This guide is designed to provide an in-depth explanation on what construction management software is, its features and how it benefits construction and service companies. This report will also look at typical objections businesses may have, as well as common misconceptions regarding the implementation of software. Integrated software products like Viewpoint, Sage or Jonas, is often compared with point solutions like QuickBooks. With this in mind, this guide will compare and contrast the two software options based on the key factors like price, usability, training and support. Lastly, there will be an in-depth look at specific functions in construction management software to provide you with a clearer understanding of whether or not your business should take the leap.
Defining Construction Management Software
Construction management software is a set of tools, processes and information used internally by construction companies to increase productivity, efficiency and visibility. Through an integrated construction management software, various tasks that were once spread out among multiple systems, Excel spreadsheets and manually written documents, are all replaced with a single solution. Not only does this simplify daily tasks for managers, but all the important functions of a business, such as accounting, payroll, job costing, scheduling, estimating, reporting and inventory management are all available from one point of view.
Who Construction Management Software Benefits
Construction management software is designed with flexibility in mind, and caters to a wide range of professionals. A variety of different types of options are available, including project management software or service management software. Despite how expansive the construction industry is, an all-in-one construction management software is ideal for professionals in all trades, including:
- Mechanical contracting
- HVAC contracting
- Electrical contracting
- General contracting
- Elevator Contractors
- Water Maintenance
- Sheet Metal Contractors
- Design Builders
- Home Builders
- Land Developers
Benefits of Construction Management Software
Whether your company checks off a number of the trades above, or specializes in one particular industry, the value and effectiveness of construction software remains the same. Both construction and service-based businesses can benefit from the various features that software offers. When running a business, many of the same functions – like accounting, payroll and reporting — are all necessary processes in all industries. Below are the three main benefits that construction management software provides to all companies:
- 360° Visibility
An integrated construction software provides businesses with full visibility through flexible dispatch board views, billings, costing, labor, materials, committed costs, change orders, purchase orders and profitability, all displayed in a single view. Moreover, it is possible to adjust the software to show only certain people – whether project managers, service managers or controllers – what information is pertinent to them. Most of the latest construction software available come equipped with GPS tracking, allowing service businesses to better track their technicians, and construction companies to keep a close eye on equipment and fleets.
Without a fully integrated software, businesses are forced to search through mounds of paperwork, in order to access information, holding them back from drilling down into specifics. With software and an electric document management system, businesses are able to upload images, files, drawings, and other important documents and attach it to a particular job or work order. Not only does this increase visibility, it also speeds up the ability to recall any specific file.
- Project Life-Cycle Management
Managing each project is an extremely daunting task for construction companies, especially when balancing a number of jobs at once. Construction management software makes it easier to manage each project, from bid to completion. One area where many construction companies struggle is reconciling estimate costs versus actual costs. With a construction software, each phase of a project, beginning with estimating, RFI submittal, transmission processes, phasing and scheduling can all be controlled and monitored. This ensures that each project remains on time and on budget.
- In-Depth, Real Time Reporting
Effective and timely reporting is key for all construction companies, but creating accurate reports can be a difficult process. With construction management software, businesses can generate reports on utilization, profitability, revenue, costs and expenses. Real-time reporting is also made possible with construction management software, which is much more valuable than digging through mounds of paperwork, only to find month old data.
How can construction management software affect day-to-day activities of the business?
Now that you are familiar with what a construction management software can do for your business at a high level, the next question becomes, what day-to-day changes can I expect? One of the greatest attributes a construction software provides is the ability to positively impact all members of the organization. Although there is a perception that frontline managers are the only group benefiting from the software, the following section provides reasons for why a true, integrated system is a good thing for everyone, spanning all departments.
Integrate all areas of the business and increase collaboration
It is often difficult to get collaboration among all members of a company. This is not necessarily due to the individuals involved, but instead, the business processes in place provide barriers to collaboration. With each department operating a different software and paperwork changing hands too often, it is difficult to see where collaboration and teamwork fits in.
What a construction management software accomplishes, is the ability to unify all functions of the business, increase efficiency, and eliminate costly administrative mistakes. With a singular place dedicated to data entry, information is entered once, saving the company both time and money. With one place to access information, all members of the organization are able to utilize the same system rather than cobbling together a variety of point solutions.
Automate time-consuming tasks
With most construction companies continuing to rely on manual processes like hand-written timesheets, paper invoicing, productivity is often at a stand-still. Once data is written and recorded, it must then be manually entered or rekeyed into accounting based systems or spreadsheets. With a construction software, information is only inputted once, eliminating double entry and ensuring accuracy. By having documents and data automatically stored and synced in the system, accessing information becomes a much easier task. Through a construction management software, these processes become automated, with work orders entered directly from the field, through a laptop or mobile device. All members of the organization can take advantage of the automation features within a software, which can help them address their specific issues, whether they work in accounting, payroll, or administration.
3 Common Software Misconceptions
- Construction software is a standalone solution
Often seen as a standalone system, construction software management is actually the opposite. Although tasks like estimating, project management and accounting are core elements of a given software, the true advantage of software is its ability to integrate among various functions. When searching for the right solution, it is often common to come across construction accounting software or project management software, to name a few. Although these solutions may seem to only focus on one area of the business, it is important to research what other functions they provide, because more often than not, they provide a much more expansive list of features.
- Construction software is a quick fix
Picking up on the first misconception, construction software does not merely address one or two of a businesses’ issues, but instead is a long-term solution. By automating integral functions of the business, construction software becomes a heavily-relied upon resource. Implementation is often a step-by-step guide that takes months to ensure businesses are ready to go on their own. Construction management software is also scalable to meet the needs of all businesses, and is able to change, adapt and grow along with businesses.
- Construction software only benefits some of the business
The goal of construction software is to create more efficient processes for all members of an organization. While some departments may benefit more strongly from software, others may stay the same. With this in mind, construction management software is able to accelerate certain processes and eliminate manual labor which increases the overall efficiency and productivity of the business. With a more streamlined operation, not only is employee and customer satisfaction achieved, a business’ profitability also soars.
Compare and Contrast: Construction Management Software vs. Standard Point Solutions
When businesses become overwhelmed and issues arise in a particular area, many companies turn to point solutions to solve that one particular problem. The tendency to turn to point solutions in areas like accounting, project or service management arise from the lack of collaboration that many construction companies experience. The following chart compares and contrasts the functionalities construction management software vs. point solutions in 4 key areas, price, usability, training and support.
|Point Products||Construction Management Software|
|Price||The cost of purchasing multiple software and point products is often unpredictable and can quickly add up. Buying point products for functions like accounting or project management, can harm your overall budget. Furthermore, introducing a new process to one area of the business may hinder productivity.||By partnering with an integrated construction management software, the cost may actually be significantly less than that of point products. In addition, making an investment in software once will be a better long term solution, rather than making sporadic purchases to address issues as they come about.|
|Usability||With point products, data is only able to interface across each system. This means that when information is entered into one system, it does not automatically sync with other point products you are using, increasing the need for double entry, or the monotonous task of rekeying information.||With a construction management software, data is integrated, which means, data is accessible across multiple areas of the business. More importantly, an integrated solution ensures that data only needs to be entered once. It is also much easier to learn how to use one system, rather than learning a number of different interfaces, buttons and icons as each point product differs.|
|Implementation and training||Training on new software is already a difficult process. Multiplying this process can pose even greater challenges. The time it takes to learn new software and onboard new staff will only increase frustrations when the number of point solutions continues to add up.||Although implementation and training for construction software can be a lengthy process, it is much more efficient to learn one system well, than struggle through various ones. With a successful implementation, businesses can maximize their use of the single software, making the most out of their investment.|
|Customer support||Relying on multiple software vendors for customer support can easily become a messy process. Apart from learning how to use a number of software, dealing with different support teams for each problem can increase frustrations and lead to even greater confusion.||With an integrated software solution, dealing with the same support team can provide a great deal of comfort. Furthermore, support from one vendor can save time and effort by providing a space to deal with multiple issues at once.|
ROI and Key Construction Management Features
To remain competitive and successful in the construction industry, investing in technology – whether it is software, point solutions, or mobile construction software – is incredibly important. The fear is however, whether or not such a large investment will pay off. Quantifying return on investment is one of the hardest things to predict, and is often what hinders businesses from implementing software.
ROI is typically understood as the gains or losses generated on an investment, relative to the amount of money spent. Although this provides a high level understanding, construction companies look at three important metrics that most effectively measure ROI:
- Payback period refers to the amount of time needed for the benefits of the investment to pay dividends
- Net present value is the value of future benefits reiterated in terms of dollars today
- The internal rate of return (IRR) represents the benefits of implementing a construction management solution restated as an interest rate
These three metrics are key areas of study for any organization wishing to make an investment. Although they are important, there are a variety of other factors that you must look at, many of which may be specific to your business. This may include having to overcome an organizational resistance to change, and often the unwillingness of staff to adopt technology. If a thorough examination is done regarding the ROI of a construction management software and you deem your business fit for the change, the best software vendors will provide the necessary training and implementation required. Here are some key construction management features that you can expect the best vendors to have.
Rather than a standalone construction accounting software, an all-in-one tool provides other benefits. Accounting is often at the core of many construction management software, but what sets this feature apart from point solutions, is its ability to integrate with other areas of the business. Typical accounting feature integrate with standard GL, AP, AR.
- Granular reporting and drill down capabilities gives you insight into financial statements and operational details. An accounting module provides the ability to create reports across multiple customers, vendors and resources
- Real-time reporting also reconciles and integrates with all areas of the business
- Multi-company and multi-division accounting makes it easier to manage the finances of all associated businesses or companies
Job costing features in construction software make it easy to manage, track and analyze the progress of each project. With access to real-time information, businesses are able to stay ahead of the curve.
- Real-time reporting lets you drill down to the documents of each job, and create accurate reports that are based on the most up-to-date information available
- Costs are automatically updated and reflected in the system when entered in other areas within the software. This makes it easy to import jobs and estimates from a third party solution
- Furthermore, automated forecasting helps to keep jobs on budget and on time
Job and dispatch scheduling is also included in most construction management packages. Intuitive dispatch boards make it easy to make on-the-fly adjustments, as well as better plan out any technician’s day. Job scheduling makes it easy to keep track of all field workers’ hours as well as progress.
- A key indicator of a good construction management software is one that has made a commitment to mobile technology. With schedules available on mobile devices, it is much easier to communicate and coordinate with field workers.
- GPS routing is another feature that is becoming commonplace among most software vendors. Through GPS, it is possible to better track productivity
When considering what construction software package to go with, reporting should be an area of focus. Most vendors provide the ability to measure business effectiveness by reporting from the high level to the job or work order level. Use the software to generate reports on utilization, profitability, revenue, costs, expenses and more.
- Consolidated reporting provides businesses with a complete view of how the business is doing, using real-time and accurate information
- Customized report features lets businesses design and create their own reports
- Through mobile, reporting is even possible on-the-go
The greatest benefit that a document management feature brings businesses is accessibility. By uploading documents into the system once, it is quick and easy to recall these files when needed. Not only does this save time in the short term, but eliminates the need for pesky paperwork that tends to pile up.
- A document management module not only stores files, but does so privately and securely
- The ability to quickly share documents is another plus, which can help speed up productivity rather than waiting for emails
- Viewing and sharing documents from the field is also becoming a necessity and can contribute to the overall trend of accessibility and convenience that software aims to deliver