Author Archives: Kristin Hege

Construction Technology: Pivotal Differentiator for Clients

Construction Technology: Pivotal Differentiator for Clients

As the use of construction technology surges across the industry, an unexpected group is expressing interest in how it works: prospective clients. Current customers and prospective clients understand that technology is valuable for businesses in general. But lately, more and more are beginning to understand how a business’ technology (or lack of) can benefit (or hinder) their projects. Whether it’s gaining visibility into budgets or timelines, or receiving updates from the field in real-time, prospective clients are asking construction firms what kinds of technology they utilize and are increasingly choosing contractors based on their answers.

In this episode, Mike Gillum, a product specialist at Acumatica, reveals which technologies are attracting clients today and explains why every contractor should be implementing these solutions in 2021 and beyond. 

 

Key Takeaways:

  1. Contractors should select technology that enhances their productivity. The right tech solutions can boost your team’s productivity by eliminating unnecessary work, increasing communication and reporting. Clients want work that’s completed on time and within budget and are increasingly selecting contractors who leverage tech to do so, even if their proposal is not the lowest quoted cost. 
  2. Prioritize technology that keeps clients in the loop. In 2020 and into 2021, it hasn’t been feasible for most clients to visit job sites to track progress and share feedback. That’s why real-time tracking solutions are so valuable –– they allow contractors to report on a project’s progress with videos, pictures and data. Clients can receive these details quickly from wherever they are, so they always stay in the know.  
  3. Tech that increases safety, reliability and accuracy gives clients the security they need. The best construction managers are risk managers. Technology solutions like safety forms and labor tracking allows project managers to instantly respond to situations that arise on the job site, minimizing any loss of time, money or injury. By effectively managing risk, the contractor can eliminate issues before they take place.

 

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Episode Transcript:

Mike Merrill:

Hello and welcome to the mobile workforce podcast. I’m your host, Mike Merrill, and today we are sitting down with Mike Gillum, the product specialist at Acumatica. Sorry, let me start that over again. All right. Hello and welcome to the mobile workforce podcast. I am your host, Mike Merrill, and today we are sitting down with Mike Gillum, the product specialist at Acumatica Construction. With Mike’s experience working with contractors for over 20 years, we just wanted to have a nice conversation and talk about and learn some of the unique insights that he’s had from his various positions. So, Mike, welcome and thank you. We’re glad you were able to join us today.

 

Mike Gillum:

Yeah, absolutely, Mike. Thanks for having me. I’ve been looking forward to this. I know we had to reschedule once, but due to opportunities, but happy to be here absolutely.

 

Mike Merrill:

Never a better reason to postpone then bringing in the bacon.

 

Mike Gillum:

That’s it. Exactly.

 

Mike Merrill:

So before we jump into the conversations today, why don’t you share with the listeners just a little bit about your background on your experience?

 

Mike Gillum:

Yeah, definitely. So I have about 25 years of experience in the automated construction software space. My father was a contractor growing up, so I’ve been in construction my entire life. He was a sheet metal contractor. So I spent a lot of time climbing up ladders and commercial buildings, hauling buckets of whatever I needed to haul as long as I was strong enough, or when I was strong enough to do that, and then spent some time estimating and doing some PM-ing for him as well.

So once I got through college, ended up coming down to Florida where I’m based now and got hired by the Construction Estimating Institute of America, which is still around today, still exists. They were putting together programs for licensing for general contractors. They did programs around estimating and project management from an education perspective for contract, something that was missing in the Florida market.

So they hired me on and had some time doing some technical support for them and some consulting. Then they ended up purchasing a software company called Tech Sonics, which is a old DOS-based product out of San Diego, California. They ended up converting that into two other DOS-based products, which eventually became Quest Solutions. Quest Solutions was a takeoff an estimating product. I was a partner in that company and we ended up selling that to Maxwell Systems in 2008.

So I converted from Quest over to Maxwell, worked there for a number of years, and then Maxwell was acquired by Viewpoint. So I worked for Viewpoint for a couple of years and then did some consulting on my own and ended up here at Acumatica. We’re quite excited to be here, and it’s been a fun couple of years disrupting the construction space for sure.

 

Mike Merrill:

Wow. Quite a background.

 

Mike Gillum:

Quite a background. Yeah. You could say I’ve been through the acquisition pipeline once or twice for sure. Learned a lot there. No doubt about it.

 

Mike Merrill:

Yeah. One act short of a circus it sounds like so far.

 

Mike Gillum:

That’s about right. Yeah. Yeah. It seems to be the state of affairs for technology. Right? There’s always movers and shakers, and things happening and merging and acquiring, et cetera.

 

Mike Merrill:

Yeah. Lots of shakeups, but it’s good. I think that unique perspective that you gained through those different experiences you’ve had certainly add value to the things that you can bring to the table for your customers.

 

Mike Gillum:

Definitely. Yeah, absolutely.

 

Mike Merrill:

Well, so one of the most important tools as we’ve talked previous to this podcast, is software in construction. So when you hear a statement like that, that the software is the most important tool or one of the most important tools, what comes to mind for you?

 

Mike Gillum:

Yeah, that’s a great question. In reality, it’s contractors today typically utilize too much software. I don’t know if you’ve heard that before or not, but in your experience, in my experience certainly, when I’m talking to contractors to run their business today they may be using upwards of six or seven different products. Oftentimes those products are disparate. Meaning they’re not talking to one another, right? There’s no integration, or if there is, it’s a manual import and an export, and they’re throwing things over the fence. The folks out in the field they’re doing their work in the field and they throw it over the wall or the fence to the accounting people, then they do their thing, and maybe a week later the data comes back together.

So that’s one of the things that definitely comes to mind as an issue today with contractors that we’re trying to help solve for. I know you’re trying to help solve for as well is bringing that all together and having data speaking to each other. So it’s all about real-time information. If contractors are able to access real-time information, they can make those important decisions around profitability on a project, or change orders, or any aspect of the project that’s out there.

 

Mike Merrill:

Yeah. That’s very interesting. I’ve heard that comment on occasion. I don’t hear it a whole lot, but I have heard it for sure. So when you say too much software, do you mean they got 15 different Phillips screwdrivers that are all about the same size? Expand on that, could you?

 

Mike Gillum:

Yeah, so they could be using… Let’s say they’re using product A to do their takeoff, and then they’re using perhaps an Excel spreadsheet or an automated system to do their estimating and bidding, or even they’re using a separate bidding tool. Then they may have two or three different apps that they’re using for project management or time capturing. Then you’ve got your accounting software. If they’re using an older accounting software that is perhaps legacy based or server based, that’s not speaking to the latest and greatest technology that’s out there from a cloud perspective, or a mobile application perspective.

So when I say too much software it’s, they’ve gone out and perhaps fixed a problem for a group of people in their organization, whether that’s the superintendents or project managers, or the estimators, or the accounting people, the AP or AR people, but they haven’t thought about the big picture of bringing all those people together. They’re one team and with the same set of information that they’re all working with, that would help make decision-making a lot easier and understanding exactly where they are with their projects, but also the company as a whole.

 

Mike Merrill:

So I’m hearing integration in any system they have as the key to utilizing and leveraging.

 

Mike Gillum:

Yeah. And integration is a term that’s often overused or misspoke about, right? It’s really the ability to gather data in one central location and have players in your company and outside of your company, both internal and external, accessing that information. So everybody’s working with the same set of data, not having to wait a week or two weeks for the PM to come in from the field, or the accounting team to go through their approval processes, or a bill to get paid. With real time information in one central location, that’s going to allow everyone to have that timely information to make those important decisions.

 

Mike Merrill:

Yeah. You stated something there. You talked about people outside of the organization. So that’s kind of an interesting point. What types of data might be shared with external people from the company?

 

Mike Gillum:

Yeah. So if you think about a construction project from a pre-construction side, all the way through the installation or implementation of the project, and then after the project once it’s completed, there’s a whole lot of players involved there. If we start on the front side, you’ve got the architects and engineers that need to be speaking to the contractor or the owner, depending on what type of project it is. You’ve got the owner of the client, you’ve got the architects and engineers, then you have the general contractor, and then you have a whole slew of subcontractors. Again, depending on the size and scope of the project.

All at the same time, you have the vendors. People that are supplying materials or supplying services to the project or to the sub or to the general contractor. So those are the kinds of folks I mean when I say external, and they’re just as important to the whole project as somebody within your own organization. So again, having them, or providing them the ability to have access to the right information, whether it’s a change in scope, or blueprints, or specs, something has changed, there’s been a revision, getting that out to the subcontractor in a timely manner impacts the whole project. From a scheduling perspective or a job costing perspective.

 

Mike Merrill:

Yeah. So that’s a great point. So you brought up something there too. We talked previously about the challenges with data lags on the job site. Is that where some of those things break down and occur?

 

Mike Gillum:

That’s definitely where some of those things break down and occur. If something happens with a subcontractor, perhaps it’s the MEP contractor, and something changed in the plans with the architect or engineer made a change, and the revision came in. If the general contractor doesn’t get that out to the subcontractor, perhaps the subcontractor’s already done the work and it was the wrong work, or they didn’t realize there was some kind of collision there where this wall wasn’t supposed to be there, or that pipes running through where my wiring is supposed to go type of thing. So having that information all in one place for everybody to access is extremely important.

 

Mike Merrill:

Yeah. When you’ve got those collisions, you’ve got lost opportunity of time, wasted materials, other delays that are impacted. So-

 

Mike Gillum:

Yeah. And it all impacts the schedule, right? As you’re well aware, contractors are on a tight schedule to get their projects finished in a timely manner. Oftentimes we’ll get paid upfront, or if they finish early, they’ll make a little bonus on that project from a profitability perspective. So scheduling is extremely important. And if you’ve got a sub contractor that’s supposed to be out there on Monday and they come out and realize, well, they can’t do the work until Wednesday or Friday. Well, that subcontractor is going to go to their next project, and you might not be able to get them back for two weeks.

Where I am in Florida right now, and I think other places as well, construction is booming. Whether it’s infrastructure work or residential, multifamily. I mean, it’s everywhere. Trying to find a contractor to come paint a house or a building, or put flooring down is weeks or months in advance right now. So scheduling is extremely important.

 

Mike Merrill:

Yeah, that’s a great point. So I guess one of the ways to combat that, and technology is kind of provided some answers in this area, but there’s things like machine learning and robotics, sensors, other things that are part of the conversation with technology and innovation these days and construction. What would you say to companies that feel like maybe those things are a threat to their job or their position? Do you hear that?

 

Mike Gillum:

It’s a great segue Mike. I think they should look at it in the opposite way. I think they should look at machine learning, AI, ML, robotics, all of that as a benefit to their organizations, because it’s only going to increase profitability on a project, increase awareness on a project and provide more timely insights. When you’re talking about those sensors, whether it’s a plumbing contractor, mechanical electrical contractor, where they’ve got sensors out on their job sites or projects where something goes wrong and someone can be instantly notified that something went wrong. So not only are you saving the client money, but you’re utilizing technology to fix the problem, to get your team out there a lot faster, whether it’s a service tech or even on a piece of heavy equipment.

 

Mike Merrill:

Yeah. So this makes me think of another thing you mentioned. Some companies have too many different software systems, too much data maybe, or in too many different places. How does machine learning help combat that and what are some of the benefits over just a standard process that somebody used manually?

 

Mike Gillum:

Yeah. So machine learning is a really, really interesting concept as is artificial intelligence. It’s really all about understanding processes. Machine learning is going to… And there’s so many different ways where machine learning comes into play. I can give you a couple of different examples there, but if you’re from an accounting perspective, a financial perspective, if your invoices are always coming in a certain way, or perhaps they’re coming in different ways with different vendors, and you’ve got to, as an AP or AR clerk, manage that from a paper process, it can be a timely thing to have happen. You’ve got hours or days of every single day where you’re having to learn what those processes look like.

Where machine learning comes into play is, it’s going to automatically read those invoices or read that expense claim and understand from this particular vendor, every time they send it in, the date is here, the dollar amount is here, the tax and total is here and it’s going to go grab that information, and then plug that into the appropriate place within the software. So what it’s doing is, is learning your habits or it’s learning your vendor’s habits or your supplier’s habits, and understanding where that information is coming from, and then what to do with it.

To automatically create an expense claim, automatically capture that expense receipt with the name of the shop. Whether it was you went out and bought your crew lunch, or you had to run to the hardware store and buy a piece of something that you needed on the job site, it’s going to learn all of those things and automatically take that information for you and then create or automate that process.

 

Mike Merrill:

Yeah, it is interesting, very fascinating to me. I mean, as a former contractor myself, when I think back, I can think of so many processes that would have been really nice to have those tools in place so you weren’t counting on someone to remember something, or manually fix or address an issue.

 

Mike Gillum:

Yeah. Then to take it further, if we start talking about machine learning or artificial intelligence on yellow iron, on big pieces of equipment. I’ve been on some job sites in the last year where there are no operators, where the equipment is running automatically. The blade on that dozer is going up and down based on information that came from the engineer, or came from the estimate, or the blueprints where it knows the grade for that particular area of the site. It’s just amazing technology. It’s coming along way. So back to your original question, I would suggest that people look at that with open eyes, with a perspective saying, “how can this help my business?” Not being afraid of it or not thinking that it’s going to take somebody’s job away. It’s actually going to increase the profit of your projects and overall for your company.

 

Mike Merrill:

Yeah. I mean, for some contractors, those terms can be scary, but I think of in a personal application at home I have the Nest thermostats on my furnace and a Nest doorbell and it notifies me on my phone when a package has been delivered or picked up or when a visitor’s there that I already know or I’m familiar with. So these tools are available in construction from what you’re saying, and there’s processes that can actually lead to greater profitability if we can-

 

Mike Gillum:

Yeah, that’s exactly right. I’m glad you made that comparison there to your home life. If we all look at our cell phones today and they’re more than just a cell phone. They’re a mini computer in our pocket and we rely on them so much from an application perspective, and an information perspective. If you’re used to using your cell phone and having ask Siri or ask whomever you’re asking Alexa or whatever device you’re using, to provide you information. That’s what these companies from a construction software perspective are offering. They’re providing that for your business in addition to what you are already are using at home, Alexa or Siri or whatever the device is, but having that in your business is only going to improve that.

Also another benefit of machine learning and artificial intelligence is that it’s going to attract more people to want to work for your organization. Some of the younger generation, they grew up with this technology. They grew up with iPads and iPhones and Android devices, where they had them when they were two years old and were whipping around on their computers. Now when they come out into the workforce, they’re expecting that technology to be where they want to go to work, and if it’s not, I think you’ll have a harder time hiring someone that has that background.

 

Mike Merrill:

Yeah. That’s a great point. I know I’ve had other guests on the podcast share similar sentiments that these kids coming out of school… They won’t know how to navigate these manual processes that some people are really addicted to today.

 

Mike Gillum:

No, they’ll look at us like we have three heads. It’s like, “What do you mean you’re not using machine learning?” Or, “What do you mean you’re not using a computer to do that or software to do that?” Yeah.

 

Mike Merrill:

Well-

 

Mike Gillum:

It’s kind of… Yeah. Sorry. It’s kind of the same concept of legacy based software, which did its job for decades, but now we’re moving out of that and into cloud-based software, and it’s the same concept when we’re talking about machine learning and AI. It’s new technology and what can it do to help my business?

 

Mike Merrill:

Well, yeah, like satellite technology and drone technology, and actually having an overview of the roof where the issue is, as opposed to getting up on a ladder, three stories up and risking safety possibly when maybe it’s not necessary to see what’s going on.

 

Mike Gillum:

That’s exactly right. Yeah. I’m sure you were part of the Procor ground break event and the ENR future tech event that happened in the last couple of months, and where they had robotic dogs on job sites walking around and making marcations on this concrete, and doing safety tours and issues through the project. What that’s doing is it’s taking that information, learning what that information, who needs that information, and then feeding that back to, whether it’s an ERP package or an estimating package or building information, BIM modeling design tool that it’s feeding that information. It’s just, it’s amazing what’s happening out there today. It’s pretty exciting.

 

Mike Merrill:

Yeah. It is fascinating. So I guess on the other side of that, so there’s that side where there’s a lot of opportunities to take advantage of, but in the same bucket of the discussion you already mentioned with companies have too much software, too many tools, how does a company avoid getting in over their head on investing in these shiny new toys that seem cool, but then they don’t necessarily change if you don’t implement them properly?

 

Mike Gillum:

Right. Great question. So again, it’s like a kid walking into a candy store, into a toy store. What do I want versus what do I need? So I would suggest that you sit down with your executive team, the owners of the organization, understand what are we doing today for our processes? Count how many different software packages you’re utilizing today to perform your tasks. Each one of your teams, whether it’s the field and the office, or you’ll break that down even further with engineering, versus estimating, versus PM’s and superintendents. Understand exactly what you’re doing today, and have a game plan going into the future with what do we need today? How can we purchase something today that’s going to grow with us? There’s lots of opportunities out there where you may not need the big engine today, and you only need a small chunk of that, and that’s available to you.

The other pieces can come online once you start growing into that process. So I would suggest that everyone does their homework, understand what the needs are, understand what’s available out there. With the internet today, we’ve got all that information right at our fingertips. We can look up and understand and read reviews, and see what’s happening out there in the market today. They can even watch this, like a video blog like we’re doing here today and understand and learn from it what their needs are. So I would suggest doing your homework and understanding what the opportunities are.

 

Mike Merrill:

Yeah. Those are great points. So with, again, the technologies are out there, there’s tools that we’ve never had before, there’s opportunities for improvement. What do you think a company today, in this environment, this climate, with everything going on in this crazy town USA, 2020, that we’re all kind of victims of, for lack of a better term, what does a company focus on to continue to growing? It sounds like everybody’s pretty darn busy. There’s a lot of work to do. How do they turn that work into productive growth?

 

Mike Gillum:

So again, I think technology is a big part of the answer. I think that understanding what the needs are for your organization today. You’ve got X amount of jobs that you’re currently working, you’ve got X amount of jobs that you’re currently bidding, or are coming up for bid over the next six to nine months or 12 to 18 months, depending on the size of your company and how far out you’re looking, but you need to have an understanding of where you’re headed. Where are we today? Are we comfortable where we are today? Are we a lifestyle business?

We’re always going to be a $25 million contractor. Do we have aspirations to be a $50, $75, $100 million contractor? That’s going to help answer a lot of those questions. If growth is in your future, then I highly suggest technology is a big part of your research and what you’re looking for to grow.

 

Mike Merrill:

Yeah. That’s great advice also. I think just reading between the lines with what you’ve been sharing, it sounds like cloud-based technology is another real key differentiator between just plugging another software tool and that’s standalone.

 

Mike Gillum:

100% agreed. Yeah. I think cloud is the future, but it’s also the here and now. Cloud technology is available today in the marketplace for almost every single aspect of your business. Whether it’s the takeoff and estimating side, the bidding side, the project management side, the scheduling side, the accounting, the ERP space, all available in the cloud today. What the cloud really means is, as you’re well aware, Mike, is anywhere, anytime access. I can be sitting here where I am in Sarasota, Florida, you’re in Utah, other people are all around the world and within minutes, you and I can go on a piece of software, enter information, and it’s instantly available to them.

They don’t have to utilize any technology like VPN or Citrix, and those can get expensive where you’re having to hardwire things in. Cloud is there. Cloud is anywhere, anytime, any device. Doesn’t matter if you’re on a Mac or a PC, you have access to that information. So I think if you’re looking today at replacing one of your big pieces of software in your organization, then you should 100% be looking towards the cloud.

 

Mike Merrill:

Great point. So what’s the difference between server-based, or I should say cloud computing or true web based systems? Is there a difference and what does that mean to you?

 

Mike Gillum:

Yeah, there is a difference. So there’s companies out there that are calling themselves hosted cloud products or hosted cloud services. What that really means is they’ve taken a server-based product that’s built to run on a company server, and they’re just plugging that up in the cloud, whatever type of cloud service, private cloud, or one of the public clouds that are out there, and they’re calling it a cloud software, but it’s not really true cloud.

It’s not built in the web, for the web, with the latest and greatest technologies. That’s the biggest differences is taking an older technology, perhaps something that was developed 20 or 30 years ago, depending on what we’re talking about, and plugging it in the cloud. You’re not going to get the speed. You’re not going to get the benefits of a true cloud solution that’s built in the web for the web by going with a hosted cloud solution.

 

Mike Merrill:

Yeah, that’s a great clarification. So I think as I think of the things that you’ve mentioned here, for companies to grow in 2021 and to plan for the future, it sounds like investing in cloud based systems that are integrated on a cloud platform, is that your best recommendation?

 

Mike Gillum:

It is. I mean, you need to look… Again, you need to look at your organization, what’s your plans for the future are, where are we today, what’s our budget? Budget’s always a big part of anything, whether it’s personal or professional, and then understand what the needs are, but again, having access to real time information and having all of the players involved on a project able to access that information, I don’t think anything other than the cloud based software is going to provide that to anyone.

 

Mike Merrill:

Well stated. So one other thing I’ve just got to say, and this is more of a compliment. Hate to put you on the spot, but you and I co-presented on a software webinar a few months back. I’ve done literally hundreds of these over the years, and I really came away thinking, “Wow, Mike is a master presenter.” You really-

 

Mike Gillum:

I appreciate that.

 

Mike Merrill:

I wonder, what do you think has helped you have that confidence and the competence in presenting to large groups on something like that with software?

 

Mike Gillum:

Yeah. I appreciate those kind words, Mike. Thank you very much. And coming from you, an industry veteran that’s probably done as many, if not more than I have done, from a public speaking engagement perspective, I really appreciate that. I think it’s understanding your space. Having done the homework on what you’re talking about, and having lived and breathed automated construction software for the past, almost, three decades has certainly helped me get to the place where I am today.

So it’s knowing what I’m talking about, it’s having the ability to speak publicly, and not be afraid to get up there and put your face out there, and just go for it. But really it’s understanding your topic. You don’t have to be an expert, but you’ve got to know what you’re talking about and you’ve got to have the right answers. When you don’t, it’s okay to say, “You know what? I don’t know the answer to that, but I can find somebody who can. I can get you to an expert.” And you’re aware, we have dozens of people we can turn to in this industry that we’ve known for a long time to help get answers and drive people in the right direction.

 

Mike Merrill:

Yeah. That’s great advice. I think even for any business owner, each of us have the opportunity to be a leader in a various capacity. So plugging into whatever it is really investing of yourself in those important details, I think is critical.

 

Mike Gillum:

Yeah. Well, that’s a great point, Mike. I’m glad you said that. So I’ve always been a fan of education, furthering your education. I don’t mean through college or going out and getting your master’s or doctorate degrees or things like that. I’m talking about educating yourself from a business perspective. Whether that’s through reading a book from a leader that you like to follow, or somebody that writes something about a certain organization.

There’s lots of opportunity out there to better yourselves from a public speaking perspective, there’s a product out there called Demo to Win. I’m sure you’re familiar with that. I’ve taken numerous sessions with the Demo to Win folks and learned so much from them. So that’s definitely been helpful to me being able to understand tell, show, tell. Tell what you’re going to talk about, show it, and then tell it. Don’t just show, show, show, show, show. You’ve got to tell the story and then come back to the tell again.

 

Mike Merrill:

Yeah. That’s great advice, again, for anyone in business, because we’re all in sales, regardless of whether we think are-

 

Mike Gillum:

No matter what position you’re in, that’s right.

 

Mike Merrill:

Again, we’re selling a vision, we’re selling our commitment, our integrity whatever business we’re in. In construction, we’re selling the experience. It’s not just the sticks of bricks, but I’m your contractor of choice because I’m going to land you safely with a completed project on time, on budget, and it’s meeting the expectation that you have envisioned in your mind. If you do a better job of selling that vision, you’re going to be more successful.

 

Mike Gillum:

That’s exactly right. Ultimately that’s going to drive you happy customers, referenceable customers, and that just keeps on snowballing for sure. Great point.

 

Mike Merrill:

Better stories to share for the next one. Right?

 

Mike Gillum:

That’s exactly right. Yep.

 

Mike Merrill:

Great. Well, this has been so much fun today, Mike. I guess one thing just in wrapping up that I’d like to ask each of the guests. What is one process or hack for lack of a better term that you’ve plugged into over your career that you feel like is your strength or the super power that you have to share? And maybe how can somebody else learn to do something similar?

 

Mike Gillum:

Yeah, sure. Great question. So I’m a hands-on guy. I like to get my hands dirty. Whether that’s on the computer, inside of a piece of software, learning how that software works and understanding it so I can better understand how it may interact with whatever software I’m working with, or how it might help a company or a business. So I like to get my hands dirty. I like to know as much as I can about it.

I’ve also got an old 1994 Jeep Wrangler that I get my hands dirty on quite often in order to keep it running. So again, I like to get into the weeds and understand how things work, and then obviously being able to share that information and help educate others. But I think that being helpful to people, whether it’s in your personal life or professional life, and being kind to others… I know that’s a term that perhaps is sometimes overused, but maybe not enough in this day and age is also very important. Treat others how you would want to be treated with respect no matter someone’s standing or anything else, I think is extremely important. So I definitely live by those credos.

 

Mike Merrill:

Great. Well, thank you. That sounds fantastic and great advice. I appreciate you joining us today. I’ve had a great time. We’ll have to do this again down the road.

 

Mike Gillum:

Sounds great. Thanks for having me, Mike. Have a great day.

 

Mike Merrill:

Absolutely. And to the guests, thank you so much for joining us today on the Mobile Workforce Podcast. Sponsored by About Time Technologies and Work Max. If you enjoyed the conversation that Mike and I had today, or able to learn anything new or valuable, please give us a follow on Instagram @WorkMax_, and also subscribe to the show on iTunes, Spotify, Google podcasts, or whatever your preferred podcast platform is, so you’ll never miss another insightful episode. Also, if you enjoyed the podcast, please leave us a five-star rating and review. That helps support, helps us to provide this valuable content and information with other businesses and individuals like yourselves so they can improve, number one in business, and also in turn in life. 

 

Construction Field Operations and Finance: Bridging the Gap

Construction Field Operations and Finance: Bridging the Gap

A construction company’s success hinges in part on how cohesive its finance and field operations teams are. The well-known challenge, however, is that these two teams work in silos and notoriously struggle to align. So how can construction leaders help these two teams overcome rifts that can lead to massive losses and inefficiency?  

In this episode, James Coyle, co-founder of Event 1 Software, explains why communication is key to getting finance and field operations teams on the same page. James shares tried-and-true tactics that companies of all sizes can implement to help these two teams understand each other’s needs and work better together. He also breaks down the ways these teams can support one another and where tech comes into play. 

 

Key Takeaways:

  1. The key to any coordination is a deep understanding of KPIs. Construction companies need to make use of the transparency that technology offers. Encourage your finance and field operations teams to share each other’s KPIs. This leads to better understanding and increased mutual respect. 
  2. Use technology that showcases both team’s pressure points. Everyone knows that finance cares about dollars and cents while operations cares about quantities and budgets. Tech solutions like digital forms give visibility to projects, shining a light on the key areas both teams prioritize. Transparency helps them better understand and empathize with one another’s needs and concerns.
  3. Insights from the field ensure more accurate budgetary goals. When the finance department creates budgetary goals solely based on numbers in a spreadsheet, they’ll miss critical insights from field operations. However, by using collected data and cost codes from previous projects, finance can make more informed recommendations based on these insights from the field.

 

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Episode Transcript:

Mike Merrill:

Hello, and welcome to the Mobile Workforce Podcast. I am your host, Mike Merrill. And we’re sitting down today with James Coyle, the co-founder of Event 1 Software and currently, a transitional specialist after their acquisition by Insight Software. We asked James to come on the show today to discuss effective communication between the financial and operation teams. Welcome, James. Looking forward to the discussion today, and appreciate you joining us.

James Coyle:

Thank you very much, Mike. And I appreciate your investment in this really important topic. And thanks to everyone who’s listening to the podcast.

Mike Merrill:

You are most welcome, James. It’s our pleasure to have you on. Before we get too deep into the conversation, I just have to say, you’ve got a very unique background and experience with technology as it relates to construction. I know going over some of the history that you and I have talked about over the years, and also just your background, you were actually in the room when Microsoft made that fatal decision to or fateful, fatal. Okay.

James Coyle:

Yeah, fateful, or fatal. It depends on the direction of perspective, right? Yeah.

Mike Merrill:

That’s right. So on our call today, we wanted to discuss a little bit about your experience when you were in the room when Microsoft made that fateful decision to go after the personal computer market. That’s a pretty crazy situation. Tell us about that and maybe some more of your background, if you would.

James Coyle:

Yeah. Well, thank you. In the room where it happened a little Alexander Hamilton gameplay here. But truthfully, the history leading up to the interaction between Microsoft and IBM was quite interesting. I was at Timberline. I was a programmer and then support and in different capacities. And I had a business systems that was going to center around OS/2 from a graphical user interface and we were very excited.

And for the record, I really liked OS/2. But leading up to that, there was a lot of interaction about what the direction Microsoft was going, but it was behind the scenes. Not a lot of people at Microsoft knew. I think people at Timberline probably did know because Timberline had a word processing and spreadsheet system for the PC that was actually pretty good, and then Timberline decided to discontinue it.

And I remember the announcement thinking that we’re accounting solution and a vertical, and there’s … That’s where our business is. There’s not a lot of feature in these little apps and stuff, like spreadsheets and word processors. Kind of funny it shut up. And so, I think maybe the direction that Microsoft was going. But really, yeah, they were just focusing on, “Oh, we’re just going to do this little side thing with.” But they were the wheelhouse behind the OS/2, right? And doing that for IBM.

So when they backed away, there was some puzzlement. But I think IBM didn’t really question much about that direction because they’re leaders in technology. And at the time, like for people today, not thinking back then, IBM was the deal. So I think that some upstart could have any impact on business, what technology people would use for business. It’s like, “Okay, fine. Don’t mess around with …” The personal computers people were having them all over. I don’t think that impressed people as much as it did a couple of years later. Yeah. Right. Yeah. It was pretty interesting Forrest Gump moment. Yeah.

Mike Merrill:

Well, and to go all the way from that to smack dab in the middle of construction technology, which we know, there’s a digital revolution going on there, mobility’s making a big play. Lots of different things that are evolving and changing continually. But one of the things that I think sometimes gets overlooked is the financial department. I mean, what has changed in their overall function in these last few years of this technology age?

James Coyle:

Well, it’s very interesting. When I was in development, programming and support and sales through when I was recruiting and training resellers and then working for what became the largest business partner, the main people we catered to and talked to and interacted with who made the decision was finance that they were. But then technology was really just more simplified, right? It was mostly I need accounting system, or cost accounting system, and I’m coming off of paper or whatever else.

And so, all centered on that. All the other things that we have from a technology standpoint like phones that you could use wherever, none of that stuff was around. And so, all through the ’90s still it was a finance and construction accounting that was the most important, which is kind of weird. Because part of the organization that actually was out there that made the difference, whether you made money or not operations, they got what was left. When you’ve seen it got around to it, they made it, they got a report to them and it was outdated or whatever.

And I remember being in different meetings with companies from operations’ perspective and that frustration. But a large chunk of the ’90s the focus was on finance. Then it began to change. So we got drawn into operations. Like I never gave much thought to it. But we created an Excel based. First it was an Access, but then an Excel based project, cost forecasting work.

Look, I never thought much about it because historically we always just printed that and gave it to them. And that was the demand. And really even after we created it, I thought, “Well, it was that one company.” And then a company that’s pretty prominent in tug historically Arno construction saw it and they instantly recognized like, “What’s that?” And they got it to deploy on a palm devices.

But really, remembered technology wasn’t around. I never of it like, “How do you even get it on a palm device? That’s pretty small screen, you know?” But when you start to see where that began to change operations and owners like, “Oh, I can make money,” then the cycle switched with Primavera and then Meridian, getting into that market. Then more people try to get into that space. And the focus then was on operations to the point where we have pro core now. And then you have all this field technology, none of that stuff exists. You remember coming up? None of that stuff existed.

And so, and the finance person would even know what, know what to do with that. What does that mean? And then today, I remember being asked about this thing just in the last like projecting what the new technology would be. And I said, wearable technology integrated through big data so that families with the other information, it will be the big game changer because you could count the steps. And people were like, “Why does that matter?” It’s like, “Well, if you count the steps and you see the same number of steps every day and then today it’s a lot less, something happened.” You probably should know about that and ask questions, right?

Mike Merrill:

Figure out how to duplicate it.

James Coyle:

Yeah. So it just came full circle. So I think that finance just got way behind and they were still looking at that age old way that people were doing finance when they were the most important people to talk to. And they haven’t come forward in time. But I think today in the ’90s when the economy tanked, like I’ve preached this for years, like best practices and no one listened. And then when the economy tanked, people started listening to transparency for surety and bonding companies.

Like I need to know what’s really going on, not guesses. And now today, with all everything’s going on here, or if someone ill, is there a protest or something like that, you don’t know if those things are how they’re affecting you. And that affects cash. And for a finance person not to think that … So today, finance has to be aware of the technology that’s out there and utilize it from a reporting, and family well with operations. You just don’t have a choice not to do that.

Mike Merrill:

Yeah. It’s interesting. Back in the day it was like, oh, there must’ve been weather problems, or there’s an issue with permits. It’s a different age right now.

James Coyle:

Yeah. We created a report on LaunchPad and people thought it was so revolutionary. It occurred to me that if the job address and all that was in Excel, I would still come up to speed like, “Oh, right. Well, people are addicted this Excel thing. I guess I got to try to figure out a way to make it work.” The address, when you go to Google and you send someone a link, the address is embedded in the link so that, well, you could just pass that. It’s just programming. Right?

And so we created a link so that the job status report could link to maps or the weather. And people were flabbergasted like, “Wow, this is amazing.” It’s like, this is just pretty … The state of the art, all the technology that was sitting out there and waiting out there no one recognized back then it was just like a weather report or whatever and you’re guessing. It’s not instantaneous. But there were people when that stuff was red readily accessible not incorporating it into their meetings and stuff even though it had been out for awhile because no one questioned the status quo because we’re making money. Why does it matter? And tell it’s harder to make money, then you start to pay attention to it.

Mike Merrill:

Right. Well, which with those advancements, of course, now we have different metrics that we can measure these key performance indicators or KPIs and accountability goes up. How have those been impacted by these technological changes and advancements?

James Coyle:

Well, first, I mean, obviously, technology has transformed what we can look at and know the state of our businesses, all sorts of key performance indexes. I think one of the biggest areas, though, is that whether people understand what’s behind KPI and the transparency. Like how transparent is it how those KPIs are calculating presented graphically or so? Generally don’t know that much about it. They just say, “Well, if you use your system, then these numbers mean that.”

And I think that someone whose job you know, you buy solution and it’s got these KPIs and then you’re making decisions, and someone is, “I don’t really know that these are accurate.” And there’s a pause before someone begins to say whatever they’re saying. And that pause is a lot, like the visibility behind the KPIs.

So I think what happened is, a lot of people when I implemented construction companies, they did not understand their system. And we took the time to even understand it, and understand their business and how the two related to each other, and understand where things could go to sleep. So that transparency wasn’t there from a visibility standpoint.

So as you March forward in time and technology keeps moving, people go, “Well, we got to really start using these dashed stuff because everybody else is.” But they get them and they don’t even know what’s behind them. So the KPIs are fantastic if people take the time to understand the visibility. And so I think that that has been very transporting and how relevant the KPI is because of wearable technology and things like that, collecting information from the field. You can’t afford not to do that today. People who aren’t doing that, I’m flabbergasted. And then understanding how it incorporates into other things, the status of the job today and using that to project out the future are both into consideration. Did that answer your question? I’m passionate about this, obviously.

Mike Merrill:

Yeah. Yes, you are.

James Coyle:

I’m passionate about everything.

Mike Merrill:

Yeah. And there’s a lot to unpack that you … I mean, you mentioned a few things. Obviously, visibility, transparency, KPIs, and it makes me wonder how do we create alignment between the field personnel and the office? Because obviously, the field has better tools to collect the data. Now, the office has to act on that and give a feedback loop so that those teams are working in symphony together. And what are some secrets to make that happen more efficiently?

James Coyle:

That’s interesting. So when I was a consultant in the ’90s at the same time we were developing the technology that would become Event 1 Software, my focus was getting operations and finance groups to work better together. But at first, I didn’t even know what the differences were. It wasn’t until I started working with operations and what they needed and what, and the state of technology. And then got a sense for their feelings for the people in the office. Well, they’re just a bunch of overhead and blah, blah, blah.

And I get that perspective, right? But they threw the baby out with the bath water. It’s like, well, there are a lot of things to run a business. And if you can’t get bonding and you can’t borrow money so that the cost of the money is less than what you’re making, you’re not going to be making a big bonus. So, I think that I was successful getting them to understand that communicating information, they have a stake in it.

Now, I thought that the other way would be less challenging, getting accounting to respect and work with the construction, the operations people. And really, it was harder because it was … Part of it, I think, is a lack of knowledge. I don’t know really what they do and what is compelling. I want to know. But they don’t take the time to share and they dismiss me and whatever. I mean, there’s some passive, aggressive … Not some. There’s a lot of passive, aggressive. There’s a ton of attention between those two groups.

So, educating the finance people so that they have somewhat of a better understanding of what you need. Like the personality of a project manager just frustrates a lot of finance people. But you need to have that personality in order to do that job. And so you have to understand. It’s like those birds, they have these wings and they are … Well, you need them if you’re going to fly. So get past that just because you don’t fly.

So getting the two groups to understand each other’s needs and how best to communicate, you got to go through things. And then why do they need to communicate? Why isn’t it important to really understand the field? And then why is it important for the field to be understood? All the rest isn’t going to work unless those two things are done. People tried to rush past that. And the two groups would sit and they would be separated, their arms cross, and they wouldn’t talk or get along.

So I was pretty good at being able to talk with the stakeholders and what they really need in order to be able to effectively cooperate and communicate. Then we could begin like, number one, let’s get operations, actionable information so they can do their job. They need to play with the numbers. Don’t take that away. Just project the finance-related numbers, because you need to know what’s doing on the field. And then the thing, well, they’re just going to lie to themselves and me until it’s too late.

Well, they aren’t doing it on their piece of paper or somewhere. So get them used to using certain technology that they use to run their job, and then with horrible and making a bad person begin to share it, it’s those kinds of things. I think that if there’s operational people listening or finance people, they can relate to the kinds of things that we’re talking about. I’m sure you had those experiences because you can talk to both parts, and you’re pretty unique in that with real life experience.

 

Mike Merrill:

Well, and I think the big thing, and it’s not to disparage one side or the other at all. It’s one speaking Chinese and the other one’s speaking English. It’s just not the same language. And they both think that their role-

 

James Coyle:

And they’re worried they’re one or the other.

 

Mike Merrill:

Right. They feel like their role is the one that matters because to them, it does because that’s their job. But today, what we continue to see and a lot of the guests that we’ve had to this point, what seems to keep being the recurring theme is that we have data capture solutions to get live field data that’s shared among both teams, and then agree that these are the key metrics that each needs.

And as long as the engine in the middle is calculating those just to your point, so that the numbers are getting crunched in the financial manner so that the office and the finance people speaks to them and what they need to know. But the field guys, they don’t care about the dollars and cents. They want to know quantities and budgets. And of course, the challenge with that-

 

James Coyle:

But we’re talking about factors. If we’re worrying about pennies, great. Let’s worry about the pennies. But I just lost $10,000. What do you think is more important for an operation person and a pennies person? Well, the pennies matter. Both are right, as you said.

 

Mike Merrill:

Yeah. And exactly I guess really the sum of both of these is that they need one common platform or solution to communicate from each side. And then from there, they have the KPIs that matter to the field. They have the KPIs that matter to the finance office. And ownership management, the teams that need to make those financial decisions that have all the data they need for the next projects that they’re getting in the hopper.

 

James Coyle:

You have hit it spot on. I mean, there are KPIs that … There’s areas that I think that there’s distance and the two stakeholders, the two groups of stickers are not going to be on the same page. And that’s okay, right? People think, “Well, we have to do everything the same on both areas.” No, you don’t. Operations technology should serve operations. But the information necessary for finance should distill from that.

Finance has information that operations should need and should be given to them in a way and timely that is useful and reasonable, right? So both parties are served best by that. You can still hear me, right? It sound like my sound cut out a bit.

 

Mike Merrill:

Yep, I can hear you.

 

James Coyle:

Okay, good. I mean, I’ve heard all sorts of things on the periphery. But when we think about getting to the position of respect, respecting why finance exists and then it’s necessary, and you don’t have to know all the details, they know it. But you have to communicate in this way and finance accepting that an operational person is not a finance person and you don’t want them to be. Right?

But they can agree to communicate certain things. These performance indexes that can be communicated, benchmarks, some kind of information that can then be utilized, feel status. I mean, I don’t know how many people calculate whether they’re on budget by the budget and cost, which is that’s it. And there’s no field relevance. It’s like, “Seriously?” Or we have a contract and so it’s like, just because you have a contract with someone and if they’re underperforming, and the work has to be done before other work gets done, you don’t think that’s going to have an impact and you think you’re protected on a project? You’re not. They’re going to fall through.

You need to know all of that stuff regardless of whether you have a contract with someone to do it, or if you have a crew that’s mixed one way and the players are healthy and not infecting each other. There’s so many things to keep your eye on today that you didn’t even have 10 years ago. And it was hard back 10 years ago. So, yeah, I think you need to focus, distill out what’s most important and focus on getting that so that the numbers that people are working with are credible and you know what the dependencies are on those numbers. I think that’s absolutely essential today.

 

Mike Merrill:

Yeah. So one of the things that I’m hearing you say is that you got people in the field that they’re very skilled at swinging hammer, or very skilled at welding, or doing something very specific to their role and the finance people don’t need them to understand what their job is. They need to focus on the production out in the field, the labor.

 

James Coyle:

They annoy them when someone’s counting saw blades that got broken, or one guy someone took one home. It’s like, they’re going like, “Who cares? Let’s get the job done.” Right? Well, someone’s watching those things. And I think it annoys the person doing the job and vice versa that the finance person goes, “Yeah, but I’m responsible for accounting for things.” No one’s going to except for me waving my hand going, “I don’t know.” But tolerance. A certain degree of tolerance on both parties is important. And then a desire to understand, right? That’ll allow them-

 

Mike Merrill:

Both sides think that they understand the big picture and the other side may not. And I think that’s the challenge. There’s one big picture and then there’s two semi big pictures and each of them have one of those and then all this is up there.

 

James Coyle:

And it just summed up our society as a whole. Well done. You could use this interaction for it and apply it to really a lot of things. Yes, I agree with you 100%.

 

Mike Merrill:

So one of the things … There’s a couple of areas that I know you and I we’ve known each other for 15, 20 years long time. We work with a lot of mutual clients, lots of similar companies out in the industry. And one of the things that I hear, and I know you’ve heard too, is companies will have what they call dump codes, or they’ll have a slush fund area that they bury costs that are overrun from a budget. What are the dangers of things like that that companies are facing?

 

James Coyle:

Well, like when I first started thinking about it I thought, “Okay, so the opposite of that is the illusion of accuracy and accountability.” I have everything coded and those are the right numbers. People will do that and wave their hand as if that really is the truth. I think the first thing is, let’s be real about what the information is and how accurate it is, your ability to account.

If you don’t have the practices in place from the beginning to take your expectations, transform them into real life actionable, right? The expectations that I’m going to conduct the project done, that’s your first danger point in having these little … I mean, a certain degree of this like, “I don’t know where to put this amount.” I mean, that’s fine. Overhead in the office and things like that, the CFOs like allocating them across jobs. A certain amount is you’re just not going to get away from it.

But if you don’t start a project with an idea of what my expectations are and how I’m actually going to produce this profitably and allocate it realistically, and then keep coming back to that and checking in with that, then this fund that is moving dollars around that I’ve seen and you’re referring to is going to grow. And there’s huge danger because right off the bat, a churn is there’s no expectation tied to that money. There’s no expectation and then how did I do?

So it’s just a big pool of unknown. And they’re not going to be comfortable, sorry, with that unknown at all. Like the people who you need in order to be able to say, “I can conduct this work profitably and finish the job.” And the surety says, “Well, I don’t believe you. I’m not bonding.” There’s a danger there, right? Then the project manager goes, “Oh, we do need them. I mean, they wouldn’t just …” Or that money costs something. So I have to account for it against expectations, because I don’t have all that money just laying around.

So the bigger that number is that’s in that unknown grouping, and I’ve seen people they’ll go, “Oh, well, we want a budget shift money.” There’s a big difference. The earlier it happens on a project, I think the more realistic the shifting is. So, if an estimator comes up with my estimate to get a bid, all right. Now, did they really know what their estimate was, and what it was based on where the risks? I don’t know, always, right? They go, “Well, I had to do it or wouldn’t have got the job.”

The project manager, someone has to look at that and go, “Okay, set that aside. This is what it’s going to cost to get this job done and this is how I’m going to do it.” Now, how much money do I have here? Right? And then they’re looking at going, “That’s not enough.” You better know that. Don’t pretend it’s not enough or it is enough when it isn’t. It’s like, “Well, we need to get as close to it being enough.” Right? It keeps people employed and all that.

So right off the bat, taking the estimate and allocating it the way you’re going to build it. But the other part in the challenge I’ve seen is, it’s like I have my way as an operational person of organizing my expectation. Finance has this rigid structure. They’ve got this general ledger thing. I don’t know what that thing is at all. And then they’ve got this CSI, Construction Specification Institute of codes, and I don’t think that they’re all that accurate.

But they want to confine me to that. Well, that’s fine. But I actually have to do the job. And then I have to communicate to the customer who might have a completely different way. And that finance doesn’t worry about that until they have to bill the person. So operations has to sit down and get everything laid out in a way that it can come with operational people, but communicate to finance.

And I think that is challenged. The earlier they do that in the cycle, and the more streamlined you are, the less you’re going to have this big, I don’t want to say it’s a slush fund. It’s a pool of unknown. But the thing is you and I both have seen. I’ve people meticulously account for things and I’m like, “What is that number based on?” Well, that’s the number. It came from where it’s like, “How does that have any semblance in reality? I don’t see any field related stuff that they’re even working with that.” Right? And they’re making business decisions on … What is that number? And so I’m passionate like, “Well, let’s not lie to ourselves.”

 

Mike Merrill:

Well, yeah, it makes me think of the, the statement that we hear all the time, if they ain’t broke, don’t fix it. Or, this is the way we’ve always done it. This is just the way we do it. And that could go for the field or the office, right?

 

James Coyle:

Yes. Yep. That’s one comment that has a historical frustration. And the other comment is that people make technology decisions, implementation decisions that affect large number of deals without understanding its impact on the other technology in organization, right? We’re going to change from this and this, and I just made that decision and you have no idea what that’s going to do or if the person could even use that technology. Right?

And IT people will do that. I’ll look at it going, “No, the right way to go about this is we look at how our company is going to operate what we need, and how the software has to weather. And then we make our decisions within that. And we make changes. No changes made just because your neighbor says, “Oh, you should buy XYZ,” what the heck does the neighbor know?

You need to know that it resonates with the rest of your technology. And IT people tend to just go, “Well, everyone else is using blah, blah, blah and it’s better.” Like 64 bit Microsoft office kinds of people, “Oh, that’s the thing.” As I dig deep, you get to the IT person is like, “Do you really know what you’re …” The only thing that resonates is that is the standard and it’s a pain to put on 32-bit. I get that. I understand that. That is a real cost. It’s a pain.

But they’ll go, “Well, we got big spreadsheets.” And I’m like, “There’s multi-billion dollar companies with a lot bigger spreadsheets on 32-bit. That’s not exert.” But IT people will pat each other on the back end say, “Yeah, that’s how I make a decision.” So I’m saying that there are legitimate business decisions and a drive toward technology. There are people who will go down a path and they’re like cows sometimes.

I’m down this path out here in the steel and all of a sudden you don’t realize that there are offenses around you. At first, they were a long way away. You never saw the fences. And then they’re closer and priests and you realize, “What is that?” Well, that’s a fence. What does that mean? It means we’re not here for all that. The closer those things get, the less time we have. Right? They don’t realize that.

And so, technology decisions can be like that. We make decisions. And pretty soon we find ourselves confined by the limitations of whatever the technology is. And someone says, “How did we get here? How do we ever make a decision that we’re going to do this when this mission critical thing didn’t work with that?” Well, because you didn’t follow good process. So that’s my other areas, not just going to the latest and greatest because it’s the latest and greatest, right?

Lots of people have all sorts of gadgets and stuff in their house they don’t use. They seem great. But when push comes to shove and you’re stressed, you go to your habits and the status quo. It needs to be intuitively incorporated. And training can overcome that to an extent, I think. There’s a lot here. I’m sorry. You asked me questions opens up a whole can. But I think you understand what I’m saying and appreciate it. I can see some pain in your eyes so you feel it too from your past experience as a technology provider and a consumer of technology. And I think that the people listening to this can relate to that.

 

Mike Merrill:

Yeah, you’re really spot on. I think because I look back, there are so many things that we wish we could do over. Everybody says, if you could just go back and make that decision again. And my whole technology career has been basically trying to repent from the sense of the past that I didn’t do well and wish I would have. And so, I try and share that pain and that wisdom gained with those that are making those same decisions today. And hopefully, not the wrong ones.

 

James Coyle:

The worst of vendors are technology companies, right?

 

Mike Merrill:

Yeah.

 

James Coyle:

You’re a technology company and you make a decision that …

 

Mike Merrill:

Right.

 

James Coyle:

Well, the most important thing is that sales can actually operate and we can follow up with our customers. If it doesn’t aid our communication with our customers, prospects and existing ones, then get rid of it. Right? And so, well, we need this because it stayed in the yard. It’s like, “Well, you just eliminate my way to timely communicate with customers. Did you not pay attention to what was most important to the company?”

Technology companies make that mistake. We’re human, right? And we’re all attracted by everybody’s going in this direction maybe I should too. And no plan to make sure that that you can utilize that within what you’re capable of using as a team, right? You get a highly motivated, good, intelligent people, not the most. It doesn’t matter. But they’re motivated to communicate with each other, working together with even aids technology, and they will outperform these smart people with the newest technology that aren’t on the same page and are tuned into the most important criteria profits are tied to. Absolutely.

 

Mike Merrill:

Yeah, and if I read between the lines of in your comment, I think what you’re stating is effective communication between the teams is really the secret in the middle.

 

James Coyle:

Absolutely.

 

Mike Merrill:

It’s not just a new system or a better system. It’s communication first.

 

James Coyle:

The systems are supposed to serve that. But look at where were technology was. Once upon a time, we didn’t have … I mean, when I first got hired for this wine technology reseller, I learned a fax machine. So I could fax a proposal and they go, “Well, why do you need a fax?” Now, fax is we’re newer. Okay. But it’s like what everybody has and I need the fax so I can get it down there. So I don’t have to drive downtown Cleveland from outside. Right? It depends on when I have to leave. I didn’t want to do it. And they were like, well, don’t buy technology just for the sake of buying it I think was the point.

But you go forward in time to other technology decisions that people have made and I have made, right? And it’s like, “Do I really need this? How is it going to help?” Well, sometimes the technology is amazing. Like this. A mobile device is fantastic tool. And it can also be the bane of our existence. What do you mean? I’m very responsive. When I get an email, I respond. And when I get a text I respond. And this is supposedly a phone. And no one picks it up and talks to people, right? Right?

It’s like communication has to be personable. You have to know what that person is and what’s going on in their life. But people use technology to get away from those things without even being aware. And I think that a lot of people listening going, “Oh my God. Yeah, that’s right.” Yeah. And I do the same thing.

 

Mike Merrill:

That was very insightful what you share that the technology is supposed to serve that communication process and not the other way around.

 

James Coyle:

We’re places.

 

Mike Merrill:

We’re slave to the technology.

 

James Coyle:

Right. If it aids in timely communication, responsiveness, great. But remember that I said what people don’t do is they don’t set up. Here’s our business. Here’s how we operate. So what’s our mantra? What’s really our KPI? Well, we need to touch our customers global at times. Well, I did by email and text. No, you miss the human element. It’s the bane of a lot of existences is different between a service company being called back or me tolerating some issue. And it really all the companies. Right?

Well, you’re highly effective, communicating timely and everything, but you miss the human element. They didn’t get the email and you never knew it. You just assume they did. If you don’t pick up the phone and call and confirm every now and then at least, you don’t get that. And so now the technology that dialed in more and more and more and timely communication began to not serve its core purpose. And where a phone doesn’t act as a phone anymore. It’s so funny, right?

 

Mike Merrill:

Yeah. Brilliant. Well, this has been a very enjoyable conversation. I’ve had a lot of fun today. We could probably go on another couple of hours, I’m sure.

 

James Coyle:

Yes, totally, would fun. Maybe I’ll be back sometimes.

 

Mike Merrill:

Yeah. We’ll need to do that for sure. So I guess just in wrapping up, one of the questions that I like to ask each guest at the end is, is there a hack or a super power or something that James Coyle does and something that you try and embody that you’ve learned over the years that’s really served you in your career that others might be able to learn from?

 

James Coyle:

Well, my biggest superpower things that differentiated me all along was my desire to interact with actively listen, communicate to the person. So I really heard them, right? And that I communicate and follow up. Right? So that’s how our technology was built for the smartest people out there. But we listened to what people wanted, built something they could use, and then we kept checking in with them. It’s that person contact, but really listening. And I think a lot of times people listen to get their point confirmed, right? Like, “Oh, at some point they said this, so that validated our decision. Let’s move forward.” It’s like, “Did you actually listen to what they were saying?” It’s one thing they said. So, that’s the biggest superpowers is I think I do a pretty good job on that.

 

Mike Merrill:

Well, great. Well, very insightful. And again, thank you so much for joining us today, James. This has been fantastic and we’ll definitely have to have you on again and talk a little bit more shop.

 

James Coyle:

Absolutely. My pleasure. And thanks to you for this investment in the people and really the industry in general. That’s what I love is that we’re improving that experience for all these folks. Not just making a profit at someone’s expense, but improving their experience. I’m passionate about that. Thank you. I really appreciate you doing this.

 

Mike Merrill:

Absolutely. We’re on the same page there. We’re on this together.

 

James Coyle:

Absolutely.

 

Mike Merrill:

All right. Thank you, James.

 

James Coyle:

You’re welcome. Take care of them.

 

Mike Merrill:

Thank you for joining us on the Mobile Workforce Podcast today sponsored by AboutTime Technologies and WorkMax. If you like the conversation, or were able to gain insightful tips or tricks, give us a follow on Instagram @workmax_, and subscribe to the show on iTunes, or your preferred podcast platform and you’ll never miss another insightful episode. Also, if you enjoyed the podcast, please leave us a five star rating and review and share the show with your friends and colleagues. Our goal is always to help you improve your business, and improve your life.

Subcontractor Technology to Future-Proof Your Business

Subcontractor Technology to Future-Proof Your Business

Cutting edge technology is no longer just for large construction companies. An increasing number of smaller firms and sub-contractors are implementing tech solutions to improve communications, increase their productivity and protect their businesses. 

In this episode, Steve Antill, Chief Revenue Officer of Foundation Software, joins the podcast to discuss technologies subcontractors and small firms can implement to streamline their efforts with general contractors. He explains the different benefits of communication, labor scheduling and documentation tools, and shares why companies – no matter their size – need to have an IT strategy. Steve also talks about how investing in technology and eliminating data silos pays off for construction businesses in the long term, and why the time to get started is now.

 

Key Takeaways:

  1. Leverage technology to build and strengthen key relationships. Whether it’s vendors, partners, suppliers, workers or subcontractors, technology can be used to allow everyone to collaborate and communicate. Having open lines of communication is especially important to proactively send notifications or get in touch when delays or absences are on the horizon.
  2. Digital documentation is a must. Even when all parties have the best of intentions, misunderstandings are bound to happen. By investing in digital documentation, contractors can store their records, search for change orders and pictures, and protect themselves from litigation and pay disputes. 
  3. Integration is the key to ensuring different systems speak the same language.  Being able to connect with the systems and data that the general contractor is using gives subcontractors insight into the current status of the projects they are engaged with as well as data on the tasks they are directly connected to. 

 

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Episode Transcript:

Mike Merrill:

Hello, and welcome to the Mobile Workforce podcast. I am your host Mike Merrill, and today we are sitting down with Steve Antill, the CRO at Foundation Software. Steve invests most of his time in building relationships across the construction industry. One of the things he really focuses on is building those relationships and bridges with companies, sales, marketing, and product development teams. Currently, Steve has over 20 years of experience and has led to more than 1,000 software selections and implementations for contractors of every side and in all different trades.

So Steve, before we jump into the conversation today, I wanted to just give you a chance to give us a little bit about your background and maybe share with the listeners what you have learned through your experience in the industry and maybe some of the places you’ve been.

 

Steve Antill:

Thanks, Mike. So I’ve been with Foundation for 21 years. Had started in inside sales, basically talking to contractors to get them lined up to look at our software. I really worked my way up the food chain, it’s one of the things we do real well here is we like to develop people over time. So I did inside sales for a while. 

Then one of the really cool things I did is, I’m out of Cleveland, Ohio, but I moved to California back in 2003 and started a West Coast office for us. We were very regional at the time so it helped put us on the map on the West Coast, so I gained a ton of experience because I was working with contractors on the West Coast, and had some experience with people in the Midwest. So as our company grew from regional to national, I was very much engaged with that. 

Then in 2011, I came back to Ohio to run sales, Director of Sales at the company. As our company’s grown and evolved, I also morphed into business development, maintaining a lot of relationships with industry professionals, accounting firms, CPAs, other vendors in the software space. We’ve continued to grow over the years and now my title is CRO and sales is underneath me, marketing’s underneath me, business development’s underneath me, but very much I’m still out there talking to contractors on a daily basis, working hand-in-hand with them on the sales side, and building relationships with various industry professionals. 

 

Mike Merrill:

Wow, that’s awesome. Great laundry list of experience and appreciate you sharing that. 

 

Steve Antill:

Thanks Mike, good to catch up with you guys. We’ve got back many years, it’s going to be a fun conversation here, so. 

 

Mike Merrill:

Awesome, well thank you again for joining us. So I guess just to start out here, one thing I’m curious about and I know you have a lot of experience in this, but what is it that drives the relationship between construction companies and their suppliers, subcontractors? What are some of those key things that you see as important?

 

Steve Antill:

Yeah, so thanks for the question, that’s a good one. From our lens, just for full disclosure, 70% of our 5,200 clients are subcontractors. They’re very labor intensive, so I tend to approach the world and view things more from the subcontractor lens. However, we do have some general contractors but most of them have labor. So a lot of our clients here at Foundation tend to be labor intensive trades like electrical, mechanical, and heavy machinery where payroll tends to be a real driving factor in their company. The labor cost, the burden cost. 

So some of the things that we see on a daily basis that drives the relationships and their dealings with other folks would be, if they’re doing a government job working with a general contractor, making sure they’re getting their certified payrolls submitted on time, all the contractors on the job are getting the right paperwork in. As you know over the years, everything’s become so litigious, paperwork has such a big trail. Being collaborative with the generals and the other contractors on the job are real driving factors. Making sure they’re dotting their I’s and crossing their T’s, so to speak, as far as getting everything submitted. Then the general is aware of that and they’re even communicating those items back up to the owners, the agencies, making sure everybody’s working in unison on the project. So that’s one thing.

Then obviously on the material side, a lot of these folks, especially the ones doing the install work, they’re staying on top of their purchase orders. Making sure their requisitions are getting to the suppliers, making sure those materials are getting delivered to the job in a timely fashion so they’re staying on schedule. Again, this is all collaborative. These guys are moving around job to job, and especially now in the last nine to 12 months, it’s going to be coming up over time. Making sure they’re getting these materials at the job site because a lot of the stuff tends to come from overseas often. Staying on schedule, communicating that up with the GC, making sure they’re getting their piece done before the next contract, especially the next trade contractor comes in to do their piece. So this stuff is becoming more and more critical, especially due to COVID. I mean you’re dealing with suppliers, issues there. You’re communicating this back to the generals and dealing with all the other trade contractors in between. 

 

Mike Merrill:

Yeah, so there’s yeah, lots of different areas and you mentioned the suppliers, materials, the sticks and bricks, if you will. That’s one side, but there is another side too. I think I’d be interested in hearing what your thoughts are on how important those relationships are between vendor, partner, suppliers, workers, subcontractors, essentially the rest of the people that actually have to put those materials in on a project, install those, deliver them, whatever their role is. I mean, how important do you think it is to have those communications properly set up with the people?

 

Steve Antill:

Yeah, right. So essential, I mean as you’re throwing the question my way I’m thinking, essential is how I’d answer the question. Getting into our world and probably your world, these technology pieces have come into the market now that allow everybody to be collaborative and communicate. I think about capturing payroll in the field, getting it submitted, just selfishly within the contractor themselves, but collaborating up with the GC’s for some of these communication tools through project management systems that they’re collaborating with their generals and other contractors on and even the suppliers, it’s critical, it’s essential. I mean, one delay, one person being off a few hours a day can throw a whole wrench into the process and to the job. Supplier getting stuff to a job site late can throw a monkey wrench into everything. 

So I mean, think about this. I mean, we’ve been doing this for a while. So many of probably your clients and our clients, if we walked in their offices a few years ago, they were doing all their scheduling for labor and materials on whiteboards. 

 

Mike Merrill:

Yeah, yep. 

 

Steve Antill:

I mean, and now there’s products out there that they use. For example, we get these great labor scheduling tools that their guys no longer have to manually call the office and find out where they’re going tomorrow or what time they need to be there, what they’re working on. They’re actually getting a text notification telling them where to be, the supervisor to check in with. Same project managers are getting notifications of, make sure you’re talking to the general contractor tomorrow, do your safety inspection, make sure all the teams are working in unison. We’re moving this direction fast where there are unsophisticated contractors that were doing all these things manually from a communication standpoint that even three years ago were essential. Now we’re getting to the point where everybody’s actually being collaborative and working together and taking advantage of these better technologies now. So all that stuff is essential and you just see a big movement of contractors taking advantage of tools to connect them up with everybody on the job. 

 

Mike Merrill:

Yeah, your words are resonating with me and it’s making me think of a guest we had recently on another episode, Damien Brothers. He was talking about how critical it is to have good documentation and how a lot of times he just learned that if he wasn’t able to document things properly, that it wasn’t even necessarily worth bringing up the argument or the contention point. So how important is having that documentation in place and where you can use it in this process?

 

Steve Antill:

I love what you just said. You don’t have it, it’s probably not worth fighting the battle. We hear from our customers, the generals a lot of them, their hearts are in the right place. The subs, their hearts are in the right place, but things go sideways. So often these jobs have issues with litigation, payments held. The traditional story you hear in construction, but there’s so many great ways to document things. 

Here’s a story that I’ve heard that I really like. Something that didn’t exist 10 years ago, there’s a software called On Earth, it’s designed for heavy contractors that can document what they’re basically moving in and out of the jobs, as far as dirt loads and things like that. So completely unrelated to what we do or what you guys would do. I really like the story. So there was a water system that needed work and a city didn’t have time to do a survey. They wanted to get them moving so their drawings and everything and survey went back to the 1980s. They said, “We got to get someone out there to fix it,” so this contractor won the job. Of course as the job started, the amount of dirt they had to move to fix this dam and water system went up through the roof. Of course, halfway through the job they were talking to the city saying, “We got a whole bunch of change orders coming your way because this is out of scope from what we signed up for.” The city said, “That’s fine, just we’re documenting, we’re being aware of it.” Of course at the end of the job they started submitted these overages and basically the city said, “There’s no way you guys moved that much dirt. We’re not paying you for these change orders.”

 

Mike Merrill:

Wow.

 

Steve Antill:

So typical story 10 years ago, these guys ended up in litigation or ended up settling and all that, however, this company subscribed to this product called On Earth, which takes satellite photos of a job site.

 

Mike Merrill:

Wow.

 

Steve Antill:

They actually went back, you’re talking about documentation, they had photos every day of all their trucks coming and going from the jobs because the city’s argument was the trucks are only half loaded. You’re basically moving half the dirt you’re billing us for and all that. They basically thew it in front of the city’s face and said, “Here’s proof, here’s documentation. This is what we truly did.” The city said, “You know what? You’re right, we’re going to pay you.” 

 

Mike Merrill:

Wow.

 

Steve Antill:

So that contractor, by subscribing to a system that was documenting things very specific to them and their needs, it probably paid for itself multiple times just in that one situation. 

So I mean, we talk of 20 years ago when me and you got into this. You never heard contractors using tools like that. Now, there’s tools like that available to all the different trades, very specific to them available to the generals. A lot of these are collaborative tools that GCs and the owners and the subs all use together. It helps the process off keeping jobs moving and it helps avoid litigation between the subs and the GCs a lot of times. 

 

Mike Merrill:

Yeah, and the market right now is so busy, everybody’s behind. There’s a lot going with some of the other challenges, the social distancing, the spacing, you can’t throw as much labor at things as maybe you used to. So the last thing you need now is litigation or delays that are external to actually getting something done. 

 

Steve Antill:

Yeah, I mean there’s so much uncertainty right now. These guys are worried about their backlog. We have clients that from March through May, June, July, a lot of their jobs stopped, started, stopped, started. Trying to coordinate all of that and getting all the parties back on the job site at the same time. Then like you said, appeasing all of these safety requirements that have come into play now. Their world’s changed and it’s going to be different moving forward in ’21. So all these technologies that capture data in the field, documenting the safety conditions at the job site incidents and all that, in my mind they easily pay for themselves because so many of them are so fairly priced and reasonable and easy and accessible for even contractors that always thought that stuff was out of their range a few years ago.

 

Mike Merrill:

Yeah, that’s very interesting. I think like yourself and me too, we have exposure to so many different contractors and so many different industries and different sizes, from little guys to huge guys, publicly traded companies. With that background that you have and that perspective, what do you think some of the biggest challenges are that contractors are facing or trying to solve today?

 

Steve Antill:

Yeah, I come back to the word uncertainty right now. I mean, we’re living in a moment right now. We talk to our customers daily over here and say people aren’t nervous would be lying. It’s November 17th when we’re recording this, I mean yesterday Michigan started shutting things down. Our company, we have over 150 customers that are active there and I guarantee in the next couple days we’ll be talking to some and they’ll say certain jobs they are doing are just shutting down. So there’s a lot of uncertainty on these jobs. A lot of uncertainty about backlog beyond the first half of next year for both small and large contractors. That’s going to be changing week in and week out. 

I mean one of the things we were just talking about today over here is, if there’s another stimulus package, we’re very hopeful there’ll be an infrastructure piece in that because that can feed a large amount of labor and labor and equipment subcontractors for a long time, which would be good for our country and be good for our industry as a whole. But again, until some of the stuff gets done, there’s a lot of uncertainty in these contractor’s minds. They’re very worried for the first time in probably seven, eight years, because the economy’s booming and just because they’re going fast still and haven’t had shut downs in certain areas, a lot of them are worried what’s going to happen late next year and into 2022. So that’s a recurring theme we’ve been hearing from our clients for a few months is, it’s almost like they just want a clear answer of what’s next year going to look like and the year after going to look like? Unfortunately, I don’t think with everything going on right now, people have any clue what the next couple months are going to bring. 

 

Mike Merrill:

Yeah, who knows, right?

 

Steve Antill:

Who know, right, so.

 

Mike Merrill:

So the jobs you’ve got in place and that you’re on, all the more reason to make sure that those run well and are as profitable as possible so that you can control those variables that you do have some control over. 

 

Steve Antill:

Yeah, yeah, yeah. So it’s just it’s a different time right now than anything we’ve experienced in probably the last decade in our industry where things have just been booming nonstop, and even though things look good right now there’s a lot of questions about what’s going to happen into the future here. 

So I think from both our GC clients and sub clients and just folks I talk to, if they know they’ve got a strong backlog, they’re comfortable, they’ll be more aggressive in what they do. They’ll focus on building their business and taking advantage of tools that’ll help their company got to that next level but when they get uncertain, it just makes them decide often not to do anything. They might be missing the boat on things that can help their company because they’re fearful of spending money on what they might deem as extras, but there are a lot of tools that could help them on the back end of all this.

 

Mike Merrill:

Yeah, and we both know of course that in construction, we’re known as laggards of adoption of technology. 

 

Steve Antill:

Yeah, completely agree, but the one thing I tell people is, I’ve been doing this 21 years, and I don’t have any hard facts on this but I think our industry, the technology’s evolved more in the last probably 36 months than the prior 17 years. 

I mean it feels like for the first time I’ve been doing this, that these contractors are embracing technology more so than they ever have and they’re more aware of it. I don’t want to stereotype things but we deal with a lot of small to mid-sized contractors that I think there’s been a little bit of a change in the generations of companies. So mom and dad started the company and ran it to the last few years and now a lot of times now this newer generation, whether it’s the kids or younger leadership, the management team, a generation like Gen X and the millennials are starting to move into these leadership roles. We’ve grown up with technology and computer. So when we come into these spots and we’re looking at the business and saying, “Why are we not taking advantage of it?” Where before, it was such a hard sell to get that generation to, why do we need this, why do we need computers, why do we need technology, why do we need a mobile solution, we can do it by hand. Now this new generation tends to be hungrier for it where they’re like, why aren’t we taking advantage of these tools?

 

Mike Merrill:

Right, yeah I remember not so long ago, I mean even a decade ago, companies were saying, “I’ve got all the technology I need in this spreadsheet.”

 

Steve Antill:

Yeah, yeah, yeah. That spreadsheet might’ve been a Lotus spreadsheet, right?

 

Mike Merrill:

Yeah, true. Good point. Green screen software. 

 

Steve Antill:

Yeah, yeah, yeah, it’s moving quick, yeah. I mean how many folks, the first thing they call into us and say is, “What cloud solutions do you have?” 36 months ago, even though many other industries, are already using the cloud,  other industries, five, six, seven years ago. Construction had just got on their radar. So when you talk about construction being known as laggers, it’s taken a lot to get there but it just seems like things are moving much quicker right now.

 

Mike Merrill:

Yeah, it’s funny you mention that. I was going to ask you how the cloud has impacted what you guys do every day and how often is it now coming up?

 

Steve Antill:

Yeah, all the time, all the time. One of the thing we even talk about is, we have multiple products over here. We have a mobile system, we have payroll for construction, we have Foundation software, the big accounting package. We have thousands of on-premise clients that over time will move over to our hosted environment, whatnot, but I think a lot of times too, a lot of times when people call in just they assume now that what you offer is cloud based. They just assume what you offer is that option and they won’t even consider anything else but a SaaS or a cloud option even if you were still selling on-premise. So it’s just interesting where once you start talking to them they do start talking about cloud and all that. 

The one thing that I always talk about with our customers and things and you guys may see it too is, I think we’re going to through this transition right now too, where I’ll flat out ask if I’m the CEO of a company, “Does your company have an IT strategy?” A lot of times they’re like, “What are you talking about?” I think we’re in that phase now, especially with these small to mid sized contractors that may be a little bit behind the big $500 million contractor. They may use a program like yours like WorkMax cloud based, but then they use Foundation on-premise version, and then they had an estimating system in for 20 years that is also on-premise. You say, “Well do you guys have a goal? Are you trying to all your key programs you need to operate your business to a hosted environment?” A lot of times they’re like, “No, we haven’t had the conversation.” I’ll say, “Well maybe it’s time you guys put a roadmap in place where maybe three years from now you want your WorkMax, you want Foundation, you want your estimating system all to be hosted in a cloud environment so you’re no longer maintaining that infrastructure in your office.” 

So I think we’re seeing a little bit of a mismatch now with a lot of these contractors where one or two of their key three or four programs are on-premise, and then the other couple are cloud and all that. They’re a little bit back and forth. So it’s just trying to educate these guys to sit down and say, “Do you have a true IT strategy of what you’re looking to do with your key systems you use to run your business on a day-to-day basis over time?”

 

Mike Merrill:

Well, so and you mentioned various systems, various products. How important is integration of those different systems if they’ve chosen some best of breed options?

 

Steve Antill:

Yeah, yeah, so we’ve gone from import export, to API. So a lot of times our customers and our prospects we talk to, tell me about your APIs. Right out of the gate, that’s the first thing. We say, “Well, what are you looking for?” “I don’t know, I was just told to ask about your APIs.” So-

 

Mike Merrill:

I was going to say, they didn’t used to even know what the word is or what the acronym was referring to, but sounds like some still don’t but they know they need it. 

 

Steve Antill:

Yeah, right. So we’re getting a lot of push from customers because they no longer want to export from one system and then manually import it in, which to tell you the truth, I mean that works fine for a lot of folks with certain systems. It works fine, but as time goes by that’ll become less and less as more API tools get written. So we do have much more of a demand for APIs now than we did probably 18 months ago, 24 months ago. 

I’ll give you an example. We have a really good relationship with Procore, and obviously they’re the big, big player in the industry right now. So we’ve developed API tools with them. They have a great system but our average customer’s always looking to add it from our lens, the accounting world. Their user’s doing it from their side, from Procore or the operational standpoint, which they do things different than us. 

We get the call all the time is, “Hey, we want to use these API tools. Make Procore and Foundation talk.” We’re like, “Okay, we have these available.” So I tell our average customer, I’m like, “Understand the technology part of that is the easy part. It’s still unifying your team and creating the collaboration between office and operations so you guys are on the same page of what you want to bring back and forth between the two systems.” 

Because for example, our accounting folks are so embedded in setting up vendors and accounts payable because that’s a traditional accounting function. Where a typical Procore user maintains their vendor listen in Pro Core because they’re writing POs and subs out of their and all that. So sitting these teams down and say, “Okay, you can send vendors from Procore into Foundation. How do you feel about that?” The operations team says, “That’s what we want to do.” Then the accounting folk says, “No, no, no, no, no, no, no. We want to maintain complete control. We want to set the vendors up in Foundation and send it to Procore.” So our API with them works both says. Their preference and the technology part’s the easy part. Getting their teams to agree of how they want these workflows to go between the two system, tends to be the struggle because they just don’t see the world from the same lens. 

But as we get more clients using those API tools and we continue to have conversations and dialog with Procore as we share more customers for example, we’re putting better processes and to say, “Hey, these are best practices other companies have done, and this is how these things have worked for you,” so.

 

Mike Merrill:

Yeah, yeah, that’s interesting how again I like how you said they’re looking at it from their perspective. Again, a power user in Procore may not be the power user in Foundation Software

 

Steve Antill:

Yeah, right. The power user in Procore may not fundamentally understand the flow of accounts payable posting in the general ledger and in the job costing. It’s completely foreign to them and all that. A typical accounting manager may not know the complete workflow of how the PM’s going through and developing change orders in Procore. They just, we want the change order in Procore to talk to Foundation. Well, what type of change orders do you wan to come back to Foundation to update your job costing in Foundation? A lot of times they’re like, “I don’t know.” Well, we have to sit these two teams down together and explain what we can do in that. So the technology again is the easier part, it’s getting those two teams to agree and understand how those systems work and can talk, that tends to be more the challenge. 

I think just as a whole in our industry, as more API tools get developed out, we’re going to continue to deal with that system by system, cross each bridge one at a time, especially we have an API tool with ProEst estimating software. We just had a client last week, really good longtime client that started asking for more things than the API offers. ProEst is like, “It’d be nice if you guys did this,” but we started looking at it and we’re like, “I don’t even know if this logically makes sense.” What the estimator wanted to do doesn’t really make sense in our system. So we got them together on the phone, all three of us and talked through it and they were like, “Oh, you’re right. There would be no point in doing that.” Even though he thought that could be something that would benefit their client, it’s just not something that happens in the accounting side. So again, another example where different departments see the world from different lenses. 

 

Mike Merrill:

Yeah, and I think you’re… I mean I’m having flashbacks of so many conversations that I’ve had. In fact, even just a couple of weeks ago we had a new client and they’re in the mining and energy space. In a big room with eight or 10 people, and depending on what feature or function we were talking about, different people around that table said, “Oh no, no, no, no, no, I don’t even care about that. What I need is…” then yet somebody else would say, “Well no, no, no, that’s critical, we have to have that.” So to your point, we’ve got different focuses for different people depending on what their role is. I think APIs and having a workflow process that lets these systems work together to maximize the options of possible touchpoints is something we can do as technology vendors but at the end of the day, software is only good if it’s used by its user. So that’s a gap that I think we have to do a better job leading people to try and fill.

 

Steve Antill:

Yeah, I like what you said there in that example. You said, “I do not need that or I do not want that.” So again, a lot of times one of the things that I’ve seen exist in our industry for so many years, at least since I’ve been in it is, these teams work in silos. Accounting, field, estimating, they work in silos. As good companies like you’re doing, developing APIs and we’re doing developing APIs, like the one we have with Procore, at the end of the day we’re still a people business.

I always reflect back at to Fred Ode, our founder. I remember probably in the year 2000 he said, “If you can connect the field and office and get them talking together, you’ll be a millionaire overnight.” Looking back on this, the truth is you would’ve been a multimillionaire overnight because they work different from each other and there’s been a traditional disconnect between those business units for so many years. These API tools are great that we can bring them together but at the end of the day we’re still a people business. Getting people to sit around that table and agree on certain things and making sure organizationally as a whole, they’re all in alignment of what they’re trying to achieve.

I think once you cross that bridge, which I think for the first time in our industry we’re doing more of now than we ever have, that means companies are effectively utilizing all these tools together the correct way. But at the end of the day we’re in a people business, if you can’t get the different departments to change their behaviors, as great as these tools are, chances are they’re not going to work for them, so.

 

Mike Merrill:

Yeah, yeah, great point. So you’re with Foundation Soft, which is essentially a construction job cost accounting solution. Is that defined properly?

 

Steve Antill:

Yeah, that’s a great way to define it. You nailed it. 

 

Mike Merrill:

So tell me, with that definition, what is that? What does that even mean? Say I’m on QuickBooks or something more simple, not as specialized. What does that mean? True job cost accounting, what are the different-

 

Steve Antill:

So I’ll give you the salesman answer and then we can drill down a little bit. So an easy way to approach this is, we’ve made our living as a company at Foundation Software, we love QuickBooks. Without QuickBooks, we probably wouldn’t exist because QuickBooks is such a great starter software for general businesses. Right, just like anyone else, a construction company starting off finds their way to it more often than not. So in the companies we market to, we believe there’s probably over 100,000 construction companies that could use our product that use QuickBooks around the United States. So there’s just a tremendous amount of businesses that use QuickBooks. 

 

Mike Merrill:

Millions, yeah.

 

Steve Antill:

Yeah, millions, and probably 100,000 between three million to 25 million commercial construction companies that we’re chasing. 

So what happens a lot is they often run their business like a check register that’s all cash based, paying their bills, all that type of stuff. Then they grow up a little bit and get a job that’s bigger than anything they’ve had, and they tend to start with tracking things by labor, material, subs, equipment cost, other. Then they start growing and doing well and then they may say, “Hey, we want to put a coding structure in place,” and if you’re an electrical contractor it might be conduit fixtures, lighting within that, then you look at labor material sub cost, but what happens is you’re building these layers of job cost. It’s just organically happening as your company’s growing and maybe you’re taking on bigger commercial jobs or bigger government jobs. 

Then couple things start happening. You start becoming inefficient where you’re doing your reporting in Excel. We were talking about spreadsheets a few minutes ago. You’re doing all what you deem as job cost reports in Excel, but there’s no real source of truth of that, it’s just numbers that are gathered and plugged into a spreadsheet where maybe you’re saying, “Hey, we think the estimated cost is 100,000 and our reports in QuickBooks says actual cost right now is 80,000.” So you’re manually plugging the stuff so things do not reconcile back to accounting. 

So a couple things that happen on the tipping point. We start seeing these contractors maybe hit $3 million, $4 million, $5 million, where the burden of doing that manually, the behavior of it, it’s a tipping point where they’re like, wow, we’re not being efficient. Maybe we should start looking at something industry specific, a construction accounting package. One of the other indicators are the CPA comes in there, they have a good CPA and says, “Guys, you’re spending way more in labor doing this stuff manually versus if you were to get a construction specific job cost accounting system that would automatically build these reports for you.” So that’s another one.

Then the one that’s really interesting is the bonding company. The company hits $3 million, $5 million, they go to bid on a larger job and they want to increase their bonding capacity and the bonding agent says, “This data you’re sending me is in spreadsheets, it reconciles back to nothing. We’re having a hard time accepting this data as a source of truth from you.” So there’s a lot of moving pieces that can happen. 

But the natural evolution is at some point probably between $3 million on up is these companies find their way into starting to think about getting into what you’re calling a job cost accounting system. I call it a fully integrated job cost system where if conceptually they’re using us or other products we compete with correctly, they’re entering data into accounts payable, they’re entering into another payroll module or they’re using your system and capturing payroll in the field and it pushes into our payroll module. They’re doing their billing functions automatically, and the beauty of the seamless, fully integrated job cost accounting system is is they’re putting those transactions into the daily modules. They’re capturing the job and the job cost structure that they’re wanting to. Then when they post those transactions, it’s fully integrated. It updates the root accounting module, just like it would in QuickBooks. It also hits your ledger, but it also automatically takes that and pushed it into the job cost system. 

So again, they are no longer manually plugging numbers into a spreadsheet. They’re in a fully integrated job cost construction accounting package. In two reports right out of the gate, they should be getting with us or any of the other systems out there would be estimated versus actual cost, to see within a job, estimated versus actual cost. So if they’re doing that and getting that automated, that’s a huge step up from manually doing it in spreadsheets. 

Then the other big one is the one that relates to the bonding company. They’re started to formulate an over under billing report where they can see a percentage of completion on the job or even broken down by the cost code within the job. Then these companies hopefully will do more with that. They’ll start forecasting off of it and using it to their advantage to start growing their business, so.

 

Mike Merrill:

Yeah, it sounds like you’ve got a lot to offer smaller to mid sized organizations that are really trying to get a handle on those true costs on a regular daily basis and head into growth.

 

Steve Antill:

Yeah, I mean we want to help these folks and if they go through training and they set the system up to be used at a basic to mid level, it’s a huge improvement from QuickBooks. It should give them information to help them make better business decisions. Adjust during the light cycle of a job. You were talking about those spreadsheets, so often these numbers are not getting up in the spreadsheet until the job’s done and it’s over, you can’t react. Where if you’re on a daily, weekly basis looking at real time job costing, you can make adjustments on the job on the fly and increase the profitability. 

 

Mike Merrill:

Yeah, that’s great, great advice. So winding up here a little bit. Just curious, what would you advise companies, whether they’re large or small, that they should be doing here as we wrap up 2020 to give themselves an advantage and be a better position for 2021?

 

Steve Antill:

Yeah, so we were talking about the emergence of technology a little bit and maybe how it also trickles down from larger contractors to smaller. I think these guys are going to have to be nimble, willing to adjust, be flexible more probably in 2021 than they’ve had to be in the last decade, just because of everything going on in the world. 

The one thing that’s really starting to emerge quickly, that I think it’s a great topic is these business analytical tools, like using the power of the eyes of the world. Four years ago, a typical $30 million Foundation client or About Time or WorkMax client wasn’t even… these weren’t on the radar. Now we’re starting to see clients use these tools and I think this could be a separator with the small to mid sized contractors. The big guys are using these now, but on top of getting good reporting out of them, they’re allowing contractors to do predictive analysis on jobs, which I think moving into 2021 can be big and it can be important. Helping to predict things like cashflow, cashflow is going to be an issue that comes up more probably, more in 2021 than it has the last few years because a lot of these guys have been doing very well and all that. Now the margins might be down, the schedules might be off. Starting to look at some past history to help make predictive analysis and decisions on jobs and being able to adjust on the fly. So it’s one of the things that it’s just real interesting. 

A year or two ago, very few of our clients were using these tools, even asking us about them. Now we’re on a daily basis, you got companies that are just, “Hey, we use Power BI, we want to pull data from your system into Power BI and build some reports off of it that’s going to help predict paper jobs we should be bidding on, cashflow cycles within different types of jobs we do.” Cashflow might be tight, there might be certain types of jobs it takes a long time to get paid on. They can do some predictive analysis on that and then even though the job could be profitable, it might hurt them next year or during the lifecycle of the job because those types of jobs may take longer to get paid on. So those are all things I think contractors should be thinking about. 

Again, these tools are readily available and they’re very affordable. I mean, you can use Google Data Studio, I mean you got clients, big companies that use Tableau, that’s become very popular as well, but again it’s just fascinating to me because contractors, we didn’t have this on the radar in any way, shape or form, a year or two ago. It’s cool to call and say, “Hey, Steve, we’re starting to use Power BI. We want to talk to you guys about doing some consulting to give Foundation married into it.” Then they’re bringing data in from other systems as well, bringing multiple systems’ data together, so.

 

Mike Merrill:

Yeah, it’s nice to see the advance in our technology in our industry and people embracing it as opposed to running away from it like they’ve done in the past.

 

Steve Antill:

Yeah, it’s a different game, isn’t it? It’s cool, it’s really cool. 

 

Mike Merrill:

Awesome, well so just to wrap up. One question I like to ask all of the guests of the podcast. What’s one hack or process or a secret sauce that Steve Antill has learned over your illustrious multi-decade career?

 

Steve Antill:

All right, so I may be living in the moment right now, but I mean I run a team of about 15 sales people and we have a marketing department over here. I think sometimes I need to step back and a good thing with secret sauce is it’s a marathon, it’s not a sprint as you go through things. I think this year is a good example of it where it’s probably not a wise decision to make business decisions on what’s happening this week or on the election until we know what the fallout is to overanalyze sales. Even this month versus over a longer period of a time. So sometime when we were looking at the business as a whole and we’ve been talking about our customers and how they do things. It’s a marathon, if you’re committed to your business and you want to be in this for the long haul, it’s a marathon, it’s not a sprint. Take your time, be patient. 

I was telling my 11-year old son the other day, sometimes the best decision you can make in life is no decision. If you’re unsure of what you’re going to do, maybe doing nothing is better than doing something that you’re unsure of, because he’s 11 and there’s something he wants. He’s not sure he has enough money and he wants to… so I was like, “Listen, if you’re not sure that’s what you want, save your money, do nothing. Then maybe in another month if you still want it, spend your money on it. There’s no rush.” So yeah, I think it’s not a sprint, it’s a marathon. We’re in this for the long haul, I’m in this for the long haul. I think a lot of our clients are as well, and let’s just take a step back and think 3D press and just see what the next level it brings to us. 

From a leadership level, passing that down to our team so everybody’s not reacting to things so quickly right now, is only a good, good thing. 

 

Mike Merrill:

No, that’s great. I think it’s great for not only business but personally. Good advice and wisdom there. 

 

Steve Antill:

Cool, thank you, so.

 

Mike Merrill:

Thank you. Well, again, thank you for joining us today. We’re always, always excited to have these great conversations and this has been certainly no exception to that today.

 

Steve Antill:

Thank you, Mike. I really appreciate being on the podcast. Thank you.

 

Mike Merrill:

You bet, so thank you for joining us today on the mobile workforce podcast, sponsored by About Time Technologies and WorkMax.

If you like the conversation Steve and I had today and were able to get some tidbits or helpful information that you enjoyed and could implement, please give us a rating and a review on your favorite podcast platform. Remember to follow us on Instagram at WorkMax_. We’ll catch you on the next one. 

 

Construction Prefabrication and Robotics: Job Site Threat or Opportunity?

Construction Prefabrication and Robotics: Job Site Threat or Opportunity? 

The construction industry is seeing prefabrication, robotics and automation solutions increase across the board. These new technologies save on costs, increase worker safety and improve quality control. But construction leaders should be proactive in engaging employees early if they’re bringing on these solutions. That’s because employees may be wary of change and could resist new processes, holding up the implementations and productivity along the way.  

In this episode, Christian Burger, president of Burger Consulting, shines a light on the latest prefab, robotics and automation technologies and explains how they benefit workers. He explains how construction leaders can engage their employees with new solutions by sharing how they’ll provide value and by establishing training protocols.

 

Key Takeaways:

  1. There is a shortage of construction workers, but technology can help. The vast majority of construction firms need to increase their overall productivity. Technology such as robotics and automation can take on low-yield work like pouring cement and data entry so employees may focus on higher-value tasks.
  2. Prefabrication technology streamlines and improves productivity. By leveraging prefabrication technologies, employees can be more effective and their output more accurate and reliable. That’s because it enables teams to work safely in warehouses and away from crowded job sites.
  3. Implement the technology that gives immediate value. When starting to use technology to automate processes, start with the ones that will give you the most immediate impact with the least amount of pushback, such as labor tracking and bookkeeping. Same goes for your prefab and robotics efforts. Start with one job code at a time, and master that before moving on.

 

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Episode Transcript:

Mike Merrill:

Hello, and welcome to the Mobile Workforce Podcast. I am sitting down today with Christian Burger, the president and founder of Burger Consulting Group, and far too many other things to list off, but Christian has a lot of experience in the construction industry. We wanted to talk today about your background and the things that you have learned about prefabrication and robotics. So welcome, Christian. We are so happy to have you here with us today.

 

Christian Burger:

Well, thanks, Mike. I’m delighted that you asked and looking forward to the conversation.

 

Mike Merrill:

Awesome. Well, why don’t you tell us a little bit about your background and your company and what you do every day and how that relates to the construction industry and technology?

 

Christian Burger:

Will do, will do. It’s hard to imagine that I’ve spent 30 years in the industry but I am getting close to that now. I started my work in the industry at FMI, the management consulting firm, doing systems work then. Spent a year JD Edwards doing some management stuff. And then from that point, I kind of branched off and created Burger Consulting Group. And we’ve been in business here in the Chicago area for 22 years, helping construction firms with software selection, implementation, process improvement, IT stuff. And then of course, that’s how I got to know you and some of our clients have chosen and implemented your software. 

It’s been interesting to watch our industry move as I’m sure you have noticed it. They didn’t embrace technology in the beginning and it was a hard push early on to get contractors to embrace the change in technology. And it’s still, I don’t know, it kind of, it’s interesting to watch, but you’ve got some companies that are pretty aggressive in embracing technology and all that it brings, and others are still a little bit reluctant and piecemeal. So I would say that, over time, what’s been interesting is to see how the industry as a whole has responded to the availability of technology. 

And one of the things everybody talks about is that our industry is under-automated, that we’re very low on the digitization curve. And also, the productivity growth for our industry has not grown in 50 years. So the question then becomes are the two correlated? So, that’s perhaps the topic for another podcast.

 

Mike Merrill:

Yeah. If we’re being honest, when people in the trades hear automation, digitization, robotics, prefab, there could be a fear of, is someone coming from my job, am I going to be replaceable? 

 

Christian Burger:

I think when they hear digitization, automation, sometimes they think, oh, the office has given me more work to do in the field. And so, they’re making me into a bookkeeper. That’s the one thing you hear the most from foreman in the field is, they don’t want to be administrators, they don’t want to be bookkeepers they want to be foreman, they want to put work in place. And so, that’s one of the fears that you have to overcome. But you’re absolutely right. I would say that more often than not during demonstrations of accounting software anyway, invariably, somebody in the room when there’s a feature that is particularly powerful in the software, it does a lot of work that somebody was currently doing manually. The answer they get is there goes my job. They think that they are being replaced.

And I would say that we are not an industry that’s overstaffed by any stretch, where we’ve got 10 accounts payable clerks and if you automate and streamline, you can get rid of three or four. There’s a little bit of that for very large companies, but overall, that’s not usually the way it goes. What I do find is that, you have to tell them is, the work that’s going away because of the automation is actually low value, and that we have higher value tasks, we need you to do. And we’re going to train you for that and show you how to do it. The people that are there tend to be long term employees and capable of much better work. And so, I like to couch the automation as an opportunity to move on to higher value tasks.

 

Mike Merrill:

I love what you’re saying there. That has been my experience almost across the board. I never hear people say, oh, yeah, we’re totally caught up, yeah, we’re trying to find work. I haven’t heard that many, many years. 

 

Christian Burger:

Yeah. I think to put it in terms, Mike, that your company probably deals with. You’re probably too young to remember this, but back in the old days, companies would do manual time sheets. And they would fill out a piece of paper in the field and fax it into the office, or they jam them all in a FedEx envelope and express mail them into the office. And then somebody had to open them up, take them out, and they’d key them in. And they would typically key them into a spreadsheet and then key them into the payroll system. So, if you can automate that process such that the hours that are entered in the field are approved and then flow into the payroll system automatically, you’ve just eliminated work on both sides, and a whole lot of phone calls to validate and verify.

And I think that is tremendous value, and frees up people in the office to do more important analysis, labor analysis, and are we compliant with overtime rules, are we compliant with wage and hour, and are we compliant with certified and doing the certified payroll reports correctly? I mean, there’s so much more work that needs to be done. I think it’s a redistribution of work, not an elimination of jobs.

 

Mike Merrill:

Oh, yeah, that’s a nice phrase, redistribution of work or labor, not a replacement of jobs. That’s great. I’m not too young to remember because that’s how my company did it. We were on paper and spreadsheets. That’s why we came into the industry to help contractors get off of those things and automate in a digital way.

 

Christian Burger:

So Mike, I don’t want to jump ahead of your questions, but I would say that one of the things that I, since we’re on the topic of time cards, one of the things that I’m feeling a bit stressed about at the moment is that we’re still fighting that battle. Time sheets should have been solved 20 years ago. That’s my opinion. And I got to believe you think so too. And the fact that we’re talking to companies today about automating time sheets is a bit, just a little disappointing I suppose, because I need people working on IoT, big data, business intelligence, workflow. Pick the topic, there’s so many things that are very current, and helping robotics to help position the company to move forward. 

And if you’re still solving time sheets and invoice routing and approval and project management systems, you’re just going to be that much further behind in getting to the things that you need to be addressing. 

 

Mike Merrill:

I think, to your point, and we started AboutTime Technologies 17 years ago plus. That was the initial phase was getting people off paper and spreadsheets. So, I would say to your point, it is no longer innovative to get off paper and spreadsheets. That should have been done over a decade ago.

 

Christian Burger:

Yep. Yep. Exactly right. 

 

Mike Merrill:

I actually tell companies it’s different conversation now. They feel like hey, we’re trying to be more innovative, and when I have a frank conversation with them, I sometimes say, this really isn’t that innovative anymore. You’re actually behind. Your competitors are already-

 

Christian Burger:

And what worries me too is when they do finally get around to doing time sheets, they got it implemented, they did a good job, everybody’s doing it, they’re relieved and happy. And they’re like, okay, good, we’re there. We’re going to take a couple years off now and rest. It’s like, no, you’ve got a lot of work to do still. So, we can’t view some of this foundational, I call this foundational technology, it’s stuff that absolutely should have been in place 10 years ago, 15 years ago. ERP system, time sheets, invoice routing. There’s a number of things that really represent that foundational layer, and you really can’t safely move to drones and IoT and robotics and shop floor and fabrication, all this other stuff, until you have these foundational pieces in place in my opinion.

 

Mike Merrill:

And to your point, I was looking at the LinkedIn page and some posts by one of our customers, BakerTriangle down in the Dallas Fort Worth area. They run 1500 plus employees. They’re a large, large interior drywall contractor at least by definition. However, not only did they automate this probably a dozen years ago with our solution, but they have huge warehouse spaces where they’re prefabbing large sections of buildings. And they have become so innovative. They are not just a drywall contractor, they’re leveraging these things that you’re talking about every day and being substantially more profitable and green while doing it.

 

Christian Burger:

That’s good. And I think, Mike, the thing that we got to recognize I think is that you and I both see customers and clients who are there, but for every one of them, there’s probably about nine others that are sort of middle of the road or lagging. The same is true of the technology itself, I mean, there’s some pretty advanced technology out there, and one or two companies have it implemented for every eight or 10. I do think that we have to be careful that we don’t send the wrong message to the market, that you need to be chasing after all the cool shiny objects because there’s too many of them. Some of them are untested. 

And there’s too many things that need to be put in place, and companies need to have a practice, a habit of leveraging technology effectively. And until they get that practice in place, buying new stuff, it’s kind of like exercise equipment. Owning exercise equipment doesn’t help you. Using it does. And if you just got a bunch of unused gym equipment in your garage, it’s not going to help you.

 

Mike Merrill:

What a great analogy. I certainly see the same things that you do. And I think with all of these advances in different industries, different practices, again, not just in new manufacturing plants, but again, these construction sites and buildings, a lot of them really are being put together in a warehouse somewhere and shipped on-site to be fastened or installed. And one of the things that, as I’ve read and studied this topic, the level of accuracy and the quality control that you can get in a controlled environment is second to none. 

 

Christian Burger:

In fact, what’s happening is that owners are starting to stipulate that certain percentages of the work has to be prefabricated in a shop. The safety, the climate control, the QA/QC, all of those are positive things, but you got to remember, in a traditional construction company, they have what could be called infinite resources. So, you’ve got 10 job sites, and each job site has its own supply chain, and each superintendent and project manager are in charge of that supply chain. I need another sub, I need more material, I need more labor. I go get it. 

With a prefab operation, you’re now funneling a lot of work through a single phase, which then means confined space, limited labor, limited equipment. So now, I actually have to coordinate the work through the shop. It’s not like one job goes all the way through the shop, and then when they’re done and shipped out, the next one comes through. They got three or four jobs going on at one time. And so now, there’s a lot of coordination. You got to tag things, you got to stage it, you got to plan logistics. And what’s interesting, Mike, is that almost no one has an ERP system prepared for that kind of work. None of the construction solutions that are out there, that you and I know about, has what you would consider to be fabrication management. It’s sometimes called MRP, sometimes called shop floor control. It’s very schedule driven. And the ERP systems we have don’t do that.

And so I feel like some of the manufacturing based ERP solutions that also have job costs are going to be making their way into the space because they do include that, or potentially, and there’s about four or five standalone shop floor kind of programs that will be implemented, deployed by these fabricators and integrated back to the ERP solution. But it is a reckoning that I think is coming. And right now, a lot of the fabricators that I’ve worked with, even big ones, seem to be managing the shop floor with spreadsheets and dry erase boards and kind of traditional methods that way.

 

Mike Merrill:

Yeah. And to your point, and this is kind of a sidebar to that conversation, we’re seeing the adoption of SAS technology and web-based ERP systems, and the importance of cloud access and collaboration in one system, not one installation, so to speak. 

 

Christian Burger:

Well, for sure. The deployment method and the functionality within are sort of two separate things. And actually, what’s another element of this is, to your sort of outline to me was the mobile aspect of things. Think about this, if you’ve got a foreman or superintendent in the field and he’s used to picking up the phone and calling a sub, calling a supplier and say, bring it, now, he’s actually having to get on a mobile application, and say, send me the ductwork for the first floor. Well, that’s got to go to the shop guy who’s fabricating that, and he’s got to stage it up, load it on a truck and get it out to the job. Well, when is that coming? 

See, that’s the other thing that’s pretty fascinating about all this is, in a manufacturing environment, your demand is known for a period of time. You know what your demand is going to be through that shop floor. And you can plan for it, mostly, there’s some changes. Well, in construction, as we all know, the general contractor is dictating when things are going to happen and the speed and the pace and deliveries and all that stuff. And then you’ve got rain or snow or whatever happens. So, there are so many variables that affect the delivery and the demand out to the job site that I would not want to be the dispatcher in the shop trying to manage the shop floor because I think it’s almost a feudal kind of battle. 

 

Mike Merrill:

Yeah. As you were talking about that process and how you’ve got a finite resource and limited time and space to accomplish certain things, I think of a cabinet shop, that’s a perfect example of a prefabrication facility. They’re building doors, putting all the different components together in order. You can’t do it in the wrong order or it won’t look right. 

 

Christian Burger:

No, you’re 100% right. But I’ll tell you, the only problem with that analogy, Mike, is that cabinets aren’t that heavy. 

 

Mike Merrill:

Good point. 

 

Christian Burger:

So they can be moved out in the way, they can be taken offline, put aside, run another order through, and then finish it up. With big mechanical stuff, it’s a lot harder, and you only get one shot at some of this. It is an absolutely fascinating time to be in the industry to look at all the transitions that are being made. And it’s that demand and that expectation that the industry is creating that I think bodes poorly for the contractors that are still working on invoices and time sheets because, I mean, it’s a world of difference. 

One of the things you asked me about at one point was, how our IT department’s changing to manage this change, or how do they need to? And I would say that it’s 50-50. I still run into construction companies who have an IT shop very focused on the gear. It’s infrastructure, it’s servers, it’s how do we get out to the cloud and backup and redundancy and it’s cyber security, which is important for sure. But it’s not innovation, it’s not leading, and it’s more maintaining. I think that we need more. 

And one of the things I hear from a lot of CEOs and companies is frustrations that they have with their IT shop is no leadership, no vision. Now, admittedly, the rejoinder to that from the IT guys would be, tell me what you want. And I think that’s a bit of a cop out. I think that it’s a combination of the two. The CEO and the top of IT person in a company should be able to have a conversation on something other than cost, about where’s the company heading, where’s the demand coming from, what are the priorities, and then a little bit on how do we get there. That has not been the traditional conversation between the CEO and the IT director. The IT director comes in and says I need some new servers. The CEO says how much money. They say it’s this much money. He says okay or no. That’s the depth of the conversation. And that’s frustrating to me because I think that there’s so much more needed. 

So one of the things that I do talk about sometimes is the need for IT to restructure, to meet the current demands of the organization, and not to meet the past demands. And that means sometimes that the IT director needs to be an IT manager, or the IT manager needs to be a CIO or an IT director. And that potentially, you break IT into two, with infrastructure being one department and help desk and backup and all that. And then the other group is an application group that works specifically with estimating BIM, VDC, project management, accounting and HR. And that group is very customer facing. I think that’s a good look for an IT department in today’s world.

 

Mike Merrill:

So what I’m hearing is you’re saying, one part of that would focus more on the hardware side, the network, those things. And the other one is innovating and keeping out ahead in technology. 

 

Christian Burger:

Yes. One of the big changes, Mike, that I’ve seen, I’m sure you have too, is that IT is no longer the domain of IT, or strictly IT. You now have, sometimes they call it shadow IT, which is a bit of a darker name for it, but I like to see companies, I’ve seen every single client that we’ve had that has invested in a business analyst, somebody, a role specifically focused on process improvement and deployment has paid for in spades. They’ve been able to get solutions up faster, better adoption. It’s been a homerun. So with a business analyst, you’ve got somebody there available to help with all these new solutions. It’s not like the old days when IT was expected to implement everything, and when it was done, roll it out to the group. 

The other thing that’s changed is you really, really have a much more experienced tech savvy user base now. They’re not satisfied to sit around and wait for stuff to be delivered. They’re ready to implement it now. And so, all IT needs to do is say, I’m here, I’m ready to help, what can I do? And support it to make sure they don’t make bad decisions. But otherwise, let the teams go at it. And I think that that’s another core competency that the IT departments need to have is being able to manage teams. 

 

Mike Merrill:

So what I’m hearing is in construction, oftentimes, we’re in our own way, we’re the sub that’s in the way really.

 

Christian Burger:

Well, when you say that, do you mean the IT department or the software company?

 

Mike Merrill:

I just mean as an organization, we’re so focused on the tangible and the things that we can see. We’re so great at following a blueprint of a plan to put a building in, but we don’t have a business blueprint. 

 

Christian Burger:

I would say the business blueprint, many times there is a sense of where we’re trying to go. I talk to heavy civil contractors about what they’re doing, and they’re focused on trucking, equipment, manpower, the normal stuff. And so, we know what the things are that we need to improve upon, but we don’t always know, and then the problem is that we see something cool on the internet, somebody sees a web demo or they talk to a peer and they’re like, oh, man, we implemented this solution, it’s great. Well then, all of a sudden, we’re going down the rabbit hole of looking at that solution, evaluating it, maybe even implementing it. But is that part of the overall strategy? And how are we implementing it? And what are we solving for? I don’t know. There’s been a lot of poorly deployed technology out there. You’ve seen it and I’ve seen it. And I think we’ve got to be much more disciplined about how we go after that now.

 

Mike Merrill:

Yeah, and it is the core of the business that I’m in and that’s getting live field data back to the office, giving that visibility to everybody so that those key decision makers, those people that are involved in ownership management and that are really accountable for results have visibility so they can make better decisions. I think that’s part of your business too. 

 

Christian Burger:

Very much so. We do spend a lot of time when we’re implementing a solution getting the process mapped out correctly. And then we lay the technology on top of that, rather than put the technology and then figure out the process. Because sometimes I feel like scope increases when you’re in the middle of the deployment. Oh, wouldn’t it be great if we could do this and this and this. And I think also sometimes we lose sight of what we’re solving for just so we can get the solution implemented.

 

Mike Merrill:

You talked about this at the beginning, I mean, you’ve been at this 25, heading into 30 plus years, I know one of the things that I’ve known you for, and then I think the industry recognizes you as is an expert in performing an audit of what a company’s resources are, what things they have in place, and what those gaps are, and then a plan to implement and roll out things that will solve those gaps.

 

Christian Burger:

Well, yes. Sometimes we get called in and it’s like help us replace this system. Whether it’s time cards or invoicing or HR or project management. But other times, people call us in because they’ve got too much. They’ve got too many problems that they haven’t been able to address and they don’t know where to start. So then we take a deep breath, take a hard look, kind of clear out some things and put together a plan. 

And I would say most of the time when we’ve done a planning process of that nature, there’s three to four years of work to be done to get everything deployed, because there will be things that you can get started on right away and you get deployed right away, but you have to be careful of pace. It’s kind of like running as an exercise. You don’t start with a marathon, you don’t start with a 10K, a half marathon. You really start with a mile, two miles, three miles, 5k, or 10k. You start easy and build up. And that’s the way it is with the technology as well, I think you have to be mindful of what your organization can stand. 

One of the big mistakes that I think companies make in that vein Mike is, you get a CEO, maybe even a new CEO or a new CFO, and they’re all gung ho and tech savvy, and they’re like, yeah, we got to do this stuff. And they really don’t take a look around at the organization in total. You’re never going to have 100% tech leadership in your workforce. That just doesn’t happen. You might even be lucky to have 20% or 30%. Everybody else is kind of in the middle and they’ll go along, but they’re not going to lead. But you’re going to have some laggards in there all the time, the people who just don’t want to go. I think sometimes companies make the mistake of listening to the laggards. And they’re like, oh, no. And you’ve heard it, Mike. How many times were you unable to sell a mobile time sheet solution to a customer because they said that one guy or two guys in the field wasn’t ready for mobile device?

 

Mike Merrill:

Happens all the time.

 

Christian Burger:

So, the problem is, they shouldn’t be listening to those individuals. They can ignore them, that’s fine, but don’t listen to them and let them dictate the strategy of the company. 

 

Mike Merrill:

They got the wrong guy driving the bus if that’s the case.

 

Christian Burger:

Exactly. Exactly right. I think you want to also decide, you’re not going to be at the tech front of every new thing coming out. You can’t be. So, you really need to decide what’s important to the business. And I’ll give you an interesting metric that we use over here to measure what to go after. 

So when we look at a process, pick a process, when we look at that, we measure it on several fronts. Is it inefficient? We know what inefficient looks like. Paper, spreadsheets, email, many hands. It’s inefficient. Well, if you’ve got a process and time sheets are a good example, there’s a lot of them every week. They’re very important and it’s manual. That’s a priority. Got to fix that. There’s another one though and that’s risk. We look at a process and we measure risk. If this process doesn’t happen, bad things happen. Well, then, even if it’s not inefficient, we better fix it. Good example, insurance certificates for subcontractors on job sites. That’s not overly time consuming, but if we don’t do it and something bad happens, it’s expensive.

So, when we look at a process, we weigh inefficiency and we weigh risk. Sometimes we find both are bad, in which case it’s even more critical they be addressed.

 

Mike Merrill:

So really, and I’ve heard this throughout most of what you’ve shared, the priority in order that you execute on any of these plans is almost important as a plan itself. 

 

Christian Burger:

I think so because one of the things you definitely want to do is, I think we all kind of knew this from day one in business is, you want to have kind of a home run or something positive as your first outcome. You don’t want to have this big, audacious goal and fail. And so, do something you can succeed at. One of the other things that I was prepared to talk a little bit about is, what are the critical items, things you need for good deployment? 

And one of the things you need is executive sponsorship. I don’t know about your company but when we do implementations, we absolutely insist upon executive sponsorship. We need somebody fairly high up with influence who can help us when we need the help. You can’t delegate this down to a project manager and say here, go make it happen and not give them any backing. There are a number of times in a deployment, typical deployment where we need a decision made that takes a president or a VP. We need resources committed who aren’t getting committed. We need a vendor, little talk with the vendor about commitment. Whatever it may be, we need to send a message to the organization that this process is really important, and we’re going to do everything we need to make it happen.

So, the executive sponsorship is key. There’s other things too, but I feel like that’s one of the more important ones. And we didn’t use to pay attention to that very well back in the old days I would say. 

 

Mike Merrill:

And exactly what you’re saying, we’ve learned through the school of hard knocks of being in business that you don’t have that executive sponsorship, just because you get someone to assign a check or make a purchase of a software system or solution or any kind of tool, it doesn’t necessarily mean that when things get tough or when you encounter a challenge that people are going to bail out on that. You need executive sponsorship to say, oh, no, no, no, this is what we’re doing. 

 

Christian Burger:

Yeah, exactly right. And force people who are reluctant to step up.

 

Mike Merrill:

And I think, again, you’ve been at this a very long time. I think one of the things, and you probably don’t work as commonly with smaller companies, but how does SMB, someone with 10 to 50 employees, how do they get involved in technologies like these we’ve talked about today, and kind of get on that path to improvement?

 

Christian Burger:

I would say there’s a couple of things. One is, take a look at the organization and determine where you’re going to get the most value from technology of some kind. If you’re a subcontractor and you’ve got a lot of labor, maybe you’ve got a lot of equipment, well then, you need systems in place to handle the labor, handle the equipment. Don’t be futzing around with other technologies that are cool and interesting but maybe aren’t adding immediate value.

I also think that typically in a company like that, you have a champion. It may not be somebody working in it, it could just be a really progressive minded project manager, or a really progressive minded HR manager, something like that. And let them have some rope. Give them a little bit of a budget, give them a little bit of time. Have them pilot something. I would say those are good, good options. It doesn’t have to be this big plans committee effort all the time. I like R&D, I like R&D under control. You can’t have project managers just running out, signing up for project management software without any control because that’s not really R&D, that’s just anarchy. So I think that that’s a way to help with that.

 

Mike Merrill:

What I’m hearing you say and what I know to be true is that software of any kind requires users. It’s not going to do everything for. You got to plug in and get to the benefit that the software can provide.

 

Christian Burger:

Absolutely, absolutely. You know, Mike, I want to make sure that you and I don’t run afoul of our listeners too. We promoted the idea that this was about robotics. And we should chat about that for just a bit. When I was doing a little bit of thinking about this podcast and what we needed to talk about, particularly as it related to robotics, one of the things that everybody points to almost invariably when it comes to robotics is the brick mason. Have you seen the robotic brick mason? 

 

Mike Merrill:

I have, yes. 

 

Christian Burger:

Everybody looks at that and says, wow, that’s pretty cool. I think that’s very indicative of where we are with robots on a certain sense. Now, there is a distinction between that and maybe just simple machinery. How much does the brick mason, the automated brick mason really cognitively know in order to do that job. And can it call out for more mortar when it needs it? Can it call out for more brick when it needs it? How does it adjust for changing conditions? So there is a little bit of a philosophical debate around that. However, it’s also fairly expensive at the moment. It’s pretty productive but it’s fairly expensive. 

So this is the type of technology where if you’re a big masonry contractor and you were trying to test this out, you might buy one of those machines, or even rent it and actually put it on a job. You’re not going to make a lot of money on that job, you might even lose a little bit of money but you get a sense of what’s possible and whether or not it can be applied, or are we too early, and then continue on. 

The other thing I was going to point out to you is that in some ways, I feel like we’ve already been at this point of robotics before. When you think of, if you’ve heard the term stateless grading.

 

Mike Merrill:

Yes.

 

Christian Burger:

And so we already have computer equipment that communicates via satellite or cell technology and GPS signal with bulldozers and pans and scrapers. And so, they’re guided with computers already. And so, now we don’t need a 20 year veteran operator on a pan or a scraper or a backhoe. We can actually let the computer do the work or a lot of the work. So, is that robotics? You still need an operator but there is machinery that’s being guided along the way. 

I also think that in some ways, 3D is a bit of a form of robotics. It doesn’t have arms and legs but it is a device that is actually printing concrete to spec. And I think that’s going to be one of the things that is entering the equation for us. 

There’s another one out there and I don’t know if you’ve seen this one or not, but actually does the rebar tying. So there’s this large metal kind of bar that has robotic arms down, and it will go over a pad of rebar that’s been laid in place. And then the arms just drop down, do the tying, move the next one, do the tying. So, we are seeing more automation of functions on construction. I think we have to because if you remember just before COVID hit, we were dealing with an extreme labor shortage. And so, I’m not sure that we’re going to get those guys back. And the industry is just not pulling new trades in. So I think that between the prefabrication that is happening and the movement in of robotics, I think the writing is on the wall.

 

Mike Merrill:

Now, that’s an interesting concept. The labor shortages that we’ve seen and just the disruptions in the market have been very interesting and unprecedented for sure. I think the youth today are not going into the trades like they were 20 years ago.

 

Christian Burger:

No, for a variety of reasons that probably merits a separate discussion. And you take that and I think that owners are starting to demand a better way because owners are tired of poor quality delays, budget overruns, the unsafe conditions, all the things that our industry has been plagued with for a long time. And so, when you look at, I mean, the whole goal of prefab and robotics is to improve quality, improve dependability, reliability. It’s going to be done this way because that’s what the machinery does, it does it that way all the time. Quality speed, and ultimately, I think to some extent, lowered costs. Now whether or not the lowered cost benefit accrues to the contractor, to the owner, it’s split, we’ll see. 

 

Mike Merrill:

And then safety. A robot’s not going to get COVID either.

 

Christian Burger:

They don’t get COVID, they don’t take cigarette breaks, they don’t file labor grievances. There’s a lot of things that are beneficial in that way. I guess I wanted to be mindful that some of your listeners may have heard the term RPA, which stands for robotic process automation. And that’s a different type of robotic processing that’s being applied to a lot of computer and data work. So, where RPA could actually read an invoice, know what it’s for, know how to code it, know where to route it. So now we don’t have to scan and type in all that data. 

One of the crazy things that we’re going to look back, Mike, we’re going to look back and laugh really at the fact that back in the old days input into computer programs was done by fingers. Getting automated with keep punch input seemed like an innovation because it was better than paper and pencil. But now with RPA, you look back, man, there’s a limit. Even if you are 100 words a minute typer, you can’t type as fast as a robot can read and input.

 

Mike Merrill:

And you’re still going to have errors, right? You’re still going to have typos. 

 

Christian Burger:

Indeed. Just as a little anecdote, I was at a construction company, it was a big specialty contractor, I don’t know, last year sometime. And I walked into their main office where they did all their processing. And on the front desk in the lobby there, the mail had just come. And there had to be about 400 or 500 pieces of mail that were invoices to be processed. Excuse me. And that means somebody’s got to open it, look at it, scan it, tag it, route it. And now, with COVID, what have you got? You can’t bring all those people into the office to read all those invoices and deal with them. So they had to go to some kind of more efficient processing. I think we’ll see RPA being deployed in more places than just invoice routing.

 

Mike Merrill:

Yeah. It’s amazing all the different areas and kind of tunnels we can go down in in improving overall construction. Sounds like we need to do another episode down the road so we can have some more dialogue.

 

Christian Burger:

There’s absolutely plenty to be excited about. But at the end of the day, I’m sort of a pragmatist at heart, and I would say, if it’s not adding value to the bottom line, then it’s fun to watch. And it’s important to know where these things are going because you don’t want to have a blind eye to where it’s heading. But you do need to be focused on the here and now. And I would much rather that a company have three or four solid pieces of technology that helped a given process that’s important to the business and continually trying to improve processes.

One of the things that I feel like, and maybe this will be in closing a little bit to your last point, is what should the IT director be looking at and focused on. And there is technology that the IT director themselves should be looking at for the business, not estimating project management, human resources, etc. So, middleware. We’re seeing middleware deployed much more actively now than before. So you’ll have a piece of software that sort of sits at the enterprise level and takes in data, transforms it, and provides it to another system. Gets data back, transforms it, puts it back. 

So there’s this back and forth that’s being handled automatically. Back in the old days, we had this antiquated batch upload, where you’d have to browse the file, find the file, click it, upload it, and it would air out. I mean, it was all manual. So middleware accomplishes that. 

The other thing we’ve got to be on the lookout for or be planning for is big data. Big data was being used as a term in our industry, I feel like prematurely. We had big files. We had point clouds and we had drawings, we had photographs, we had videos, we had a lot of content that was big, but we didn’t have legitimate big data. Now with equipment that’s providing telematic data and biometric solutions like heart rate, temperature monitors, things on our heart hats or wristband, what have you, we’re able to get big data in and can start to do analytics. But our systems that we’re using aren’t really prepared for that. So consequently, if you’re a pretty savvy IT director today, you’re being mindful of data warehouse and BI. And you should have your own enterprise version of that, rather than the data warehouse and the BI tool that your ERP system gives you versus your HR system, versus your project management system.

I don’t need eight BI tools in different applications. I want one BI tool that I can look at for everything. That’s a good goal and I think it’s out there. But that’s what the IT directors should be focused on now, in addition to supporting the user community.

 

Mike Merrill:

Wow. A lot to absorb and digest. Thank you so much, Christian. I’ve loved our conversation today. You always have a lot of insight to provide, and your expertise is appreciated by myself and our listeners as well. 

 

Christian Burger:

Happy to do it, Mike. I appreciate you asking.

 

Mike Merrill:

So as a closing question, just one thing I like to end on. What’s one hack or kind of process that’s been impactful for your business success that you’ve kind of adopted and made a key element to how you operate your business today that others might be able to learn from?

 

Christian Burger:

I do appreciate that question. I think I also teach, I teach class in Northwestern in the fall. I find that asking good questions is actually more valuable than anything else. It’s more valuable than anything I know, is really asking good questions. And so, if you’re going to interrogate a process, sit down with a group of people and really look at what you’re doing, well ask good questions, because from the questions, you will learn what you need to know about how to fix a process or what’s broken. 

I like to think and plan ambitiously. I feel like I don’t want to just focus on, like today, what can we fix today? I need to fix something for the future, because if I only focus on today, then when I get to the future, next week, next month, next year, I’m like, well, okay, now what? So I want to be thinking ahead. I think that’s kind of critical. 

The other piece when I do any work at all is always focused on developing a strong team. And you’ve seen this in your business, Mike. You know going in, when you’ve got a strong team available to help deploy your software, it’s going to go well, no matter what. And where if you’ve got a weaker team, it’s a lot harder and a lot more risk. So I want to have strong teams available. 

I also feel like, the last thing I’ll say is that I really like for people to understand why. Why are we doing this and how is it going to help? Not just here. Click here, fill this in, post this. The mechanics aren’t usually interesting. I mean, they’re necessary but they aren’t interesting. But helping a guy or a gal figure out, why are we doing this, what’s the purpose, that feels important as well. And I feel like if I’m doing those four things, I’m generally in the right place.

 

Mike Merrill:

That’s fantastic. So ask more questions and make sure they drive to the why. 

 

Christian Burger:

Indeed, indeed.

 

Mike Merrill:

Well, thank you again, Christian for joining us today. Very much enjoyed it. Thank you listeners for tuning in to the Mobile Workforce Podcast sponsored by AboutTime Technologies and WorkMax. If you enjoyed the conversation today and were able to learn anything new or insightful, please follow us on Instagram @workmax_ and subscribe to the podcast on iTunes or your preferred podcast platform. Also remember to leave a five star rating and review, which will help us to continue to bring these meaningful and helpful conversations to help improve your business and your life.

Supply-Side Processes Improve Job Site Productivity

Supply-Side Processes Improve Job Site Productivity

Material delays. Out of stock materials with no anticipated date of availability. These are the realities even the best contractors face from time to time. The good news is there are ways to avoid supplier shortages so you can keep your project’s timeline and budget intact. 

In this episode, we invited Buck Buchanan, the president of Buchanan Business Consulting, to share his experience from the supplier side. He breaks down tips and tactics to remain in control of your supply chain no matter what is happening in the market. 

 

Key Takeaways:

  1. Build multiple supplier relationships. Expand upon what your options are by having one supplier that is cost-effective, one that is reliable in all situations, and a third that is very flexible to meet your unique needs. 
  2. Be aware of the trends in your community. Knowing what is happening nationally and internationally is really important for your planning, but don’t underestimate the effect on supply that the trends in your local area have.
  3. Building relationships goes both ways. Build authentic relationships with your suppliers. Give grace when possible and avoid treating them like a commodity. Engaging during good times leads to suppliers going above and beyond when you are in a pinch.

 

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Click Play to Listen to the Podcast Now:

Episode Transcript:

Mike Merrill:

Hello, and welcome to the Mobile Workforce Podcast. I am your host, Mike Merrill. And today we are sitting down with the Buck Buchanan, the President of Buchanan Business Consulting. And buck is full of wisdom and practical tips from many years of working on the supply side of construction. Buck has a rich and long history, lots of experience, and, I think, a unique perspective on job site productivity as it relates to supply and demand. Welcome, Buck. We’re glad to have you on the podcast today. Thank you for joining us.

 

Buck Buchanan:

Thanks, Mike. Thanks for having me, and I look forward to the conversation. This ought to be fun.

 

Mike Merrill:

Great. Sounds awesome. Well, first off, why don’t you tell us a little bit about yourself and your history and your company, and also just your day to day.

 

Buck Buchanan:

Okay, sure. So today, I have a consulting business. And I do some consulting with a variety of clients, some construction, some not construction. I do some executive

coaching now. But my roots go back to construction. So for over 35 years, I worked on the construction product side. So I worked for two different manufacturers that made products. We made plasters, paint, stuccos, waterproofing material, tile grouts, tile adhesives, things along those lines. And we sold them in both residential and commercial markets. We had some outlets that went through the DIY supply side, some of them went through the dealer side, some of them went through the national distribution side. So we went through a variety of different ways to get our product to market. But I was able to really work throughout the United States, and really even into Canada, and even got involved in export developments for a while. So I’ve seen it on that side.

And the people that I’ve dealt with, which I think might be important for your people that are listening in, I’ve dealt with the architects, the contractors, the general contractors, the builders. So I’ve touched all pieces of the people that are actually on the ground working on projects.

 

Mike Merrill:

Yeah, that’s an interesting perspective for sure. And I’m sure our listeners will appreciate learning some insights from you. Obviously, this last year has presented us with a lot of new challenges with supply and demand and materials and travel restrictions and shipping restrictions. What things should business leaders be looking for while trying to navigate these types of challenges moving forward?

 

Buck Buchanan:

Well, I think the big thing is to really understand where you are and what are your relationships with your suppliers? Because it’s interesting, the people that I talk to, it’s a very fluid process. But if you go back to March when this started, nobody really knew what to expect. So everybody plodded along, and the jobs you had work in, you were trying to finish them up. In some states, you were able to work. Some States, you had to shut down. So we all had to go through that. And now that we’re six, eight months into this, some people are doing well, some people are finishing up jobs. Some people don’t know what’s going to happen next year, other people think it’s going to be great next year. So there’s a lot of that that you run into.

And then you’re also seeing on the supply side of things that some of the things are not as readily available as they were in the past. And some of that was because, I think, industry shut down. Industry shut down in some cases for two or three months and they stopped production. And now that people are trying to get done before the winter starts, get their jobs ready, there’s a shortage of material. So that’s where things are. And so people really got to keep their eye on the supply-side today.

 

Mike Merrill:

Yeah. And I think, too, this is true with a lot of parts of business, job site productivity is important but communication is always key, and especially when you’re trying to work out completing a project where you have resources that are required in a timely manner. What is the main communication issue that you see between the job sites and suppliers today?

 

Buck Buchanan:

Well, I think it’s the because of the, let’s call it potential shortages, that you’re running into, what a contractor needs to be looking for is to make sure they’re really dealing with a supplier that they can trust and rely upon. And I think it’s because there is a flux in certain products, again, depends on where it was. Last month, wood prices went through the roof. So if you’re building a house, number one, your cost went up. Number two, why did costs go up? Because there was a shortage of material. So that was one thing that people need to be really aware of.

The only way to navigate through that is to make sure whoever you are, whether you’re the subcontractor, the builder, or the general contractor, you need to make sure that you’re staying in touch with the supplier so they can give you the heads up of what are the lead times. When are they getting materials in and how’s that going to impact my job? And again, obviously there’s a cost factor, as well as a time element, of just the pure raw material. So the key element, I think, is you really need to be in touch with your supplier.

One other thing I’ll throw in here is some of the dynamics may change a bit in that the contractors need to have reliable suppliers. Now, some contractors say, “Well, I’ll just shop that out tomorrow and I’ll go to supplier A, B, or C, whoever’s going to give me the best price.” And that works pretty successful for some of these guys. But now may not be the time to do that. They may need to be thinking about going to supplier A because he’s more reliable than supplier C, which may have the better price.

 

Mike Merrill:

Yeah. So what I’m hearing is regular communication with those suppliers to keep a finger on the pulse of the supplies that are available. 

 

Buck Buchanan:

Yeah. Because it is fluid, again, some products may be readily available, they may have inventory. Others, they may not have inventory. Some are specialty products, which there’s not as much manufacturing time as it was in the past. So it really depends. Anywhere from lighting fixtures to lumber to drywall all have their own set point of what their availability is these days.

 

Mike Merrill:

Yeah. And I’ve heard quite a bit, and I’ve seen this over the years, where larger companies, sometimes they’re able to stockpile and maybe warehouse and store materials that they know they’re going to need a lot of in advance. And of course, that can cause more shortage of the available materials on the open market.

 

Buck Buchanan:

Sure, sure.

 

Mike Merrill:

So if you were a contractor today, what kinds of things would you do to shield yourself from those types of shortages or those issues in delay?

 

Buck Buchanan:

Well, again, planning is really an important thing now. And I think you’ve got to plan your job and what your needs are so you schedule them accordingly. And in that schedule is you’re taking into account is when can I get my materials? When can I get them delivered to the job site? Are these products that are in inventory, if they are normally, you need to make sure you check with the supplier to make sure they do keep these products in inventory. Is it a specialty product?

If it’s a specialty product, it’s got additional lead times. You need to be thinking about that as well. So if it’s a specified product, if it has to go through an approval process at the architectural level in the specification writer level, then you need to make sure that you’re taking that into account along with the supply side of the goods. Because just because it goes through an approval process, then you just have to order it. Well, okay. If you’re not aware of what the lead times are on the order end, then you’re going to have problems with that.

 

Mike Merrill:

Yeah. I know we were talking a little bit before we hit record, but I built a home last year, finished it pre-COVID. But there were some interesting things that I ran into. As a former general contractor myself and trades contractor, I have a handle on this stuff normally. But when it came time to do my trusses, all of the truss plants, just about every one of them were over three months out. that cuts into your job site productivity. And so you better be measuring that foundation as soon as it’s poured, because if not, your house is going to be sitting for months on end. And that was partially related to materials a little bit, but most of it was just the labor shortage, and the space that they had to build only so many trusses a day for a home, and you just had to get in line.

 

Buck Buchanan:

That’s right. And you bring up labor, and that’s before COVID has been an issue. There has been a labor shortage in construction really since the recession that we had in 2008, 2009. And that has also put a real damper on construction, because now these builders got to figure out where am I going to get the people to build a building? Do I have skilled labor? Is there just general labor available? And that’s really been a big challenge.

 

Mike Merrill:

Yeah. And I’ve heard, too, and I don’t know, maybe you can shed some insight on this, but I’ve heard, and I’ve seen this in the past as well, but it seems to be coming up to the surface again, where some of these suppliers are getting into the installation business maybe where previously they weren’t. Can you talk about that a little bit?

 

Buck Buchanan:

Yeah. I haven’t seen that too much, except I would say the flooring industry seems to have done more of that than, let’s say, any of the other trades. The lumber trade, the concrete trades, the drywall trades, I haven’t seen that happen. But certainly in the flooring side, hardwood floors, carpeting, tile, et cetera, there are cases where that’s happened, and there’s some trend lines going in that direction. But I’m not really aware of other ones. There probably are, but I’m just saying that I know in flooring, it’s been going on for some time.

 

Mike Merrill:

Yeah. I know previous, you mentioned the housing bubble in ’06, ’07. At least where I’m at in Utah, we had a lot of the lumber suppliers here that were running and managing their own labor crews to install the lumber, to do the framing.

 

Buck Buchanan:

Oh, really?

 

Mike Merrill:

Yeah I know the work. And I think at the time, there was so much demand on subcontractors that they felt like they had more lumber to sell than they could have installed, and so they decided to get into that end of the game just to help make sure that they could keep the lumber moving through their yard quicker by providing labor also.

 

Buck Buchanan:

Well, that makes sense. That certainly makes sense. Again, what’s interesting is when I had the opportunity to travel the United States and see lots of the markets to find that there’s niches of how things are done in certain markets, and it can vary from one end of the country to the other.

 

Mike Merrill:

Yeah. Another thing that we talked about a little bit, I had heard here through the grapevine, some of the more specialized lumber suppliers, the non-Home Depot, Lowe’s type lumberyards, weren’t selling to retail customers. They were conserving their inventory for the contractors that had accounts and were frequenting them because there was just such a shortage that they weren’t going to shortchange their contractors that were giving them business all year, year after year.

 

Buck Buchanan:

And I would say that I could see that happening. And I actually experienced that when I was in California. And this was in 2005, 2006, and we were making stucco. Well, if you drive out in California, stucco’s everywhere. And business was so good, this was ’06, that we had to do that. We had to limit to our better customers that we supplied our stucco to. So that can certainly happen when there’s a shortage and when business is rolling along.

 

Mike Merrill:

Yeah. So we’ve talked a little bit about this 2008 time period, that recession that we hit. Are you seeing any trends today with COVID or other things going on resurfacing? What are your thoughts on that?

 

Buck Buchanan:

Well, I think there’s a couple things. One thing you learned from 2008 was that you need to readjust your business according to what’s going on in the world today, or the economy or your local market. So I think that’s one big thing. So just because maybe businesses booming in Colorado, the business may not be great in Kansas. So you’ve got to adjust your business accordingly.

I think what a lot of people are running into now, if you look at construction, either on the residential side, most markets, certainly particularly the Sunbelt, the South, you’re seeing that the residential market is still pretty vigorous right now. There’s still activity. Multi-family is coming in big, particularly in metro areas. You’re seeing a lot of activity on the residential side.

But when you get into some of the commercial markets, you’re seeing some shifting going on. So for example, if you’ve been by a shopping center lately, we got lots of them here in the Atlanta area. They’re in Dallas and Salt Lake and Los Angeles and everywhere else. You’re seeing that those places, those stores are closing. And that’s shifting because somebody rings your front door and your package is delivered. So that’s causing some change in that you’re going from the standalone stores, which retail was a huge part of, that shift is now going to more of the warehousing or the industrial construction. So fulfillment centers and distribution centers are becoming big, whereas some of the retail is going away. So you’re seeing some of those things shift and change, and so you have to adjust your business according to those particular models.

I think that’s one thing we’re seeing… It was going on before COVID hit, but it’s been accentuated now that COVID’s been here because people just don’t go out. So that’s caused changes. You look at transportation, airports. Where has the airline industry been in a while? Last eight months hasn’t been very good, which means hotel and motel industries are going down. So if your business was heavily focused in those sectors, you needed to make some adjustments.

 

Mike Merrill:

Well, so speaking of that, what can our listeners learn from the experiences you had in going through 2008 and coming out the other side, different or changed or whatever adaptations you made? Is there any wisdom you can impart for them?

 

Buck Buchanan:

Well, I think you’ve got to be realistic as to what you think your business is going to be doing. You can’t go back in history and say last year was really good, so this year should be really good. You’ve got to look at it is your market there? And the market being is whatever your niche is, your target markets are, are those still moving forward? And are they moving forward in the short term and the mid term? And I think that’s one thing. And then you need to be making adjustments to say hey, are we adjusting our business to fit where the market is going? Because for example, if you’re working 100 guys in the field and you see there’s a shift in your marketplace, those are really good 100 guys, you got, but you only need 60 going forward. So you need to make those kinds of adjustments now as you move forward. So I think that’s certainly one aspect.

Another aspect, too, is to look at, on the supply side, is to say do we really need to be doing all this? Or can we narrow our focus down to concentrate on where we’re really making money? And if we do that, then we may eliminate some costs. Maybe you got involved in doing some form of your business because the general contractor said, “Hey, can you do this?” “Yeah, I can do that.” “Hey, can I do this?” “Yeah, I can do that.” Before you knew it, you got into three or four things beyond what your specialty was, and now you’re just getting by. So point being is refocus your business based on where your focus is as how you see the business is going to be operating in the next 12 to 18 months. That would be the biggest thing that I could offer. And then you got to have the guts to make the changes. Again, if you see your business going from 100 to 60 people, that’s not an easy decision to make, but you got to make the right decision for your business as it goes forward.

 

Mike Merrill:

So you mean the bury your head in the sand business plan isn’t very effective?

 

Buck Buchanan:

I don’t think so. I don’t think you’ll last. And I can tell you that our philosophy was, when we were going through this, is we wanted to be stronger when we came out on the other side. And so we did what we had to do to keep our infrastructure in place. We had eight manufacturing plants. We wanted to keep those eight manufacturing plants going, but we weren’t going to be able to run them six days a week like we had been. So we had to scale down, we had to move products from one plant to another so they became more efficient. So we had to readjust our focus on our business, what we were making, what we were doing. We had to refocus our employees. We had to move some of them around. And frankly, we had to get rid of some of them because we just couldn’t afford to carry that number. So again, you got to make the adjustments based on where the business is going to be.

 

Mike Merrill:

So what I’m hearing, too, is the old adage measure twice, cut once. You really need to take an accurate measurement before you start cutting.

 

Buck Buchanan:

Amen, brother. That’s for sure.

 

Mike Merrill:

All right. Well, so looking back over your career, you have a lot of experience, many years, decades. What’s the biggest lesson that you’ve learned that still comes into play for you today?

 

Buck Buchanan:

Well, I think that a lot of people need to consider this, is in construction, and you can get involved in dealing with BM systems and CAD drawings and digitizing of drawings, et cetera. But at the end of the day, it’s you’re still dealing with people. And I think relationships are very important. And I think that’s probably the biggest point that I could bring out, is number one is you got to have relationships all up and down through the chain. And the chain in construction starts with the owner, it goes to the general contractor down to the subcontractor to your supplier. All those people are involved in the construction process, and you need to have good relationships all throughout that. And if you’ll do that, I think that’s the number one thing.

There’s a couple other things that I think are really important as well, is number one, listen. A lot of people like to talk and they don’t listen. And I used to manage sales forces couple of different times in my career. I found out that a lot of times, that salespeople like to just talk and not listen to what the customer was trying to tell them. And I think that’s true whether you’re a builder, whether you’re a subcontractor, whether you’re a supplier. If you’re dealing with people, listen to what the people are telling you. Because if you do that, you’ll find out what their real needs are. And you’ll find out where they are in their emotional level and where they are in their business levels. So listen is one.

Another thing is once you listen, is to make sure that you follow up with them on that. And a lot of times, people will listen and then they won’t follow up. So you’ll go in and have a good meeting with a subcontractor and you think things worked out well. And you said, “I’ll give you a call Friday and let you know how you’re coming on that contract.” But you don’t call the subcontractor. You don’t call him until you’re in a jam and you call him. Well, guess what? By the time you’re in a jam, he’s picked up four or five more jobs, and you didn’t follow up with him and you got no point on his radar. If he can pitch in, he will, but he may not be. So that relationship goes back into it. So follow up, and then do what you promised the guy you’re going to do.

So again, relationships, listening, and follow up on what you say you’re going to do. If you do those things, I think you’d be pretty successful in what you do. Because again, people want to deal with people they like doing business with. And that can make a difference whether you’re a big general contractor or you’re building two houses. It’s the same with supplies.

 

Mike Merrill:

Yeah. I love what you did to tie all that up together, because I think too often, especially with sales guys, they they’re listening to respond. They’re trying to get the words out of their mouth sometimes before someone else is done talking. You can listen, and it’s not like the text message where you get the read receipt. Well, they opened my text. Well, it doesn’t necessarily mean they read it or that they thought about it or made any decision on it.

So I think that following up and treating them with respect. And then also, fostering that relationship as another person and not just a supplier or a sub or something that you don’t have respect for them. When you need to call in those favors, when you are in a pinch, you have that relationship to fall back on to ask for that special favor or a little extra help. And I think in my experience, most of the time, generally, people want to do well, want to do the right thing or do good things, and they’ll try and help you out in a jam if they can. If you have that relationship established, to your point.

 

Buck Buchanan:

Absolutely. Absolutely. And I think that’s really important, is to make sure you’ve got those kinds of relationships. But again, when I refer to the selling chain, everybody that’s going to be involved in the building process, you need to have the relationship with them and you need to listen to them. A lot of times, people, they’ve got programmed in their head well, I’m going to say this when I get in front of that guy. It’s almost like they hit play. Well, they don’t know when to hit stop. Well, they hit stop once the guy says you got the order, that’s when you hit stop. You just don’t keep going after it because you’re only on slide 35 of the 50 slide show, right?

 

Mike Merrill:

Yeah. Sage advice, no question about it. So in winding things up, one of the questions that I like to ask, and that I’m always curious with our guests, is what’s been a hack or a shortcut, something you’ve found in your career and your experience, that’s helped you really get ahead or have an advantage that’s been a blessing to you?

 

Buck Buchanan:

Well, again, I go back to the relationship point. And to me, again, I think that’s key. A key element is to have the relationships, get to know the people. Another thing is know as much about the business as you can. Too many times, people don’t understand what they’re dealing with. They don’t understand how the other side deals.

So for example, when you’re competing against another supplier, what does that supplier do better than what I do? I need to know that. What does that owner of that business do that I need to know about? The guy that’s going to build this track of houses down the street, that’s going to build 200 homes, what’s in his head? What do they like to do? What are the things that turn turns them off? What are the things that gets their hot buttons going? So know as much as you can about who you’re dealing with, whether they’re going to be a customer or whether they’re somebody you’re competing with. Because the more you know about them, the better off you’re going to be.

It’s no different than when you sit down on Sunday and you watch the NFL play football. And there’s 20 some odd coaches and they’re trying to figure out what that other team’s doing. So why? Because they want to know how they can compete with them and how they can beat them. It’s no different in life or business. You need to know… And too many people don’t know what’s going on in the business. They don’t know who they’re competing with, they don’t know what they’re up against.

We started this conversation by talking about supply. And again, the only way you can understand that supply is have a good relationship with the people that are supplying your stuff. And if you do that, then you’re going to be okay. So understand what your supplier’s doing, understand what you’re competing with, understand what your customers want. So those, to me, are things that you understand the landscape, you got to understand who you’re competing with. If you learn all that, I think that’s a big benefit for you.

 

Mike Merrill:

Well, and it’s almost like for those of us that are married, you’re going to spend eight to 10 hours a day with your spouse or your significant other. And you’re going to probably spend eight to 10 hours a day working, and then you’re going to sleep and do whatever else the rest of the time. So if a third of our lives is spent behind a desk or at an office or on a job site or somewhere related to our construction business, it’s a pretty significant portion of our time investment in life. So I think what I’m hearing you say is act like it.

 

Buck Buchanan:

Yeah. Learn the business. Understand… And the businesses is the entire business. It’s how everything works, it’s the people that are involved with it, it’s the people you compete with. That’s what the business is all about. If you’re building houses, you’re competing with somebody else building a house. If you’re selling material, you’re competing with somebody else that’s selling material. So it’s really no different. So you got to understand the entire market. So yeah, you’re right.

 

Mike Merrill:

Well, thank you so much. This has been a great conversation today. Very insightful. And it’s a the silent side, I think. Sometimes the companies, they forget about the supply side, I think, more often than not. So great to have your insights and thank you for joining us today.

Thanks for the listeners for joining the WorkMax Mobile Podcast, sponsored by About Time Technologies and WorkMax. If you liked this conversation, please feel free to give us a like, and follow us on Instagram @_workmax.com, and subscribe on iTunes or your preferred platform. And if you enjoyed the podcast, please give us a five star rating and review to help us to continue to provide this valuable resource to our market that helps you improve your business and your life.