Posts in Project Management
What to Look for in Contruction Project Management Software

project-bindersProject Management can simplify how you manage projects. Like other types of software, there are generic solutions (made to handle all sorts of projects), and solutions designed specifically for the construction industry. The key to finding the right project management software for your construction company is to find the solution that will help you keep the right people well informed at all times by providing easy access to up to accurate and up to date costs, contracts and document information.

In order to achieve that goal, make sure to look for the features listed below when evaluating your options:

Centrally Integrated Data

Ideally, you want a solution that integrates with Accounting, Estimating, and Purchasing, etc. This will allow you to be able to issue and see all prime contracts, subcontracts, updated plans and drawings, change orders, purchase orders, meeting minutes, requests for information (RFIs), and other project related documents, all in one place. It also eliminates the duplicate data entry that not only takes valuable time, but is also a common source of mistakes and re-work.

Real-time Information for Better Decision Making

Having all of you project information stored in a central source also helps make sure that you and your employees of have complete and current information on the project they are working on. There's no need to stop and manually synchronize information from accounting, project documents, etc. Your project information is always current and can be shared with those who need it to make real time decisions about the project.

Create, Track and Retrieve Documents

Every construction project includes a raft of documents; RFIs, meeting minutes, submittals, transmittals, etc., all must be created, tracked, and updated. Trying to keep track of these in a "special" folder on a network drive in problematic at best and often chaotic. Look for a solution that stores and manages documents in a central database and includes logs that can be queried to find out when changes and revisions were made.

Also, look for a solution that works with the other tools that you use, like Microsoft Outlook email, Word or Excel. If you use these types of documents, you should be able to add and retrieve them from the central database on the fly.

Access to information

Your solution should include the ability to quickly create queries and run reports that give you the details behind the numbers. If you’re on the phone and need to know about the payment of an invoice, you can pull it up in a hurry to see exactly how and when it was paid. When looking at job cost reporting capabilities, make sure the reports can also contain un-posted costs as well, so you know where you truly stand today.

Tools for Managing Change Orders

Change orders can make or break the profitability of a construction project, so it is essential that you project management solution includes tools for taking charge of the change order process. Look for features that help you quickly identifying potential change orders, solicit quotes, and pricing. You should be able to record all the details (i.e. when quotes are due, from whom, etc.) using a familiar-looking pricing worksheet grid. If you needed, look for solutions with security settings that allow you to control who can request and approve change orders. Ideally, your project management system should be able to forward change orders to your accounting system - removing the need for double data entry.

Easy to Learn and Use

Look for project management software that works the way you do. If a software solution requires everyone in your company to do their job differently just to suit the software, then the chances of successful adoption of that software are slim. Look for software that is straightforward and easy to learn, with electronic documents that mirror many of the paper documents you’re probably using today.

If you have any questions about project management software for construction companies, feel free to contact us.

5 Traits of Successful Construction Supervisors

number-5Do you have what it takes to become a successful construction supervisor? If you are filling a supervisor position, how confident are you that you can identify the candidates that will be successful in that role? While there is no “one right way” to be a successful project manager, those who are successful in that role tend to share common traits.  If you are looking to hire a new supervisor, keep the traits below in mind when evaluating candidates for the position. If you aspire to be a supervisor one day, honestly evaluate yourself in the areas listed below and identify any areas that you need to improve to help you be more successful once you do become a supervisor.

5 Traits to Look For in a Construction Supervisor

1. Leadership, or the ability to inspire people to follow a shared vision or goal. Supervisors who help their co-workers feel they have a real stake in a project (and the company) will be much more successful in the long run than “leaders” who only bark orders and issue threats.

2. Supervisors must be organized in order to be able to keep track of all of the details of a project (i.e. budgets, deadlines, scheduling, regulations, etc. ) while also making sure they are staying on track with the “big picture” goals.

3. Good Communication Skills are essential to be a successful supervisor – in fact, this may be most important skill they need.  Supervisors must be able to clearly set goals, assign responsibility, set expectations, evaluate performance, and provide feedback – all of which call for communication skills.

4. The Ability to Delegate – this can be tricky for a newly promoted supervisor, but delegating tasks and trusting (but verifying) others to complete them are part of the job of being a supervisor. Trust between a supervisor and other team members is greatly effected by the way a supervisor delegates and follows up on assigned tasks.

5. A supervisor must also be flexible and have the ability to handle pressure. Things are going to go wrong, obstacles will arise. You cannot control every aspect of a project and there will be stressful days. Successful supervisors are able to maintain a positive outlook,”roll with the punches”, and take challenges in stride when they arise.

Of course, these are the only traits and skills that a construction supervisor needs to possess, but it will be pretty hard to be successful without the items listed above.

What traits do you look for in a construction supervisor? Leave a comment below.

Features to Look For in Estimating Software

ConstructionIf you are shopping for estimating software for you construction business, you may feel overwhelmed by the number of choices and options available to you. Like any other software purchase, we recommend that you spend time determining your company specific needs before you begin looking for solutions. Once you have determined your business needs, you can begin exploring specific features and solutions that will meet those needs. To help you get started, here are some of the typical feature sets that you will find in commercial estimating software solutions.

Core Functionality

Estimating software designed for construction companies will typically have these three sets of core functionality:

  • Takeoff software or systems- help measure plans and blueprints to estimate the amount of materials and labor needed to complete a project by helping you “take off” the quantities of items needed. These systems may work with paper and/or electronic plans.
  • Cost databases - Stores materials and labor costs to reference when creating an estimate. This reference cost data may be your own or may come from a commercial source.
  • Estimating worksheets - these are the “spreadsheets” where the calculations that make up your estimates take place

In addition to the three core elements mentioned above, you will also want to look for other features that will help streamline your process for creating and managing bids. Here are some other features you can expect to find in a commercial estimating software solution:

  • Item List or Activity List - A main project view that outlines the various items and/or activities required to complete your project. This view provides a convenient way to navigate the items in your project. Some solutions will allow you to organize your activities by tasks and  sub-tasks. , or sub-levels.
  • Item Detail or Activity Detail – The supporting list of  of  resources needed (along with their costs) to complete each activity.
  • Resource Costs: Views and reports of costs related to labor (wages, benefits, burden, and workers compensation, etc.), equipment, materials, subcontractors, and any other cost detail items.
  • Markups – In addition to storing standard costs, most programs will allow you to store cost mark-ups. Typically you can store flat, overall mark-ups that can be applied to a variety of costs, as well as resource-specific mark-ups.
  • Overhead – Most construction companies will also want features related to the storing and applying of indirect costs including fees, permits, etc.
  • Reporting – is an important area that is often overlooked. Make sure you will be able to get the information you need to manage your estimates and projects out of your system. Estimating software typically include standard reports such as proposals, activity reports, and cost breakdowns. Some include “ad-hoc” report writers that allow you to design and run custom reports.
  • Integration or Exporting: For a complete solution, you will want to look for estimating software that integrates with your accounting and project management software. Integration is preferred, but a second, less desirable option, is to select a solution that allows you to export the data for use in other applications, such as spreadsheets.
  • Job History – Typically a standard feature, this allows you to store the information from past projects for review and use in estimating similar projects in the future.

Depending on the nature of your business, you may also want to look for estimating software that has been created specifically for your vertical..

Create a Planning Rhythm for Your Construction Company

ekgDo you have a strategic plan for your construction business? Some business owners in the construction industry resist the strategic planning process because they see it as a time-consuming project that returns little value. Most of us have heard stories of business owners spending a lot of time (and a lot of money) creating a business plan only to have it collect dust on a shelf. Others believe they only need a strategic business plan if they are going to borrow money from the bank.

If you view a business plan solely as a document, as another item on your to-do list that needs to be checked off because someone told you it was important, chances are you won't gain much value from the process. Plans are built upon assumptions and those factors underlying those assumptions are bound to change in a dynamic industry like construction.

Contruction companies that establish a regular strategic planning process, on the other hand, are better equipped to identify changes in their environment, understand how they affect their plan assumptions, and take advantage of new opportunities when they arise.

Part of establishing a planning process is meeting with your team on a regular basis to review the plan, set goals, recognize achievements, discuss opportunities and threats, etc. Depending on the size of your company you may have different types of meetings (attended by different levels of staff). For example,  If your construction business has between 1 and 25 employees, your strategic plan may cover what you want to accomplish over the next 3 to 5 years. But in order to stay on track and adjust to new opportunities, you may set up a pattern of meetings that looks like this:

  • Annual Planning Meeting:  Working on your plan for two consecutive days.
  • Quarterly Planning: One day.
  • Monthly Meeting: Half a day.
  • Weekly Meeting: Anywhere from 30-90 minutes, depending on your team size.

That is just one example of how you can establish a planning rythym - you'll need to find a rythm that fits your company. And don't worry about getting it exactly right the first time, you can always adjust.

When you conduct these meetings on a regular basis, you will begin to establish a rythym in your business. This rythym helps keep everyone on the same page and working together. They know what the plan is, why you may not be addressing an issue now (you've already planned to tackle it next month), and how their daily activities fit into the plan for the company.

Maintaining your rhythm is important. One thing you can do to maintain your planning rythym is to make the first item on your agenda the setting of the next meeting. Sharing meeting results with team members who didn't attend a particular meeting also helps keep everyone involved.

If you haven't adopted a strategic planning process, I highly recommend doing so. By doing so you will be creating a vision that enables every individual to see how their role fits into the big picture.

Cash Flow Analysis for Construction and Real Estate

Cash is the single most important asset that keeps your contracting business running. Owners and managers need accounting and business systems that give them the ability to evaluate cash flow and liquidity at the company and individual job level as well as by job groups, job supervisors, etc.. They need to be able to analyze overall trends and quickly drill down to the project level in order to determine which projects are providing positive cash flow and which are using cash.

Sage 300 Construction and Real Estate provides flexible, interactive reporting tools business owners need to effectively manage their operations and cash flow..

Watch the short product demonstration video below to see how Sage 300 Construction and Real Estate’s Excel based reporting makes it easy to spot cash flow trends and drill down to the detail level so you can address issues before they become big problems.

http://youtu.be/iB_PWDSvc0M

Have questions or want to see more? Contact us for a no-pressure demo or consultation.

You can view additional demo videos here.

External forces Affecting Construction Companies

Building FutureMost construction companies have started (if not completed) working on their strategic plans for 2014.  These plans typically include different types of forecasts. A common practice is to include a contingency plan in order to be prepared if results fall below projections. Project forecasts are also a staple of the planning process. Construction companies live and die by their ability to forecast and manage their project portfolio.

There is a third area of strategic planning and forecasting that is all too often overlooked by construction companies. That area has to do with planning for the impact external forces.

Forecasting External Forces

As we all know, there are also things that happen outside of our business, outside of our control, that can have significant impact on our business. While these forces are outside of your control, it’s still important to consider how external factors will impact your organization.

Many construction business owners find it helpful to group external forces into 5 buckets, or categories, during their strategic planning and forecasting process. The common buckets we see are:

  1. Economic factors – Is the current economic climate expected to change? If in a recession, do we expect it to continue throughout the year? If we are in growth mode, do we expect that growth to continue, increase, or slow down?
  2. Political / regulatory factors - What new regulations are on the horizon? Are taxes expected to increase or decrease? Is there new legislation (i.e. the Affordable Care Act) that will impact our business? Will new work be available due to government programs?
  3. Social factors – Is our business affected by the aging of the population? Are there social trends that will increase or decrease demand for the services we offer?
  4. Technological factors – Will changes in technology influence our ability to compete? What are the risks and rewards of adopting new technologies like cloud computing and mobile devices?
  5. Environmental facts – What are the global and local environmental issues that will impact the industry (or your customers’ industry)? What is the next “green” movement on the horizon?

As part of the process of reviewing these external factors, you will want to create plans to help you prepare for what might happen. After reviewing the types of external factors that can have an impact on your business. This is often referred to as scenario planning. According to the Journal of Accountancy, scenario planning is focused on answering three questions:

  1. What could happen?
  2. What would be the impact on our strategies, plans, and budgets if it did happen?
  3. How should we respond if it does happen?

You may not be able to create a detailed plan for each of these external forces, but by identifying the threats and opportunities that exist and regularly discussing them with your staff, you are more likely to identify them sooner and be better prepared to avoid, or take advantage of them when they arise.

 

 

How Construction Companies Gain an Edge with Mobile

contractor with mobile deviceThe use of mobile devices is steadily rising in the construction industry. In fact, according to a McGraw-Hill industry survey, 93% of respondents use some sort of mobile device on their construction sites. As most of us continue to adopt and use mobile devices, it only makes sense that smart construction companies will figure out new ways to use these devices to gain a competitive advantage. One of the ways mobile devices help owners and project managers gain a competitive edge is by allowing them to make better decisions faster – not only in the office but while they are at the jobsite.

Construction professionals with “anywhere, anytime” connectivity to their information systems are able to make better decision faster due to the efficiencies they gain in the 3 Cs – Convenience, Communication, and Collaboration.

Convenience

Every time your field personnel have to call the office for information on their project, or return to the job trailer to request or submit reports, progress slows on the project.  Mobile solutions enable frontline workers to access details and perform tasks with a smartphone or tablet. This convenient access keeps projects moving so you can complete them on time and on budget.

Communication

When we think of mobile devices we typically think of smart phones and when we think of phones we think of communication. Improving communication is the number one way mobile tools improve jobsite productivity'.

Improvements in communication can from something as simple as being able to take and share pictures (worth a thousand words) with the project team. Improved communication can also mean getting information back to the office in a timely manner, i.e. submitting and approving employee time for a project. Mobile solutions that provide access to back-office financial data help improve communications by giving everyone on the team access to the data they need to perform their jobs.

Collaboration

Modern construction projects involve a lot of people, from different companies, making hundreds or thousands of decisions. The ability to work together and the speed at which issues are identified and communicated to all of the parties who are responsible for resolving them has a direct bearing on how profitable a project is.

Are you ready for mobile?

Feel free to contact us If you have questions about whether or not a mobile solution makes sense for your construction company.

5 Key Performance Indicators every contractor should know

measure with KPIsKey Performance Indicators (KPIs), can be powerful tools for managing and improving the profitability of your contracting firm. Business owners and managers can use KPIs to evaluate how things are going, spot problems early, and make decisions with confidence. There are a vast array of KPIs to choose from, here are 5 to help you get started.

Liquidity or Cash Flow

Cash is the single most important asset that keeps your contracting business running.  The complex nature of contracting can make forecasting cash flow difficult. The timing of your cash receipts and payments can be affected by schedule delays, invoice processing time, processing and approving change-orders, subcontractor payments, labor costs, and numerous other factors.

As an owner or manager, your accounting system should give you the ability to evaluate liquidity at the company level. You should also be able to drill down on a project by project basis and determine which projects are providing positive cash flow and which are using cash.

Budget Variance

Once you can accurately track your cash flow in real time, you can be more strategic in the planning and managing of your projects and their budgets. Budget slips can be recognized and addressed more quickly. Variances will always occur, but by setting and monitoring your KPIs, you can manage variances by exception and spend more time on the tasks that demand your attention.

Schedule Variance

As customers continue to demand shorter project duration times, managing project schedules is critical to your success. Effective scheduling includes the integration of subcontractor schedules, and change orders into a master schedule.

Schedule variance is typically calculated by taking the planned completion duration and subtracting the current forecasted days until completion – giving you the number of days the schedule is ahead or behind. Taking the schedule variance in days and dividing it by the total remaining days until completion will show you the variance as a percentage of remaining duration. This will give you an idea of the significance of the schedule variance and your ability to get the project back on track.

Unapproved Change Requests

Changes can make or break your projects. Your system needs to be able to track and document the changes to your projects so that disputes are minimized and you get paid for all of the work you put into your job.

Work Backlog

General contractors who are skilled at backlog management are well positioned to select profitable projects. The KPI for backlog can be an early warning indicator of profit fade. To calculate it, sum the total gross margins forecasted for all projects and subtract the total earned gross margins on all projects. Gross margin on awarded but unsigned contracts can be added to this total. The total of gross margins in backlog is then compared to selling, general, and administrative expenses budgeted for future periods.

Remember, no single KPI can tell you everything you need to know about how your business and your projects are doing. You need to view KPIs as a group in order to get an accurate and complete picture of your business. If you have questions about how to use KPIs to better manage your business, contact us anytime.