Working practices in the construction industry for smaller construction/contracting companies largely haven’t changed over the last 30 years.
Whilst mobile phones, email, estimating software, project management tools and better more effective accounting software have all made a positive impact the main fundamental challenges/issues still remain.
Operational inefficiencies, material wastage and unnecessary remedial work (due to poor planning/management or poor work onsite) can account for up to 35% of costs on some projects.
From conversations that we have had with a number of smaller construction/contracting companies, using figures provided solely by them we would estimate as an average that for every £850,000 of turnover realistically £50,000 per year (or 5.88% of turnover) is being thrown away so for businesses that turnover:
Much can be learned from other industries such as manufacturing and the service sector where just 20 years ago these were industries where out of date working practices and ineffective processes were commonplace.
At a basic level, it can be a very worthwhile exercise for Directors and Managers to sit down together, document their existing processes, identify what works well, identify where the common pain points and aim to improve the existing process on paper for employees to then adhere to them moving forwards.
Completing this type of exercise can boost productivity by 5% to 15%, however, it has limitations as it won’t remove many errors/mistakes from creeping into things or remove the wasted time it takes to manually enter the same information into multiple documents/systems.
Over the last 10 years, it has become increasingly common for smaller construction, contracting and trades businesses to begin to address a number of process/data related issues by implementing stand-alone business applications such as Accounting Software, CRM Solutions, Estimating Software, Project Management tools, stock/inventory management systems etc.
Whilst these applications usually appear to partly resolve issues or reduce the number of problems in the short term it usually becomes apparent that they can create a different set of challenges for you to deal with as you now need to manually copy data from one system to another system (or systems!) which reduces employee productivity and often allows data entry mistakes to be made.
A few businesses have also found that by the time they add up what they are spending on stand-alone applications that it can add up to £££££ and this route isn’t either as cost effective or efficient as they initially thought.
A year (or few) down the line businesses who have gone down the route of implementing stand-alone applications and systems decide the time is right to investigate looking at fully integrated Construction Management Software or Construction ERP Software and realise that there is now a hidden and often substantial cost of migrating data from existing systems over to a new system and in the majority of cases these costs even for a small business can be £1,000 to £5,000. Regularly this results in a lot of historical data being archived and only essential data being migrated over to a new solution.
By far one of the best and most future proof options if to implement a fully integrated construction management, job management or ERP type solution.
These solutions provide a number of modules (CRM, Estimating, Contract Management, Purchasing, Supply Chain Management, Stock Management, Resource Management, Project Management, Service Management, Invoicing, Asset Management, HR Management, Integration with Accounting Software and/or Integrated Accounting/Financial Management Software, Mobile Apps, Telematics for Vehicles etc).
This type of solution offers several benefits:
The only disadvantages to this type of solution are that they are usually fairly expensive, they are big applications and often too much for smaller construction/contracting businesses. Per user per month SaaS (Software-as-a-Service) or software license costs soon add up, better solutions of this nature cost £65 to £120 per user per month so even a small business with just 10 users can look at paying £650 to £1,200 per month and this is before and set up and/or training fee’s (typically another £4,000 to £10,000) are taken into account.
Accellier helps small-medium sized construction companies and contractors accelerate business results.
Our Construction Management Software helps you increase sales and profitability, reduce costs, improve efficiency, keep your customers happy and give you back control.
Construction Management Software: