5 Critical Success Factors for Construction Subcontractors
Since the economy’s slow improvement, the construction industry has seen growth as well. The issue, however, is the growth is mixed. Some companies are benefitting from the economic environment, while others are still struggling with the lasting effects of the recession. eSUB, a mobile and cloud-based subcontractor construction management and document control platform, enables successful firms to improve productivity with best practices for getting paid.
Table of Contents
Following are five critical success factors for construction subcontractors to win in today’s (and tomorrow’s) economy.
1. Operations Visibility
Visibility gives managers and executives a complete view into the daily processes and activities within their business. It allows these leaders to evaluate the progress of active projects. It also provides the opportunity for them to make well-informed decisions, or address project issues early.
Threat: Silos
Departmental silos take place when one department does not want to share information with other departments within the company. How it hurts the business:
- –Reduced efficiency
- –Lack of collaboration
- –Employee dissatisfaction/turnover
Remedy: Tear Down Silos
Open communication is critical. Ensure the entire team knows the objectives, risk, and expectations of a project.
Benefits:
- –High morale
- –Projects completed on time and under-budget
- –Few unpleasant surprises
2. Embrace Technology
Out of the top 19 major American industries, Construction spends the least on technology- only 1% of total revenue. With all the benefits of technology, why the hold-up? Technology designed for subcontractors is becoming easy to implement, train and deploy across the company.
Threat: All Levels of the Workplace are Reluctant to Change
It’s coming from both those at the top and the bottom of the pyramid. Execs view technology as an expense, rather than an investment. While initially, the company loses money, major benefits and cost-savings will be the result long-term. Additional, companies may perceive that they are technologically advanced because of their adoption of spreadsheets. In reality, this is a very simplistic approach to technological advancement. The data may be stored, but not yet converted into meaningful information. Older employees at all levels are slow to accept technology, because they trust the same processes they’ve used for years.
Remedy: Purposeful Cloud-based platforms and Mobile Apps
Applications will not only store data but communicate it in a meaningful way. Find an application that is made specifically for the construction subcontractor industry. The benefit in this is that it asks and provides only relevant business information. Mobile apps are extremely helpful because they can be used on-site, and, interestingly enough, they’re appealing to the older generation. Many find it easier and simpler to use than a software program. In addition, the cloud offers tremendous benefits with increased security, anywhere-anytime accesibility to all project files, workforce information, reports and reduces IT expenses. Say goodbye to taxing hardware and network drives, and one person having all the domain knowledge, etc.
Benefits:
- –Increased productivity and efficiency
- –Greater control over projects
- –Short-term and long-term cost-savings
3. Manage Complexity
Construction projects are growing increasingly complex. Some factors of a complex environment:
- –Multiple stakeholders and locations
- –Architects are designing smart structures, including components with which contractors have had minimal experience
- –Unanticipated events- accidents, severe weather, shipping delays
Managing multiple tasks and responsibilities is not easy.
Threats: Generic Software and E-Discovery
Some executives are cutting corners when installing software. By selecting Enterprise Resource Planning software (ERP), companies are saving money, but the programs are generic and can be used for any industry. There are multiple issues with choosing incorrect software:
- –Generic software can mean larger expenses to configure the software to meet industry demands
- –While software changes are made, decisions will need to be done using incomplete and inaccurate information
E-Discovery is another potential, and costly, threat. If your business does wind up in court, your company may have to pay a lawyer or forensic expert to sift through stored data relevant to the case.
Remedy: Communication and Technology
- –Clear communication and active collaboration between the office and field
- –Accurate data entry as early as possible – removing multiple points of failure
- –Tech with a simple, human interface – designed for construction professionals in field, not computer professionals
- –Tech specific for the construction subcontractors
Benefits:
- –Effectively manage active projects across all users
- –Generate accurate reports
- –Easy integration to accounting
4. Document Only What Matters
Although we want to document everything, it’s not feasible. Data documented should accomplish two things:
- –Manage projects
- –Resolve disputes
- –Get paid
Everything else is noise.
Threat: Data Collection On-Site
- –Data gets stuck on-site if workflow isn’t clear
- –Inadequate training on collecting data
- –Work-sites too busy to document consistently
Remedy: Accuracy, Structure, and Supervision
- –Ensure the team understands the importance of accurate documentation
- –Document every issue that can lead to litigation
- –Automate documentation with mobile devices
- –Active supervision
Benefits:
- –More accurate documentation when recorded as it happens
- –Executives receive necessary information to manage projects, minimize risk, and increase profitability
5. Avoid Litigation
Litigation is very costly. It is not unheard of for a construction firm to face bankruptcy and fail because of a lawsuit. Some potential suits: mold, water damage, miscommunication, and defective workmanship.
Threat: Plenty of Litigation to Go Around
71% of large construction firms are spending over $1 million on litigation currently. Clearly, lawsuits are widespread in the industry.
Remedy: Documentation
If the court date comes, companies need to be prepared with relevant documents. Inadequate documentation is a simple way to lose in court. Keeping daily reports makes the firm look prepared and thorough. It shows that the company paid close attention to the project. Foremen need to execute regular spot checks noting defective materials and any disputes with GCs, Owners and suppliers. Photo evidence is also important.
Benefit:
Documentation builds your defense, but avoiding litigation altogether eliminates costly legal fees. With close monitoring of projects and consistent documentation, potential legal issues can be prevented.
Construction Management Success at Your Fingertips
Visibility, communication, and technology are clear themes in successful construction companies. Keep up-to-date, but bear in mind your company’s needs when selecting technology. For example, you need software designed exclusively for subcontractors. Not software that appears to be one-size fits all – GCs, Subs, Owners. Each type of user has very different priorities and workflows for getting the job done – ontime and within budget. Accurately noting key information keeps the whole team on board and, with active communication, can boost morale. Adopting some of these practices can improve both your efficiency and bottom line.
