No matter what industry you’re in, software implementations are challenging. But this is especially true for the construction industry. Why? Although construction companies have been using software for decades, our industry is still one of the least digitized.
Despite low digitization, software has the potential to revolutionize the construction industry if companies can improve their adoption rate, especially for mobile software. The companies that achieve successful software implementations realize significant benefits, such as an increase in operational efficiency and overall team productivity. Indeed, the right construction software can improve your company’s control over a project’s cost, schedule, and scope. It can also provide strategic information that allows you to continually improve your business process. Furthermore, project managers can use construction software to improve process automation and project controls.
However, construction’s low digitization means construction software is historically difficult to implement for two reasons: (1) a lack of necessary buy-in for both office and field team members and (2) a lack of dedicated IT staff to champion rapid adoption of software within a company.
In this post, we reveal some of the key benefits of a company-wide software implementation, barriers to success, and tips for implementing construction software throughout your organization.
Benefits of Software Implementation
A company-wide software implementation can provide benefits in the following key areas:
- Labor productivity
- Schedule discrepancies
- Committed cost
- Margin discrepancy
- Liquidity and cash flow
Low labor productivity can break a project’s budget, especially for subcontractors. But software can help managers isolate the jobs in a project, allowing them to identify inconsistencies between labor estimates and actual expenditures. By identifying inconsistencies, project managers can establish daily performance goals to better predict the cost to complete a project.
Project owners can also use software to eliminate scheduling discrepancies by improving communications regarding project progress, allowing projects to be completed on time. Completing projects on time is especially important with the multiple scheduling demands and project specifications that are common with modern construction projects.
The rising cost of materials increases the financial exposure of construction firms when suppliers aren’t contractually committed to a project, especially those with longer durations. Software can help a company track uncommitted costs and increase the proportion of committed costs.
Managers can also utilize software to minimize discrepancies between the business plan goals and gross margins by monitoring margin variances. Or they can use software to compare the cost estimate to the gross margin on individual projects, allowing them to see if the project is achieving its profitability goal.
Liquidity and Cashflow
Finally, software can analyze a project’s liquidity and cash flow to determine if it’s consuming or generating cash. This capability primarily involves monitoring key accounts for asset and liability balances.
Barriers to Success
As we suggested earlier, there are two primary barriers to success when it comes to successfully implementing software. A software system’s end users often determine its success or failure regardless of its potential for improving efficiency and productivity. Obtaining user buy-in can be a challenging process, but it’s essential for a successful software implementation.
It’s therefore important to look at an upcoming software implementation from the users’ point of view. A new software implementation requires users to give up a familiar system and learn a new way of doing things, so feelings of apprehension are normal. Many companies implement new software without soliciting any input from the people who will use it. This practice means that users may not even know about the pending implementation until the software has already been purchased, which will almost certainly make users resistant to the change.
Lack of management support and/or internal champion is another common reason for a failed software implementation. Early management buy-in is essential because a number of key decisions must be made before beginning this process. The management team must also participate in planning the implementation, which will minimize losses of time and money caused by changing this process after it’s already underway.
While construction workers are no longer reluctant to use software, they still need help to start using it, including mobile apps. Software champions can improve the adoption rate of new software by communicating its benefits in terms that workers can understand. A successful champion is someone who can be a trusted resource for the rest of their peers to get the team excited for the change and answer any questions they have about the software. For example, champions can emphasize the new system’s capability for streamlined data entry or more detailed reports. This process should begin well in advance of the implementation to maximize user buy-in. Workers should also receive regular training to ensure they know how to use the new system. This training should include complete training for new users and specific training for system updates. A formal group training can show your users that this change is supported by leadership and they’re committed to its success. Training can also get the team excited to use the software and ensures that everyone is using it the same way according to the standards of your project or your company as a whole. If you do not include training in your rollout plan for a new software, you run the risk of the tool not being used correctly or not at all.
The preparation phase of software implementation is an ideal time for a company to standardize its coding structure, including the codes for accounts, customers, jobs and vendors. A standardized coding structure means that the same code stands for the same thing in all projects. It’s especially important to establish a more logical coding structure when a company is migrating from a generic accounting program or other legacy systems with limited flexibility in their structure. Standardized coding also allows your reporting system to compare data across all jobs, thus providing better insight into your business processes.
Beyond coding standardization, implementing standards on how the the software will be used by your team is instrumental in realizing your ROI early on in the project. Getting your entire team using the software in the same way will minimize confusion, increase efficiency, and streamline your workflows right from the beginning of your project.
You can’t do anything successfully without a plan. A plan, or roadmap, is essential for a smooth software implementation. It includes a timeline for the implementation, including the expected completion date for each phase. A roadmap also describes the new information you expect to receive from business and project management perspective. For example, real-time software should allow you to monitor your system’s key performance indicators in real time.
A company typically defines its business requirements at a high level during the evaluation phase of software implementation, before purchasing the software. However, once the software has been purchased, an effective roadmap requires these processes to be defined at a lower level by taking the software’s functionality into account.
The pre-implementation phase of the roadmap should increase the detail of business processes by identifying improvements that need to be made to those processes, even if they’re independent of the software. Managers should also identify specific workflows, roles and responsibilities by job and function during pre-implementation. These tasks will help determine the software’s installation path, which should include information quality control and testing scenarios.
A new software implementation may involve changes to the company’s business, organizational, and operational models, so it’s essential that the roadmap define the scope of these changes. New software will also require significant changes to most team functions, which provides an ideal opportunity to standardize business processes across multiple geographic locations. Managers should also define shared responsibilities to benefit from the new system during implementation, which will typically include departments such as finance, human resources (HR) and purchasing.
One of the most important but challenging aspects of software implementation is data migration. System administrators must migrate data to the new system at some point, but many companies delay this task until the end of the implementation process. This decision is usually based on the assumption that it will be easy to accomplish once the implementation has been designed and tested. However, data migration can be challenging because data from one system doesn’t always map easily to another system. Furthermore, the new system may not be able to handle the required volume of data. Project managers may therefore need to make decisions regarding the specific data to migrate to the new system.
The definitions for data input and output are also delayed until the end of the implementation in many cases. However, the new system must be able to accept and produce information if it’s to benefit the company. Data input and output definitions should begin as soon as implementation begins, although these tasks may not be completed until the end of this process.
Project managers should maintain an accurate sense of a software implementation’s scope by focusing on the specific steps outlined in a well-defined roadmap. This strong sense of scope is essential for accurately estimating the project’s timelines, milestones and costs. It will also allow the implementation to achieve the desired business objectives.
It goes without saying that project managers must develop a maintenance process for the new software that includes periodic checks to ensure that it’s still being used as intended. Usage often declines after software is implemented because managers don’t have time to enforce its use. However, this natural tendency must be avoided if the software is to serve its purpose of improving efficiency and productivity. Regular training refreshers or training on new functionality is a good way to ensure the software is being used as intended and follows the standards of the project.
The bottom line is that to reap the benefits of new software used on a construction project, your company must be willing to put in the time and resources to ensure the tool is being used to its peak potential. In other words, to successfully implement your software, you must make sure your adoption rate is high (through training your entire team and ensuring that those in a leadership position are championing the change), take advantage of the change in software to enforce new & existing standards (both within and outside the scope of the software), and maintain a clear roadmap for continued use of the software.
Implementing new software on a construction project isn’t easy, but it’s not an impossible undertaking. If users are prepared and given the help, guidance, and motivation they need, the benefits from software implementation can significantly eclipse the initial time and money invested.