In previous years, commercial construction spending grew from roughly $626 billion to $807 billion in 2018. As we progress into 2019, most forecasts and reports suggest that 2019 is the year where commercial constructions pending plateaus.
With plateauing growth, trade contractors will have to work out the best ways to protect their profit margins. However, an important question remains on how can you, the commercial subcontractor, can take advantage of this opportunity and foresight now to eliminate the burdens of business drag? Do you still use Excel, Word, PowerPoint, Outlook, and print documents all over the place? Did you know these are the exact tools that are causing your projects to lose revenue and incur avoidable high costs?
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New Technology in Construction and Efficiency
While getting work done on time, on a budget, and to the standards of your clients remain your top priorities, the reality means managing the immense amount of paperwork each job can produce. From proposals to contracts to change orders to purchase orders and more — often requires more time than maintaining the construction work itself. So, the question becomes are you managing your business effectively or barely staying on top of things?
Drowning in word docs, spreadsheets, and different applications mean you’re missing on revenue opportunities. And, quite possibly not getting paid on work completed. Administrative and operational challenges are by no means unique to subcontracting; what is unique, however, is just how paper and process-intensive the business is, and the extent to which subcontractors are affected.
With the plateauing of spend, it’s crucial for subcontractors to prepare themselves and their business for any changes. While investing in new technology can have an upfront cost, the ROI on the right tech for your business will be apparent within the first year. In the case of project management solutions, trade contractors that use a trade contractor specific software are likely to see an ROI on paid change orders. In a trade contractor specific solution, the foreman can track a project in the field notes and daily reports, while the back office can see any changes that were made in the field and the approval for those changes.
General Contractors and Technology
While large General Contractors and Architects have already adopted some form of project management software, the specialty subcontractor market is finally reaching the threshold – A revolution that makes software easy to adopt, use and affordable. Most importantly it meets their strategic needs to deliver results. The driver of this change is web-based Software as a Service (SaaS) software. No longer do subcontractors have to invest in expensive hardware and software that quickly becomes obsolete; they only need a web browser and an internet connection. With the explosion in mobile telecommunications, subcontractors, for whom the “office” is often quite far away from an office, are be able to run their companies in an efficient, almost-paperless way, from any location.
The 300-lb Elephant in the Room: Document Management & Processes
Perhaps the biggest hurdle with a traditional document-and-spreadsheets approach is the inherent inefficiency stemming from reconciling all the various pieces that pile up over the course of a job. There also the missteps of relying on manual processes. Companies even dedicate a day of the week to reconcile PO’s, bills; invoices, contract and change orders, and time entries. While that is how many businesses choose to operate, that isn’t the best way. And many times that ends up being a giant time suck that hurts the company in the end.
There’s an easy solution out there that provides paperless record keeping, as in the case of preparing Change Orders on a tablet and emailing them for signature, combined with powerful data integration. What this means is that the system will match purchasing with bill payment, contracts and change orders with invoicing, labor and spending data with your project management. What used to take hours of work, with a lag time measured in days or even weeks, can now be accomplished with a few clicks in minutes, bringing incredible efficiency and operational visibility.
One of the problems with the common way of project management is the lack of readily available data. It’s hard for project managers and supervisors to know what exactly is going on at a site, or the data needed to see when things might go wrong. Without that knowledge and foresight, the teams are operating in silos. However, a cloud-based project management solution can be the key to unlock the actionable data generated on site and in the office every day.
Without question, the cloud-hosted SaaS and Mobility era in the construction industry have arrived. The revolution is here! Those subcontractors that figure out how to apply these new tools effectively to their businesses will enjoy real competitive advantages in efficiency and cost savings. They will also eliminate the burdens of traditional business drag.