the way that ERP computer systems can help bring together many aspects of your business team into a cohesive business operation. There are many more examples of this kind of process that can be enabled and improved using computer ERP systems. These systems may seem expensive on the surface; however the benefits can be even greater. Consider the benefits of improving your staff ’s efficiency even a small percentage, and how much that extra productivity is worth. The benefit of a piece of equipment, like a truck, is easy to understand. Once the benefits of an ERP system are realized, the same value will be easy to understand, and just as critical to your daily business. Lastly, it should help bring together every aspect of your business: operational management, scheduling and accounting just to name a few. Since ERP software is relatively new to the poured wall foundation industry, these integrations will become more common. This approach will help you to manage your entire business and control your costs, maximizing revenues and improving efficiencies in your entire operation.

MOBILE COMPUTER ACCESS

It wasn’t long ago that computers first connected to the Internet. Communication speed and reliability weren’t very good, but that was fine because there wasn’t that much value to be seen. Things have changed. The advent of a more robust internet has created the ability to work from anywhere. This has been helped by the use of wireless air-cards. An air-card is a computer attachment which gives common laptop computers the ability to connect to the Internet from almost anywhere (and therefore to their work environment) through the wireless phone network. This new technology is affordable, fast and reliable. This technology offers a new ability – to communicate and use computers remotely on job sites or wherever the work is.

It is not difficult to see that the poured wall foundation industry’s work is widely dispersed, with locations often an hour or more from a central office. With wireless access you can access critical business information wherever you are. For example, a customer meets a project supervisor at the worksite and wants to make a simple change to a foundation – adding an extra 2 inches to the gravel depth of a garage slab. Failing to record that change or to bill incorrectly would have expensive consequences. Now you have the chance to make the change immediately upon instructions from the customer, and have that change communicated real-time to anyone who has involvement with the job.

Another example is the use of total-station surveying points for a foundation. If a scheduled job is not able to be surveyed for some reason – instead of coming all the way back for the next job’s information, it can be downloaded on the spot and the staking crew dispatched to the next job (which may be only minutes away from the crews current location). Compare that to bringing the staking crew all the way back to the office and then back out again to the worksite. Wireless is not free, but can be well worth the expense.

SIMPLICITY IS KEY

Your business is complex enough. Use information technology only where there is value and in the most cost effective, simple way.

A key simplifying technology is the use of an Application Service Provider. Application Service Provider (or ASP) hosting is a way to use a dedicated off-site computing center to run your application software. The hosting facility is already installed and running so that you won’t need to go to the trouble and expense of hosting the application yourself. In a nutshell, it leaves the effort and responsibility of managing a computer system to dedicated computer system professionals. Consider the last time you bought a substantial computer application (accounting package, time tracking…). You needed a server, with the correct system configuration. You had to be sure that it was secure and properly backed-up. Later you will be faced with upgrades. All of these efforts cost time and money, and can be largely eliminated with ASP hosting, which generally needs only a basic computer and an internet connection. ASP hosting is sometimes coined “On-Demand”, which simply means that the hardware, software application and database are already working and ready for your “demand”. This model of hosting software is becoming more prevalent, because it “lets the computer experts manage the computer”, leaving your key team members free to focus on managing your business. This technology has blossomed with the advent of reliable internet and wireless access.

Another technique to keep things simple is in subscription licensing. Much of the equipment used by poured wall contractors is purchased outright. Its life is limited, its value being depreciated over its useful life. Software has some important differences. Software has a limited lifespan, which if not upgraded and enhanced, will eventually devalue throughout its life. Even though software is often thought of as owned, almost no software is owned; even the Windows operating system is licensed. If you paid a large upfront purchase, say for Windows Vista, you have paid a one time licensing fee to use that version of Vista. However, if you were to do the same for more expensive, complex software, the outright one-time cost would be prohibitive and the terms surrounding the purchase could be very complex. Instead, consider the subscription approach. It is the equivalent of leasing a truck. Instead of a one-time, upfront purchase, you make smaller pay-as-you-go subscription payments. This way if the product or service does not suit you, you are free to walk away without the huge cost forfeiture. It also provides a way to keep your system up to date utilizing new functions and features as they become available. This process is simpler, less risky and puts some discipline back into the service-for-fee arrangement.

SERVICE IS KING

Everything in this world breaks. This reality applies to software. In the end, your success or failure with any IT product will be decided in large part by the service and support you receive. This service is in training, implementation and customer support. IT is a customer service industry; insist on it!

Furthermore, customer service is more that just a required product element, it can be an indicator of which company/product you should choose in the first place. When selecting software I am often faced with the decision to choose between the top product and the top company. Sometimes those two choices are not in conflict, however in cases where they are, I often choose the top company. If I plan to use a product for a long time, the top company will end up being the best choice in the end. The best product is often a temporary situation, in which the better company will eventually create the top product.

HARNESS THE POWER OF THE USER

Users have individual and specific needs. Today there are many high quality software tools available to meet those needs, such as spreadsheets, document generators, database applications and design tools. They have been around for a long time, and many people now use them to solve highly customized needs like estimating and customer billing. These tools have been used to handle very simple needs or loaded with features and business rules. But, with the benefits of these tools come risks. These tools, while simple and effective, often do not handle growth well. You might think that a spreadsheet which handles 10 business rules might be able to handle 20 or 30, but what will happen when it grows to 50 or 100. A mini-van which can transport 7 people would not adequately handle 100 people. This is true of software as well. There are other aspects of computer systems like multi-user sharing of data and interfacing with other information technology products to name a few. Like anything else, software products work well within certain parameters, but once exceeded they struggle.

GET THE MOST FROM YOUR IT DOLLARS

Your investment in IT is like any other. When you buy a piece of equipment, don’t you want that equipment to be used? The same is true of information technology. You need to maximize the benefits from your IT investment.

First, get as many people using a computer system that can effectively use it. This seems obvious, but with licensing, hardware and training costs, there is a tendency to reduce the users of any IT asset. In my experience as an IT provider, I prefer not to charge for the number of users, because it actually discourages its use and value. I want customers to gain the greatest benefit, and that means opening up the lines of communication to as many business users as possible.

Next, when information has been entered into a software product, use it for all it’s worth. If you have a drawing of a foundation, use the drawing for take-off information, staking information, concrete utilization, 3-D imaging, exporting into an estimation tool. In general, use each piece of information to its maximum benefit.

Finally, employ computers at doing what computers do best, manipulation of information in a consistent fashion. Don’t use computers to make judgments; use their strength in manipulating stored information to empower your business team. By sticking to this rule, you’ll improve your general use of any software product In conclusion, I want to reiterate that information technology is the tool that you can use to improve your business. If knowledge is power, then I hope you have some new found power to run your business. Technology can be an empowering tool. Used wisely it can improve your bottom line.

Walter Morgan is the Director of Product Development at Oak Ridge Solutions, a leader in the development of business software products for the poured wall foundation contractor. Oak Ridge Solutions product lines and services can be found at www.oakridgesolutions.com or reached at 877-408-2681

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