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October 2007

Business Building

Are you Keeping up With Tech?

Are you convinced computers are here to stay? Many construction companies still haven't embraced technology as a required business tool that is necessary to be a leading company that stays ahead of the competition, maintains loyal customers, and always makes an above-average profit.

A recent survey of 2,000 construction companies revealed that being on the cutting edge of technology is not a priority. Most companies are scrambling to catch up with computerization and are happy just doing the minimum. When I speak at construction industry conventions, I observe older company owners hoping to retire before they have to learn the computer. One of our company goals is to be a technology leader. We won't consider hiring a project manager or superintendent who isn't 100 percent computer literate in email, word processing, scheduling and estimating. It is too risky to hire someone and hope he will become techno savvy later.

Customers are No. 1
Construction companies obviously must conform to their customers' wishes or lose business. More than 75 percent surveyed use email to correspond with customers, and 66 percent use email to communicate with architects and engineers. Only 50 percent use the Internet for job correspondence with other contractors, subcontractors or suppliers. Contractors reluctantly follow their customers' wishes, but don't embrace technology for their own business and project management practices. Only 10 percent use the Internet to submit invoices or progress payments to customers.

Our industry is considerably behind the times when compared to others. In the retail business, products are ordered, produced, shipped, paid for and re-ordered without a single piece of paper. Construction still requires paper invoices, original and notarized signatures, conditional and final lien releases, joint checks, architect and bank inspector approvals, and copies for everyone involved.

Required tool?
Computers are becoming more of a required tool as 50 percent of project managers carry laptops, while only 25 percent of field supervisors have or use a computer. Maybe the old mindset that field people work with their hands instead of their heads still prevails.

Years ago, we bid on a large office building project. The specifications required us to submit a construction schedule as part of our bid using Microsoft Project software. Until then, we were drafting simple bar chart schedules by hand. This bid requirement forced us to finally move to computerized scheduling. Once we computerized, schedules became simple and easy to modify or update, and what once took hours had been reduced to minutes.

Of the companies surveyed, 50 percent now use some type of scheduling software. A few years ago, we upgraded our scheduling software to a more sophisticated, cutting-edge, comprehensive package. Now, when we propose on projects, our schedule puts us ahead of our competitors and, often, is a major factor in winning the job.

Tech saves cash
A few years ago, I read an article about how General Electric reduced overhead costs 25 percent by implementing and maximizing the use of technology. This inspired me to make it our company goal to reduce paperwork by 50 percent. We researched and purchased the best integrated-construction project management software for a company of our size. It has helped us become more efficient as we eliminated paper, faxes and mail for project minutes, job correspondence, shop drawing tracking, subcontract logs, change order requests, daily job reports and many other items. We also contracted with a blueprint company who receives the plans from architects and engineers, and then transmits them to our subcontractors directly over the Internet.

To my surprise, the survey shows only 20 percent of subcontractors and 33 percent of general contractors use a comprehensive project management software package. What are they waiting for? Recently, I spoke at a Marriott construction conference. Marriott requires all of their contractors and subcontractors use the same software system for every project. On most government projects, a project Web site is built to handle all job-related matters, including scheduling, correspondence, changes and everyday communications.

Spend money to make money
The last question surveyed:

"Do your kids know more about the computer than you?"

Answer:

Fifty percent said, "Yes."

The world is changing, and technology is a reality. Companies who realize it become leaders, while those who don't fall behind and never catch up. Technology can make you more efficient and professional, help you win more profitable contracts, keep track of job costs, and make money for you. Leading companies invest at least $2,500 per employee per year on technology. Are you keeping up with tech?







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