Construction ERP Software for 2021

construction-erp
Economic forecasts from esteemed organizations predict that the US construction industry will contract in 2021. So why are others expecting growth?

In this episode of The ERP Advisor, we discuss how implementing the right software can help companies defy downward trends and grow while the competition shrinks. We also provide helpful insights from recent ERP projects with clients in the construction industry.

Our Predictions for the Construction Industry in 2021

We’ve observed many of our clients experiencing a growth in their businesses recently. COVID-19 may have slowed down several industries, but construction was an area that seemed to get busier – especially closer to the end of 2020. We predict that the construction opportunities will continue to expand in 2021 with many projects popping up.

Software Solutions Becoming Vital in 2021

Construction companies work hard and take on big projects, often with a lot of risk. As busy as we expect construction companies to be in 2021, they will find that process inefficiencies will be harder to ignore. The increased need to work from home in 2020 made people more digitally focused and we’re seeing that in the construction industry as well.

By updating their software, a construction company can go from having a process that takes a week or more, to doing the same process with the click of a few buttons. This allows invoices to be sent to clients faster, payments to be remitted to vendors quickly, and keeps everyone on both sides of the process happy. This can have a positive effect on the subcontractor side of the business as well, helping companies keep their good people around for future projects.

Construction ERP Software for 2021: Our Recommendations

ERP Advisors Group never takes referral fees from any software company, or for endorsing any application, or for working with any implementation partner. Our goal is to help our clients figure out exactly what problems they need to resolve and then find applications to fill those needs.

When choosing a product and a company to work with, we look at things such as their long-term viability, capitalization, investment in research and development on their products, the executive team, the ownership, and their overall strategy.

Below are some of the software products and partners that we feel are a potential fit for construction companies.

CMiC

CMiC has construction accounting software called Intelligent Construction Platform which can run your entire business. We're negotiating a deal with them right now. They're good people and we like working with them. They're evolving their product from a traditional on-premise application to more of a software as a service solution. We like their products as an end-to-end-solution which can handle the complex requirements of a construction business.

Viewpoint

The ViewpointOne product is a software suite of technology solutions that help businesses with job costing, project management and more. They have broad industry experience and have made some acquisitions over the years. They are also a larger firm, which gives us confidence in their long-term viability.

Procore

Procore construction management software helps organizations manage their financials, projects, and resources in one platform. They are a specialized firm that is making a lot of traction around the job cost, project management and operational side of the construction ERP industry.

Horizontal ERPs

Then there are horizontal or general ERPs, such as Microsoft or NetSuite, which work across multiple industries and can be utilized for construction companies as well. These can be helpful for companies who need more customization than a smaller, niche-specific product can provide.

Microsoft Products

There are two Microsoft products - Business Central and Finance & Supply Chain. We see good use cases for either of them and have found that they work well for construction. If you’re a little smaller organization, Business Central might make better sense for you.

NetSuite

NetSuite is a software suite with multiple applications, including some construction-specific software. They have partners who have programmed some tools and we have seen an interesting integration capability between NetSuite and Procore, with one of our clients.

Sikich

Sikich is a partner that has very specific construction solutions built on the Microsoft Dynamics 365 Business Central platform. Their product is an integrated software solution designed to manage overall projects as well as estimates, billings, documents, financials, schedules and more.

sa.global

sa.global is another Microsoft Dynamics 365 partner on the professional services side that we’ve worked with and recommend for construction companies.

Acumatica

Accumatica offers an ERP solution that allows construction companies to see a complete view of their business in real-time, from project management and payroll, to inventory and job cost accounting, with a CRM and more. Their product is more of a construction-specific solution for smaller organizations and works well in that space.

Get Expert Help From Our ERP Consultants

Narrator: This is The ERP Advisor.

Today's episode: Construction ERP Software for 2021.

Juliette: Shawn Windle is one of our speakers for today. Shawn is the Founder and Managing Principal of ERP Advisors Group based in Denver, Colorado. Quentin Dewitt is our guest joining us today. Hi Quentin.

Quentin: Hello.

Juliette: Quentin has been in the information technology business for over 20 years with a wide variety of knowledge and experience in ERP systems.

Quentin manages the ERP Advisors Group team on needs analysis, software selection, and implementation services. On today's call, we'll discuss how implementing the right software can help companies defy downward trends and grow while the competition shrinks. We’ll also provide helpful insights from recent ERP projects with clients in the construction industry. So welcome, thank you guys for joining me today. I appreciate it.

Shawn: Yep, thank you.

Quentin: Absolutely.

Juliette: So, we have covered a lot of different topics through the years that we've been doing these calls. And from what I can remember, I think this is the first call that we have devoted specifically to the construction industry. So, I think there's a lot we can cover. Probably not all today, but we'll give it a good try and get a good start to it. So, Shawn, if you're ready, I'll throw the first question to you.

We are still in these very uncertain times, and we've seen a lot of conflicting economic forecasts for 2021. But really, at this point, who knows what's going to happen? But using the construction industry as an example, can you talk to us about how companies can use an ERP system to achieve growth in the face of uncertainty.

Shawn: Yeah.

The construction industry is very interesting. We're software people, we don't work in the construction industry, but several of our clients right now do. From different kinds of — we have subcontractors, specialized general contractors, sort of the whole gamut, even some up front, more design work engineers.

What we're seeing with that particular industry — thinking specifically of one person at a Midwestern firm, that that we were just working with, his view was the architecture, engineering, construction industry lags a little bit behind the overall macro economy. Their expectation — it’s probably a six or seven hundred person engineering firm — was saying that they expect to slow down in 2021. We just lagged and everything was great in 2020 and we had COVID. So, what do we do right? And now we're kind of coming out of that, but are we? Are we not?

But I don't know. I mean, we're seeing that a lot of our clients construction companies and that are really busy, that there is still a lot of funding. This second round of PPP came out and there's some infrastructure money that's going to be made available for that.

I kind of feel like we can create what we want to create at this point. There's other factors that are going to drive other decisions and the cost of capital and the risk — I mean, that's why we love working with construction companies, and even just real estate, property development, property management, all these types of firms is because they're sort of Maverick, a little bit. Like yeah, we're going to go out and do this big project and we're going to make it go right, and may lose our shirts, but we got other projects that we're working on, too. And so it's sort of — but it's really working with the mass of building things and really building society, so we love that.

But I think it's an opportunity. Again, we're not industry experts. We don't do reports on what's going to happen with this particular industry. We are experts in software and that, to your point, Juliette, is where it gets very interesting because in almost every organization that we talk to, there are still processing efficiencies. “It takes us, you know, several weeks to put together bills for our clients”, well, that impacts your cash flow because you don't get the cash. If it takes you a week or two to put together the invoice instead of click a button — it's usually a little more than click a button — but if we can get the invoicing out faster, we can get collections back faster.

There's simple things on the procurement side, too, if we can keep our vendors happy and make sure that they're paid on time or paid when paid, making that connection — we have a lot of clients that have that specific requirement where we don't pay our subcontractors until our customer pays us. But if we can shorten that time period, well then our subcontractors are happier with us and they want to do more projects with us. It seems like the subcontractors have been the most busy in the spaces, but that relationship between design, general contractors, subcontractors — the tighter we can couple those business processes and that's where software comes in. So, there's definitely — most of the companies we're talking to — there's definitely opportunity to optimize those processes. And also to make our people in the field — to make their life easier with having more real time data on their projects, cash flow, budget versus actual versus estimate to complete, having all that information in place is super vital to be running a productive project.

I mean, we're lucky. Juliette and Quentin can talk to this, too, right that we work with great companies and they're out there making it go right and a lot of our clients are that way. They just do what they have to do to continue to be successful, keep their people employed, and things happen, sometimes you have to let some people go you, then you bring it back. I see the opportunity for construction being really high in 2021. Generally, I just think there's still going to be a lot of great projects, a lot of great things happening. There's a ton of capital that's still sitting on the sidelines waiting — and I have a whole thing on private equity and venture-backed companies and putting it in and roll-ups and all that stuff — but you know what kinds of building projects are out there that still make sense to do.

And my dog will be joining us on the call here in a minute. I have a feeling. Work from home is so fun.

Anyway, but then you look at like, wow, the infrastructure for these companies to run from really needs to be upgraded and the cost of the entry point for getting into really good apps is great — Quentin and I are negotiating a deal right now where Quentin is leading that.

Anyway, so it's really exciting to see how software can really help specifically the construction industry for those reasons. The fundamentals are really good for that industry, and the “let's improve the infrastructure” and work from home made people be more digitally focused already, so to take that old app and then put in something that's just more end-to-end business processes just makes a ton of sense for the construction companies we're talking to.

Juliette: Well, with that said, we know that the construction industry and different companies have some very specific and unique needs for their ERP requirements and Quentin, let me ask you with your experience, can you speak to some of these very specific and unique needs that you've come across?

Quentin: Absolutely. So, there are a very diverse set of needs for construction companies and self-performers such as electrical, mechanical, subcontractor-type positions. They have very diverse needs process, maybe field services. Going out and actually performing work on a work order type basis versus a larger construction project basis. They usually have a lot of specialty needs as far as estimating those, they need tools to be able to look at designs, track those back to labor specific parts, they may also need prefabrication, so some light manufacturing to put things together that they can't just order so they might preassemble some sort of assembly that needs to be delivered into a job and cost it against the project.

That is not a traditional need of most industries that just build something and they sell it. This is a little bit different. There's extreme needs around very diverse payroll or complex payroll such as Davis Bacon, certified payroll, prevailing wage needs — if you're not in an industry that needs those, you probably haven't heard of them. But they are very controlled mechanisms on how you can pay, what you have to pay, the certain levels of pay that go into that.

The industry also has a lot around contract management. They have these huge contracts, maybe multiyear, multiple contractors or subcontractors, and they have to control all of that and manage change orders around it. What was actually specified? What did we do? How did that change?

Another area that that is in the construction industry that's really important is quality and safety. When you go on or you're wearing your hard hat, how many incidents are there? There's all sorts of things that go along that. And the construction — she has a lot of inspections building inspections and things like that that you have to have the right quality level, both from an inspection level, but also what you're delivering to your clients.

So, there are so many avenues that we could talk about as far as best of breed applications that cater to each one of these individual needs, but then there's also the overall ERP scope of what products out there can do all of this and how can we make this platform work for the construction industry?

So, I have more I could go into, but that’s just one question.

Juliette: Well, there's a lot of moving parts to it, and a lot of different areas that they need to keep track of, and that goalpost seems to continually move.

Quentin: Absolutely.

Just from a project management standpoint, these projects are not just a few milestones with a few subtasks, they can be thousands and thousands of complex milestones with cost codes against them, resourcing management against us. What resources are going to what job? When are we going to get something done? What's the estimated cost to complete?

It can get very complex very quickly.

Juliette: Yeah, so with that, Shawn, let me ask you, can you speak to any specific software solutions that are tailored to meet the needs of different construction clients?

Shawn: Yeah, and — so you know, Juliette, and for the for the listeners, if you've heard our calls before, you probably know this, but I'm going to reiterate this — we don't make it dime from any software vendor, nobody pays us. There's no referral fees. There's no implementation partners that say, “Hey, we'll give you 10% if you push the deal our way.” We don't do that at all, unlike some of the other advisory firms, that's all I’ll say.

Anyway, so — and we also don't really endorse any specific application. Like all of the websites where you do the search on give me the best construction software solutions and you go to a site and you click in — they're paid by the software vendors to tell you what they think the top vendors are, but, “Oh, it's okay, we'll just give you 10 names.” And we don't do that either. We really help a client figure out, what do you need and want and can you afford this stuff? And do you really want to go through this? Is there really a business benefit? Okay, there is.

Then we do the selection process and then we do look at as many apps as we can, but we will get down to a shortlist pretty quickly with our clients because there are general requirements of any software solution that we look at. Things like long term viability which gets into their capitalization, their investment in research and development on their products, the executive team, the ownership, overall strategy — I mean, those are not like going out and buying like a burger where you just eat the burger and it's done. You're sort of going into a partnership with the software vendors for many years. So, you want to make sure that they're not going to get bought next year because their capitalization was kind of low.

It's sort of hard to know that but we look at all those factors. So, with that said, here are some of the apps that we've worked with on our clients that that we feel are a potential fit for a good construction company depending on the size, it could be small or large like Quentin said, or specialized or more general.

But we often see CMiC — we're negotiating a deal with them right now, and they're good, we like those guys. They're good people, they're willing to work with us. They're evolving their product from a traditional, on-premise “oh, maybe we'll put you in a data center” to now more of a software as a service solution, so we're working through all that stuff but we like those guys, for kind of an end-to-end solution.

Just like Quentin said, these are complex requirements, and they can kind of do most of everything. Same as looking at Viewpoint which has made some acquisitions over the years. We've got a couple different products that they sell depending on different circumstances. And a lot of good industry experience, they’re a larger firm, so that that makes us feel a little bit better with their longer term viability.

You see a specialized firm, like a Procore that's making a lot of traction around job costs, project management, sort of that feature — less about the accounting side but more on sort of the operational side. And then there's always the — we call them horizontal ERP's — which are sort of like industry, general — they work across multiple industries. And we see the Microsoft products — by the way, there's two Microsoft products guys, both of those products, Business Central and Finance and Supply Chain — we see good use cases for either of those products. For a little smaller organization. Business Central might make sense, and there's some partners like Sikich that have very specific construction solutions on the Microsoft product. But then the bigger Microsoft product, there's some partners that that Quentin has sort of vetted recently. What's the big one?

Quentin: I don't remember off the top of my head actually.

Shawn: SA Global is one on the professional services side that we've worked with. But then there's another partner that does Microsoft Dynamics 365 — it used to be called AX — but they have a very focused — like if you do Microsoft Dynamics 365 AX Construction, the name is going to come up. But they have a very specific construction solution, it’s well known, but the price is higher, it's just a higher entry point, but you get more software. Do you need all that software? I don't know. Depends on what your needs are. That's sort of like a “Hey, give us a call. We'll help you.”

Acumatica has got more of a construction-specific solution for a little smaller organization, but not bad.

And then even NetSuite, they've got some construction-specific stuff. They've got some partners that have written some things, and we're seeing a really interesting integration capability with NetSuite and Procore with one of our clients.

So, those are just some, there's many others, but the key thing is that there's some good options in the market, really good people that really understand construction, like Quentin said. If they don't know what prevailing wage is, you made a mistake and don't buy that software because they're idiots. When it comes to you knowing you, and that would come back and burn you.

We had a construction firm last year that purchased a software solution from a company — I won't say who it was — and they were basically sold the wrong version of the software for their industry. And they wanted to do the deal fast; they got a really good fiscal year end deal and they really wanted to put the software in fast so everybody was go, go, go, go. But there were indicators that it wasn't the right fit and right before go live, “Oh my gosh, this isn't going to work. It's not going to meet our needs is terrible.” I was like — they actually called us to help on the selection prior and it was, “Oh no, we got this. We're good.” So we said, “Okay, perfect. Call if you need anything.” And well, they called the day after Thanksgiving, and they're like, “Oh my gosh, we don't know we're doing. We have this app and we thought that it fit. They told us it fit. They told us we didn't need da da da.” Like okay, that's what they did, but what did you do? You have some responsibility here, too, and they really took responsibility, as did the software vendor. And we were able to get them onto a better fit product and got them implemented on time and on budget, which was amazing. And they're running the app now, of course, they're going through all the “OMG, how do we do this? How do we do that?”

But, there's really good solutions in the market for construction businesses now, and there always was. There was some other app — we've worked with like Dexter Chaney, which now is a part of Viewpoint, and they've kind of folded all these products together and it's a little hard to see where the assets are now, but there's good apps. And there's Foundation Software is another really good product — they're their owner is awesome, he's just a funny guy. So, there's good products, good implementation partners behind these companies, that's the other thing that that we look for.

We don't want to just look for a product. But we also want to make sure that there's a partner that really understands our client’s industry. And I can't say this enough, SIS is the name of that company, Quentin, Strategic industry Solutions — you probably found it. Really strong construction capability, their people have been in construction for a long time, they know their product, they know your industry. Their really good partners then get to know you individually. “Oh, you're just a construction company. We know what to do. We're going to slam in the software.” No, you're not. You have to actually have to find out what the differences are in these different companies.

So, bottom line is good solutions in the market, we've worked with a lot of these folks, we can give people some — in five minutes — some tips on who they should talk to. If it's really a complex situation and you're lost in all the data and this vendor saying this and that vendor is saying this about that vendor and ah, chaos. That's what we're here for is to help you through that process, but just know there's some really good solutions out there. That was a long answer, Juliette, did that make sense?

Juliette: It makes sense, and it's perfect. And I'm going to let Quentin follow up with that. Can you talk to us about when a company would consider moving from a more general app to a more established ERP system such as NetSuite or something similar? Or one of the apps that Shawn just mentioned?

Quentin: Yeah, I can talk to that point.

So, obviously there are applications that are built specifically for construction industry, but one of the things we alluded to is, from a technology standpoint, a lot of these applications are falling a little bit behind the current times on the technology platforms and how they function and aren't necessarily taking advantage of all of the current day technology such as OpenAPI's and software as a service.

So, we've seen a lot of good construction ERPs that are still in that older boat; they want to be on-prem, it's very complex, your perpetual license versus task model, but those can be also some of the reasons that you want to go on to a more general ERP such as the Microsoft platforms or NetSuite or something like that where they have a great technology platform. It's really sophisticated, flexible, capable of any new needs you might have — it's just more present in the market, so there's more dollars going into the development of it, and it's more established and you know it's not going to go anywhere.

Some of these smaller construction specialty apps, they may just not survive. They may not continue, and if you invest in them, it may not be the right option for you. There's also a scale factor involved if you're a small construction company that — sub 100 employees — you can probably get away with a small application, but as you grow and you scale and become larger and you need more capabilities, more best of breed integrations, then one of these very established ERP packages can really be that hub to make all of that work together.

So, those are some of them. There’s really a lot of other things. Some of these platforms can be customized specifically for your needs that may differ from company to company. A lot of these smaller or specific construction packages can't really customize, they just do it one way and you're just kind of stuck with the way they do it, whereas the construction company itself, from their needs, they need some very specific things that because they operate a little differently, those ERP packages that are more established can really speak to those points, build out custom modules that do exactly what you need.

So, those are some of the reasons. Shawn, do you have anything to add to that?

Shawn: No, I think I think that's pretty good. The one thing I would add is — and I guess this goes along with what you said, Quentin — but the sophistication of your users is where things get really interesting, where you have some — again we work with everybody and thankfully. I think both Quentin and I used to work with these large organizations that were very complex, and you had all these smart people around and they never got anything done. But they were interesting. But all the way down from a firm is just starting up. But the thing about the folks we normally work with is that they care about their organization. They want the right thing for the future. And they get it, they get the capabilities that could be possible.

So, one of the companies I'm thinking about, Quentin, that we're in right now, they've got some level of sophistication. They've got like some a very few amount of technical people on staff. But their operations are pretty straightforward. They build things, and they do an amazing job in what they do. But when it comes to technology and software, they just don't need any some solution that's wicked super crazy complex, they need something that's more elegant, more simple that a lot of folks will need, for instance, like a lot of our specialty folks we work with, they will scale up for projects and then they will scale down when the projects aren't there, so they have a lot of new people coming in and out at any given time. So you want to have really easy to use software, even if it's not the most whizbang, it's not going to do kind of crazy integrations where we're taking CAD drawings and converting that into estimates that then get converted into purchase orders and all this artificial intelligence, robotic process automation, digital transformation — let's just automate the business process. This gives some nice screens for people to enter the data and get great report. And, by the way we just made the company 10% more in Ibotta, and we only spent 1%.

So yeah, that's the other thing I would mention is really look at your people and say what do they really want and need. And then as you're looking at that, for the people that are looking at this different software, like I'm sorry that you got the job to do it because it's hard, but at the same time with that responsibility just say how do we really balance the right level of technology with what our people will really use into the future — that same client I'm thinking of, we happen to be very fortunate that our sponsor on that project gets that. I mean, he's like I want to go out here, but I think the organizations right here and we're like probably does make sense to do here and now, but now we have a road map to the future to get there and you can't get to that really high level, that high echelon of functionality, until you do some of the basics first. So, to get to that you need to go here and if you don't get to here, you're going to get fired. We don't want that.

Anyway, look at your people. That's the only thing I would add.

Juliette: Well, and it's also — it sounds like finding an application that works for your needs now but is able to adapt with the changes of your organization, your company, what have you, and then evolve with you. Is that right?

Shawn: It's spot on, yeah.

I especially think for construction companies it's really important to find that from a partner because

you're spending all your time on big projects, lots of risk, lots of people, lots of everything, lots of jobs like Quentin said, thousands of tasks on a work breakdown structure and something you're trying to build and do, and you have equipment, you have inventory risks — “Oh, we purchased for the job so we don't have inventory risk” — that's not true. What if you buy too much? What if you buy the wrong product? It has to get returned. There's a lot of issues in a construction business that are very real. I mean, there's issues in all organizations, but you really feel them in a construction business so pick an app and a partner that can help you get to where you need to go now, but then you don't have to change and — certainly not in two years or even five years.

We really love for our clients to have a 10-year horizon on their products, but a lot’s changing now, so that's kind of hard. But we even have clients, Juliette, in the construction industry where they're now private-equity-backed, and they're a platform to buy other specialty contractors. They didn't start off that way, they were very focused on restoration kinds of projects, but they built a relationship with some funding sources, they liked it, now they're out. They bought a roofing company, and I don't know what they're going to buy next. But now we got two different businesses. We went from $50 to $100 million. We're going to go to $200 million. And we need a platform that isn't just a traditional standard construction application, we need something that's a little more new school where they may start selling recurring services instead of just doing jobs, now they're doing more support work, like ongoing, and now we've got a recurring revenue stream, not just field services stuff, but value added service, not just break fix kind of work, but continuing to go out and doing more proactive work on the assets that they build, the buildings that they build, the facilities that they build. So, they're starting to get into adjacent services to where they're not just doing their complementary. So, we really spend the time upfront to understand where do you see yourself going in the future? Sometimes you don't know, but I mean, I think of all the industries we work with, Quentin, I would say that the house analogy probably is pretty good for the construction industry.

Software — it's unlike a house. You build another room. You make the addition, like it's more physical, right? Software is more like we can do anything with it, but, I mean, Quentin when you think about our clients, what do you think about when it comes to that — like even with that analogy?

Quentin: I think that's a great analogy. It kind of is a different space. The construction industry very much focuses on the physical, and software is a very virtual platform to work with, and they sort of clash a little bit. It's like the software can't always do what happens in the physical world and trying to connect those two can be difficult. It's possible, and especially with some of the newer software packages and bigger ones, but bridging that gap is a definite struggle for the construction industry as a whole. That's why we aren't seeing these construction-specific platforms as advanced as other ones, because that gap is just huge and the diversity of needs is so huge. And construction companies as a whole aren't necessarily as technologically advanced as other industry companies, they do the physical work, so the software hasn't quite caught up.

So, I like the analogy.

Juliette: So, with that said — I'm going to pose this to both of you — with your experience of working with our various construction clients, are there any specific insights or considerations that you can share with us about working with them on their projects?

Shawn: Quentin, go ahead.

Quentin: Yeah, I can definitely say that the construction industry is a very broad industry. There are possibly tens or even hundreds of different specialty niches in this.

Every company operates differently. One GC is not the same as another GC, one electrical company is not the same as another, mechanical — same things — and so a lot of these software products are built to handle this straightforward process, and so every construction company every different organization needs to look at their specific needs before touching any of these applications because, generally, you can go out and every software company will say, “Hey, this is the right product. This does everything you could possibly need it to do.” But if the company hasn't looked at their real needs and how they're different from the standard, then they're going to get the wrong product. So, you need to really look at your internal needs and how you operate as an organization and what your culture is before you look at what your software is going to do, or what package to get. So that's one thing is, don't just run off. Look at software.

That can be generalized to almost all industries, but I think it's even more important in the construction industry where one small mistake can cost you thousands, hundreds of thousands, even millions of dollars if you do it wrong. So, it has a bigger impact in the construction industry, so get it right, get it set up, do the right thing for your organization.

Shawn: Yeah, Juliette and Quentin, I completely agree with that.

And again, as I think of our listeners here, I want to kind of like — are we okay on time? I know everybody’s been super patient during their lunch and everything. We’ll go just a little bit longer because I really think this is super helpful. That's why these calls — we really try to take “Oh my gosh, we were on a zoom call this morning. Here's what we wish other folks knew.”

So, if you think about a construction organization, you've got some kind of bidding process that's up front. Whatever that bidding process is, for our low voltage it's like security integrators, right? It's usually CAD and they're like, “Okay. Here's the rooms. Here's the buildings. Here's the space. We'll put a camera here access control parts, parts, parts, parts.” All the way to a roofing company that's doing their estimate, they go out on the job, maybe they look at the square footage of the roof, they look at the materials, whatever. All kinds of different options I can give you examples of. There's a labor piece and there's a materials piece usually for most organizations. Sometimes it's more labor, sometimes it's more materials, but there's some kind of an estimate, some kind of a negotiation contracting upfront to say, okay, here's what we're going to do for you. Now, we get that signed, and now you hope like hell that your estimate was correct. I think everybody feels that way in professional services. I know we do. You don't want to go back and change order. You just don't. That's not a good way to do business. You have to, things change, fine, but then you take that estimate and you convert it into, again a contract, a quote whatever — whatever you call that thing that's signed that says do it.

Now you have to go and purchase your materials. Now you have to go and source your label. Is it your own people? Is it subcontractors? Do you have to have laborers working under you? Whatever it is, it's hard. So, you got the labor. You got the whole materials flow going. You get the materials, you get, your people. And then you get your project manager, your lead person, there's usually somebody at corporate, there's somebody down in the field, maybe there's one or the other, whatever. And then that person, they have to start the work and you got to get everything organized and get everybody there and get all the materials there on the site and then you start working. Doing the job, doing the job, doing the job, and you're tracking all your costs throughout that whole time, you're communicating your results back to the owners back to your GC, and here's what we got done and then boom, stuff happens we'll say. Well, how do we handle it? Well, we’ll eat the costs or we're going to do a change article through the change order process. I thought we knew this, but we didn't know it or the material isn't there on time or the laborers that you hired don't show up and so you're dealing with this like — I get overwhelmed just thinking about. I'm like how do these guys do this, so I'm like, well, we kind of have similar issues, right? I mean everybody has similar issues, right? But you run the project, you execute the project and you do your quality checks, you do your billings, and then you have to do your revenue recognition. Is that cost plus? Is it whatever it's based off of — which is hard to get your accounting folks in line with what the projects doing and then people are beating you over the head. You're over budget, you're over budget — whatever it is to that whole process and then boom, you're done. And now you've done your QC checks, you've done everything else, you do your final billing, you get your final payment, and you're paying your people all along. And now you've got this end of project and you're done with the project.

All of that process is extremely complex. There's variability everywhere, anything can happen. But there is a common process that you can look at that you can automate that and you can automate the data flow so that everybody involved can see the data that they should see.

Does the guy banging on the on the wall with a hammer if you’re a framer or whatever, does he need to see what the profitability on the job is? Of course not, but the systems have the ability to segment out this data and keep the data that people need. They just have to enter the data, make it easy for them.

We had one client that's using an app for — it has this proximity, this capability with the GPS tracker, it can look at the list of projects, and depending on where the person is they can say, oh, you're on this project.

Juliette: Wow.

Shawn: That's cool, right? That's pretty simple these days. That's not that hard, because everybody has got a cell phone, so at least when the person enters their time in the field, they can do it on their phone and it says, are you on this project? Yes?

All I'm trying to say is that those kinds of problems of just bringing all the data together, automating the process a pre-approval workflow — corporate receives an invoice from a materials vendor and corporate shouldn't pay that until the field supervisor agrees that they received it and they got the right quantity. “Okay, well we got an email. I'm going to print it out. I'm going to put it in the job packet that goes to the job every Tuesday and it's going to sit there, right?” Don't do that kind of stuff! Those problems have been solved. Scan in the invoice or if you have it in email, just add it to the system and then the system set up to say for this job this is the approval matrix. Here's who we go to, send it out, people look at it on their phone — now that they just click through and say fine without looking at it, that's a different story — but there's this automation of processes — the invoicing process — like we have all of our time, we have our materials, we have our schedule of billing upfront, so let's build that into the system.

These problems have been solved and a lot of organizations that we're working with in the construction industry are still suffering from that field services same kind of thing. Here's a job, here's a service ticket, assign it to a person, let the person add their materials, let them add their time, let's see how it really went, do the bill — we've just solved those problems.

So now we can do things like wow, this client really wants this customer who really wants this crazy — whatever. The architect is trying to make a name for themselves and they're trying to do this crazy building, or we have a prospective client that's building facilities at 14,000 feet — like that's cool. Those are really cool problems to solve but getting the invoicing right, don't do that — there's enough systems out there is what I'm trying to say. When you look across those processes, they have been automated. You can do it and just know there's good systems that can do that. I think that's the key thing I'm trying to say on my little soliloquy.

Juliette: No, it was perfect.

So, I think we're coming to the end of our time, but is there anything more that you think that we should touch on before we wrap for today?

Shawn: I’m done.

Quentin: I think we've covered it all. I mean I could literally talk for hours about all the complexities within the construction industry. I didn't even touch on retention or stored versus installed materials, or all sorts of things that they have to deal with.

But, it just all comes back to understand your organization, understand your needs before you go and get software. But there are solutions out there and it can make it work well.

And now is a really good time to look at it as we go into this unknown future. Make sure you have the right platform to build and go forward.

Juliette: That's perfect. Well, thank you both for sharing your expertise. Maybe we can roll this into a Part 2, a continuation, that'll be good.

So, thanks for your time joining us today, I appreciate it. And everyone, thank you for joining us for today's webinar. Please let us know if you have any questions we can help in any way you can reach out to us email, call whatever. We're happy to help in any way we can.

Be sure to join us for our next call on Thursday, February 11th: An Overview of Enterprise Accounting Software. We will examine how to get what you really want out of your enterprise accounting software along with taking a look at optimum functionality in use cases for different configurations, please go to our website erpadvisorsgroup.com for more details and to register.

ERP Advisors Group is one of the country's top independent enterprise software consulting firms. Advising mid to large sized businesses on selecting and implementing business applications including ERP, CRM, HCM, business intelligence, and other enterprise applications which equate to millions of dollars of software deals each year across many industries. This has been The ERP Advisor.

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