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Cloud for ERP: Simplifying Job Site Technology

Technology for Construction Advances Careers

The construction world is too competitive and fast-paced to rely on analog systems, especially when it comes to accounting and payroll. This is why the future of construction technology lies in cloud-based software. Enterprise Resource Planning (ERP) software, in particular, is on the rise thanks to its ability to connect people from job sites to the main office on any smart device or computer, giving them the opportunity to share information in real-time. This leads to benefits such as expedited labor reporting, connected and reliable information across the entire organization and up-to-date rules and regulations. So how does ERP work? Is it easy to implement? And how quickly can a business see benefits? 

Darcy Boerio, President of DAB Partners, joins Mike Merrill on this week’s episode of the Mobile Workforce Podcast to explain what to know about ERP software and how to make the most of it. She breaks down the differences between cloud-based software and cloud-capable software, and shares why cloud-based software will push legacy systems to the side for good.

Key Takeaways:

    1. An ERP is a central hub that connects key areas of a construction business: Contractors work with various systems and run into problems when these systems can’t connect. However, when they implement an ERP, data from job sites, such as labor tracking, can flow seamlessly to departments like finance and accounting. This results in everyone working from a single system of record.
    2. Giving employees cloud-based software increases mobility and productivity: Mobility gives workers and employees the freedom to access and update their systems from any device, no matter where they are, at anytime they choose. This eliminates risks of delays, guesstimates that throw off data, and ________. 
    3. Cloud-based software ensures your policies and systems are evergreen: One reason manual and analog tracking is so detrimental is that it slows productivity, increases errors and decreases user confidence. Cloud-based software ensures up-to-date with any changes and updates that the developer makes. Additionally, an evergreen platform ensures that payroll, accounting, and safety policies are in compliance.

 

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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 Darcy Boerio the president of DAB Partners and the cohost of the Enterprise Software Podcast. Darcy has nearly 25 years of experience in onsite technology and implementations. So we are very excited to have you on the podcast today. Thank you for joining us Darcy.

 

Darcy Boerio:

Mike, I’m so excited to be here. Thank you for asking me to come and it’s great to see you.

 

Mike Merrill:

Yeah, we’ve had some of our events that we used to see each other at shutdown this last year.

 

Darcy Boerio:

Yeah. To submit the only time I see you is when you’re out running on Instagram.

 

Mike Merrill:

Well, I try and do that as much as I can. So I like some of your running pics too.

 

Darcy Boerio:

I need to do more of that.

 

Mike Merrill:

Sounds like I’ll post more and I’ll watch for you too. So well, before we dig into the conversation today, can you give our listeners just a little bit of your background and experience?

 

Darcy Boerio:

Sure. So I started my software career at Timberline Software about mid ’90s and worked in the Beaverton, Oregon headquarters for the next 10 years or so. I started in support and over the course of the 10 years, I always joked that I worked on every segment of every floor in the building because I went from support. I did consulting. Then I moved upstairs and I was in QA for three years, believe it or not. And then moved to sales and marketing. So worked kind of in all facets of that business before joining Alliance Solutions Group of what as one of the original employees, then Timberline as… well, Sage Construction and Real Estate, or many iterations of that over the years reseller. Around 2012, I decided to exit the construction business because I can name with the economy. So I went and worked for Avalara, a cloud-based sales tax automation software, and then did a couple of years with some different ISVs.

And then 2017, somewhere along the way I started co-hosting a podcast, Enterprise Software Podcast. I’ve been doing that for about six years and really have discovered my passion for all things, ERP software. And then started my own business DAB Partners in 2017 where I consult with software publishers to help them grow their partner channels and referral networks.

 

Mike Merrill:

Wow. That’s a long and illustrious career, and you’re not done yet, right?

 

Darcy Boerio:

Oh, no.

 

Mike Merrill:

Your husband says no, right?

 

Darcy Boerio:

Yeah. Right.

 

Mike Merrill:

So Darcy’s husband, Tim also works for Alliance Solutions still. So I run into him quite as well. And he’s another good friend of the industry. So you mentioned something there, you used the word ERP. Can you just explain what that stands for those listeners that maybe don’t, or aren’t familiar with that?

 

Darcy Boerio:

Absolutely enterprise resource planning software and it’s not a term that we’ve used in, I would say in the construction industry, when I was around the construction industry, we’d call it construction accounting software, or we called it even maybe construction financial and operations software, but ERP really implies… you’ll get different answers from different people. But to me, it’s not just saying, “Okay, we’re just doing accounting and then we’re going to do something else over here and something else over here and all these disparate solutions.” It’s saying, “We’re going to find a product or products that work together that cover our entire enterprise.” And so we used to leave it to the realm of manufacturers and distribution. We didn’t really talk about it in terms of construction until fairly recent years, but really it’s… For a construction company, we’d want something that’s going to cover obviously their job cost accounting, their estimating, their project management, maybe service management, and have it all be integrated together seamlessly rather than having a bunch of different products for each of those things. So I would say that’s the big difference of what an ERP is today in the construction world.

 

Mike Merrill:

Yeah. Versus just an old accounting and payroll system.

 

Darcy Boerio:

Yeah, exactly.

 

Mike Merrill:

Yeah, that’s a lot of areas of the business that a system like that touches. So I imagine with mobility being such a big piece of today’s ecosystem, that’s just a whole other dynamic. How have you seen that play into the ERP space at this point?

 

Darcy Boerio:

I mean, it’s huge and it really expands out the ability to have a true ERP environment, because you’re able to put integrated tools in the hands of people that aren’t sitting in the office connected to the server. And so it just makes it that much easier to accomplish that goal of keeping everyone on the same system and all in sync and together in ERP. And mobile it’s such a crucial part of ERP. I mean, you can’t have an ERP or an ERP add on solution without some sort of mobility component, especially today, obviously.

 

Mike Merrill:

Yeah. And the mobile, I guess, essentially it would be an app, or some type of collection to feed that ERP. Is that how you’re seeing it utilized?

 

Darcy Boerio:

Typically, yeah. I mean, there’s different variations, but mobile kind of implies also just general mobility. So I mean, it is apps, it is handhelds and tablets and devices like that, but it’s also being able to work from anywhere. Especially obviously today that’s mobility too. So it’s all part of mobility. Back in, oh gosh, it was, I think 2005, I used to sell this product called Field2Base. Have you ever heard of it?

 

Mike Merrill:

I remember Field2Base very well actually.

 

Darcy Boerio:

I don’t know if it’s still around or not, but I would go out to meet with contractors with this big tablet. I mean, they were so heavy and huge, but they were tablet PCs and nobody really knew about tablet PCs back then, but they were in these ruggedized cases and we’d go out and we’d be like, “Look, you can go out on the job site and you can take a picture and write on it and then send it back into the office.” And everyone’s like, “Oh wow.” And these things were… they were $2,000 for the hardware alone and then the monthly after that, we actually just ran across when the other day we were cleaning out some closets and found an older one that we had sitting around the house and we were laughing about it because it’s so long ago, it’s come such a long way.

So I mean, that back then was people had… sometimes they would have a laptop on the job site. Often they would not have internet on the job site. They would maybe have a fax line on the job site. So we’ve just come so far in just maybe 10 years or whatever.

 

Mike Merrill:

Yeah. I remember we had the PalmPilots back then to collect and they had these tablets and we remember just thinking, “Wow, that is amazing that they’ve…” We felt like at the time, maybe it was a little bit too far of a… Sorry about that. Oh, jeez. That’s new John. That’s my RingCentral system. We’ll just take a pause for a second, if I can… The funny thing is that their marketing director, she’s probably forgotten I’m on this podcast right now. Exit out of that altogether. Let’s see. Where were we? I said PalmPilots and you’re talking about…

 

Darcy Boerio:

Maybe just start with Field2Base. I remember those back then.

 

Mike Merrill:

Okay. Sounds good. I remember running into Field2Base back then. They were again, kind of ahead of their time for sure. Definitely, they were onto something. I think it was just a little ahead of the curve. We were using the PalmPilots to collect data and we thought, “Wow, how cool that would be to have the whole computer and a tablet and all that in one solution.” But obviously it was probably a little too far of a gap to bridge early in those days.

 

Darcy Boerio:

They think it was. It was interesting because we had a lot of really quick early adopters that were just like, “Yes,” but those were like the bleeding edge people and then it just tapered off and it was really hard to get adoption. I remember the first time I saw your product, I think it was either at Southeast Building Conference or the International Builders’ Show. And I was like, “Wow, that’s so cool.” And I can’t remember what device it was on. Maybe it was a PalmPilot, but it was so cool because it was just… somebody showed it to me. It was a time entry. It was basically clocking in and clocking out, I think, and it was just so simple. It had big buttons and you just go I’m in, I’m out. And it was like, “Wow, that’s so different from having to buy a $2,000 tablet and then have one person holds the tablet and everyone else comes and checks in on it and everything.” So it was a pretty revolutionary what you guys had already back then in the mid 2000s. I think it was or something when I first saw it.

 

Mike Merrill:

Yeah. That sounds about right. I think it was the International Builders’ Show in Florida if I remember. And I think it was Field2Base South and North Carolina. Is that what I’m remembering?

 

Darcy Boerio:

Yeah.

 

Mike Merrill:

Okay. Seem like that. So again, going back, we’ve come so far in actually a short period of time really, we’re talking like a decade or so, like you were mentioning maybe decade and a half. So I was a general contractor and when I was in my early and mid 20s and growing up in the industry, so to speak, I know accounting was almost a swear word back at that time, it was like a necessary evil, paying your taxes you had to do it, but you didn’t really like it. What’s changed? Is it the same? And why is that perspective out there do you think?

 

Darcy Boerio:

I think for one maybe there’s a perception that you need to understand accounting to use an accounting software. You don’t need to do a T-account or debits and credits or things like that. I mean, that’s all in play, but that’s behind the scenes. Assuming that you get it all set up right, then a modern accounting software, ERP software does it for you. You don’t have to sit there and every time you make a transaction entering what GL account is going to and all that kind of stuff, if you set it up properly based on your rules. So it can be actually very beneficial because it’s not just invoices AP and AR, you’ve got now your job data in there and that’s all incorporated in and you can get important reports out of it. So it’s very valuable. It’s not just this little thing that should be set over on the shelf alone to pay your bills and bill your customers.

 

Mike Merrill:

Yeah. And I love what you said earlier about the mobility, because that’s something I think is a great reminder for everybody. Mobility doesn’t mean smartphones and tablets and apps, but the ability to work remotely, like you’re saying Darcy, even on the accounting level, have that data out there at your fingertips on the job.

 

Darcy Boerio:

Yeah. I remember when I was selling Timberline and it was an on-premise software. There wasn’t any cloud options for it. And then there’d be these other cloud products out there and they’d go, and this was years ago. So people come to me and go, “Is your software in the cloud?” And I’d say, “Is that important to you?” And they’d go, “Yeah, that’s really important.” And I’d say, “Why?” They didn’t even know what it meant, but they just knew that they were supposed to be in the cloud. But the argument was that, well, I mean, does accounting really need access from the field? I mean, they’re in the office, where are they going? That was the thing back then. Obviously today we know that’s not the case because number one, accounting this past year, hasn’t been in the office, but number two-

 

Mike Merrill:

No, it hasn’t.

 

Darcy Boerio:

But secondarily, I mean, I live in Florida and sometimes we have hurricanes coming and people have to go and if they’ve got their server in their office, they got to go, “Wrap it up and put it on high ground and pray for the best.” If their server’s damaged, then no one can work. If their power’s out of the office then they’re all relying on connecting to that on-premises server, even if they have figured out how to connect it remotely securely. They still may not be able to access it if there’s no power or the server has been damaged. So that’s just one of the reasons why I mean, back then we didn’t think of all those things in cloud wasn’t as accessible as it is now, but today it’s like, “Okay. Yeah, you need to be in the cloud even accounting.”

 

Mike Merrill:

Right. And then you’re challenging Florida definitely. I mean, I’m in Utah. We don’t have hurricanes here, so that’s not… maybe earthquakes or avalanches, but a different challenge, but it is interesting that a server is so critical for those that have their business hosted on it. I mean, what a risk to have that in one location that maybe isn’t so secure. So tell me with cloud based accounting systems are options now that the job site has visibility into the same data that the office does, what has that done in your perspective for efficiency of just construction or even industries in general that utilize these types of technologies?

 

Darcy Boerio:

I mean, it’s the real time data and it’s the real-time bi-directional data. So when something’s happening on the job, there’s technology, like what you guys do, that it makes it so easy for someone on the job to…. they don’t have to dig into some software and get it on the laptop at the end of the day and go enter a bunch of information and then maybe print a report or whatever. And then someone else back at the office enters it in manually. And so the office gets access to that information much more quickly for whatever they may need it for their accounting purposes. And likewise, possibly more importantly, the field gets access to the data from accounting without having to wait until, oh, that invoice hasn’t been entered yet, or that invoice got entered, but I’m not sending you a report until tomorrow.

And it’s right there immediately in real time. And ideally even with abilities to analyze the data, drill down into the data slice and dice, do what if scenarios with the data right there in the field and to really know about any risks that you have on the job, as far as budget or schedule issues that may be arising. So you just know that much faster and are able to react in time to mitigate the problem.

 

Mike Merrill:

Yeah, that’s a great point too. And I mean, I still hear this commonly, if companies aren’t getting their invoices out quick enough maybe the jobs closed out or maybe now they’re hitting another draw cycle. So not only speed of making decisions, but just getting paid and ensuring that you are getting paid. Sometimes companies don’t get paid. And if the budget runs over and there are challenges with ownership or whoever the bank, whatever, it doesn’t really matter. If you’re last in line to get paid, sometimes if you do get paid, it might be pretty late.

 

Darcy Boerio:

All of these things can make or break a job very easily. So under billing can do that and off schedule can do that. So there’s a really lot of things to keep an eye on. In the past, I mean, I’ve seen people getting faxes with the stack of papers. Aging myself a little bit on that, but I still think there’s some of you guys out there that are doing that, that are maybe not faxing, but there’s still a lot of paper being transmitted around, a recording being transferred around to be able to sift through and everything. And it’s yesterday’s data because somebody ran the reports this morning or whatever. So real time information is so much more accessible and so important.

 

Mike Merrill:

Yeah. So you mentioned cloud-based and that was the buzz word or the question, the check box that somebody should be checking off in order to be innovative, but what’s the difference between cloud-based systems and cloud hosted?

 

Darcy Boerio:

Typically hosted is really just going to be your software only it’s on someone else’s server. well, it’s all on someone else’s server, but someone else has a physical server for you or a virtual server somewhere and they manage it, instead of you managing it. And typically those are data centers where they’ve got the temperature controls and the security and things of that nature. But there’s still anything subject to cyber terrorists and things like that. Ultimately it’s on-premise software. You still have to do your updates. Somebody still has to come in and update the software when there’s a new version and that kind of thing. It really isn’t substantially different from an on-premise server, except that you typically have someone else who’s maintaining this hardware for you and you don’t have to do that yourself versus cloud software where it’s actually out of the office.

 

Mike Merrill:

Yeah, I said, so they’re wrapping it in plastic from the hurricane instead of you.

 

Darcy Boerio:

Typically, they hosting centers will pick it and in a location where there’s very low natural disaster, they’re probably a lot in Utah and whatnot, not many in Florida probably. But with a with a cloud-based software that’s typically not the case. Now there are some cloud based softwares that are actually really just hosted on a large instance of AWS and then there’s also just true cloud software. So it’s all varying degrees, but typically with a cloud-based software you’re not responsible for even worrying about that server or even thinking about it, the upgrades can be pushed out automatically to you instead of you having to go say, “Okay, it’s time for an upgrade. Let’s go get all our ducks in a row and upgrade the software.”

 

Mike Merrill:

Yeah. And I think in my history, both as a contractor and as an executive here at a software company that sells cloud based systems that used to do on-premise software, I can speak to the great cost savings of going to a cloud based system where you’re not paying for the labor to do those updates and the effort and the lags and the delays, I mean, just that cost alone is very expensive and something that I think contractors have primarily started letting go of that. I don’t think that’s the majority any longer, which is a good thing, but there are still some, like you said, that are still hanging onto their fax machines and still got their paper.

 

Darcy Boerio:

Yeah. The typical contractor does not have the technical expertise on staff to take care of all that. I could go on all day about this with security risks and things like that. It’s just, I would never want to trust it to the guy down the hall who’s real good with computers. So you usually just go ask him when there’s something wrong, you don’t want that person in charge of your sensitive data and your operations being up and running.

 

Mike Merrill:

Right. Yeah. It’s very critical data. And definitely, I think sometimes we forget we get busy and our hair’s on fire and we are just used to doing things the way that we’ve always done them, and in construction we’re problem solvers. We’re good at fixing things and jerry rigging stuff to find a solution quickly, but this is not an area to try and cut those corners on for sure.

 

Darcy Boerio:

Well, you don’t think about it until you’re lying in bed at night thinking, “Oh, do we even have a backup? We might have one, but have we ever tested actually restoring it?” And those things get alleviated.

 

Mike Merrill:

Or does the guy that know even still work here? I mean, I’ve heard that a lot, they lost the guy that knew.

 

Darcy Boerio:

Yeah. Well, and that’s another point that I think we should talk about is losing the guy that knew, because I think whether you’ve been on a software for a long time or you’re new to a company that’s using a software, I think it’s so interesting that so many businesses only use just a fraction of what their ERP software can offer. And the person who set it up, did it for whatever your business conditions were at that time. And maybe haven’t evolved. I mean, maybe you didn’t have a lot of people out in the field running all over the place. And so it wasn’t a big deal at that time, but I think businesses just need to remember that they should be checking and saying, “Where do we have manual processes? Where do we have gaps in communication?” And just saying, “How can we fill these?” Because chances are, there’s a solution. It may even already be in your software. It may be an add on solution, but you always keep evolving with your software because I know that people that make the software are always evolving for you and if you’re not paying attention, and you’re just assuming that you can’t do things, then you’re missing out on a lot of the value you could be getting out of your software.

 

Mike Merrill:

Yeah, that’s a great point. Last month it was very enjoyable. We were at a local AGC event. It was the 99th annual Utah Chapter AGC Conference. And they did have an in person. So it was wonderful. And the fact they’ve got another event, a couple of days here, a safety conference that we’re going to so pretty excited about getting out there and seeing people again a little bit. But anyway, I was sitting down at dinner with a group that was telling me they’re still on the same software, but they started doing concrete work. Then they got into general contracting. Then they started doing paving and now they focus on construction for mining. And so they’re like… and oh, by the way, and cell phone towers and maintenance. So it’s like their entire business has shifted multiple times. And now they’re looking for a software that’s more designed for the things that they’re doing. And they’ve tried to just navigate all of that with one ERP solution that probably is under serving them.

So it’s a great point you bring up that our business has changed and we should regularly look at those different tools that we’re using, make sure we keep them sharp. So do you have any scenarios that you’ve heard of companies that maybe for a specific reason they’re not on the cloud or they can’t be for one reason or another? Do you run into those scenarios?

 

Darcy Boerio:

Yeah, it’s usually when people don’t like to be efficient or save money or communicate well, that’s usually the type of person that’s best served steak. No, I always say there are a couple of examples where it’s arguable that maybe it’s not best to move to the cloud, but one being there’s people who just… there are businesses who are located in places where there’s just not good internet. And that’s going to be a challenge no matter what you do. So there’s tools out there that can combat that for the field tools, because a lot of tools, I believe yours will go ahead and work off a wireless connection or we’ll collect the data and then sync back up when you’re in range.

So for that, argument’s even going away a little bit, but if you’ve got a huge manufacturing plant in the middle of nowhere and you just don’t have good internet, then that’s another one I would say is people who have a lot of HIPAA requirements tend to balk against having any kinds of cloud-based solutions because there’s just a lot of the products out there don’t deal with that. I don’t know that a lot of contractors have that problem. So those would really be the only cases where I’ve encountered people having legitimate reasons not to go to the cloud.

 

Mike Merrill:

Yeah. No, that makes sense. Well, that’s good. So that means everybody else has an opportunity, I guess we’ll say to maybe look at it further, if you haven’t made the jump.

 

Darcy Boerio:

I don’t know, have you seen any other legitimate objections? I mean, I’m sure you’ve heard some, but-

 

Mike Merrill:

I hear from companies say they do government work that’s maybe certain reasons or maybe a division or department of their company that, like you said different very site-specific, or again where they physically are located. But I haven’t heard too much that I don’t think we could help solve with a cloud based system, but people still think that on occasion that maybe it’s not best for their business. And maybe it’s worth investigating that a little bit further with today’s technology. So in our pre-call you had mentioned something about cloud based systems being evergreen. What does that term mean for the listeners? And is that something you can shed some light on?

 

Darcy Boerio:

Well, so I don’t know, there’s a lot of moving parts in regulations and forms and things of that nature that change very regularly. I mean, the best example I can give is a great one, which is Avalara, which is a sales tax automation software that’s cloud based, because they have thousands and thousands of rural rate and boundary changes every year. And they just push those out to the cloud. And so when you’re a connected to Avalara, you get the latest and greatest automatically because it’s a cloud-based software. So all those types of things, any kind of compliance it’s much easier to keep on top of if you’re not responsible for manually entering it into your system, because you’re connected to the cloud and it’s going to automatically bring the latest compliance, whatever type of apparatus you’re going to need, whether it’s tax or payroll forms or things of that nature automatically that can save you a ton of time and also keep you out of being in non-compliance.

 

Mike Merrill:

Yeah. Right. No, that’s a great point. Actually, the OSHA or different safety regulations, especially with COVID, I mean, how many things are changing almost daily, weekly, monthly? I mean, there’s been so many changes that everybody’s been dealing with and it would be nice to know that some institution or organization is on top of those things and that’s a full-time job, and you can just continue building buildings and doing the things that you’re used to doing and let them focus on keeping those things up to date for you. So with somebody who’s maybe on a legacy system today, a server based client server, and they’re looking to move to the cloud, what does that journey look like? Or what project do you think that they’re in for to make that change?

 

Darcy Boerio:

So there’s a lot to that. I would say it’s scary. We have what we have. We don’t want to lose what we have in our functionality. I mean, my advice would be definitely number one, to talk to… contractors talk to each other. They’re in the AGC, or in the ABC, or in the CFMA talk to your peers and find out what they use, what shortcomings they’ve found and that kind of thing to try to just make sure you’re picking the right choice based on what they tell you, not based on what you read on the Rocher or from a software publisher, but what your peers are really saying. And then find a partner who specializes in construction and a software reseller typically, then you’ll know within a few minutes of talking to them, probably if they really understand construction or not, it’s very imperative that they understand construction.

There’s a lot of companies out there that understand ERP but don’t necessarily understand the intricacies of construction. So finding a partner… but that it doesn’t have to be horribly painful. You are going to probably have to make some decisions about how much data you want to convert. And people get a little scared about losing their historical data, but there are ways to mitigate that. You get choices to make about how much you want to bring over and how much you still need to be able to access. And there’s a lot of technology out there to bring over the important data that you need. So those are the things and just think longterm what you’re seeing with some of the legacy systems in general, in ERP, and I’m not calling out anyone particular, but the non-cloud basis that they’re not investing a lot more in the future of these legacy products.

And so if you want to keep being able to get the latest and greatest and even a product. So if I’m a software publisher who makes an amazing business intelligence tool, and it’s the coolest technology, and it’s really awesome and everybody wants it, but I’m going to look at your old legacy product and I’m going to go, ” I’m not going to write an integration to that because that’s dying off.” And so you’re potentially cheating yourself out of a lot of cool new technology and ahead of the game, because if people just aren’t developing all this great new technology is out there, there’s AI machine learning, all these things, nobody wants to go build that for a product that’s going away. So that’s another consideration. Just start the move. Every journey of a thousand miles begins with the first step. So talk to people, hear their stories and get with the 2020s.

 

Mike Merrill:

And I guess obviously you would say because of what you’re sharing that it’s well worth the move as soon as possible, not later, right?

 

Darcy Boerio:

I mean, that’s what I’ve seen with adoption. I mean, honestly, I can’t think I’ve ever heard of anyone say to me, “Oh, I wish we never moved to the cloud.”

 

Mike Merrill:

Yeah. We did that here. We moved our accounting and ERP from an on-premise. And I remember having to get backups to the accountants. And yeah, wait, hold on. Don’t do anything in this until we get the backup back from them. And I mean, it was just a mess and you were in a holding pattern and you just can’t do that these days. So we are so thankful that we… I mean, I got to be on my phone a thousand miles away looking at a report or a dashboard in the accounting system.

 

Darcy Boerio:

Out in the woods, running around, what’s my county doing?

 

Mike Merrill:

Fair warning, checking those reports, no questions. So before we wrap up, I always like to ask a few more personal questions, but even before that, I know, I mean, you’re a respected podcast hosts, I’ve enjoyed many of your episodes. You have awesome guests on, and I’ve really enjoyed listening to your Enterprise Software Podcasts. Are there any guests or topics or stories or just something that really stuck out to you that you could share with our listeners that you learned or heard, or you think that they might enjoy hearing?

 

Darcy Boerio:

Oh, thank you for the compliments. That’s very kind of you. That’s really hard because I have so many favorites and one of my favorites is always a guy named Ed Class, he’s with Sage.

 

Darcy Boerio:

I’d be curious to know how applicable his topics are to a construction company, because he is very much against hourly billing. Now, I don’t know that the construction industry could ever really get away from that, but he does it. His whole concept is value based pricing. So you’re basing your pricing on the value of the output, not on the actual cost of the inputs, essentially. So this stuff’s really good. I don’t know how much of it you could adopt as a contractor, but it’s very thought provoking.

 

Mike Merrill:

Yeah. Well, and interesting to you. I mean, the phrase, you can’t teach an old dog new tricks, so to speak those ideas are always fascinating for me to hear, because again, I am constructions in my bones. I think like a contractor still, sometimes I have to try and put on a technology hat and not look at things the way that I might have in order to be more effective in a technology space. But I think there’s a lot of contractors out there that want to be more innovative. They just don’t quite know how. And so when you’re busy and especially in a market that’s just booming and crazy right now, it’s pretty hard to find extra time and bandwidth to go and try something new.

 

Darcy Boerio:

I agree 100%. Another facet of what he talks about too, is he’s very passionate about subscription pricing for anything. And even just as a human being, as a consumer, you can learn a lot from him about how he’s basically saying everything’s going to be in subscription very soon. Look at how much we’ve switched everything to subscription. So he’s got some really interesting thoughts on that as well. So that helps maybe comfortable people feel more at ease with a subscription model that you typically have with cloud-based solutions is just understanding, look, you’ve subscribed to Netflix, you subscribe to whatever else you have. So you’ve always had certain subscriptions and now it’s more and more, so why not your software, lower your operating expenses, I mean, I’m sorry, your capital expenses and shifts a little bit towards your operating expenses.

 

Mike Merrill:

Yeah. Great advice. Well, so now that you’ve been on the podcast a little bit, and we’ve had a little bit of dialogue, I want to ask you a few personal questions, so nothing crazy, but so what’s one skill that you feel like you’ve mastered, or been able to really implement in your business life that you could share with others that maybe they could learn from?

 

Darcy Boerio:

I think one of the most valuable things that I’ve mastered is how-

 

Mike Merrill:

Don’t be bashful Darcy.

 

Darcy Boerio:

Oh, no, actually I would say one of the biggest things that’s had an impact on my business has been podcasting. It has been such a great opportunity for me to meet people that I would probably have otherwise never had access to and learn from them and get their insights. And it’s also really pushed me to keep up with the industry news that’s important to my business, even though sometimes I’m like, “I don’t want to read that article. I don’t have time to keep up with everything.” I’m like, “Oh, I got to do it because you might talk about it on the podcast. I need to talk to my listeners about this.” So that’s been really valuable and I encourage anyone to look into it to, to doing a podcast. It’s a lot of work, but it’s a lot of fun and can be very rewarding.

 

Mike Merrill:

Yeah. I love that. You had that always learning attitude and it shows you’re very well versed on a lot of topics. I’m sure this is a big part of why.

 

Darcy Boerio:

Thank you.

 

Mike Merrill:

You bet. So what about your superpowers? There’s something that’s just like when Darcy puts her cap on what is that something you’re excellent at?

 

Darcy Boerio:

Okay. Well, I guess if we put my cap on, it’s when I put a badge on at a conference. My stupid human trick, I prefer to call it than a superpower, because I feel like is networking. I love networking. I love going to conferences and meeting new people and introducing people that can partner together and help each other out. So it’s just something that I really enjoy and I humbly say, I think I’m pretty good at, so that would be my stupid human tricks, super power.

 

Mike Merrill:

I love it. I remember meeting you at a conference over 10 years ago and that wasn’t by accident. So I’m sure that there’s many others that were memorable for it. So I agree. So what’s one mistake that you’ve made in your business career that you wish you would’ve learned earlier? I guess, maybe not a mistake, but something that you feel like you were able to overcome and improve that an impact for you.

 

Darcy Boerio:

I think one thing I learned is to be more willing to say no to things that aren’t in my wheelhouse, which is not to say that you shouldn’t try new things and branch out, but what it tends to do in my experience and from what I’ve seen other people doing it as well is take you on a learning curve that distracts you from your core profitable facets of your business. So that’s a lesson I have to learn to myself. To me is like, “Oh, I could get involved in that. That sounds cool. Oh, but wait, I do have all this other stuff I have to do that I’ve been meaning to do that actually is part of my core business, stay there. It’s okay.” So I mean, it’s not to say don’t try new things, but just be aware. Is it worth going into, is it going to help be healthy for your business in the long run to take something on?

 

Mike Merrill:

No, that’s great. I love that. Super applicable to our audience of course. Do you take that job on that’s totally not what you do just because you can and it’s there, or do you stay in your lane and focus on what you’re already good at?

 

Darcy Boerio:

Yeah.

 

Mike Merrill:

Love it. All right. Well, so the last question. So if our listeners were to take away one thing from yours and my conversation today, what would you hope that would be for them?

 

Darcy Boerio:

I would say to just keep in mind that cloud and mobile are not going anywhere, they’re here to stay, so get into it.

 

Mike Merrill:

Buckle up.

 

Darcy Boerio:

Yeah.

 

Mike Merrill:

I like that. Well, thank you very much. It’s been a pleasure Darcy. I’ve very much enjoyed catching up with you a little bit and having this conversation. I think our listeners will really enjoy this one.

 

Darcy Boerio:

Oh, thank you. It’s so good to see you. Thanks for having me.

 

Mike Merrill:

Absolutely. We’ll do it again down the road.

 

Darcy Boerio:

Okay.

 

Mike Merrill:

Thanks. And thank you for joining us on the Mobile Workforce Podcast today, to go listeners sponsored by AboutTime Technologies and WorkMax. If you enjoyed Darcy and my conversation today, or were able to learn some helpful tips or tricks or insights, please give us a five-star rating and review. And we would love you to also subscribe to the podcast. We appreciate you sharing this with your friends and colleagues. After all our goal is to help you improve not only your business, but your life.

 

Technology for Construction Advances Careers

Technology for Construction Advances Careers

The way individuals land jobs and move up in construction companies has changed since social media entered the picture. Today, sites like LinkedIn serve as one’s digital brand and resume. And while leveraging technology isn’t formally required to get a job in construction, it is how HR and hiring managers search and vet prospective candidates, giving these job seekers a clear edge over their tech-wary competition. Fortunately, there are simple steps everyone can take to stand out in today’s competitive hiring landscape. 

In this episode, Karla Meador, the Managing Partner at NEAR Search Group, joins host Mike Merrill to discuss how technology has changed the way companies hire, as well as actionable advice for breaking into the construction industry and seasoned professionals looking to make a change. 

 

Key Takeaways:

  1. Build your LinkedIn profile before you start looking. LinkedIn gives individuals an opportunity to demonstrate their skills, strengths and job history. It’s also the go-to social platform for professional networking and recruiting. Avoid building up and being active on LinkedIn only when you’re searching, as you’ll miss out on connecting with others in your industry. It’s also a good idea to add references throughout your career journey, because hiring managers will check your profile to see how others view working with you.
  2. Engage with online recruiting websites. LinkedIn may be the biggest professional platform, but it’s not the only one. There are a number of free websites like indeed.com that will connect a potential candidate with job opportunities. By setting up your digital profile, you’ll allow recruiters to come to you. 
  3. Research the position you want – including important keywords. Studies show that resumes get looked at for under 10 seconds before being decided on. To stand out and earn the attention of hiring managers, do your research online. Understand what is most important for the hiring manager and make sure to use the keywords in your LinkedIn and job site profiles.

 

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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 Karla Meador. Karla is a managing partner at NEAR Search Group. And her experience working with construction companies hiring needs for over 20 years is going to give us some really awesome insights today in helping employees and individuals improve their opportunities in their career. So thank you, Karla, for joining us today. We’re excited to have you. 

 

Karla Meador:

Thanks, Mike. I appreciate the invite and looking forward to a spirited conversation. 

 

Mike Merrill:

I’m sure it will be. So before we jump into the dialogue too much, can you give our listeners just a little bit of your background and experience? 

 

Karla Meador:

Sure. I came up through the sales side of the house and have sold a variety of things, but often with two construction firms usually tied to IT. I love technology. I’m worked my way into management in a hiring role, and then doing like an executive and as an owner, as you know, my past. And then decided I had the chance to join a partner and create our own search firm. So now we help other owners and individuals looking for better jobs. We help those folks. And we’ve got over, as you said, over 20 years experience and a lot of expertise in IT and construction. 

 

Mike Merrill:

That’s awesome. Well, I’m looking forward to the conversation today. So I guess to get things started off, the first thing I’m wondering, moving up the corporate ladder, or at least improving someone’s role out a project or a job site or within a construction company is usually everybody’s goal. Everybody wants to move up and improve and grow. It used to be back in the day, you could work hard, bury your head and just do your thing. And eventually your boss would notice and you would get promoted and have new opportunities. That doesn’t seem to be the case today for some reason. Why do you think that is? And maybe what’s changed?

 

Karla Meador:

And that’s a good insight. I do think it has changed. One, we have more turnover, even at a management level or companies buying other companies, used to have a mom and pop forever for 30 years. Then you get bought out and you have different management. So number one, it’s hard to get noticed if your boss is changing every year and/or your company’s getting bought out or moved, etc. And then number two, we just live in a society that’s more showmanship, for maybe lack of better words, where social media things like LinkedIn, Facebook and those things are predominant. And we’re just a society now that catches bits and glimpses. And you want to make sure that you’re part of that new way and that you’re capturing bits and glimpses of your best and able to present that to whoever is your new team lead or owner. 

 

Mike Merrill:

Yeah. That’s interesting. So it sounds almost like people need to be more aware of marketing themselves aside from just working hard. Is that what you’re saying? 

 

Karla Meador:

Absolutely. We tell people to market themselves, like for a small business, actually in looking to garner a new client. Put the same amount of emphasis and detail into what you want and how to present yourself. It’s no longer, “Head down, work hard. They’ll see me and they’ll reward me.” It’s almost like the squeaky wheel gets the grease. 

 

Mike Merrill:

Okay. Well, that’s a valuable insight and I think you’re really onto something there. So what can an employee do within an organization to align themselves with that success and make themselves more refreshed in that light that you’re talking about? 

 

Karla Meador:

There’s a lot there and I’ll just hit the highlights and certainly dive in anywhere you want. Number one, I always, me personally, find a coach or a mentor in the group. Most folks feel like it’s a compliment or an honor to have somebody come up and say, “Hey, you mind teaching me a few things.” You have to be able to humble yourself to work with somebody and gets some tips from them. And if they’re in your tutelage, if you will, they can often help you get up the ladder. And that’s worked for me as well. I think social media, things like LinkedIn. Pay attention to your background, the picture. Make sure you get a lot of references, long before you’re looking. Get them along the way. As soon as you finish a great project and you have a really happy customer, get that reference then. Don’t ask 10 years later. 

Build your portfolio, if you will, your marketing material. We always caution folks too, to be careful what you put on Facebook, if you’re looking to get new customers, or if you’re looking to get a new job. And also in work, it’s just being a cultural fit and being able to show where you add value. And I really thought about this. There’s several ways, but it can be you can raise revenue. You can have ad-ons and produce more. You can help cost efficiencies and improvement. But you can also just be a great morale person. That time when the power went out and you ran and bought up a bunch of extra battery packs and gave it to the crew. What are you doing? And how do you showcase that? And let people know without looking like you’re always bragging, and there’s a fine line and it takes practice. 

Mike Merrill:

Yeah. Lots of great points in that bit of information you shared there. So as far as really impressing management or doing those little things, are there some little tips or secrets that you think somebody could utilize to do that, if they’re not already actively or proactively doing those things? 

 

Karla Meador:

Absolutely. I think one, mirror your audience. So if you’re in front of a manager who, let’s say, likes to golf, maybe make that a little bit of your interest. You’re going to have to look for something connection. It has been proven people tend to hire people that are like them. Notice, I didn’t say, “They like.” I said, “That are like them.” So if you’re a curmudgeon and a grumpy personality, they tend to hire that. So we always tell people to mirror their environment. If they’re a jokester, you and I are very outgoing and talkative, that’s a plus. Some places, telling jokes isn’t. So I think the biggest thing is that you fit into the culture. 

And then again, to be seen is to make sure that when you’re doing something that you find a way to highlight it. And that can be verbally. Maybe a peer gives you kudos. “This is what happened, and this is how I solved it.” That’s not cocky. “This happened, this broke. I stepped in and this is how I fixed it.” And you can always at the end, “Could I do anything better?” Managers are like, if I get something like that, I’m like, “Wow. This person really takes this company seriously, their job and wants to improve.” 

 

Mike Merrill:

Yeah. I love… Earlier you mentioned LinkedIn and some of these other tools, and I know on LinkedIn, you can recommend somebody or you can request a recommendation. So that might be a way from what you’re saying. 

 

Karla Meador:

Oh, absolutely. I think it’s an underutilized tool. Understand as companies get bigger, HR departments and a lot of companies now always look at your LinkedIn and always look to see if they can find your Facebook. That’s 80% of the companies now from the data that I read. So make sure you have a great background picture. You have a great picture of yourself, whatever that might mean for whatever job that you have, as well as that you have detail. And to me, other than the relevant pictures would be the references. As you do accomplishments, it can be your resume. “Mike closed this project under budget and early. Mike did this and this,” and you’re showing that trajectory of your career. And it’s extremely valuable. LinkedIn is used by so many people now, and there’s still people that aren’t on it in our industry. And even at the beginning level, the entry-level, I would encourage everyone to get on LinkedIn and really spruce it up.

 

Mike Merrill:

Yeah. Lots of great advice there. So what I’m also hearing is you’re saying strike while the iron’s hot. Document. Make sure that there’s a trail of the goodness that you’ve helped provide for your employer. 

 

Karla Meador:

Probably a lot of things I’m going to say are obvious today, but that’s probably the least obvious. And you’re absolutely right, because you will forget. You don’t remember some of the brilliance you did 10 years ago, but it may be applicable to a new job. That again, a lot of the questions they ask are what do you do in a tough circumstance? That’s a great question. I would ask people, what if this happened, what would you do? And what a great example of our systems crash and our buildings fell apart, and this individual stepped in, but you need to capture while they’re there and they’re happy. When you try to go back and collect this information, it’s stale. It’s dated. And often people forget. It’s not until I start interviewing and bringing these pieces out that I’ve see that they’ve done some incredible things. But most of us have never been instructed or taught how to showcase our strengths. 

 

Mike Merrill:

Yeah. That’s a very underutilized from my view as well. What do you think the role is for maybe employees to, I guess, showcase themselves even to other businesses within their industry? Is that a part of this, where you’re making sure you’re visible to other potential employers? 

 

Mike Merrill:

Of course, we want to be loyal, but that can come into play, right? 

Karla Meador:

Absolutely. Well, if things change, you might want to move. You might want a different career and you’ve hit the ceiling. Absolutely, LinkedIn is a great way. A lot of people don’t know there’s a little button that you can click that says, “Seeking employment,” but generally other people don’t see it, but recruiters do. You can give signals that way. I think other things you can do are join user groups. I know on LinkedIn, there’s a lot of great construction groups. Find what is in your niche particularly, and where you want to go. Always remember, it’s not where you’ve been and not necessarily what you’re doing now. 

If you want to grow, it’s what you want to grow into. So if you want to grow into a project manager, I would suggest, obviously, joining that forum and learning about that. I find the user groups, whether they’re in person or virtual, that matters. And again, finding that person that you make a connection with, that’s willing to help. Or you ask a network and I’m finally always networking is the biggest piece. And I’ve even been able to network off LinkedIn. It’s like Facebook, you develop a friendship, if you will. And just say, “Hey. Help me out.” And I help you out.

 

Mike Merrill:

Yeah. I love that. And I think to your same point, if you’re sharing valuable content on LinkedIn that’s additive and inspiring or helpful in some way, that also adds to your resume. Just like a personal social media post, that is something positive and encouraging and something that you’re proud of, and that you’d be okay with your grandmother to see, so to speak. Is that what you’re saying? 

 

Karla Meador:

Absolutely. Again, sometimes what you put can hurt you, so just make sure it is showcasing your professionalism. And I would always say your niche. What I’m seeing in all industries is things are becoming more, you’re less of a generalist. If you’re a bricklayer, you’re a bricklayer. And you want to show that you are the subject matter expert in what you do. And it could be shoveling, doing a ditch, but what is it that you do better than anyone else on your crew? And showcase that and get references for and join a forum.

 

Mike Merrill:

Yeah, that’s great. So what about somebody who maybe they are laying bricks or digging ditches, but they have an aspiration to move into the office eventually? What can somebody like that do to try and create an opportunity where they can upgrade their position in their view? 

 

Karla Meador:

Okay. Great question. Number one, let your manager know and let HR know if they have an HR department. I can say, as a manager and you might concur, sometimes we just forget. We just think they’re happy laying bricks 10 years down the road, that maybe their back’s starting to hurt and they would like a change. And understanding as well, people are allowed to change. Maybe they were happy three months ago, but now the onus is on that person to say, “Hey, Mike. I’ve been laying bricks for you for 10 years. You’re my manager. I would like to do estimates, take calls and do estimates and go out in the job site. Do estimates, come back and write them up. Can you teach me how? Let me shadow or give me a mentor.” So I think understanding what it is you want to do and being able to articulate that, and then reaching out to your manager and, like I said, HR makes the best sense for the quickest path, if you want to stay in the company that you’re in. 

 

Mike Merrill:

Oh, that’s great. So what about, let’s say somebody moves from the field to the office and maybe they lean technically in one regard or another. They like computers. They like IT. What can they do to stand out in a more technical role? 

 

Karla Meador:

And if they like computers and technology, I always encourage everyone, one, on your own time to show initiative. Learn, maybe it’s AutoCAD. Learn more about the computer, social media. There’s a lot of classes, often free or near free that you can take now. A lot of companies offer that as part of their HR employment package and people don’t even know it. There are free online classes for the betterment of you and your career. So always be learning and be soaking up that knowledge. And technology, it’s doubling itself every six months. So what are you doing to stay relevant and current? Walk in and say, “Hey Mike. Why aren’t we using Zoom meetings more during COVID?” Those types of things, so you’re on the cutting edge of that. 

And you do not have to be with the company long or a technical expert to find a couple of neat little apps or tools that can really make a difference. And people are all the time bringing something to me that I’ve never heard of. And it’s so cool and can help the business. And I think things like that and IT, that don’t take a team. It’s not a huge software conversion of hardware. It’s something simple that can be effective for the company. 

 

Mike Merrill:

Yeah. So you’re very experienced in this field. Obviously, you’ve been a recruiter and helped hire and find talent for decades now, even at the young age of 28, is that right? 

 

Karla Meador:

That’s correct. I’m 29 in July. 

 

Mike Merrill:

Good for you. Wow.

 

Karla Meador:

Yep.

 

Mike Merrill:

We’ll get your card out for sure. So-

 

Karla Meador:

Awesome.

 

Mike Merrill:

But having said that, I can imagine there are times when you look at a resume or you look at somebody’s portfolio and there are things that really stand out and you think, “Wow. This person is very hireable.” What are some of those things that you look for that really seemed to be a no-brainer for placing?

 

Karla Meador:

Great question. And obviously, it depends on the job. But if it’s at a certain level, a degree. That does still matter when we’re talking more inside the office. A degree in ideally your field of engineering, if you’re an architect, what have you. Tenure, stability, a rule now is about three years or more. It used to be five or 10, but if you stay with a job every three years or so, or more, that shows stability. Then I know another thing that we’re looking for is progression. So if I am at WorkMax, and I’ve been there five years and oftentimes we are doing the same role. But what have I been doing to show progression in that role? An example might be winning a contest, winning an award, added responsibility. It’s not always a promotion or a job, a title change, but people are looking for someone that shows that they’re learning and gaining a new territory, or they learned a new skill. Those things are really important. 

 

Mike Merrill:

Yeah. And in our current environment, obviously, some industries are really struggling. If you’re in the hospitality or other areas where business is just down, what do people in those positions or situations have to do to remain employed? Are there any tips or tricks or things that you would recommend? 

 

Karla Meador:

Well, in hospitality, you’re right. That is a downmarket, but our group’s part of SRA. And that is one of the top 10 search firms in the country. And hospitality’s killing it. And they’ve found ways to repurpose those folks and put them in different jobs. And again, not an expert in that and what all that they do, but there are companies that doing quite well. So you have to, in times like this, you have to look at what skills that you have and how that can be transferable into a booming business, whether that’s delivering, whether that’s doing banquets, whether just… I don’t know. There’s just all kinds of different things that people are looking for. 

 

Mike Merrill:

Yeah. So what… So how does that translate to construction or engineering or architecture? What are the differences there? 

 

Karla Meador:

I’m sorry, I missed that. How about to construction? So if it’s down how you want to… If you’re being laid off, et cetera, obviously you’re going to look for the company’s hiring. I would recommend two things immediately. LinkedIn and hooking up with a great recruiter or head hunting firm. The reason LinkedIn, it shows a lot of jobs. It’ll show… And a lot of people don’t know this, but it does show if you can click on jobs, you can search on location and what your field is. And also another good thing, I like Indeed. I’m not sponsored by any of these companies, but indeed.com is free. You can sign up and it will gather all the jobs within the parameters that you set and deliver it to you. So you don’t have to go on every website. 

But obviously, you’re going to look at competitors. Look at your network, but to technology-wise, Indeed and LinkedIn. And then I would hook up with a good recruiter, because as we know, some of the best jobs are never advertised or put on the website. They want it on the down low. Especially, we’ve got a search now where we are probably replacing someone. So even HR doesn’t have that role. So if you do all these things and you have a good resume, there’s still a lot of great jobs out there. 

 

Mike Merrill:

Yeah. We use Indeed here and it is a great tool. We make sure every position gets posted there. And actually I got feedback. I was doing an interview just the other day for a new position we’re hiring. And this candidate said that they were getting notices from Indeed as if it was us saying, “Hey. We’re potentially interested in you coming in for an interview.” And basically, they took them through… It was a bot basically-

 

Karla Meador:

A pre-interview.

 

Mike Merrill:

Yeah. Basically, the system was pre-interviewing them to see if they’re a qualified candidate. And what that did is that encouraged this person to apply. And so even though we didn’t intentionally do that, his skills matched some of the requirements we had. And so Indeed automated that. And actually, I just sent an offer. Letter out this morning. So it worked.

 

Karla Meador:

Well, that’s a great testament to you using that technology as a business owner to increase your hiring pool. And they all are doing which… A lot of these different sites are doing pre-interviews. They’re screening. They’re looking for key words. They’re searching on key words. They’re looking at the salary ranges. If you have a max of say 70K and somebody wants 90, it’s already filtering out things for you and ideally delivering in a tunnel, the cream of the crop that are the best fits for you. 

 

Mike Merrill:

Yeah, that’s great. I think some of the points you’ve nailed down, the three years, that’s an interesting thing. And I would agree with that. It makes sense to me. If they’re eight months or a year, a year and a half at eight different positions, I know we probably got a challenge with this individual knitting and sticking with something. So, and then as far as… So we talked about hospitality, construction also and the up and down market, different challenges that we have, when you’re interviewing or trying to find or fill positions for candidates in construction, can you just step through that process, what you’re looking at, what types of things that you’re doing? So that maybe somebody is looking to apply for a position might how to peek into what a recruiter like yourself might be looking for. 

 

Karla Meador:

Absolutely. So some of it we hit on, but it’s good to reiterate we’re here. One, obviously, a resume that showcases their talent. Shows that progression, that they haven’t job hopped. If they’ve had a couple of reasons that they had to move on, I like a little quick blip in the resume. Because we only get about 10 seconds, if you can believe, that’s the studies. 10 seconds for a hiring manager that’s going to look at your resume. So that summary must sing your praises and succinctly to say what job you’re going for as well as again, that progression and adding value to the current organizations that you’re at. I think that’s huge. Another thing is key words. I oddly, probably one of the most things that I do is tell people, “You do this, but it’s not in your resume throughout.” 

So making sure whatever the key words are, whatever programs you use, whatever equipment, tools, if you’re traveling and locations, put all of those things in, because a lot of us do keyword searches. So make sure those key words are in there. Then when I actually talk to the person, we’re looking for the obvious things, cultural fit, and again, that can be different at different organizations. We like to use tools like Zoom. We listen very closely to our clients and what culture they’re building and need. And some are more particular than others, but we find… We try to get to know them and warm up and get that right cultural fit as well. And obviously, LinkedIn, and any of your extracurricular activities, throw in there somewhere. But I think a LinkedIn presence is important. 

 

Mike Merrill:

Yeah. Lots of great pointers there. So I hope the listeners are taking notes. If they’re in a position or possibly going to be in a position where they want to change or move to a new organization, I think, like you mentioned, Karla, at least three years at a job shows stability. So I think in this day and age, for sure, people do tend to move around quite a bit more than historically. You don’t hear very many 30, 40 year ways anymore. 

 

Karla Meador:

No. And if they have, the name of the company’s changed three times. 

 

Mike Merrill:

That could be very true. So winding things up a little bit, just like to ask a few questions here at the end of you personally. So what’s the one skill, Karla, that you feel like you’ve mastered in your professional career that served you well?

 

Karla Meador:

I would say in what I do and almost anything, staying in touch with people. I’m a people person. I’ve stayed in touch with you. Stayed in touch with others. You reach out and you genuinely make a connection and you care, so staying in touch. It may be once a year, but I feel like if I was there with you right now, it would be as if no time had changed. Go out to lunch and have a good time. So I think that’s made that connection and staying in touch with people that I resonate with.

 

Mike Merrill:

Yeah. Relationships matter, don’t they? 

 

Karla Meador:

Absolutely. 

 

Mike Merrill:

So what about Karla’s superpower? Is there something else besides relationships that you feel like you really have in your wheelhouse and you just lick your chops every time you get an opportunity to do this certain thing?

 

Karla Meador:

I think just on a broader scope, I listen to what other people say, my energy level. And you can probably attest to that. People are like, “Wow. If you’ve met her or been in the room with her, you know it.” There is some cultivating to that. And just like you exercise or meditation, prayer, eating right, being healthy, positive aspects, but I’ve always had a lot of energy. And so when I see something, I get excited because I have energy. Even if something good comes your way, but you don’t have the energy to deal with it, it’s hard. So I think energy I hope.

 

Mike Merrill:

Love that. Yeah. I would completely agree. You are a firecracker. 

 

Karla Meador:

Yeah. It’s hard for me to just sit still in this chair for 30 minutes. 

 

Mike Merrill:

Well, you’re doing a great job, so thanks for putting your best foot forward on this. So another thing, what is the importance of data in your business? What does it do for you and why is data so important? 

 

Karla Meador:

I think for any business of any size, it is now the business analytics, using data to help make future better decisions. A couple of things I’ve mentioned during this interview, we know that the average hiring manager spends 10 seconds on a resume, decide they’re going on, and they rarely get to page two. We know that job hoppers in anything less than three years. An older person reading it might think it’s five or 10, but it’s three. So we use these things to understand and educate sometimes our customers what’s the market, what’s real and what’s to be expected? So data helps you predict what’s happening and what’s going to happen in the future, what we’re going to see more of. And of course, and all of that allows you to build your business and build your revenue.

 

Mike Merrill:

Oh, that’s great. Yeah. Lots of great stuff here. Great pointers again. I hope everyone’s taking notes. What about… Are there any mistakes you’ve made that you wish you could go back and change in business? Something that you have since learned from and think, “Oh, man. Why did I do that?” Is there anything you want to share with us? 

 

Karla Meador:

Sure. For the most part, like everybody, it happens for a reason and you have to be okay with that. But for me and for others often, I think it’s garnering and getting input from others and accepting that, being open, especially when you’re younger, it’s a little hard to humble yourself and ask, “Hey, Mike. What could I do better?” But it is getting input from the outside. And maybe that’s even outside your organization. If you’re having trouble with somebody in the office, maybe talk to a coach, a life coach, professional level. But it is seeking outside input and not thinking that you have to fix everything on your own. 

 

Mike Merrill:

Yeah. So I’m hearing being vulnerable is okay. 

 

Karla Meador:

Yes. And that is hard for some of us. And I think that was harder for me when I was younger. And as you get older, not so much. You actually have to be very secure to ask another person for help or how can I be better? What can I do to be better in this role? 

 

Mike Merrill:

Yeah. I love that. Love that. So just to wrap up, last question. So if there’s one thing that you want listeners to walk away from this conversation today with, what would that be? 

 

Karla Meador:

It’s going to be motivational. If you want it, it’s there. You can find it. In this market, in any market, that we are always seeing jobs for good people. So if you see that job that you want or that client that you want, you want a huge client, you keep at it and try different things. Use social media. Send them an interesting link. Tout yourself. Tout your company. But you’ve got to be your own small business, if you will, and showcase your talents. And if you do that and do it enough to the right people, it will happen. You’ve just got to continue to, again, market yourself well.

 

Mike Merrill:

I love that. I’ve heard others say, “We are all CEOs of ourself, the business.” 

 

Karla Meador:

Yep.

 

Mike Merrill:

And so it’s like, what you’re saying. 

 

Karla Meador:

Absolutely.

 

Mike Merrill:

Love it. Well, thank you, Karla, for the conversation today. Had so much fun, and hoping to connect again down the road as we continue our long-term friendship. And again, you’ve made an impression on me and our organization, and that’s why even after 10 or 12 years or whatever it’s been, we can pick up a conversation like this, nice and easy. 

 

Karla Meador:

Absolutely. And I do want to add this, that I appreciate it too. Same thing we could get in a room and it would be like time hasn’t stopped, hasn’t moved forward at all. I think that what you have is a great product, knowing IT and construction. I was always impressed with WorkMax and AboutTime and what y’all were doing and what you’re about. And I do think that’s going to be, we all know, technology is key. And I think you heard that a lot for all my points today with LinkedIn and social media, et cetera. It’s going to be technology.

 

Mike Merrill:

Well, thank you. That’s fantastic. So thanks, Karla. And thanks again for the listeners for joining us on the Mobile Workforce Podcast. Today sponsored by AboutTime Technologies and WorkMax. If you enjoyed the conversation Karla and I had today, and were able to gain some helpful tips and insights, please give us a rating and a review on iTunes or your favorite podcast platform. Those ratings and reviews help us a great deal to continue to bring these valuable conversations to our listeners, to help you improve your business and your life.

 

Live Field Data Protects Your Budget

Live Field Data Protects Your Budget 

Technology permeates every aspect of the construction job site, giving contractors better control of their projects, workforces, safety and budgets. And while creating financially efficient job sites can be a tall order, live field data is a reliable way to get on track. With so many ways live field data streamline business and increase profits, we decided to go straight to the experts to break things down.  

Jimmy Gabbard is the IT Manager at Potter Concrete and Austin Chiapuzio is a Systems Engineer at Flair Data Systems. They join the podcast to talk about an exciting data management project they’ve been working on –– collecting live field data from all of Potter Concrete’s job sites. In this episode, they share how construction teams can leverage data, hands-on reporting and how live field data can protect your construction budget.

Key Takeaways:

  1. Review your processes to identify inefficiencies. The first step to ensure a financially efficient job site is to pour over your processes. This begins by analyzing live field data, which gives you the ability to see all of your teams, projects and jobs –– the very things that impact your budget the most.
  2. Get prepared to implement new technology. When construction companies decide to invest in live field data, they can’t assume it’s like an on/off switch. The implementation of any new system or software requires putting a plan in place. This means understanding what information is needed on the job site and how you are going to incorporate your current standard operating procedure.
  3. Stay focused on your budget. Even with the top technology at your fingertips, you can’t make the most of it if you aren’t asking the right questions. What data do you need access to? What are the implications for my budget? Will this data allow me to make better decisions? When you stay focused on your budget, and what impacts it, you’ll better understand how live field data can improve your business.

 

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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’re sitting down with Jimmy Gabbard, who is the information technology manager at Potter Concrete, and Austin Chiapuzio, a solutions architect at Flair Data Systems. We’re going to discuss how Potter Concrete is enjoying the benefits of live field data and a tracking system that they have developed and customized, leveraging mobile and cloud technology on smart devices.

 

Mike Merrill:

Really looking forward to the conversation today with Jimmy and Austin, and also this fresh approach in content for our episodes. Glad to have you guys with us today.

 

Jimmy Gabbard:

Thank you.

 

Austin Chiapuzio:

Thank you, thank you.

 

Mike Merrill:

Absolutely. Before we jump into the conversation, can you gentlemen give the listeners a little bit of a quick introduction of yourselves and maybe your experience? Jimmy, if you want to go first, and then Austin, you can go after.

 

Jimmy Gabbard:

Sure. I was born and raised in Chicago. Moved to Dallas early ’90s, ’94. Got involved in IT mid-’90s. Started out as a PC technician, went to a systems admin, junior admin, worked as an admin and then I’m in the role now here at Potter Concrete as the IT manager.

 

Jimmy Gabbard:

I’ve been in the industry for over 20 years and seen a lot. I remember the days of server rows being full of modems, so that goes way back. That’s a little bio for me.

 

Mike Merrill:

Great. How about you, Austin?

 

Austin Chiapuzio:

I spent most of my life here in the Dallas, Texas, area. I went to college at UT Austin, hook ’em, horns. I started working at Flair Data Systems as an intern back in high school. My dad actually worked for the same company, so I helped him out during summer breaks, spring breaks, things like that, specifically doing voiceover IP. That’s when I got the glorious opportunity to meet Mr. Gabbard here. I helped install the phone system for him 14 years ago when you guys moved to the new building?

 

Jimmy Gabbard:

You were a young pup.

 

Austin Chiapuzio:

I was. I was 16 years old. Went to college, came back, did Cisco voiceover IP for several years, then Flair Data Systems opened an analytics division. Being the math nerd that I am, I immediately jumped on that opportunity and have been doing analytics ever since.

 

Mike Merrill:

Wow, so a very technical background. Good for you. It sounds like Jimmy’s aligned with the right kind of guy to accomplish the work that he’s doing.

 

Jimmy Gabbard:

Yeah, we’ll see.

 

Mike Merrill:

The jury’s still out. Okay, even after 14 years, huh?

 

Jimmy Gabbard:

Yeah, I know, right?

 

Mike Merrill:

Well, one of the most important aspects of construction and the industry today, really, is the technology that companies are leveraging, so can you tell us a little bit about this project that you guys have created and how you are utilizing web solutions and mobile technology to help your construction business?

 

Jimmy Gabbard:

A little bit of issue of how it came about, I’ve been working with Flair Data Systems about 15 years. We had a customer appreciation, actually Flair Data had a customer appreciation night and so my wife and I, we went. I seen Austin over there at his little booth, his little Click booth. He walks over.

 

Jimmy Gabbard:

I hadn’t seen him in a while so I’m like, “Hey, what are you doing?” He was talking about analytics and I’m like, “Okay.” Well, my wife does analytics for DHS. She does Power BI, so of course, they started talking nerd. I’m like, “Oh, my gosh.”

 

Jimmy Gabbard:

Then they started getting detailed as far as the data they’re pulling and what they’re able to see and how their users are utilizing it and making business decisions. I’m like, “Hmm. That’s interesting. I wonder if it can help us with our saving money and can it see this and can it see that.”

 

Jimmy Gabbard:

I started asking a few questions and I think at the end of the night, I’m like, “Hey, you need to come out, talk to my manager, which is the CEO, and let’s just see what it can and can’t do.” Here we are a year later and it’s worked out very well so far.

 

Mike Merrill:

Wow, so you’re about a year into this project or since you got this thing going?

 

Jimmy Gabbard:

Yes.

 

Mike Merrill:

Awesome. Austin, tell us a little bit about Click. What is that exactly and how does that relate to what Jimmy’s trying to do at Potter?

 

Austin Chiapuzio:

Click is a business analyst tool. It takes a bunch of different data from a bunch of different data sources, marries it together and then provides front end visualizations on that said data. As he mentioned, Power BI is another competitor to Click. They both do similar things, Power BI, Tableau, Click. All three of them are data analytics tools.

 

Austin Chiapuzio:

As far as what it does for Jimmy, he has multiple data sources for the time being. He uses About Time and Timberline, so it connects to the backend database of both About Time and Timberline, pulls the data in. Then I’m able to take these two different data sources, marry them together and use data from both these different data sources to provide insights and things like that into what they’re doing on a daily basis.

 

Mike Merrill:

Wow, so you’re essentially aggregating data from multiple systems and presenting it in a more meaningful way.

 

Austin Chiapuzio:

Correct. There’s a lot simpler way of saying it.

 

Jimmy Gabbard:

Yeah, there is.

 

Mike Merrill:

Well, so if we’re being honest, Jimmy, isn’t that normally a little bit outside of the scope of what most subcontractors are doing today?

 

Jimmy Gabbard:

Absolutely. Most subcontractors, you hear the word analytics, data analytics. My first thought was that’s a number. That’s going to cost some money, but at the same time, you’ve got to think about, “Okay, what can it do for you, as a subcontractor?” Some contractors, a lot of them are small. There’s some decent size ones, but any area that you can cut cost and know where you’re, if you will, winning, areas you’re losing, it’s a great insight, on a daily basis, to know how your business is doing.

 

Jimmy Gabbard:

Subcontractors, man, I can’t say it enough. You need a tool that you can dive deep into to see all of your numbers because if you don’t know, you don’t know whether you’re winning or losing on a daily basis. On a daily basis, you can make just better business decisions and you see the train before it falls off the track.

 

Mike Merrill:

Yeah, that’s powerful, very well stated. I don’t know if you put a calculator on those numbers of if you even know what kind of money you’re talking. Even in general terms, how much money do you think you’ve saved from implementing a system like this?

 

Jimmy Gabbard:

We’ve talked about that, my manager and I. It’s hard to put numbers on that right now, but I will tell you, being able to look at the Click dashboard and what Austin has done for us, it’s going to be difficult unless something catastrophic happens on a job site, to lose money.

 

Mike Merrill:

I like that. I think any business should like to be able to make a statement like that, especially if they mean it and it’s true.

 

Austin Chiapuzio:

Something I heard Noel say, I’m pretty sure it was last week, a lot of the data we’re showing on this visualization is something they used to get, but it was something that would take anywhere between six to a dozen accountants digging through their data to be able to provide the same type of information. Even then, it was just in Excel format. It was just numbers, which is meaningful to someone who understands those numbers, but it’s also hard to look at it and know right off the bat what’s going on, or as Jimmy always says, am I winning or losing? As far as the numbers savings, I guess you could say it’s however much those accountant salaries are.

 

Jimmy Gabbard:

Those number change daily, so they might work on those numbers for a week. Well, by then, you’ve already spent $10,000 in labor, so those numbers that you are supplying to those guys, it doesn’t matter.

 

Mike Merrill:

Old news.

 

Jimmy Gabbard:

Yeah, old news.

 

Mike Merrill:

Wow. Yeah, that’s a common thing that we hear in construction and, I think, just generally. People, they’re resistant to change and you hear if it ain’t broke, don’t fix it or we’ve always done it this way; that’s why we’re still doing it this way, we’re a business, we’re still making money. What would you say to people that are making claims like that but don’t understand what you’ve been able to figure out here?

 

Jimmy Gabbard:

How do you know you’re making money? Can you make more money? How can you make more money? By something like Click being used with About Time, all of our numbers go through About Time. About Time is so vital in this process and to be able to see all of our units and panels and slabs and soon to be rebar, you get a deep down dirty view of everything that you’re making money on and everything that you’re losing money on.

 

Jimmy Gabbard:

We have a crew that works on a Saturday. That’s a $6,000 day. Did you really have to work Saturday overtime? What did that do for us? Was that a game changer, working an extra day for $7,000, $6,000? It’s stuff like that. That’s great data to have and I can tell you what the guy did yesterday, how much you spent yesterday, who I spent it on. People don’t have that information now unless you go to accounting and you get it a week later.

 

Mike Merrill:

Essentially, for those that don’t know, About Time is a mobile technology. It works offline. It collects the time and the labor and the production. Why would you say that is becoming such a valuable tool, and not just the software itself, but the process? What makes it so different than what you were doing before?

 

Jimmy Gabbard:

We were doing time cards before. Time cards is labor intense. You might have a few extra employees that you really didn’t have. Anybody can manipulate the time, an extra two or three hours here, my cousin needs five hours here this week, and this and that, ghost employees. Those things happen. It is what it is.

 

Jimmy Gabbard:

When we implemented About Time, we took away the ability for superintendents to be able to change time. We have one person that does that. That one person gets an approval from the COO or VP to change that time and so pretty much, whatever they worked, they get paid for.

 

Jimmy Gabbard:

You clock in at 9:37, it’s not 9:45 or 9:39:15. There’s not 15-minute grace period. You get paid to the minute and that’s a big number when you have a company of 1,000 employees. It’s a big number of savings. We saved over a million dollars the first year with About Time in just payroll.

 

Mike Merrill:

Wow.

 

Jimmy Gabbard:

That’s incredible and even About Time will say this. In looking at About Time, our first thought was, “Wow, that’s a number. That’s a big number,” like with Click. Click’s not as big as About Time’s, but we couldn’t afford not to have About Time. Just the amount of money that we would save. If we’re going to pay a guy to work 40 hours, he worked 40 hours, not 42 hours, not 41 hours. About Time has brought that to the table and it’s just been a game changer, a game changer.

 

Mike Merrill:

I love that you addressed the issue up front that really at the source where the data is being collected, by who and holding them accountable. Then when it comes to great work on the back end, he’s taking that manual calculation, tabulation, spreadsheet entry out of the mix and giving it back to you in a way you want to see it.

 

Mike Merrill:

Austin, on your end of things, how have you felt the implementation of this new process that you guys have developed is going and what are some of the lessons that you’ve learned in helping field adoption and the company enjoy the benefits of the work you’ve put in?

 

Austin Chiapuzio:

The implementation has been super smooth. One of the problems I commonly run into is companies just want to go, go, go, go, go. They want everything yesterday. One of the things that I’ve just praised Potter and Jimmy and Noel for is validation. We’ve gone in there, we connected the database, brought all the data in, did the math on it, made sure that everything lined up, all the numbers looked right, made sure that everything was perfect from a data standpoint, and in that process, found some process flaws in how they were doing their time entry, how they were doing payroll, things like that.

 

Austin Chiapuzio:

Fixed those processes and then slowly moved forward. It has been invaluable, being able to take it step by step, being able to validate things at every step of the way. It’s going to make going forward that much simpler.

 

Austin Chiapuzio:

Getting the initial setup was super important and then now whenever we go add phase codes, when we add other data sources, we don’t have to worry about is this data right. We know this data is right. When I look at this number, I don’t have to say, “Why is that number wrong?” It’s not. That number’s right.

 

Jimmy Gabbard:

Yeah, we’ve done a lot of validation, a ton of validation to make sure everything is correct because when I rolled out About Time, it was a big roll out to a lot of people and what I didn’t want to have happen, a lot of times when companies roll out an application, they roll it out, get it all out there and it’s not fully complete, if you will, because a lot of times IT departments get a thumb on them and we need to get it out as fast as possible.

 

Jimmy Gabbard:

The problem with that if things don’t work correctly, you get a bunch of people shooting holes in it. Then you get a bunch of people saying, “Oh, that’s junk software. It’s not going to work.” With About Time, we rolled About Time out to just a few superintendents. They tested it for a few months. Then we got more superintendents involved. That’s what we did with Click.

 

Jimmy Gabbard:

We validated, validated, validated to make sure everything was correct. Now going forward, when we start adding equipment in through About Time, add in more data sources through About Time and whatnot, it’s going to make things go that much more cleaner, smoother. I’m so sorry for Austin because I beat that kid up with, “Are you sure” and “This isn’t right.” He’s like, “Well, you’re doing this wrong.” I’m like, “No, I’m not. Oh, wait. Yeah, I am.” There’s a lot of that, which is great that we have that relationship that we can badger back and forth, but the validation has been priceless, just priceless.

 

Jimmy Gabbard:

He also built an app. I think it’s in Click, where it validates weekly time, hours and dollar amount with Timberline and About Time. We can see if somebody added time into Timberline and not into About Time. Those numbers will be off, so that’s a great validation for our owner, for VPs and CEO, right? Pretty much it goes back to, “Okay, if you’re going to pay for 40, I want to make sure you can pay for 40.” All the time goes through About Time and through Timberline, so when that validation is off, we know right away. You can’t get away with anything.

 

Austin Chiapuzio:

I can see if people put time into the wrong phase code, so if a superintendent clicks the wrong button and now they’re putting their time into panels instead of the superintendent phase code, I can immediately say, “Hey, that time is not supposed to be there. Go back, fix it,” and everything is married up. As far as from a backend data perspective, it’s all clean and accurate.

 

Mike Merrill:

Yeah, that’s fantastic. That is powerful. Of course, as Jimmy’s field guys are collecting the data out the source, Sage 300 RE or the Timberline product is the Bible, if you will, the master database and because your About Time database and your Timberline are Sage database are integrated, you’ve got them sharing the same dataset. I love that middle piece that you’ve got other validation going on, making sure visually that people can keep things balanced out. You’ve found a lot of holes, it sounds like, and plugged them.

 

Jimmy Gabbard:

Trying to. He’s done a great job.

 

Mike Merrill:

With that, going back a little bit, Jimmy, are there any things on the roll out or implementation of this you wish you would have done a little differently and maybe also, what did you do that worked really, really well that others might be able to learn from?

 

Jimmy Gabbard:

Austin and I talk about this all the time, what we wish we would have done better is knowing what question to ask. That’s big, why this and why that, so that’s a big one. What was the other question? I’m sorry?

 

Mike Merrill:

Oh, that’s okay, and then what did you think went really well or exceeded your expectations, was awesome, was a good approach?

 

Jimmy Gabbard:

Exceeded my expectations? We have a magnifying glass into every part of our data. I’m blown away at what Click can do for us. I’m still just amazed every time he says, “Oh, it can do this; it can do that.” I look at him like, “You’ve got to be kidding me.” That’s amazing in itself right there. Hopefully, I answered your question.

 

Mike Merrill:

Yeah, that’s great. Between the two of you, it sounds like you’ve both been through similar projects with other systems. Jimmy, obviously, you learned how not to roll it out before you even started this, right? That probably helped. Would you say that’s accurate?

 

Jimmy Gabbard:

That’s highly accurate. At other companies, we’ve rolled things out and you’re having to just chase your tail trying to fix things, and you knew what was going to happen when you rolled it out so fast.

 

Mike Merrill:

Speaking of that type of a rollout, if you look back and think of where this decision came from, who made it? Did you make it? Was it your executives? Did they put you on a mission to go find something? How did the idea even come about to look for a solution like this?

 

Jimmy Gabbard:

There was no mission. Nobody sent me on a task to go find it. I have a money-saving mindset. It’s just what it is. I try and find ways to save money, and it just happened. I happened to be at the right event and he’s in the right kind of software and my mind started going. He knows how my mind is. My manager knows how my mind is, and I’m like, “Wow, this has got to be able to help us.” It just happened.

 

Austin Chiapuzio:

Click does a really good job. I wanted to bring a point back on what Jimmy was mentioning on knowing what question to ask. Click, and data analytics in general, does a great job at answering questions and giving you more precise questions to ask. When we first started this, if I could go back and change anything, the one thing I’d go back and change is finding out specifically what question they wanted answered.

 

Austin Chiapuzio:

When we first started it, we got in there. We looked at the data, found what data they had access to, gave some stuff on what I could show, but didn’t really have any guidance on what I was showing. I would show them this and they would say, “Oh, that’s cool, but can it do this?” Then we’d show them this and it was, “Oh, that’s cool, but I really want to see it this way.” Once they asked the question, “Am I winning or losing,” and that was the big question they asked, once they asked that, it was off to the races.

 

Austin Chiapuzio:

That made it super easy to be able to see. When you first look at this dashboard, you can see a speedometer that has green, yellow, red. If your speedometer’s in the green, you’re doing good. If it’s in the yellow, you might want to look into stuff and if it’s in the red, as Jimmy says, “Some tang wrong.”

 

Austin Chiapuzio:

It does a really good job at answering questions and once you ask that question, am I winning or losing, if you’re losing, it does an even better job at giving you reasons why. The next thing that we would do it try to answer the questions, why am I losing, where am I losing, things like that. Then you can drill down and look and be able to see, like Jimmy was saying, “Did I spend $7,000 in overtime that I didn’t need to spend? Did someone put their time in the wrong phase code? Are they moving money around? Was there eight people on a job site and you only finished two panels? Why did you only finish two panels when you had this many people?”

 

Austin Chiapuzio:

It gives you more direct and specific questions to ask. It just does a really good job of doing that. As my VP says, analytics is a feedback loop. We just analytics to find opportunities for process changes to boost performance. Then you use the analytics to see those performance boosts and then find other areas where you can become more efficient. It’s just a good way of giving an overview or insight into that information.

 

Jimmy Gabbard:

That’s a good point, to be more efficient. Last week we had a meeting with five field superintendents and we were showing them Click and what it’s doing for us and why it’s so important to enter the units in through About Time. We created a form in About Time to be able to enter units and we sync it daily and it populates Click.

 

Jimmy Gabbard:

Towards the end of the meeting, I’m like, “Look, this is a fabulous tool. It’s going to make you a better superintendent. You’re going to get up in the morning and you’re going to look at your dashboard because we’re going to present it to them on their iPads, wherever they’re at, and they’ll be able to see their speedometer. Are they red, yellow, green?

 

Jimmy Gabbard:

The red areas, they’re calling somebody. Our project managers, same thing. Why is this red? Pick your phone up, you’re calling the superintendent, “Hey, we’re red on panels. Why is that?” If we keep going this way, we’re going to lose $75,000, so what a great tool to know whether you’re going to lose money and you’re a week into the job, starting the job, and it’s already trending for you. It doesn’t get any better than that, so the About Time and the Click, the way they flow together and work, they were meant for each other.

 

Mike Merrill:

Wow, a match made in heaven, huh?

 

Jimmy Gabbard:

A match made in heaven.

 

Austin Chiapuzio:

Something cool, also, that has come out of this is, like Jimmy said, we’re moving into equipment next. There’s a ton that can be done in About Time. Jimmy’s forgotten more about About Time than I know, but just in looking in the backend database, I can see all these tables and I can see all these different fields that they’re currently not taking advantage of.

 

Austin Chiapuzio:

It’s other things that they can use, things like the form. We built that form and that was something that existed that Jimmy was unaware of from the beginning. In doing this, he’s also doing more in About Time and utilizing their existing software more to give more data to get more insights. That’s, again, where that feedback loop is. It’s what can I do to get better visibility into my day to day business without actually having to go out to the job site and physically look at what’s going on.

 

Jimmy Gabbard:

Austin, talk about the geofencing that I tasked you to do. We have a girl that does face confirmation and geofencing. It tracks guys if they’re clocking outside the geofence of inside or whatever. There’s some great reports in About Time that she’s been utilizing for, I’d say, six or eight months. I’m like, “Hey, can you pull that data from About Time?” Of course, he goes through his big long deal of, “I can do this. Let me pull this.” I’m like, “Just do it.” He’s working on a dashboard for her that’s going to pull all that information.

 

Austin Chiapuzio:

Right now, back to the validation app that Jimmy was talking about, right now all it does is it looks at Timberline and About Time and says whether or not the hours match, which is huge, as Jimmy says, but along with that, everything needs checks and balances, so things like that geofencing. About Time does a great job at being able to see that information. It’s super valuable information, but it takes a second to go through all those different entries, being able to find which ones are within a certain range, which ones are outside a certain range.

 

Austin Chiapuzio:

I have the ability to see their home address as well as the address of the job site. Then I can take the address that they clocked in at or the coordinates. Then I can say, “Okay, I have this coordinate that they clocked in at. I have the coordinate of the job site and I have the coordinate of their home address. Now give me the difference between all of this.

 

Austin Chiapuzio:

I can tell you, okay, they clocked in five miles away from the job site, but they clocked in half a mile from their house, so just right off the bat, I can tell you who’s not clocking in from their job site and if they aren’t, how close are the clocking in to their home address that they have in Timberline. Again, that address is not in About Time. It’s data that’s in Timberline and utilize that with what About Time is doing to be able to give more insight into that data and make it quicker to see.

 

Austin Chiapuzio:

All of the people are at the top so instead of having to go through everybody, she just clicks, “Okay, I want to see people that are clocking in greater than X distance away, greater than five miles away.” Now she has a condensed list of people she can look at. It’s a better use of her time.

 

Jimmy Gabbard:

A result of that is, “Okay, why are you doing that? I don’t want to pay you an extra 30 minutes there” and oh, by the way, when they get home, then they clock out. We’re able to see that data through About Time. That’s an hour a day for one employee. How many people are doing that? That’s a big number at the end of the year. That’s information that About Time gives us and Click just compiles it and gives us what we need to see.

 

Austin Chiapuzio:

Yeah, About Time is super awesome and a lot of the stuff that I’ve seen from About Time, it collects great data. You can never have enough data but the problem with having as much data as we’re given is we don’t necessarily have a tool to see it easily. That’s where Click comes in.

 

Austin Chiapuzio:

A lot of people will see this use case and they’ll say, “Okay, well I don’t necessarily have the same type of situation that Potter or Jimmy has. It’s not going to be useful for me.” That’s not the case. I use Click at home to do my own budget. This is a specific use case, but anywhere there’s data, something like Click is really good at showing that data in a different, more efficient way and making it interactive.

 

Jimmy Gabbard:

You’ve got to have somebody like Austin to know how to present it.

 

Mike Merrill:

Yeah, will, that’s great. We both know, Jimmy, in construction and obviously, Austin, through your affiliations, information is king on everything. That’s what really matters in construction, is managing data results.

 

Mike Merrill:

One of the things, going back a little bit, Jimmy, that you said that I thought was really powerful and impactful, was how you empowered a superintendent to utilize the mobile app by, “This is going to make you a better super.” That’s what a lot of companies seem to be missing out on. They are focusing so much on their money savings or budget savings or profitability for the business and not necessarily highlighting how it can really make the individual employee’s life easier by leveraging those tools. Do you agree?

 

Jimmy Gabbard:

Yeah, I agree on that and to give an example, at that same meeting last week, one of our better superintendents, at the end of the meeting, said, “I’ve been waiting for something like this for so long.” It’s going to make him a better superintendent, more efficient, help him manage his job a lot easier, and at the end of the day, everybody is going to make more money. That’s great for the company, great for the superintendent, great for me, great for Austin, great for About Time, everybody. It’s a good deal, man. It’s a great tool.

 

Mike Merrill:

That’s powerful. One other last thing I wanted to ask: How important do you think was buy-in from the top down, Jimmy, in your company’s case?

 

Jimmy Gabbard:

The importance of the buy-in? We’re subcontractors, just a bunch of good ol’ boys that have done things a certain way for a long time, but I will tell you the men that I work with, they’re very open as far as… Like my manager, Noel Nalls, he’s like, “If the numbers make sense, we’ve got to do it.” That’s a great mindset.

 

Jimmy Gabbard:

A lot of people are just like, “I’m out” at a certain price, 100 K, $1,000. “We can’t do that.” If you just break even, that’s a no-brainer, right? If the numbers make sense, let’s do it. That’s what we did in the beginning. That’s why Austin came out and presented, “Here’s what it can do; here’s what it can potentially do for us in the future.” Once that happened, “Wheels up; let’s get it going.” The buy-in was… Austin, would you agree, from the beginning, it was pretty well 100%?

 

Austin Chiapuzio:

Oh, yeah. The buy-in was 100%. The way we always say it is we have to have a champion. In any project, especially something like this, you’ve got to have a champion. You’ve got to have someone that’s invested. You’ve got to have somebody that understands the data and understands the benefits of seeing the data a certain way. Noel, Jimmy, everybody has been just super invested from the get-go and I could easily say they’re both huge champions for it. Yeah, it’s super important to have somebody there that’s willing and wants to see that data and wants to see it succeed.

 

Jimmy Gabbard:

Yeah, and you’ve got to know what technology can do for you. A lot of people are just against technology, especially in the construction industry, but you know as well as I do, in any job site nowadays, a job site is full of technology, wireless, mobile. We have big jobs where we have job trailers. We have wireless. We have servers out there. It’s just incredible.

 

Jimmy Gabbard:

It’s a remote office. Guys are on the 13th floor and they have their iPads looking at plans. Changes happen and they get it like that. You have to. You have to have technology to be able to grow with the big boys.

 

Mike Merrill:

Um-hmm (affirmative.) It’s a better way to build better buildings, for sure.

 

Jimmy Gabbard:

I like that.

 

Austin Chiapuzio:

I like that. I’ve never heard that before.

 

Jimmy Gabbard:

I like that.

 

Mike Merrill:

I just made it up.

 

Jimmy Gabbard:

Wow. You should go into advertising.

 

Mike Merrill:

That’s it. Lots of great information and insights on this discussion, no question. Austin, if there’s a listener out there that’s in the construction business and they’re looking to get access to aggregated data like you’re providing for Jimmy, how’s the best way to get them in touch with you and see if you can help them as well?

 

Austin Chiapuzio:

They can either reach out to me via email. It’s going to be A Chiapuzio, A-C-H-I-A-P-U-Z-I-O @flairdata.com or you can just go to flairdata.com/analytics and I believe they have a contact us somewhere there. Those are probably the two best ways.

 

Mike Merrill:

Perfect. That’s awesome. Well, just in wrapping up this awesome conversation, Jimmy, if you could look back, is there one thing in your career that, really, you felt is a strength of yours that served you well, a hack or a superpower of whatever you want to call it?

 

Jimmy Gabbard:

You’ve got to be open-minded to everything, to all technologies. If you’re just straitlaced and you’ve got tunnel vision, you’re not going to be successful. That’s all there is to it. You’ve got to be open-minded to every piece of software, every idea that people bring to you and just see what it can do.

 

Mike Merrill:

I love that and in listening to you describe how your business and your company and your coworkers seem to approach things, it sounds like you’re a learning organization at Potter Concrete, which those words don’t usually go together when you’re talking about a construction company.

 

Jimmy Gabbard:

Oh, our guys, they embrace it. It’s like, “Um, let’s just see what happens,” but once you’ve proved the concept, they’re onboard, man. Everybody’s ready to go, man. We have to tap the brakes a little bit because they want it so fast, right?

 

Austin Chiapuzio:

There’s been several times they sit there and start talking and get off and get excited. I love those conversations and then Noel’s like, “All right but wait. Wait, wait wait. Not yet, not yet, not yet.”

 

Jimmy Gabbard:

Yeah.

 

Austin Chiapuzio:

He’s great.

 

Jimmy Gabbard:

People see the benefit of it and they just want it now because they know what it’s going to do, not just for them, for the company, to manage their people. We have superintendents that have a very large group on a job and it makes their job easier, it’s going to. We’re just scratching the surface of what we want to do with it. It’s exciting.

 

Mike Merrill:

Yeah, if you’re saving over a million dollars in payroll in the first year and that’s just the surface, boy, you’re in a good place.

 

Jimmy Gabbard:

Yeah.

 

Mike Merrill:

What about you, Austin? What’s your hack or your superpower, if there is one?

 

Austin Chiapuzio:

Numbers, I guess, would be mine. In college, I took math classes for fun. I like numbers. I like logic. That would be probably my biggest superpower and my biggest downfall.

 

Mike Merrill:

Okay.

 

Jimmy Gabbard:

Let me throw this out there, Mike. Here’s one thing. A few weeks ago, my manager, Noel, after a meeting with Austin, we were looking at, “Okay, we need to add burden into the numbers and that way we have a true number and this and that.” Austin was talking about burden in some accounting lingo. Well, I know the numbskull, so I know what he talks about and this and that.

 

Jimmy Gabbard:

Noel calls me afterwards, on the way home. He was like, “I’ve got a question for you.” I go, “Yeah?” He goes, “Austin’s a great guy, but how does he know all that accounting lingo?” I said, “Oh, we went to UT Austin. He’s a CPA.” He was like, “Ah. That makes sense.”

 

Jimmy Gabbard:

Not only does he have the analytics, but he has the accounting side, which you’re talking about is so valuable. Oh, my gosh. He can get in Timberline and do what he needs to do. It’s phenomenal. You kill two birds with one stone, but I wish he’d trim that beard a little bit, though.

 

Austin Chiapuzio:

Yeah, my wife says the same thing.

 

Jimmy Gabbard:

I’m kidding.

 

Mike Merrill:

Well, what I’m hearing, Jimmy, is you’re saying it’s not just the what, but the why and how that Austin really brings to the table, which is what a winning one-two combination.

 

Jimmy Gabbard:

Yeah, he’s done a great job for us and is a good kid. I love him.

 

Mike Merrill:

That’s awesome. Well, again, that’s important, the personal relationship side of your vendors, having that relationship. I know, Jimmy, you and I don’t know each other real well, but we hit it off real well and I knew immediately, man, we’ve got to have you on the podcast. This has been a fun conversation.

 

Jimmy Gabbard:

It has been good. It has been good and the product has been fabulous.

 

Mike Merrill:

Well, we appreciate that and I guess just to wrap up, Jimmy, if you made a mistake in business or just in your career, what’s one thing you wish you could go back now and redo? Is there anything that stands out in mind to help others avoid that pitfall?

 

Jimmy Gabbard:

I’m real big on doing my due diligence as far as research. Sometimes there are times when you get rushed and sometimes you miss a few things here and there. Like we’ve done with this project, tap the brakes, slow down, do due diligence and research, validate stuff.

 

Jimmy Gabbard:

Validation has been huge to me, just a validation mindset, not just in Click but everything in general. That’s been key to me. The validation through Click has helped out with payroll in About Time and a few other areas in the IT department, so I’ve taken validation pretty seriously over the past year, if that makes sense.

 

Mike Merrill:

That’s great. Yeah, it does. I’ve very much enjoyed this conversation with both of you, Jimmy and Austin. I appreciate you joining us today.

 

Jimmy Gabbard:

Thank you.

 

Austin Chiapuzio:

Thank you very much.

 

Mike Merrill:

I look forward to many years of working together in the future.

 

Jimmy Gabbard:

Yes.

 

Austin Chiapuzio:

Absolutely.

 

Mike Merrill:

All right, well, thank you for joining us today on the Mobile Workforce Podcast, sponsored by About Time Technologies and WorkMax. If you liked the conversation that Jimmy and Austin and I had today or learned anything new or helpful in your business, please give us a follow at Instagram, at WorkMax Underscore and subscribe to the show on iTunes or your preferred podcast platform so you don’t miss another insightful episode.

 

Mike Merrill:

Also, if you enjoyed the episode, please leave us a five star rating and review. That helps us bring these valuable conversations with other folks to you and your organizations to help you improve in business and in life.

Top Construction Accounting Mistakes to Avoid

Top Construction Accounting Mistakes to Avoid

Accounting is not one-size-fits-all. And construction accounting is especially unique in everything from the way time is collected and allocated to the way job costing and work in progress gets tracked. Because of this, John Meibers, VP of Deltek + ComputerEase, is passionate about educating contractors on what they need to know in order to keep their books accurate, up-to-date and meeting industry standards. 

This week, John joins the Mobile Workforce Podcast to share why it is important to work with a CPA that knows the challenges contractors face. John shares the top accounting mistakes inside the Deltek Ultimate Construction Accounting Guide to uncover common and costly pitfalls made by contractors and their CPAs – and how to avoid them. 

 

Key Takeaways:

  1. Contractors need to review daily reports from their accounting team. To be in the construction business means having to manage tight margins. That’s why it’s imperative for contractors to work closely with their accounting department beyond bi-monthly payroll updates. Work in progress (WIP) reporting and good job cost reports on a regular basis – even daily – ensures contractors are always working within the lines of their budgets. 
  2. Margin and markup are NOT the same thing. Contractors tend to use margin and markup interchangeably, but this is incorrect. Markups refer to the budget created for a project to allocate for profit while margins refer to the profits that are left after a project is completed. Therefore, a 20 percent margin on the job does not mean to markup an estimate by 20 percent. Instead, to get a 20 percent margin on the job, the markup would need to be at least 25 percent. 
  3. Treat the equipment you own like the equipment you rent.  A big problem that accountants see in the construction industry is not accurately allocating for the use of equipment. Tracking usage helps accountants evaluate the value of the equipment owned. This allows contractors to make educated decisions managing their equipment. They can easily see what to keep, what to retire, and what would be better to sell and rent when needed, in addition to getting an accurate job cost report on their projects.

 

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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 John Meibers, the Vice President at Deltek + ComputerEase. Thank you for joining us today, John. We’re excited to have you in on the podcast.

 

John Meibers:

Thanks, Mike. Happy to be here.

 

Mike Merrill:

Awesome. So before we get too far into the conversation, love to hear a little bit about your background and maybe an overview of your history for the listeners.

 

John Meibers:

Yeah, sure, no problem. I’ve been working in the construction industry for a little over 32 years now. I don’t know if that’s good or bad.

 

Mike Merrill:

So been a minute, right? Been a minute.

 

John Meibers:

It’s been a long time. So I started my career in construction, I worked for a large mechanical contractor for about 10 years, helped to run that business, got associated with ComputerEase initially as a customer there, went out and purchased a ComputerEase solution to run our business, our ERP system. Of course, back then, we had a lot of manual systems in addition to that, paper time sheets. We’re going to talk a little bit about time in a little bit. I know it’s certainly a subject that you’re familiar with, Mike.

 

Mike Merrill:

Yep.

 

John Meibers:

But, back in the day, paper time sheets. We though it was really cool when we could have time sheets faxed in from the field. We had landlines out in the trailers, installed in the trailers, and fax machines in the job site trailers, and they would fax the time in or call the time in where we didn’t have fax machines. You tell stories to people today like that, and they kind of look at you like you’re crazy, “Well, what do you mean, fax machine? What is that?” But those were the days.

 

John Meibers:

So I did that for about 10 years, developed a good relationship with ComputerEase. An opportunity came to go and run the ComputerEase business for the ownership at that time, the ownership group, and took that opportunity and then did that for a little over 20 years, so helping contractors implement the ComputerEase solution. I had used it for 10 years. Now, I’m helping others implement it and running the business selling and implementing our solutions. Then, about a year and a half ago, we became part of Deltek. We were acquired by Deltek, so I came over and brought most of the team with me. It’s been a great experience, and I know, I think, Mike, we go back probably … We first met, I don’t know, a number of years ago, to say the least, so we’ve been certainly working together off and on for a good number of years now.

 

Mike Merrill:

Yeah, and you’ve had quite a whirlwind story, all the way from the field to actually the accounting company and now getting acquired. So I’m sure your journey’s been long and interesting.

 

John Meibers:

Yes, seen a lot of things over those years and see a lot of things change as far as how contractors do business. I know that’s a lot of what we’re going to talk about today. That’s why I’m real excited to participate in today’s conversation.

 

Mike Merrill:

Awesome. Well, I noticed Deltek just recently released the Ultimate Construction Accounting Guide, and there’s a lot of great information in there, a lot of points and tips, and, again, there’s about, I think, nine items that it brings out and discusses in depth. We’ll talk about some of those today, but, overall, with that guide, if there was one takeaway, what would that be, and what would you home someone would gain from that after going through it?

 

John Meibers:

Yeah, so I think the one key takeaway for me, and I make this point when I’m addressing contractors all the time, is you have to work with people and products that understand your industry. 

 

Mike Merrill:

Yeah, I love that. I always loved the statistical side of things or graphs or charts or numbers, and I know, like I mentioned before, there’s a top nine items that you guys talk about the breakdown of accounting mistakes in construction companies. Would you mind if we go through and talk about some of those real quick?

 

John Meibers:

Yeah, no, that’d be great, Mike.

 

Mike Merrill:

Great. So one of the first ones is talking about not tracking committed costs on a daily basis. What can you tell us about that?

 

John Meibers:

Yeah, so committed cost, I see this problem with contractors a lot of times. We’re writing purchase orders, subcontract agreements. They may be formal or informal. It could be a verbal agreement but nonetheless an agreement. But we’re not tracking that anywhere. So when I go out and I have a job and I have a budget, and I go out and commit to spend a percentage of my budget, I need to have that noted somewhere. I need to have that tracked. Otherwise, as the actual cost comes in, I think, “Okay, if I got a $100,000 budget, let’s say, as an example, and I’ve already committed to spend $80,000 of that, I need to know that.” I only have $20,000 left to spend. I haven’t been billed yet for the $80,000, but I may have a $50,000 subcontract agreement and $30,000 worth of purchase orders. I need to know that $80,000 is already spent and I only have $20,000 left.

 

John Meibers:

There’s nothing worse than either thinking you have more left to spend than you do, spending it only to find out that you didn’t have it, and here comes that bill for something you already committed and now you’re over budget, or getting to the end of the job and thinking, “Hey, I only spent 90 of the $100,000. Hey, we did really well in this job,” only to find out here comes that last invoice that you already committed to in the form of a purchase order or subcontract agreement, but you didn’t have it tracked anywhere. I think that’s a big mistake, and I see that all the time with contractors, typically because they don’t have the right tool to do it. I tell people, even if it’s just manually, have it tracked on a spreadsheet at a minimum, but know that you’ve committed to spend that.

 

Mike Merrill:

Yeah. That real-time feedback loop is critical in keeping up with those costs.

 

John Meibers:

And, really, kind of on that committed line, I know we’ll talk about it in one of the other points as well, but it used to be committed cost, people thought of only as material and subcontract costs. But now, really, committed cost is pending payroll or committed payroll. Time that was worked today that won’t be paid until next week, that comes in under that committed cost umbrella as well.

 

Mike Merrill:

Yeah, agree. That’s a great point, and, again, that’s the largest variable expense in any construction company, is the labor, so that would be-

 

John Meibers:

Absolutely.

 

Mike Merrill:

… the first one to rein in, it sounds like. Great. What about one of the other points, confusing margin with markup?

 

John Meibers:

Yeah, that’s probably one … Because a lot of times, contractors use that interchangeably, and it’s not the … They’ll talk about, “Well, I want a 20% margin on the job.” Great. Somebody thinks, “Okay, then I need to markup my estimate 20%.” No, to get a 20% margin on the job, you need to mark up your estimate 25% to get a 20% margin. Too many times, people hear that 20%, and I go in as an estimator maybe, and I think, “Oh, I need to mark this up 20%.” Well, not if our goal is to have a 20% margin on the job. I need to markup that estimate 25% to get the right contract amount to yield a 20% margin. I’ve had contractors, sat down with one not too long ago, and I was working with their CPA, and I was working with them, and we sat down and we looked and they couldn’t understand why their margin was wrong, only to find out, well, your margin was wrong because you were using the wrong markup. You had set a goal to have a margin of X, but you weren’t marking it up appropriately.

 

John Meibers:

It’s an easy mistake to make. You throw them around, and people throw around markup and margin, and somebody hears one and thinks of the other. But you really need to take time to make sure that everybody’s clear on the difference between those two and make sure you get everybody on the team on the same page. The estimator’s thinking of markup, “I got to markup my costs to get to a certain number.” The owner’s thinking, “I have to have a certain margin on the job to be profitable.” So you really need to make sure everybody understands and is on the same page when it comes to that.

 

Mike Merrill:

Yeah, you got to cover that overhead that it’s going to take to administer that markup.

 

John Meibers:

Right.

 

Mike Merrill:

Right. Great. Yeah, that’s a good point, and I think that one’s often overlooked. What about when companies confuse percent spent versus percent complete? What can you tell us about that?

 

John Meibers:

Yeah, this is one of my favorite topics and certainly a big part of the WIP topic as well. I do a lot of webinars and certainly seminars, back when we were able to go out in public and do things and get in front of people. But I’d always ask people, “Let me see a showing of hands of how many people have ever done a job for exactly what you estimated it was going to cost,” and very rarely if ever does anybody raise their hand. It’s not the way it works in construction. Well, then, if you’ve spent 50% of your budget, why would you ever assume you’re 50%? The fact that you’ve spent 50% of the budget has little or no bearing on the amount of actual work that’s done.

 

John Meibers:

I try to teach people that when you’re asking that question, and sometimes it’s easy for me to … Maybe you’re asking me as a project manager, “Well, how far along are we on the job?” It’s easy for me to say, “Well, I’ve spent 50% of the budget.” That’s not really what I want to know. I want to know you’ve spent 50% and you’ve done 40% of the work or 60% of the work. That’s the key. You really need to know both to be able to accurately run your construction business and manage it properly.

 

Mike Merrill:

Yeah, that’s a great point. Again, like you’re saying, if you’re short materials, obviously, you’re going to have use some of that labor money. If you’re locked in and don’t have the ability to issue a change order or if it was a hard cost estimate, then, obviously, depending on your agreement, you got to watch those things.

 

John Meibers:

I mean, it’s great to know what you’ve spent, but that’s only one piece of the equation. You really have to know how much work did I do for that amount that I spend, and it’s very rarely the same number.

 

Mike Merrill:

Yeah. Love it. What about when companies do not … You were talking about WIP reports. What about when they’re not doing those frequently enough?

 

John Meibers:

Yeah. I always tell people there’s … I’ll ask you, “How often do you do your WIP reporting?” I have a couple answers that I just really don’t like. “Not at all,” I hate that answer, and almost a close second is, “Only when somebody asks me to do it. My CPA came in, they’re doing an audit at year-end, or I’m going to the bank to get an increase in my line of credit and they’re asking me for a WIP report.” I always try to teach people you need to do it to properly run your construction business. You’re doing it for yourself to run your business. Then when people on the outside ask for it, the auditors, the CPA, the banker who’s trying to work with you on your line of credit, you’ll have that information.

 

John Meibers:

But it’s really a tool to run your business and to manage your jobs and manage the company as a whole. So I think best practice is at least monthly. I’ve got contractors that will do it biweekly or weekly, and that’s even better. But I think, at a minimum, it should be monthly. I really hate when I hear people say, “Only when I’m asked to do it,” or, “Not at all,” because I think even if nobody on the outside is asking for it, it’s a great tool to be able to manage your business and see where you’re at.

 

Mike Merrill:

Yeah, you should already have it on hand at your fingertips because that’s a part of your workflow that you regularly do, right?

 

John Meibers:

Right.

 

Mike Merrill:

All right. That’s a great one. With those WIP reports, what about making adjustments to the P&L statement when there are changes?

 

John Meibers:

Yeah, and that’s one thing, they go really hand-in-hand. I always tell contractors, without a WIP report, it’s not possible to have an accurate financial statement. Without making the appropriate entries on the P&L and the balance sheet to move the over/under billing from the P&L up to the balance sheet, you can’t have an accurate financial, which is why if you go to the bank or you go to the bonding agent, you have to get bonded on a job, then you go to the surety underwriter and you give them a financial report without a corresponding work in progress report, they’re going to say, “Well, this is useless because I need to support the revenue that you’re claiming on the financial statements.” So they really go hand-in-hand.

 

John Meibers:

Sometimes, I’ll see people do the WIP report, but then they won’t carry it through and they won’t make the appropriate financial adjustments. It’s real simple. If you’re doing WIP on a monthly basis, you’re making a monthly reversing entry in the P&L and the balance sheet to move that cost, the over/under billings from the P&L up to the balance sheet. They really go hand-in-hand. You can’t really do one without the other, and the P&L is pretty much useless without the corresponding WIP report and WIP adjustments.

 

Mike Merrill:

Yeah. I mean, regardless of what data you’re collecting, obviously, the more frequently you’re collecting it, hopefully it would be more accurate, and so you’d have that accurate data to keep those WIP reports up-to-date and run those accurate and enjoy the benefit.

 

John Meibers:

Yeah. Very true, Mike. The more frequently you do it, the more accurate it’s going to be. I don’t want to ask the PM to go back and tell me where we were on the job three weeks ago. I want to sit down and say, “As of today, where are we at?” We have a whole process where you go in and you do your field estimates. You revise your percent complete or you do your dollars to complete or units. It can be unit-based as well. There’s various methods to how we calculate the estimated cost remaining. But the timeliness of it is very important.

 

Mike Merrill:

Yeah, love it. There’s certainly certain parts of the project are always going to take longer, even if maybe the materials are 60% consumed, but you may still have 50 or 60% of the labor left to do, right? If you’re a framer and you frame the exterior walls, you’re ready to spin trusses, well, before you put those trusses up, even though you feel like you’re well on your way, you’re probably not even halfway done with the project.

 

John Meibers:

Yeah, you could’ve spent 100% of the material but only done 20% of the labor. So it’s really important that you look at that at that level and be able to report at that level. It goes to not just labor and material within a particular task but how many tasks. People ask me that all the time, Mike, and I’m sure you get the same thing, “Well, how many different cost codes, tasks,” depending on the terminology they’re using. I always turn it around and say, “Well, how many activities can you reasonably expect the people in the field to report their time to,” because that’s really where it all starts.

 

John Meibers:

A little bit easier, I could take a purchase order and fairly easily divide it between multiple tasks, but the real art is, okay, I’m going to get labor reported from the field, and how many different buckets can I expect them to accurately report that time in? That’s how many activities I should have. If I’ve got 20 activities and they’re only going to put all the time into two activities, now I don’t have good job cost reporting. I got the budget spread across 20 activities, and I got all the actual time coming into two or three of those 20.

 

Mike Merrill:

Yeah. I think they call that pencil whipping, don’t they?

 

John Meibers:

Yes.

 

Mike Merrill:

Well, I got some more budget here. We’ll just dump it over there.

 

John Meibers:

We’ll just dump it over there, and we’ll move it around. That’s not a good way to do it. I know, from an estimator’s point of view, yes, it may be more detail. But just because it’s detailed out to that level doesn’t mean we can’t consolidate that per job cost. Because if we can’t reasonably distinguish between an hour of labor here versus there, I need to have one category that covers both of those hours.

 

Mike Merrill:

Yeah. Well, and once you’ve collected that data, now you need to actually take action based on that feedback and make changes, right, and improvements, hopefully.

 

John Meibers:

Right. It’s all about being able to use that data and have productivity rates, and all that goes into real-time job cost reporting and accurate reporting from the field. The reports that come back out are only as good as the data that went in. If it’s not accurate going in, we’re going to have bad information coming back out.

 

Mike Merrill:

Yeah. I had a guest on the podcast recently, and they talked about reporting every half-day, so it was more than daily. That was interesting. I’d never heard that before, but it makes a lot of sense to me. I want to know what happened this morning sometime by early afternoon.

 

John Meibers:

I mean, at the lunch break, you’re more likely to remember what you did in the morning than you are at the end of the day, so, no, I think that’s a real good point.

 

Mike Merrill:

Yeah. Great. So we’ve talked quite a bit about labor, WIP. What about equipment and tools, things like that, assets? What about not tracking what those costs are more accurately?

 

John Meibers:

Yeah. That’s once again a big problem that we see in the construction industry, is I’m not accurately allocating for the use, number one, of our own equipment. You’re probably pretty good at charging … If you have to go out and rent a piece of equipment, you’re probably going to allocate that to the job you rented it for. But if you own equipment, either I’ve talked to people and they just think, “Well, I own it, so there’s no cost associated with it.” I’m like, “Well, that’s certainly wrong.” But, more importantly, if I want to get an accurate job cost report, if I’m an estimator taking off a job, I just know we got to use a backhoe on this job for X number of days. I don’t know if we’re going to rent it or if we’re going to use one that we own.

 

John Meibers:

But I need to be able to then report cost against that, so if I have two jobs going on and I have one backhoe and they both need a backhoe, is it fair that the one job that we rented one before gets hit with the cost and the one that we used our own gets no cost because we don’t allocate for the use of our own equipment? So I think we really need to treat that equipment as a cost, whether we own it or we’re renting it. It also then helps us evaluate the value of the equipment we own.

 

John Meibers:

If we’re charging that equipment out, basically treating it as an internal rental center where we’re renting our own equipment to ourself to use on this job, now I not only have accurate job cost information, but I’ve got information that says, “Is it worth owning this piece of equipment based on how many hours we used it or days we used it throughout the year?” It may be better off that we’re going to go ahead and retire that or sell that and only rent it for the few number of times we use it. So it allows people to get a good handle on managing the equipment they own and when it’s time to retire it, when it’s time to sell it off, or whatever the case may be, in addition to getting an accurate job cost report.

 

Mike Merrill:

Yeah. When equipment’s unutilized, you got an opportunity for profit sitting there earning you nothing while it’s depreciating. When I was a general contractor, I remember many times someone would say, “Well, can’t you just move that pile of dirt real quick and spread that around a little bit,” or, “Hey, can you just dig this quick trench for my cable line. It doesn’t need to be that deep.” But I’m consuming fuel, I’ve got somebody operating it, and now I’m liable if I hit a gas line or something else. I just have all kinds of risks and costs, and it’s important that, even if we do own that equipment, like you say, we need to attribute those costs appropriately in order to really know where we’re coming in.

 

John Meibers:

Yeah, because a lot of times, you see a contractor and maybe the type of work they do changes over time. At the time, maybe they were using this more frequently than they are today, and they just assume, “Well, it’s sitting here. It’s in the yard. We have it in case we need it.” But, come to find out, we very rarely use it. Aren’t we better off then selling that? Because it does cost you money for it to sit there in the yard, and it’s not always the best decision. I think we want to try to encourage our contractors to make intelligent decisions on the equipment. Then the job cost side of it, certainly, I want to be able to look at a job and it … It’s really irrelevant whether I used a piece of equipment we own or we rent it. That job should have the appropriate equipment cost allocated to it.

 

Mike Merrill:

Well, and often, when you’ve got extra in one place, you’re short somewhere else, so sell that equipment or rent it out and invest in something else that you’re short on or another employee. There’s ways to utilize those resources more effectively than letting anything sit.

 

John Meibers:

Absolutely.

 

Mike Merrill:

All right. So one of the other points in this great report, it asks or talks about not tracking unposted payroll, and I absolutely love that thought. What can you tell us about what that means?

 

John Meibers:

Yeah. A lot of times, people talk about real-time job cost report but not really knowing what that means. Well, if you really want real-time job cost report, I want to look at the job report at the end of today and I want to know where I stand on the labor because that labor today may not be paid for seven, eight, nine, 10 days. If we start on a Monday and our pay week runs through Sunday and then we’re going to maybe pay on the following Wednesday, well, you’re 10 days behind getting that job cost report to reflect today’s labor. If you’re tracking units, unit productivity, once again, I don’t want to be 10 days behind and know that, for the last 10 days, we’ve been underproducing based on our budget. So the unposted time needs to come in from the field on a daily basis so that I can track that. That’s a committed cost. Unposted labor is no different than the committed cost we were talking about earlier for POs and subcontracts.

 

John Meibers:

The other thing, if you put time in daily, it’s going to be … We talked about half-days just a few minutes ago. But even if it’s only daily, it’s much more accurate if we do it daily than if we wait until the first of next week to report the time for this week. I go back to my history at the top of the show here and go back to my early days in construction, it was on Monday. Monday, everybody was faxing or calling their time for the week before. I’m looking, I’m like, “Well, you’re just making this up as you go. You don’t really know what your crew did a week ago.” We’d have a running bet going on that on the week of a holiday, they’re now reporting a week later, how many people would actually put that they worked on a holiday because they’re going through the motions. They were saying, “Oh, last Monday, I did this.” No, you didn’t. You didn’t even work last Monday.

 

John Meibers:

So the accuracy, number one, and then, I think, certainly, getting that real-time, on-the-job cost report. Because if you’re a labor-intensive contractor, if I’ve got a crew of … I don’t care if it’s a crew of two or five or 10 or 20, and, certainly, the bigger the crew, the more labor dollars. But if I’ve got a crew of 20 people out on the job site today, I don’t want to wait 10 days to know how we’re doing as far as my cost goes. I want to see those numbers today.

 

Mike Merrill:

Yeah. So you’re talking about shortening up that delay of reporting those hours and planning on that expense ahead of time instead of just in 10 days when I have payroll due.

 

John Meibers:

It wasn’t practical years ago. It wasn’t practical when we had to call it in or fax it in or physically bring the time sheet into the office. But with the tools out there today like WorkMax, it’s very easy to report time on a daily basis. So I think that’s one of the great things with technology. It has really made that easy to report that time real-time.

 

Mike Merrill:

Yeah, you can actually enjoy live field data live as it happens, which is a far cry from weekly or monthly reporting, of course. We talked about hours, but there’s also burden, there’s insurance, there’s work comp, liability, other costs. So we not only need to worry about those hours spent but the burden rate for all of those hours, even if they’re not posted yet. There are some gotchas in there if you’re not really watching all of the numbers closely when you’re trying to estimate and know really where you’re at on your WIP.

 

John Meibers:

Yeah, because you really need to see that fully-burdened cost. Certainly, actual once it’s posted, but even when it’s pending, I need to know. I always recommend you put an estimated burden rate on it that covers both the burden and the fringes, the total, your fully-burdened rate once … And ComputerEase, once we post it, then it’s going to show labor, burden, fringes, and give you a fully-burdened rate, which is the combination of those three, and it’ll certainly give you the breakdown because, certainly, a $20 an hour pay rate costs a heck of a lot more than $20 an hour.

 

Mike Merrill:

Yeah. One other point to bring up is maybe overtime or premium pay, double time, right? That could grow exponentially if you’re not keeping a finger on that through the week.

 

John Meibers:

Yeah. I mean, you think of some of the cost of … Once again, you talked about the uniqueness of construction. Everybody has worker’s comp rates, but nobody has worker’s comp rates sometimes that are as high in the construction industry, so that’s a big piece of the … The worker’s comp for you or me sitting in an office, Mike, is nothing, is really immaterial compared to the worker’s comp rate for somebody that’s out in a ditch or up about 30 stories high on a building. So that’s a big part of that labor cost, is the burden. The fringe benefits, whether you’re a union contractor and the fringes you’re providing, whether you’re a non-union contractor doing prevailing wage work where you’ve got a substantial amount of fringe benefits that you’re required to provide, those things all add up in a hurry. So that $20 quickly becomes significantly more than $20, sometimes double, two and a half, three times the $20, in some cases, you could be spending an hour.

 

Mike Merrill:

Yeah. Yeah, agreed completely. You talked a lot about the WIP report stuff. It sounds like that’s definitely one of the areas you really like to preach and harp on a little bit because it’s probably a gap for a lot of contractors. What are some things that companies can do to maintain a more proper WIP report?

 

John Meibers:

I always tell people you want to start … If you’re one of those that is doing it not at all or only doing it when asked, think about starting small. You don’t necessarily have to, day one, “Okay, we’re going to change from that. We’re going to start doing it weekly.” That’s probably a recipe for disaster. Maybe you’re not going to do it on every job to start. Maybe find the key stakeholders within the organization and get the buy-in from the project manager, who’s probably going to be the one sitting down with the finance team to report the information. Start and put a plan in place. Typically, you’re going to get to where you’re going to have … Most companies have weekly production meetings and reviewing the status of all the jobs. You incorporate this into that. You’re going to review the WIP. You’re going to review where we’re at. You’re going to review the projected cost remaining. Quickly, you start to build that into your process, but it is really a culture change. You really got to change the whole organization and the way they think about all these things.

 

John Meibers:

We’re all working together. I’d go back to my early days in construction. It was like, okay, accounting didn’t understand why the project management team didn’t want to work with them to give them this information, and the project management team thought, “Well, you’re just bugging me for this information.” But, no, really, we’re on the same team here, and we’re working to the same common goal, which is we need this information to effectively run our business and make sure we’re as profitable as we can be, and it’s the best opportunity we have to see something that’s going to happen before it happens. In there, if we’re doing it right, we’re able to spot things that are trending the wrong direction in time to fix it. We can always look after the job’s over and look back and say, “Well, we should’ve done this differently,” or, “Maybe we could’ve done this differently.” But wouldn’t you like to have the opportunity to say, “Well, hey, if we make a change now, we can still impact the final outcome on this job?”

 

Mike Merrill:

Yeah, if you wait, it’s too late, right?

 

John Meibers:

Yeah. The information after the fact is good. It’s good information, and maybe we’ll use it on the next job to better our process. To me, job costing, the whole WIP process, to me, it’s like not doing it would be like going to a sporting event and not knowing the score, not knowing what to do if I’m managing the game. Am I ahead? Am I behind? Do I need to make end game decisions to help affect the outcome? To me, if you’re doing the WIP reporting and have good job cost reports, you can make those real-time, in-game decisions to ensure a profitable outcome.

 

Mike Merrill:

Yeah, that’s great. I like that analogy. So you kind of touched on something there that I wanted to ask you a little bit more about. You talked about the cultural change and maybe some approaches you can take. Do you have any other tips or ideas on helping invoke change within an organization from a-

 

John Meibers:

Yeah. I think the big thing to me, Mike, is I want to make sure that everybody understands we’re on the same team. I’ve seen it too many times where it’s … I guess I mentioned, accounting and project management, it seems like they’re in two different organizations and they think it’s one against the other. I always want to bring everybody to the table. I want the accounting team sitting in on those production meetings because they’ve got a big say in the numbers. They’re the ones that are responsible for making sure we have accurate numbers that we can look at. I want them to be a part of that and not, “Okay, get off my back and let me go do my thing.” Too many times, you see that, and I think you got to start with the top-down approach and change the culture of the company and make sure, from the ownership on down, that we’re all on the same page. It’s not an us versus them mentality.

 

John Meibers:

You still see it today a lot of times. I’ll go in, and it’s like, “Oh, those accounting people,” or, “Oh, those project management people.” It’s like, “No, no, no, wait a minute. We’re all on the same team here. We’re all after the same common goal.” I think you really got to push that down from the top and make sure everybody understands that we all have a different role in the organization, but we all have an important role. One doesn’t work without the other, and it’s not that one is more important than the other, that we all have to work together.

 

Mike Merrill:

Yeah, I love that. I think it is important, from the office perspective, too, to remind them, obviously, the field, they’re out there in the elements, the weather, and doing things that are difficult in a different way. Most office people wouldn’t necessarily prefer to be out in that trench.

 

John Meibers:

No.

 

Mike Merrill:

Maybe some of the trench guys wish they could be in the office. I don’t know. But understanding and having empathy for your coworkers is-

 

John Meibers:

Yeah, I think understanding that they’re very good at what they do in the field and the office is very good at what they do with the numbers and putting everything together. Get everybody on the same team. I think that’s really important. I see more of that today than maybe in the past. Maybe it was a little old-school mentality years ago, where it was, “We’re the most important part of it, and you’re just insignificant.” Now, I think it’s not quite the same today. I’m encouraged to see that we got more people working on the same team and towards that common goal.

 

Mike Merrill:

Yeah, I would agree. I think technology has helped advance that cause, too, and connect the field and the office in a more meaningful way. So what one does directly impacts the other, and they both got visibility as those things happen then.

 

John Meibers:

I would agree. I think that technology’s a really good point, Mike, because you think about back … I go back to my early days in construction. It was like, “Oh, man, you’re not calling your time in on time, and you’re really making my life difficult because I got to get payroll out the door by tomorrow, and you are making my life difficult because you’re not calling the time and you’re not faxing it in. I got to chase you down.” Well, now, with technology today, as a site superintendent, I’m sending time in every day, so it’s no longer a problem. I don’t have to rekey it. I just have to prove it when it comes into the system. So I do agree, especially when it comes to time-keeping, technology is really taking down some of the walls between the two because you’re no longer a pain to me because you’re not getting the time in and not giving me time to rekey it because I no longer have to rekey it. It’s coming in from the field, and it’s coming in real time.

 

Mike Merrill:

Well, yeah, and in the field, it used to be, “Hey, I’m finishing concrete in the dark here. You think I’ve got time for stupid paperwork?” Now, if they can hit a pin number and clock out on a mobile device and be done in five seconds, then there’s really no burden.

 

John Meibers:

No. It’s really completely changed the amount of burden we’re putting on the field staff to turn their time in when it’s a simple click of a button, like you said, type of pin-in or clock-out. Or even if you’re not using the clock-in, clock-out, even if you’re just hitting and putting in eight hours, but the list of the jobs and the activity codes are all there and you’re punching in the hours and hitting submit and you’re done, that’s far less burdensome than what it used to be in the past when you had to figure out a way to get the paper time sheets filled out and faxed in or called in and I’m chasing you down from the accounting office to, “Hey, I don’t have the time,” and you’re thinking, “Man, I’m out here busting my butt and you’re bugging me about time.” Well, now we’re able to streamline that process significantly.

 

Mike Merrill:

Yeah. I love that you went down that path a little bit. Speaking with the labor costs, we’re talking a lot about payroll and getting payroll in, but what about the effect on more timely billing?

 

John Meibers:

Yeah. Not only the payroll comes in, if I’m doing time and material billing, that’s going to be more timely. If I’m doing service work, most contractors have service departments, I can turn the bills around the same day. I got the service bills going back out the day that the work is done, and I still talk to people that don’t have a good system and they’re, “Well, we’re 25, 30 days behind in getting our service bills out.” I’m like, “Wow, that’s horrible for cashflow, number one, but just the experience for the customer, that you came out and did service work and I don’t even see a bill for 30 days, is just not something we want to have today.” So, yeah, really allows you to get real-time billing out the door, and, once again, because you have real-time information to work with.

 

Mike Merrill:

Yeah. The other thing is it’s a great visibility tool and a reminder on a lot of companies in the past that didn’t have these tools, they would forget to bill something, and now it’s been months, and when it gets brought to their attention and they submit a bill, they say, “Hey, that job’s closed out. I’m sorry.” Now, you’ve got an argument, a conflict and a dispute.

 

John Meibers:

Yeah, it’s really hard to go back after that job’s over, Mike, you’re right, really hard to go back two months after it’s over and say, “I forgot to bill you.” That’s a bad experience. Even if you manage to get paid, you’ve now created a bad experience for your customer and maybe lessened the chance of them being a customer in the future.

 

Mike Merrill:

Yeah. We hear that not only with the labor side but equipment and materials, other things, too, that a lot of things end up going unbilled because the documentation process has lagged or delayed or depends too much on a human doing something after the fact that they just never quite get back around until it’s too late. I guess, just to kind of wrap up this part of it, overall, what would you say are maybe some best practices for implementing an in-depth job cost accounting system like ComputerEase?

 

John Meibers:

Yeah, so I think you want to first evaluate the processes you have in place today. How many things are we doing outside of our current job cost accounting system? A lot of times, typically, you may have disconnected systems. You got Excel spreadsheets tracking certain things. You got a system maybe you’re paying your bills with. Taking inventory of those systems and processes, and work with a technology provider that’s willing to go through that and understand your process. That’s the most important thing to me, is I want to understand what you do today if you’re a contractor. Only then can I determine whether we might have a solution for you. But I really need to start with understanding what you do today and then making sure I understand your needs and then explain to you what’s available.

 

John Meibers:

You really need to work with somebody that’s willing to take that time to go through that with you and understand where you’re at, what your pains are, and where you need to be, and then help you come up with a process to do that. Then understand that it’s not an overnight solution. You’re not going to magically wake up tomorrow and you’ve implemented all these things you’ve never done before. I always tell people that the first thing we’re going to do is we’re going to get you out of what you’re doing today and we’re going to move that over to our solution. Then we’re going to start to layer in all the other things that you weren’t doing before because to try to do it all at once sometimes can be disastrous. So first replace what you’re doing in a system that has more power and more flexibility and then start to layer in the other things that you’re missing today.

 

Mike Merrill:

Yeah, I love that. I’m picturing a doctor’s visit or something and a diagnosis, really, before you can prescribe what’s required to fix those ailments in their business.

 

John Meibers:

Yep. And if there’s more than one thing wrong, they’re not going to fix them all at once. They’re going to say, “Well, we’re going to do this first. Then we’re going to do this, and then we’re going to do this.” It’s the same way here. We’re going to evaluate where you’re at, and then we’re going to put together a game plan that ultimately will get to the ultimate goal, which is implementing all the new things.

 

Mike Merrill:

Yeah. If there’s something really unique or specialized, then, yeah, you may have to go to a specialist for a certain thing. But baby steps first and build on that foundation, and you can bring up the health of the business, just like you could somebody who’s having personal ailments.

 

John Meibers:

Absolutely.

 

Mike Merrill:

So just have a few more questions here at the end more on a personal level. What are some skills or what’s a skill that you feel like you’ve mastered in your business life that you could share with us?

 

John Meibers:

I think, for me, it’s the ability to listen to the customer or potential customer. I’m not here to tell you what we can do. I try to train my team this way. We’re here to listen to what their needs are and be able to understand that. You listen a lot. You ask questions. Because, a lot of times, somebody will ask me a question, well, I don’t have a canned response. I’m listening to the question. A lot of times, I have to answer the question with a question because I really need to understand what it is you’re trying to do and not just take it at face value based on what you said.

 

John Meibers:

I got to dig a little bit deeper, and you dig deeper by listening to the contractor tell their story, how they got to where they are, what they’re doing, where they want to go, what type of work they do, what their current processes are. I think that’s one of the things that I always take great pride in, is I think I listen to that and am able to piece that all together then and come back with a proposed plan that makes a lot of sense.

 

Mike Merrill:

So you try and listen to understand and not to respond, is that what I’m hearing?

 

John Meibers:

Correct, yes. It’s important to understand, and you can’t just listen, “Oh, here’s a response.” No, I really want to understand what you’re saying. I want to understand your business so that I can help you effectively.

 

Mike Merrill:

Love it. So if you could go back, rewind the clock of time and go back to a day and time where maybe you made a mistake earlier in your career, is there something that you learned and would do differently today that maybe the listeners could take some advice from and maybe avoid a pothole or two?

 

John Meibers:

Yeah. I think probably the first one is early on I learned that I didn’t listen. I didn’t listen. I was responding, and I wasn’t listening. Maybe early on in my career, I don’t know that I fully understood the value of getting everybody’s buy-in and getting everybody on the same team. I talked about how important that is, but I can remember early on it was like I could’ve been on either side of that. I could’ve been on the project management side that was those accounting people were a pain, or I could’ve been on the accounting side and those project management people were a pain. I wish I would’ve understood a little bit earlier on the value of these things. But it’s never too late. You learn as you go. I learn something every day. I think the day I think I know it all will be the day it’s time to stop then because I don’t think that’s ever going to happen.

 

John Meibers:

But I think it’s important that you realize the value of teamwork, and it really is. To get to the common goal, we all have to be working on the same team. Even here at Deltek + ComputerEase, whether you’re in sales, you’re in implementation, you’re in customer care, you’re in admin, we’re all working towards the same common goal, which is to make sure all of our clients are taken care of. I stress that to the team all the time, is the importance of teamwork and understanding and respecting what everybody does.

 

Mike Merrill:

I love that. That’s great. Good for you. Last question, last thought. What would you prefer that the listeners walk away with after hearing our conversation today? If there’s one main point you want to echo again, what would that be?

 

John Meibers:

Yeah, so I think I’ll go back to probably what I said at the top of the show, is make sure you’re working with people that understand your business and are willing to listen to you, and that’s from your technology providers to your CPAs to your insurance agents to your bankers. If you’re the only contractor that they’re working with, that’s probably not a good idea, or whatever business. It doesn’t even have to be construction. I use construction because that’s the business that I service. But work with people on the outside, trusted advisors that understand your business, because everybody’s business is unique.

 

Mike Merrill:

Love it. That’s great. Well, I very much enjoyed the conversation today. Appreciate you joining us today, John, and look forward to continuing our longstanding relationship into the future.

 

John Meibers:

Absolutely, Mike. I appreciate you having me. Yeah, always great, and love working with you and your entire team, so look forward to doing that well into the future.

 

Mike Merrill:

Thank you, and thank you to listeners for joining us today on the Mobile Workforce Podcast sponsored by AboutTime Technologies and WorkMax. If you enjoyed the conversation that John and I had today, please give us a follow on Instagram, @workmax_, or on LinkedIn, @workmax. Also, give us a rating and a review on your favorite podcast platform. Those five-star reviews and ratings help us to bring these valuable conversations to other teams like yours in hopes to help them improve not only their business but their life.

Construction Succession Planning and Business Exits

Construction Succession Planning and Business Exits

Being prepared for the unexpected is part of success on the job site. And yet most business owners haven’t thought about what it takes to eventually sell or pass down their own business. According to Dan Murray, the Coach at Your Restoration Coach, that’s a big mistake.

In this episode of the Mobile Workforce Podcast, Dan shares the serious repercussions that stem from not planning a business exit in advance. He dives into the financial implications, including how most construction business owners have a big portion of their retirement savings locked into their business. He also discusses timing and explains why planning should begin years in advance. Finally, Dan breaks down action listeners can take now, including actionable steps that make a business valuable to potential purchasers.

 

Key Takeaways:

  1. Take time to determine a business’s worth. A common saying is sellers should get five times EBITDA, which gives a baseline of predictable future profits. But what a business is worth is based on its consistency with the price decreasing if it has a lot of variances from one year to the next or big swings back and forth. The more predictable and solid a business’ financial performance is; the more confident a buyer will be – and more willing to pay more.
  2. A sale doesn’t have to interfere with daily business. An owner’s goal should be to work themself out of a job. That’s because prospective buyers are wary of taking on companies that depend on one person to run everything – or risk things falling apart. The most successful businesses are the ones that run fairly autonomously from the owner in day-to-day business matters, which increases the likelihood of a smooth transition when a sale is made.  
  3. Selling a business comes at a cost. When business owners focus on the final dollar amount of the sale, they’re not seeing the full picture. There are a number of costs involved, including fees to brokers, lawyers, and accountants. On top of that, it’s important to consider how much will be taxed on their earnings. As a general rule, a third of what the business sells for is what the owner keeps in their pocket. 

 

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Episode Transcript:

Mike Merrill:

Hello and welcome to the Mobile Workforce podcast. I’m your host, Mike Merrill and we are sitting down today with Dan Murray. He’s a coach and a consultant with Your Restoration Coach. Dan has worked in the disaster and restoration sector for about 25 years and spent the last 12 years as a consultant serving contractors across Canada and the United States. So, today he’s going to share a little bit about the process of transitioning your business and eventually setting it to sell maybe to the next generation or to move on to retirement. So, hello, Dan and thank you so much for joining us today.

Dan Murray:

Hi Mike, is awesome to be invited in to participate in this podcast and it’s great to reconnect again. We haven’t seen each other in quite a few years and it’s great to see what you’ve been doing to help different contractors and other service providers. And kind of I’ve been watching your progress as you have been moving along and what you’ve developed and offered and it’s just great to connect again.

Mike Merrill:

Great. Well, I’m looking forward to this too. So, thank you again, Dan. So, before we kind of get going into the conversation, can you kind of share with our audience a bit about how you got into consulting from the restoration industry?

Dan Murray:

Well, that could be a long story so I’ll try to keep it as brief as possible. But I did get into the service business and doing first in the early 1980s when the earth was young and dinosaurs roamed the earth kind of thing. And I first got into it as a carpet cleaner and a water damage contractor. And we did quite well, we operated that way for a couple of years. And then I had the grandiose vision of thinking that well why don’t we start off with janitorial services? 

So, we started the janitorial company and thinking that quite often doing water damages and starting to do a little bit of firework back in those days, we would have lots of peaks and valleys in workload so we did is that I thought that we could have our janitorial staff do fire work in the daytime and we help each other that way but it just didn’t work. I had two really good days in the janitorial business. You probably can guess what those two days are Mike.

Mike Merrill:

Yeah, the day started and the day you hung it up?

Dan Murray:

There you go, absolutely. What we found was that the definition of clean is completely different when you’re doing a fire damage job versus doing a janitorial job. In the old janitorial expression used to be ash trash and dash, you just give the top of the desk a quick clean or give the traffic lane of a carpet a quick clean and it’s clean. Well, you have a smoke damage, it’s far from that you have to do deep cleaning and clean every surface, clean furniture up and down and everywhere else.

Anyway, three years later, we sold the janitorial, we start really focusing on doing full service restoration. And from there, our business just took off and we did build it from basically scratch, from nothing to a multimillion-dollar business. Then in the ’90s I started doing catastrophe losses. I was involved with a franchise network and I was on their task force to develop a large loss division which I headed up in Canada for several years. And I also traveled to the US doing large losses. And a large loss in those days was considered anything over $250,000 single sight loss and the largest loss I was on we did $2.3 million in three weeks. The largest single loss that I did on my own was a little over a million dollars, cleaning and painting and we had a 45-day timeframe to do it and we finished it in 43 days. 

So, then I had some good successes there for a few years and then the franchisor that I was with asked me to come on board corporately and I ran the Canadian division for them for four years. Had about 70 franchises across Canada and that’s where my passion for training and coaching and advising business owners really started to take foot and then I switched over to buying into a company in my area. And I did that for six years as a franchisor and operated a couple of the franchises and we build it up to 15 offices and then had a really, really bad parting of ways with our business partner and I took a few months off. And then in 2009, we started full-time consulting and incorporated a company to do this in 2010 and we haven’t looked back.

Mike Merrill:

Oh, good for you. A lot of history and bumps and bruises I’m sure also.

Dan Murray:

Yeah, that’s what I always tell my clients is that I do have structure, of course. I have programs that I’d like to take people through but a lot of what I do is just helping people through the life lessons that I’ve learned. I’ve made every mistake you can make, I think. I don’t know, I still make the odd one. But my goal is to be that little on someone’s shoulder say, “No, well, you could do it that way but you may want to think of this and this and this.” Part of being a coach is that you help people make the decisions whereas as a consultant you do things for people. And lots of times I’m doing more advising than coaching and so it’s really pretty awesome to get paid to do something that you love for an industry that you really have spent your whole career in.

Mike Merrill:

Yeah, good for you. And I know you’re very respected and revered within the industry and the space. So, it’s been harder, of course.

Dan Murray:

Yeah. Well, it’s a great industry. What’s been interesting is when we started in the early ’80s, it was just basically just a baby. We used to go to the local hardware store and buy the little dehumidifiers and buy those axial fans and the square fans. There’s no equipment manufacturers out there today, there was no testing procedures. And it’s just really been a fun ride to see it from where it is now to see where it came from. And it’s really almost a commodity business now in that there are so many disaster restoration firms. 

We’re all doing things based on the same training to the IICRC organization. There’s only maybe half a dozen equipment manufacturers, there’s only one remote timekeeping system we should be using but we all know who it is. And there’s one main software, there’s a couple other ones on the side but for doing estimates and everything on, so estimating. But it certainly has its challenges now from what it used to be and it’s a much larger business than we ever thought it could be.

Mike Merrill:

Yeah, and I think to your point, it’s interesting because kind of like the topic that we’re talking about today, lots of companies have to look into the future and kind of decide what that transition might look like when they either retire or sell a business. What do you think in either of those situations that companies can do today to prepare themselves for that eventual outcome that they have as a goal?

Dan Murray:

Well, you said a key thing, Mike, is that they need to prepare because I’ve seen some really sad situations where a business owner hasn’t. And it is not nice to get a phone call from the widow saying that had a heart attack or to get a call from the owner and I just had a meeting with my doctor and you can fill in the blanks. Those are not nice calls to get and at that point is too late to maximize the value for the business. It’s just basically how do I get out of it? It’s a fire sale type of deal, right? And it’s sad, it really is sad because most… 

And I think I could say this, okay, most business owners have the biggest chunk of their retirement in their business. Real estate certainly is partly a big point, especially if you own your own building that you’re operating out of. But as far as your net worth, what you have for savings to retire, it is what you’re thinking you’re going to get out of your business when you sell. And if you start thinking about that three months before you want to sell or have to sell, is too late. So, you have to prepare financially and get your business ready. I say a minimum of two years but three to five years is the best. 

And so this is where I transition my business in the services that I do in consulting and advising and coaching is to help people get ready for this transition. This has been the last six years, it’s been my main focus in business. I’m not a business broker, I don’t do business brokerage services, I have worked with other business brokers or with business brokers, I don’t do it. But what I do is I help with the getting ready to get it ready for sale. 

But quite often, the sale never happens. And the reason is that the same principles that make a business valuable to a potential purchaser, are the same standards in a business that make it easier to run more profitable, less stressful for the owner and help building a team. So, several my clients say, “Well, why would I sell when it’s starting to make this kind of money and it’s running so smoothly? And now I can enjoy and have a regular work schedule and enjoy the benefits and let it accrue.”

Mike Merrill:

Yeah, that’s the double-edged sword. I think of… I’m in business and have been for most of my adult life as a contractor originally and then helped start this business back in 2003. And so 95% of my life has been full throttle, pedal to the metal, I’m not thinking about, oh, eventually, I’ve got to use some brakes or maybe the engine brake, if nothing else and figure out how to… 

I guess if an analogy might be, get off the freeway to an off-ramp because at some point as much as I love this and being a business is fun, it’s also scary and difficult and challenging. And like you said, the last thing you want is to leave your wife with a mass because your health fails or you get too stressed. And so those things are real challenges. And that’s great that there’s individuals like you and companies out there that are helping educate and coach.

Dan Murray:

Yeah, you’re absolutely right. And you made a good point there, Mike, is that you’re doing something that you love. And most entrepreneurs I would hope, are doing what they love. But what happens and I’m guilty it happened to me, is that you get so enthralled with your business and it’s all encompassing that you forget about your personal life, you forget about developing hobbies. And one of the things that is really come about to me in the last five or six years of working with so many entrepreneurs and contractors mainly, is that they have to prepare themselves personally for the exit.

And I know what happened to me when I sold my a couple of my businesses back and then in the ’90s, is that you need to have a vision for what you want to do personally after the sale, right? So, we have an exercise that we go through with clients or potential clients. What do you want to do? What do you want to do when you grow up? What do you want to do when you get free from this business? Why do you want to exit? Those are questions and I don’t always need to know the answers that they come up with but I’ll ask them the question is and go ask them to talk it with their spouse or with themselves, talk them with their family. Because I know what happened to me when especially the first business I sold because I work night and day in it for five years. And I sold it at that time, it seemed like more money than I would ever had in my life. But nowadays it’s a pretty small sale.

One day I was walking down Main Street and hey there’s Dan who owns this business and oh Dan, I’m getting calls to come to this luncheon, the Chamber of Commerce and this and that and people networking, dropping by my office. Next thing you know, I’m just setting home, I took three months off when I was in my ’30s and kind of revamped where I was going before I started my next business. And for those three months, I started realizing, I’m not getting the calls, I’m not getting the invites, I don’t have an office to go to. My self worth was tied up in my business. So, I’m always cautioning entrepreneurs to be careful because you have to really work at developing and keeping a life outside that is tied into your family. And so yeah.

Mike Merrill:

So, it sounds like if I were to kind of list off some checkboxes or have a list of items that somebody should be aware of or be looking at to prepare, sounds like having some personal goals and kind of a transition plans to next steps established before you sell your business. Are there some other things that would make that checklist that a company should be thinking about?

Dan Murray:

For the company or for personal, Mike? I can go either way here.

Mike Merrill:

I mean, maybe a little bit of both. I mean, what are some of the more important things in both of those areas? You identified maybe having some personal goals but what else would be on that list?

Dan Murray:

Well, one that kind of crosses both, personal and business is what’s the value? What do you need after the business to retire? What is the business worth? Most people don’t realize the terms make a big deal on a transaction, right? People say, “Well, let’s just use a simple number, that’s it.” Or, “Well, my business is worth a million dollars.” Well, how is that paid? If the purchasers aren’t going to pay you 50% on upfront and you got to do an earn out over, say, five years, if you hit all these benchmarks, you may or may not get the other or want to get a portion of it.

So, I say in those deals, you got to be happy with the initial amount. If you can live off that, then the rest is a bonus. That’s where you… So, the terms is a big thing and sometimes the more aggressive you are with the terms, the shorter the… How much you paid up front and in the shorter any term is usually it means that your amount of money that you’re going to get shrinks a little bit, right? So, but really what is your bottom line is what you got to be wearing because…

And when you put your hat on from being the purchaser which and I’ve helped a couple of companies do acquisitions, tuck-in type acquisitions to expand in their local areas, what’s a financial buyer buying? You got to put your hat on and just think what the other guys how they’re thinking, right? And really what they’re buying is your future profits but even more important of that, how reliable those future profit estimates are. That’s really what you’re buying. And that’s why when you see people say, “Well, get five times EBITDA, I get six times or eight times.” Every industry is different. But really what you’re doing is that you’re buying predictable future profits and is discounted if it has a lot of variances up and big swings back and forth. It’s got to be fairly predictable.

Mike Merrill:

Yeah, that’s a great point. Also, I know, we’ve worked with consultants too in our business and one phrase that has stuck in my mind is, one consultant told us good companies sell, great companies get bought. And so making yourself attractive where people are pursuing you because of predictable profits, branding, market recognition, future potential, all those things, is an important factor aside from just the EBITDA and other things that are maybe mathematical equations. There are other factors that can lead to that value.

Dan Murray:

Absolutely. I’m going to steal that phrase. I like that one, Mike. What I have used in the past is you’re either going to get pushed out of the business or pulled out of the business. Decide which way you want to go. Because being pushed out of the business isn’t fun and not very profitable for the most part, right? But you said it much more eloquently than I did. So, I’m going to steal that line and we’re going to-

Mike Merrill:

I had to steal it from someone else to give it to you, so no problem. 

Dan Murray:

Fair enough. So, but another point you said is you have to think about… I think most of the audience listening to this are probably in the service-based business, right? Whether it could be-

Mike Merrill:

Yeah, the trade so to speak, yeah.

Dan Murray:

Yeah. So, what business are we really in? And you’ll hear people say, “Well, you’re in the business of creating and keeping customers?” Well, I always like to say, we’re in the people business. So, when it comes time to start thinking about selling, you have to think about your team. And in all my correspondence and all my stuff that I’ve written over the years, whenever I mentioned team in a business, I always use a capital T because I think they’re so important that your team members need to be recognized. And so how will they be treated in a transition meant a lot to me when I did some of my deals in the past.

I’ve talked to other business owners where they weren’t all that concerned. They were looking after themselves which is fine. I can’t judge there’s no right or wrong, there’s no absolute decisions, it’s whatever is right for you and your personality but I do think that your people need to be treated right, you need to… And there’s different ways that other people involve or not involve their team members in a potential discussions on a sale. Some people will make it very transparent, others will keep it very close to the chest. 

When I sold my first business, I don’t think anyone knew until the day I announced it. But since then, I’ve different vibe is that sometimes being transparent is good. Whether you transition your business to an employee team who’s going to buy you out that’s an option that can work really well or have them minority partner so that you can have the freedom to do what you want because they have a vested interest is another option. So, again, there’s so many ways you can go and there’s so many different paths. Is according to your team that you have, how skilled they are, how passionate they are about the business and where you are in your life and in your needs.

Mike Merrill:

I’ve heard said many times by other guests on the podcast, one of the important things in making sure that your business is scalable is making sure you have layers so that when you do exit the business, the business can still function for the most part without you And I think there’s more value to a potential purchaser if that can happen. 

Dan Murray:

Yeah, absolutely. The more… Sorry. The better a business can run without the owner, the more profitable it will be to the owner on a sale, you’re absolutely right. If the listeners take anything from this podcast today it should be that, if they can reach a point where they work themselves out of a job in their own business, they’re doing a good job. And from a personal perspective, there is nothing more satisfying, it was at least to me in my career, was in seeing people grow and develop as leaders and managers in my company and see them come to a point where they could take over responsibilities and do things that they never thought they could. That is very self-rewarding as a manager as you help other people develop.

Mike Merrill:

Well, and I think for many of us that are entrepreneurs, that’s one of the most challenging things is handing those reins over. I mean, this is your baby and so to leave your baby in somebody else’s arms for any amount of time is a bit of a hurdle and you have to figure out how to get over that really. Otherwise, you’re going to be too connected and it won’t end well, probably.

Dan Murray:

Yeah, one of the eight drivers that we always work on with our clients and I told you we have a bit of a structure that we work on is what we call the hub-and-spoke model and I think I’ve heard it on your podcast before listening to other guests. And really, the more the owner is totally in control and that all the major customer decision sales and market decisions, supplier decisions, sub-trade decisions, all those are made by the owner, he or she is the hub and it’s a very stressful and tough position to be in. 

And when I started many years ago, when I had a bit of hair, working my way out of that position, one of the things… I may be getting ahead of myself a little bit on what we want to talk about towards the end but one of the tips that I have for the listeners is, when someone comes to you with a problem and you know the answer and a lot of times your team members, your employees will come to you simply for the fact that they’ve never been given the liberty to make a decision where they’ve worked before. They’ve never been counseled that way or given… When I go to work, I do what I’m told, right? I don’t do what is right, the company culture is developed by somebody if it has not developed by you, it’ll be developed by some other part of your team, it may not be the culture that you want. 

But what happens is that when someone comes to you and says, “Hey, Mike, should I go to Mrs. Smith’s job and start that today? Or should I go clean up the shop?” I’m just using a silly example. But when someone comes to you with a question like that, you can start coaching and developing them to make decisions on their own by saying or instead of just barking out the order which most of us do, you can say, “Well, what do you think we should do, Joe?” Or “Mrs. Smith, what’s the conditioner? What was it her expectations, yo?” And then when they give you the answer that you like, you say, “Yeah, I agree, that’s a good decision. Go ahead and do that.” And you do that enough times or if they give you a silly answer, “I think I should go wash the truck, instead of going to serve a customer.” You can say, well, “Let’s stop and think about that for a minute. And here’s the three reasons why you may want to reconsider.” But have them involved and after a while, they’ll start making decisions on their own.

Mike Merrill:

Yeah, I think that’s great. One analogy that popped into my mind, I’ve used this in a sales environment before but we’ve all used a navigation system, GPS. And when I’ve traveled a lot like you do and I’m in an unfamiliar city, I lean heavily on that GPS and I’m waiting to be told where to go and what to do and it’s difficult to navigate until you hear that voice tell you where to go. But if you don’t have a GPS and you’ve got to pay more attention then you can usually get along just fine. Also, it’s more just knowing that you can depend on your own ability instead of waiting for somebody else to tell you what to-

Dan Murray:

That’s right. And there’s one benefit, I guess. When we are recording this, we’re in the middle of the COVID, the pandemic and travel is really come to almost a screeching halt and I was doing 35 weeks a year on the road for the last 10 years visiting clients and a few months ago, I came to a screeching halt. And I do everything on Zoom now and Loom. I use another service called Loom but Zoom is my main one for two-way videos. And I don’t know whether I’m going to go back to travel, this is working extremely well. I wouldn’t want to be in the air carrier business or hotel business right now. I don’t think.

Mike Merrill:

Yeah, it is amazing what we can do when you hear the phrase where there’s a will there’s a way and when your options are limited and you’ve got to figure it out. There’s a lot of different approaches that you can take that might be equally or even to your point more effective.

Dan Murray:

Absolutely, absolutely.

Mike Merrill:

So, with this topic of discussion, what are some things that business owners can do to sell their business or hand it on to a future generation, a son or a nephew or somebody else that you’re mentoring with no regrets? Because I think that would be one of the bigger challenges and it’s one that I hear about quite a bit once companies do sell or do pass things along, there’s all the reasons that they wish they wouldn’t have or that they wish something would have been different?

Dan Murray:

Well, really the old adage is really depends, it depends on the owner what they’re doing. But there’s a personal attachment to businesses for the most of us, right? So, when you detach from the business, what are you going to do with your life? I guess a short and simple answer to that question I tell people is that, a happy accident is meaning that you have a happy life. In other things beside business, whether it be coaching your kids at sports or traveling or doing whatever. And the other thing is, the big thing of course, really why are we in a business it’s really to have financial resources to be able to live the life that we want. 

So, again, the first driver of the eight company drivers that we work on with people that number one is the financial performance or your business. Your financial performance has to be good and it has to be improving all the time. And while you own the business, it allows you to be remunerated properly and when you go to sell, it’ll also do that as well. Because you got to remember, when you say five times whatever or four times, whatever the multiple is, you’re getting paid on your EBITDA is basically if you can make an extra $100,000 a year by running a good business and keeping things tight. If you get five times that multiple, when you sell, that’s half a million dollars and I don’t care who you are, half a million dollars is probably going to make a little bit of a difference on your enjoyment.

Mike Merrill:

Sure.

Dan Murray:

Can I make another point on this, Mike while we’re-

Mike Merrill:

Yeah, absolutely.

Dan Murray:

One of the big things I see people not considering when they sell, they always think about the big dollar amount they can get, they don’t stop and consider all the costs that are involved. Lots of times especially if you go to brokers and other professionals, you’re going to have lawyers and accountants and you can spend tens of thousands of dollars on lawyers and accountants really quick just getting your business ready to deal with the due diligence and all this sort of thing. Then if you get brokerage fees, so you can have eight to 10%, easily in fees on what you’re going to pay for a transaction.

And then you can have some personal fees if you guys have holding companies or family trusts or whatever, you can have other fees involved with setting up all that and to save taxes. And then the big thing that where most people don’t stop and think about is how they’re going to be taxed on their earnings. So, I always say just hold your thumb up in the air and pick a number but basically a third roughly of what you get out of your business, you’ll end up keeping in your pocket. And most people don’t take that into consideration. They think of if I sell $4 million, I get a million dollars. I wish I could say it was so but it isn’t.

Mike Merrill:

That’s a great point and I think even within that framework, there are different tax approaches that can be taken too so depending on the turnout or other factor, at the end of the day, what’s really going to net you the most revenue? And I think that’s a great thing to consider.

Dan Murray:

Yeah, so there’s at least a dozen ways I can think of off the top of my head I you can structure a deal and there’s so many in zeros but I’m a big believer in that. We’ve all heard the expression win-win but I think it needs to be win-win-win, and it’s a triple win, right? We need to win, whoever is acquiring our business needs to be a winning deal and our existing team members and customers need to win. Like if everyone wins, there can’t be a win-lose scenario or someone’s going to not be happy.

Mike Merrill:

Yeah, I really like that. I think in a lot, a lot of cases, a lot of company owners, they are concerned about the long-term viability of the business, how it affects those employees and team members like you’re saying and along those lines, I’ve heard you say before, it’s important to have more than one exit strategy also. So, maybe if you’ve got a few horses in the race, whether it be different suitors or maybe some different options on how this transaction could take place and what it looks like, what wold your advice be?

Dan Murray:

Well, I always like people I’m working with to actually sit down and there’s an exercise that we go through and write down who would be potential. Could be a big multinational, it could be who just wants to do what they usually call them tuck-in acquisitions, where they want to expand or they want another dot on the map or your pain in the butt they just want to buy you out so that their local branch can grow, that can happen. You can have… 

Family members is what most people think of but that can be really good or really bad. And are the kids ready and able to run the business? Have they paid the dues? The other thing is you may want to stay on as a lower percentage owner and give some shares to two or three key members of your team and just let them run it or hire a CEO or general manager and forfeit a little bit of the annual profits and just so you can enjoy life. Go get your 43-foot diesel pusher and go have a time as your general manager is running the business. I mean, there’s nothing wrong with that. Except that you’ve got potential liability exposure that maybe you wouldn’t if you had the money in a bank.

Mike Merrill:

Yeah, yeah, that’s a great point. And I know you as a coach and a consultant, helping companies understand the health of their business and what’s in their best interest of growing profitably, I know that you’ve mentioned in the past how important data is being forward-thinking and then planning, what role does data play in all this that companies need to consider that maybe important?

Dan Murray:

Well, it’s huge, especially when you get to the transition stage, most companies want to do due diligence and you need to know your numbers before you start putting a price on it. We’ve all watched Shark Tank and shows like that and people get just nailed for having crazy valuations on their business and we’ve all seen it in dealing with contractors. But the thing with data is that, well, in the insurance industry as a vendor for contracting, we have what’s called KPIs;key performance indicators. And what these is, when they started pushing these down on us, they really made us better business operators. Because before a lot of us weren’t looking at things, we weren’t looking at the average response time, we weren’t looking at the average time a file was open, how quick we could dry a job or how quickly we could rebuild it. 

And so I always say we need to have our own KPIs not just our customers and we need to look at them on a dashboard-type basis, one page report because most entrepreneurs will glaze over if you give them a 10-page text-only document, they’re not going to read it. Most of us What do we do when we get our financial reports for crying out loud? We look at two places;top number for revenue, go to the bottom right-hand number for the profit. And goodness gracious, we would never want look at the balance sheet and figure out some things like day sales outstanding or days payable outstanding. Oh, my goodness, that would just be too hard to do. But it’s vital to the business to know some of those numbers. And it’s easy to do with different types of software today.

Mike Merrill:

Yeah, so really what you’re talking about then is live field data, live visibility, daily updates on dashboard. So, really, you’ve got a finger on the pulse of the business?

Dan Murray:

Yeah, and as far as for the contractor running in their field management, that’s becoming more live data all the time too from your employee timekeeping and job costing. Our biggest cost on a job usually is our personnel so we don’t have that number down, but we’re in trouble right out of the gate. The other thing that’s coming on, for example, nowadays is that there’s newer technology, AI type of technology where you take a piece of equipment out of your shop, put it in your truck, take it to a job site and leave it. 

A lot of our things we can charge for or at least we know it’s there nowadays, we don’t have to barcode swipe, we don’t have to write it down, it’s automatically done because there’s a little RFID or whatever transponders in each location. And you can use a GPS as well. A manager consents and say, “Okay, I’ve got 77 air movers out in the field today and 27 humidifiers, they’re all billable by the day and I’ve got it all right there live, I can see where it is. I’m not going to lose it, I am going to capture every hour I should be billed for it.” So, having live data in the field as well is extremely important.

Mike Merrill:

Yeah, I would imagine for potential purchaser of a business too if they know you’re using those types of systems, they’re going to have a lot more trust in the data that you’re presenting.

Dan Murray:

Absolutely, that is 100% right. I’ve seen that happen several times over the years.

Mike Merrill:

So, this has been a great conversation. I’ve really enjoyed it. I guess just kind of wrapping up, one of the things that I like to ask a lot of the guests is, what’s one key practice or best practice or something that’s been impactful in your entrepreneurial career that you could point to for the success you’ve had.

Dan Murray:

Always be learning. Always be learning. And it takes some time but it’s a very inexpensive way to do it. Be a reader, you want to be a leader, be a reader. You want to be an expert at something, you have an expertise you want to learn, whether it be writing code or how to do a water damage. If you read a book a month on a particular topic you want to be good at, in a year’s time, you’re going to be surprised at how much better you are at understanding whatever it is you want to get better at.

Mike Merrill:

Great advice. Yeah, that’s very wise, I would say. If you could kind of relive or do something different or change a decision you made at one point, is there anything real specific that pops out in your mind that maybe someone else can learn from?

Dan Murray:

Well, now that’s an interesting question. Is this where we get real honest or we just going to get fluffy?

Mike Merrill:

I mean, something that’s applicable to others too probably, professionally speaking.

Dan Murray:

Listen more and talk less. Really listen. And by listening not only verbally but listen to the body language of your team members, of your customers, show some empathy instead of always… No matter what kind of type of contractor is listening to this podcast, when we go into someone’s house or business to work, we’ve probably done that job function a thousand times. To our customer, it could be the first time they’ve ever had this type of job done. And to them, they’re kind of overwhelmed and they don’t understand the processes. And so we got to show some empathy and patience, listen, read their situation, understand what they’re going through so that we can serve them better.

Mike Merrill:

Well, that’s a great note to end it on. And I so much appreciate the conversation today. It’s been a pleasure to have you on, Dan and I look forward to continuing to keep in touch in the future and following your success.

Dan Murray:

Thanks, Mike. And I look forward to many years of this great podcast series that you started in the future.

Mike Merrill:

Thank you, I appreciate it. And thank you to the guests for joining us today on the Mobile Workforce podcast sponsored by AboutTime Technologies and WorkMax. If you like the conversation that Dan and I had today or were able to learn anything new and interesting, please subscribe to our podcast and give us a rating and review on iTunes or your favorite podcast platform. 

You can also follow us on Instagram at WorkMax underscore or on LinkedIn at WorkMax. And again, please leave us a five-star rating and review if you enjoyed the show. We appreciate your support and if you can subscribe and download those episodes that really helps us out to continue to bring these types of discussions to you to help you improve your business and your life.

Construction Analytics: Balancing Long-Term Portfolio Risk

Construction Analytics: Balancing Long-Term Portfolio Risk

Construction can be risky business. Fortunately, with the right information, contractors have the ability to understand their overall exposure to risk. Increasingly, contractors are turning to technology to speed up the process. Typically, people assume this process works much like understanding a stock portfolio. Contractors need insights into their projects across their portfolio to see which are profitable, which are breaking even and which are in the red. But technology today goes beyond data collection and delivers predictive insights that rely on trends to show risk ahead of time, so contractors can make adjustments as needed.

According to Viewpoint’s Matt Harris, mobile applications and live field data can be compared against aggregate data from the industry at large. This provides accurate and predictable insights into any bid or job a contractor is looking at. Thanks to this technology, contractors can gain confidence in their assessments of risk like never before.

 

Key Takeaways:

  1. Daily data collection is no longer enough. Automatic data collection allows for very refined control over how resources like labor, equipment and materials are being consumed and deployed on projects – all of which are critical to risk management. And while many companies have morning win-loss reports that show how a project did the day prior, it’s not longer enough. With margins so tight, contractors need to drill down even further. That’s why more and more contractors are segmenting their data by shifts, so they can better understand how projects are progressing morning, afternoon and night. 
  2. Passive data collection is on the rise. Data collected by employees shines light on areas like job progress, labor usage and safety. But there’s so much more data that can be collected through the Internet of Things (IoT). IoT is technology that uses sensors like GPS and motion detectors on equipment to allow data to be shared without anyone having to collect or report it. As more contractors leverage data collected directly (from human input) and passively (through IoT sources), the better they can assess their risk in the future. To take advantage of passive data collection, look for IoT options on construction equipment, and then ensure the data is included in your risk management strategy.
  3. Data aggregation and predictive modeling software is changing the bidding process. More and more data is collected and analyzed from across the industry through data aggregators. This improves predictive models that can help contractors understand their risk for future projects.

 

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Episode Transcript:

Mike Merrill:

Hello and welcome to the Mobile Workforce Podcast, I am your host, Mike Merrill. Today we are sitting down with Matt Harris, the Chief Product and Strategy Officer at Viewpoint. We’re going to discuss your business portfolio and projects and how you can use data to balance your risk and insure that you are taking the right projects to accomplish your overall business goals. Hello Matt, I’m glad you’re here joining us.

 

Matt Harris:

Hey Mike. Yeah, hey great to see you and thanks for inviting me here. You and I have known each other for many years now. I’m excited about your podcast frontier here and thanks for having me on.

 

Mike Merrill:

Awesome, yeah it’s great. And you’re hailing from sunny Portland, is that right?

 

Matt Harris:

I’m hailing from sunny Portland, yeah. One of these days we might see the sun. This time of year we don’t see it very often but yeah, here in Portland, Oregon.

 

Mike Merrill:

And I’m from sunny Salt Lake. Or snowy Salt Lake, I should say.

 

Matt Harris:

Snow Salt Lake for sure. Yeah.

 

Mike Merrill:

All right well before we jump into the conversation today, can you give our listeners just a quick introduction about your background and your experience?

 

Matt Harris:

Yeah, for sure. As you mentioned I’m the head of product and strategy and business development here at Viewpoint, and am responsible in general for the businesses of our products, our growth, our investments and insuring that we’re having expansion, not just financial expansion of the business, but making sure we have usage and adoption of our products to the fullest extent possible as well. And a lot of this includes the innovation, what are we doing next and what are we trying to improve upon. I’ve been at Viewpoint coming into my 10th year so it’s been a long and very interesting and really compelling journey for me, and has been extraordinarily fun as we’ve evolved as a business. About two years ago we’re now part of the Trimble portfolio of businesses and that’s been a very interesting evolution of our business as well. We’re doing a lot within the Trimble ecosystem of products and businesses and it’s been very exciting. We are coming through a major impact to the economy in our industry and COVID and I’m happy to say many of our customers and their employees and their businesses have been doing well and we’ve been focused on making sure we’re helping them to whatever extent we can.

Our business is doing well as well and we’re looking forward to getting out of this as quickly as possible here and continuing on the journey we’re all on.

 

Mike Merrill:

Yeah, that’s a great background and as you mentioned business really does seem to be booming in most places. Construction’s doing very well generally, despite the challenges of our time. With that thought in mind it’s almost an interesting challenge to have. It’s a good problem to have, but I think a lot of businesses are having a challenge deciding which projects to actually take on because they’ve got so much backlog they’re actually being able to be a lot more picky. So what would you advise companies to be looking at when they’re deciding which particular projects to pursue in this economy?

 

Matt Harris:

I think the first step and even before you can get to that question is businesses should be finding ways to really collect a lot of information. As much information as they accurately can about their projects and about the work that they’re doing. Clearly businesses are always, contractors are always looking at, they estimate jobs, they bid jobs, and they obviously make progress on jobs. The ability though, to accurately aggregate and pull in information about jobs on a regular basis, on a daily basis, on a four hour basis around how much labor is being consumed on a job. How productive the equipment is for those projects, how the material is being consumed. The ability to do that and collect that information in real time and near real time and compare that to your original bids to your budgets, to your forecasts is really the step one in being able to predict the future and use data to your advantage to understand the risk in your overall project portfolio.

This is where, and things that you know very well and things that we know very well, very straightforward mobile applications that the fore-people are using on the job site, that the superintendents and project managers are doing on the job site that are looking at how much time crews are spending on various aspects of the job, how productive the equipment is, how much material is being delivered to the job site and is being used in the project that day, comparing that back to your budget and really having a good understanding of how your actual costs are changing relative to your budgeted plans. That is extraordinarily powerful information. Not only to tell people, are you ahead of plan, are you at plan, are you behind plan today, but it turns out you can use a lot of that information to start to predict the future as well, and I’ll get into a little bit more of that prediction a little bit later on. But I think really step one is use some of the mobile applications that are available in the market today and make sure that not one your people are using them to collect the information but then you’re connecting that information back to your bids, back to your estimates and budgets. So you can really compare what you’re actually doing compared to what you thought you would be doing.

 

Mike Merrill:

Yeah, very sound advice. There’s a lot there to unpack, which is great. That’s what we want to talk about today. Something you mentioned caught my ear, so to speak. You mentioned the four hour mark or half day. Where did that come from and is that something new? Are companies aware of that? What are your thoughts on tracking by the half day at least, it sounds like?

 

Matt Harris:

Nowadays because the data collection can really be very automated, you can really get very refined inputs on how resources are being consumed and deployed on projects. Resources meaning labor, equipment, materials. Many companies we speak with, they have morning win-loss reports, for example. They want to see how the project did yesterday and so where they have to catch up, where they’re ahead. Some companies call these scorecards, and how they did in the week to date and yesterday’s progress or the overall project to date. Now that data can start to be aggregated really regularly you can start to really partition that into day parts. Into the morning day part or the afternoon day part or overtime and evening as well. You can really literally see how different crews or different components on the job are progressing more regularly. So it’s mobile applications tied into your cost model, you can really get more refined reporting on what’s happening. Is the morning more productive than the afternoon, than the evenings, you can start to see that information. That’s the information that’s available to us today.

 

Mike Merrill:

Yeah, I think your points are well understood by me. I guess from a statistical perspective, just grabbing a number in your mind, what percentage of your customers would you say are actively leveraging these types of tools and what percentage are still a little bit behind or way behind?

 

Matt Harris:

I would say that within our customer base right now it’s about 50% of our overall customer base have some form of mobile application on the job site where they’re aggregating data in real time. We do have a lot of great usage data on this. We know we had 75000 active users in our field productivity tools every month. That’s been really taking off in the past year, year and half or so. In fact, the fastest growing component of our portfolio right now is in mobile field productivity. It’s in strong demand and the ability to really capture data in near real time and then compare it back to the cost model and do this all paper free and automatically is a very appealing need or very strong need from our customer base right now. We, and I know you guys do have some really compelling products to help make that happen. As you know mobility right now and field data capture is on the minds of everybody in the industry and it’s a really strong growth platform.

 

Mike Merrill:

Yeah, I love that, and for those that aren’t yet there, it should be. Your competitors and the rest of the industry is utilizing those things currently.

 

Matt Harris:

Oh for sure. I mean right now the applications are so good and reasonably inexpensive that the productivity gain far outweighs the costs of manual data collection that is otherwise being done through clipboards or sometimes writing on 2X4s or whatever. To collect information and have to manually enter that in and that being once a week and inaccuracies. If you’re able to collect this in a real time basis and not only inform executives about how they’re doing against their project objectives but also you can feed the information back to the superintendents, right? So some of the things that we do is as soon as a superintendent collects crew time, for example, we tell them right away are they ahead of plan overall in the project budget or are they behind plan in the project budget. They can say to themselves, “Tomorrow I better be careful around how much overtime I use or I better have a plan to get this phase finished out.” So we can actually inform the people who are really making decisions on how to use crews and people to make better decisions and make decisions that’ll help them hit their budget targets.

 

Mike Merrill:

Yeah, I love the idea of that feedback loop that it sounds like you’re talking about.

 

Matt Harris:

Yeah, it’s really very powerful.

 

Mike Merrill:

So obviously paper and spreadsheets are out, if this is the kind of data you want to have in the timely manner that we’re talking about.

 

Matt Harris:

Yeah, paper or spreadsheets are definitely out. Paper in particular. What we saw last year and I would assume many people saw, yourselves included is that paper as a communication means is really going away and there’s more and more demand that we’re seeing in our customer base in the industry to fully digitize. Get out of paper means and really stop paper hand offs and really start and enable the digital hand off. That’s not only at productivity at the job site, that’s in employee communications, that is in a subcontractor communications, vendor and supplier coordination, everything is really moving towards a digital framework and digital communications and one of the things obviously with more and more people working remotely the ability to hand off paper and do that is harder, but also there’s just the common sense of let’s get out of paper and start to use digital means. It just makes it easier and safer for everybody too.

 

Mike Merrill:

Yeah, I love that. Migrating off of those more rudimentary or basic tools of the past allows us to collect more what I would call passive data. There’s active data, passive data, what are the differences between those two and how do they come into play together?

 

Matt Harris:

That’s really interesting and then we can start to think about how we collect data and what we do with it. Right now as a superintendent is using our products, a mobile application to collect crew time or equipment time or material deliveries, there’s actually a person who’s doing something there and they’re using a mobile app for example and they’re providing information to that mobile app, which is way better than doing it through paper or other means. That is more of an active process. Somebody is actually entering data into that application which is then feeding the model. When you think about it we can start to do things in a job site that will instrument the job site and that will actually passively collect information on the job site without anybody having to do anything.

For example, we can capture using IOT, internet of things. We can capture information on equipment that tells us where the equipment is and if it’s in the job site we know that it’s being consumed by that job without anybody having to do anything and we can also capture information to see if the equipment is running or not, if it’s being operated or not. From that information we aggregate that and create and get an understanding of the equipment, it’s use on the job and how productive it’s being on that job. And in this case, an equipment manager or superintendent didn’t do anything. It’s just automatically happening throughout the job.

There are other things that we can do just to see in terms of people and labor, when they’re on the job site through automatic clock in and clock out methods and where they’re working on a job site. We can start to look at things like that. We can understand through imaging or through other job site cameras or even drones, we can start to see where the material is on the job sites, is the material stockpiles growing or shrinking and all that data is captured automatically and then fed into the model without anybody having to do interfaces on a mobile application at all. That is, in it’s very beginnings right now, certainly equipment is further along than some of the other things and we’re doing it in some ways with material as well. Particularly with civil materials like aggregates and other types of things where we’re using drones and imagery to look at the stock piles and the inventory levels on sites for some of the more civil materials. But that’s very early on but it’s a very interesting opportunity for us all.

 

Mike Merrill:

Yeah, you mentioned the term “aggregators”, for the listeners what does that mean and also what value does that provide to have an aggregator?

 

Matt Harris:

Yeah. The aggregation of the data, what you can start to do and what we’re working on now is as more and more of this data becomes available and we look at how jobs are performing and their costs relative to original bids and their budgets, then we can start to really understand how a contractor is performing historically against all of their jobs, and actually not just the contractor but the industry at large, and we can now build some models that tell us how we think the contractor will do when they bid future jobs. This is where things get really interesting. So as we understand across thousands, hundreds of thousands and millions of projects how much was spent on labor, how much was spent on materials, on equipment. We compare that with the original bids on the jobs and the estimates. We compare that with the type of job, when it was done, where it was done. We actually build models then that can predict, that look at the overall industry and how does the industry perform? We build models that look at how does this one particular contractor perform relative to the industry.

And we can also build models that tell a contractor if you bid a job and it has the following elements to it, you intend to spend so much in labor, so much in equipment charges, so much in material, your original contract value is this. We can tell that contractor with an 80% probability of likelihood we can tell that contractor how likely it will be to achieve their targeted profit outcome. So this is where we get into some of the things you started with, Mike, around how can we help contractors better manage their portfolio and backlog? So we can inform them of bidding on this job under these circumstances will either result in a high margin likelihood of probability or a low margin of probability. Probably no surprise to us all, the endstage profit margins on a project are very, very different from the original bid. So we’re able to actually predict that difference.

 

Mike Merrill:

Yeah, 80% that’s a big number. I wouldn’t challenge that. I would imagine that’s probably the case? One question that comes up in my mind is how is one contractor able to leverage data from the industry or from others of their peers?

 

Matt Harris:

So in two ways. First in the model I described and what we’re doing is we’re working on this with a select group of our customers now. With this model that we’ve created, it compares a single company’s performance on project profit margins to the industry at large, so they as a company can see in general how did they do. Are they better than the industry are they worse than the industry. Then we also can use that data to help inform them on a project that they might be bidding on, how they’ll perform against that project and how that project is likely to perform. So that is an example, and our customers now are using this. Estimators are using it to really get kind of a help quantitatively validate some of their bids. Help them get more than a gut feel around the project. Owners are using it to start to look at is this a job, how likely could I be to lose money on this job? Should I take it on right now? If you have a backlog or the opportunities for bids are pretty substantial, let’s choose the right bids and marry some low risk jobs with some high risk jobs. So that’s happening right now. That’s an example of the things that we’re doing.

The other example of things that we’re doing is that we’re providing information back to our customers in just an overall industry benchmarking. We can look at what’s the average profitability of jobs like that for the industry at large and as I mentioned, how does that compare to a single firm? We are actually providing information on just hiring trends in the industry, is the industry and in regions and states, are they hiring more people than they’re letting go? Or are they letting go of more people than they’re hiring and get an index of labor trends and that certainly affects how quickly it would be to bring new people on board, what labor rates might be doing. We’re providing indices on just overall backlog trends. So are backlogs increasing are they decreasing, by type of project, we’re providing some indications there. So we’re really providing some now macroeconomic indices that our customers are using to help inform them around what’s directionally happening in the industry right now.

In the era that we’re in, there’s a lot of volatility right now, the pandemic, things shut down then they came back and you’re like what’s next? Having these indices is what we’re hearing from our customers is the indices are really super helpful.

 

Mike Merrill:

Yeah, I’m envisioning as you’re talking a lot of great information there and it’s actually astonishing to me, I mean I come from the industry and spent a decade or more in general construction before we started our mobile data collection company 17 years ago. It’s amazing to see the transition of the industry and that we could even be having conversations like this. I’m picturing a stock portfolio or dashboards with ticker symbol and seeing the ups and down trends. Is that a realistic comparison that companies could enjoy today with the technologies available?

 

Matt Harris:

It’s a very realistic comparison. That ultimately what we’d like to be able to do is provide an owner or a C-suite a risk profile on their projects. Just like an investor would have, at least a good investor, would have a good understanding of a risk profile of their investments and marry some high risk investments with some low risk investments so you have a balanced portfolio. What we’re able to do, and we’re in the very early phases of this now, is really provide risk profiles of a project portfolio. High risk jobs versus low risk jobs and ideally a good contractor would want to have a balanced approach of that. Obviously not have an entirely high risk portfolio, because then maybe putting more of the company at risk, but you also don’t want too of a low risk portfolio in possibilities of growth. So and that also is dependent on the phase of the company and things like that. So we’re enabling with some of this data which is very easy to get and we built the models, we’ve done the data science ourselves with a very clever group of data scientists that we have both at Viewpoint and at Trimble. We’re providing some very simple tools for our customer base to use.

 

Mike Merrill:

Wow. Truly incredible and you mentioned this is a newer evolution of where things are at. So it sounds like moving forward into the next three, five, 10 years, decade plus, companies are going to be able to compare this historical data in trending and really make more predictive long term decisions, not just which job do I take next but where do we point the direction of the company as we continue to grow.

 

Matt Harris:

Oh yeah. The application of data science in our industry right now is only just beginning. I mentioned being able to predict profit margins for future jobs, looking at the industry overall and macro industry trends, we’re also looking at individual projects the change in costs on those projects, the change in costs in last month and the month before really tell us how costs are going to change next month. So we’re building models that really help project managers look at based upon how much I spent this month and the month before, how’s that going to influence what I can expect to spend next month. So they give them warnings of a profit fade event before it happens. There’s other really simple applications as well. We can use artificial intelligence now to just automatically scan invoices, pick up all the relevant information in those invoices and then populate invoice records inside of our software for payment and approval processes. Now a lot of that is done manually through keying and so we can not only provide systems that are much more accurate than keyed entry but also three, four, five times faster as well, just through the application of some of the new AI techniques and methodologies.

 

Mike Merrill:

Yeah, I often site the statistic that 7% of everything typed is a typo of one sort or another and there’s no spell check on calculators, so when somebody fat finger’s a number or adds an extra zero there’s a lot larger consequences than just a small typo.

 

Matt Harris:

Yeah, it turns out you’re exactly right. It’s actually more than that. What we see is about 1/3 of manually entered data is inaccurate, so we’re measuring it and some of the machine AI techniques that we are using now has 93% accuracy. That’s getting better. Now 93%, some people will say that doesn’t sound that awesome, but when you compare it to people or manual entry right now is only accurate 2/3 of the time, 63% of the time. That’s a big jump. That’s kind of what we’re trying to enable.

 

Mike Merrill:

Yeah and that’s probably if someone’s having a good day. If they’re having a bad day it might be 1/3 as accurate, right?

 

Matt Harris:

Right. Yeah. I’d imagine it mixes out.

 

Mike Merrill:

Data doesn’t have any emotion.

 

Matt Harris:

Yeah. Yeah. And doing things like this not only makes it more productive that we can now enable our customers to instead of entering data, look at it. Understand it. Do things with it. We’re trying to really help them get better use out of the data. Acquiring the data should be very straightforward and that’s what we’re trying to do and enable tools like that. Then helping them use and consume the data is kind of the next wave.

 

Mike Merrill:

I always say with proper mobile tools in place you can now manage data, not drama. So to speak.

 

Matt Harris:

Yeah, well said.

 

Mike Merrill:

I mean I can tell, obviously, that mobility is probably the newest key innovation in this whole recipe. How critical is having a solid sound mobile strategy for constructions businesses today?

 

Matt Harris:

I think mobility is a foundational step in just getting job site understanding of what’s happening. In otherwise said, I don’t see how you do this without a strong mobility platform and environment. In enabling your field leadership, superintendents, fore-people, project managers, whomever, equipment managers, operators, even field service technicians as well, with a platform that’s not only going to inform them what needs to be done today, but also help them collect information on what’s happened and relay back to them how they preformed that day or that half day, relative to the budget model or relative to the forecast is absolutely critical. The difference makers are the companies who are doing that and giving their people on the ground making it happen the ability to be informed, no only acquire the data but be informed about how they’re doing on a regular basis is instrumental.

It’s almost like if you’re not doing that you’re almost doing the project with a blindfold on. Then we’ve seen it, they get the monthly reports, and it’s like, “Who, whoa, whoa, what happened? We’re way off! What went wrong?” Then they scramble and try to get into the reports and see what happened, but they’re already a month behind and on a 10 month job it’s hard to catch up. The difference between getting information with the right people at the right time for the right decisions and not doing that is really… I can’t imagine how to run a project if you’re not doing it that way.

 

Mike Merrill:

Yeah and I know you mentioned earlier it sounds like you’ve been at Viewpoint, now Trimble, for about 10 years now? Is that right, a decade?

 

Matt Harris:

Coming into my decade, yeah.

 

Mike Merrill:

Well congratulations for that, that’s awesome. What I recall from your background, this industry was new to you at that time, is that right?

 

Matt Harris:

It definitely is right. I came out of another world whereas with the technology company I’ve been in software for a good part of my career, but I came out of the world doing something very, very different in the life scientific industry, but working in construction and construction technology has just been awesome. Making an impact has really been fun.

 

Mike Merrill:

Yeah, I can imagine. I think the industry has moved more your direction from where you came from or met you in the middle at least as you’ve embarked on this journey, from the sounds of it.

 

Matt Harris:

Oh yeah. You know it’s just fun. I think we’re in a unique role, you and I, I think we have a unique opportunity to really make an impact. What we do matters and when we do it well we hear it, we understand it, when we don’t do it well we also hear it and understand it. That’s the nature of our industry. I’m very proud to be part of such an industry and we’re earnest in our wanting to make an impact. Not obviously help our business but more importantly do things important for an industry that we think could use our help and we pay a lot of attention to making a difference. When we do our job well hundreds and hundreds of thousands of people get paid and put food on the table for their families. We take that responsibility extremely seriously. The role that we play, just foundationally, is very, very important to us and I think we’re lucky to have that responsibility and we know we have to earn it every day.

 

Mike Merrill:

Yeah, we feel very much the same way here. It’s very impactful and blesses lives when we do a good job. That’s neat to be part of something that changes peoples lives for the better.

 

Matt Harris:

Yeah.

 

Mike Merrill:

So in that tenure for nearly a decade, what has been the most surprising thing to you and maybe what’s the thing you’ve enjoyed most about this journey so far?

 

Matt Harris:

I think that there’s a lot of talk in the ecosystem at large that, I’m going to say this the right way, that construction’s behind, they don’t really get technology and it’s backwards from a technical adoption perspective. What’s been surprising and interesting to me is it’s not behind, per se, it’s an industry that’s really based upon very tangible needs. To the extent that we as technology providers or anybody can solve real problems for our industry, for our customers today. There’s a demand, there’s a need for that. People just don’t want to be working in a blue sky environment so much and making bets on stuff that may or may not happen. I like the practicality of the industry and just the need to solve real problems. If we solve real problems people will use our products and our software.

So that’s been one really interesting component of it all. I think this whole, what is perhaps an overused term around digital transformation, that’s live. That’s happening, we’ve been talking about it to some extent. The adoption of cloud browser and mobile technology is to connect job sites in the field with back office and costs and the overall project environment, that’s really happening in a big wave right now. It’s exciting to see that. We call this next wave of the data transformation, it’s kind of the next thing that’s happening. So I appreciate working within the industry and really getting very clear on the value we can create, solving real problems with our products now and then the potential to solve a whole new set of real problems with our products with data in the future. And I think it’s just been a fun industry to work with.

 

Mike Merrill:

Very exciting. So in this journey is there one business process you feel like you’ve really worked on or focused on to master that’s had a larger impact than other things?

 

Matt Harris:

There’s been a variety I’d say. One of the things that we’re very, very focused on now is a new sense of… it’s kind of coming up in the software industry, it’s called product lead growth and it’s really making it very easy not only for customers or buyers to acquire the software, which we try to do in some techniques that we have here at viewpoint. But now we’re looking at it more so with the individual user mode. How can we make users come into our software as simple as possible, so that customers are getting value out of our software with their users right away. How can we make sure that not only is the software easy to use but training is very easy and simple to follow from within the software itself that the software becomes almost self implementing, if you will, and that we can point people, if they’re trying to solve problems, we can point people to different parts of our software that will help them solve that problem and it would actually give them a roadmap of different parts of our software to use.

What we’re trying to do here is create a simple user experience. So think of it more than just a customer, Joe’s Civil Contracting. Now think about it as the project managers at Joe’s Civil Contracting, the superintendent, the HR director, the payroll clerks. How do we make it very simple and easy for them to adopt more of our software? What we see is that the more people, and the way our software is used for the most part, as people adopt it, it doesn’t cost our customers more, but we just want our customers to get full value out of all the things that they could be using within our suite, and that’s a big part of what we focused on.

 

Mike Merrill:

Yeah, it sounds like individual ownership by role, regardless of what position they’re in.

 

Matt Harris:

Yeah. Making sure that individual users needs are being met and really understanding if we’re doing that or not. Some of the things that we’re doing in our products right now, tell us where are things being adopted very quickly, where are they not, how can we make it better for users.

 

Mike Merrill:

Love it. So what is Matt Harris’s super power, if you have one? What are you really good at personally?

 

Matt Harris:

I’m just… I’m a super curious person. I call myself a knowledge junky. The reason why I think I’ve been at Viewpoint for 10 years is that I think there’s always new frontiers to learn and I’m really interested in learning new things. The construction industry, how we can digitize the industry, how the data applications in the industry, how we can really be lead in a product lead growth framework where users are adopting our software as much as possible. There’s so many opportunities to learn, the evolution of the industry overall, I think that is my strength. I get super excited when I’m learning and our industry has lots of learning opportunity for me. To be honest I think that’s one of my greatest strengths.

 

Mike Merrill:

Yeah. I love that. So is there one thing you wish you would have known when you started at Viewpoint that you now know very well and what has served you? Maybe someone else can learn from your experience.

 

Matt Harris:

That’s a great question. I would say now when people come into our business and we bring people in from the software industry at large, obviously a lot of people with domain expertise in construction and other people who are just great software experience in general and great business experience. One of the things that I’ve learned over time is, and I referred to this previously, is that in our industry for contractors, what we do we have to make it immediately relevant for what a contractor needs today. We need to define things in a highly literal way, make it clear. If you use this your invoices will be entered into your system five times faster with far fewer errors. This is a problem because you’re spending so much on doing it today. If you use this your superintendents will know if they’re ahead of plan or behind plan at 4 o’clock every day. So we need to be very literal in defining and showing and proving that we can solve real problems that our customers and our users are having today and that’s what I tell our team. It needs to really have clarity on the problems that we’re solving. Literal problems that we’re solving.

When we do that well, we can see. Our products, not only our sales but our usage of the products goes through the roof. When we miss the mark on that people kind of scratch their head and go, “I’m not sure what we’re supposed to do with this.”

 

Mike Merrill:

I love that. I think it’s applicable even for our contractor companies that are listening to learn from that same advice with their field personnel, their office personnel, that clarity and simplicity of the messaging regardless of the task is critical for clear communication and execution.

 

Matt Harris:

Yeah.

 

Mike Merrill:

Love it. Just one last thing, if there is one takeaway from today’s discussion for the listeners, what would you say to them?

 

Matt Harris:

If you’re not using mobile applications for your projects right now I would absolutely, positively, take advantage of them. There are great like your company’s making, great products like our company’s making, other products. They are cost effective right now and easy to use. In most cases they are also connected to the back office. Not only can your job site people, your superintendents and fore-people be capturing information really easily but it can be connected into the back office as well. That will just absolutely, positively save time and also enable a company to begin and start to collect information as they think about the next step, which would be the data journey. How do you use that information to help you make better decisions in the future.

 

Mike Merrill:

Fantastic. Great takeaway. Well, thank you Matt. I’ve very much enjoyed our conversation today. It’s fun to catch up and see you again even if virtually, for now. I appreciate you joining us.

 

Matt Harris:

Likewise, Mike. Great to see you again, thank you so much for inviting me to this and yeah, best of luck to you, the business and the family and I hope to see you again soon.

 

Mike Merrill:

Thanks. Take care.

 

Matt Harris:

Bye.

 

Mike Merrill:

And thank you to listeners for joining us today on the Mobile Workforce Podcast, sponsored by About Time Technologies and WorkMax. If you enjoyed the conversation Matt and I had today or learned anything new and helpful please give us a follow on Instagram at WorkMax_ or on liked in at WorkMax and please also subscribe to the podcast. We love our five star ratings and reviews, when you are able to chime in and give your feedback there it helps us to bring this valuable information and insights to other businesses like yourself. Our goal is to help you improve your life and your business.

 

Analytics in Construction: Beginner’s Guide to Data Visualization and BI 

Analytics in Construction: Beginner’s Guide to Data Visualization and BI 

Every industry has trends that come and go, so it’s understandable leaders get wary of the latest buzzwords. The true test of what’s a shiny toy object versus what has longevity is the value it provides. Take Business Intelligence, or BI for short. BI gives contractors the ability to visualize data and quickly decipher it so they can recognize trends on the job site and take action. The buzz around the power of analytics is for good reason. BI and data visualization signify a huge step forward in construction technology and productivity. 

In this episode, Frank Di Lorenzo Jr. and Ben Harrison from Preferred Strategies share how to take the data you have and leverage it with the help of BI. They also share how BI can be used with other key technologies, such as machine learning and artificial intelligence, to put powerful reporting in the hands of everyone on the job site. 

 

Key Takeaways:

  1. Data visualization makes KPI tracking actionable and timely. According to Frank, visualized KPIs give a contractor the same power that the dials and instruments in an airplane cockpit give a pilot. When everything is going right, it’s hard to say if altitude is more important than how much fuel is left in the tank. But when the fuel is getting closer to the red line, the pilot is immediately alerted where to focus. Frank says data visualization is much the same. It gives insight into the analytics of a project to reveal how it is doing and offers alerts on KPIs contractors should focus on.
  2. Contractors need a data feedback loop. Labor used to be tracked by filling out time cards, only for them to be put in a filing cabinet never to be seen again. Now everyone on the job site has a phone or a mobile tablet that’s always connected and providing real-time data, like safety forms and task progress, back to the main office. This connection creates a feedback loop where the information flows from the job site to the office and back again on a continual basis. This is important because it is this feedback loop that gives BI and visualizations their power. Giving users the ability to see the data analytics from others on the same job site ensures that everyone makes the best decisions with all of the information available. 
  3. Business Intelligence far surpasses spreadsheets. In its day, Excel was a useful tool for basic tracking and reporting on a job site or business –– that has all changed with BI. BI consists of dynamic data coming from different parts of the business and provides historical, current, and predictive views of business operations on the fly. Unlike Excel, this means data only needs to be entered into the system. From there, BI will process the data instantly to deliver insight into your KPIs. 

 

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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 Frank Di Lorenzo Jr, the client relationship director and Ben Harrison, the product director at Preferred Strategies. Today, we’re going to discuss the predictive data and data visualization. I’m looking forward to this unique conversation with these gentlemen today and looking forward to getting a fresh perspective about project information. So hello, Frank and Ben. Welcome on the podcast today.

 

Frank Di Lorenzo:

Hey Mike, thanks for having us. I know Ben and I are both really excited to be here. 

 

Ben Harrison:

It’s great to be here. 

 

Mike Merrill:

Awesome. Well, thanks again. So before we jump into the conversation too far, can you gentlemen give the listeners just a quick introduction on your background, maybe your experience in the industry, and if we can start with Frank, that’d be great. And then Ben, you can follow.

 

Frank Di Lorenzo:

Sure. Happy to. So Frank Di Lorenzo Jr. Thank you Mike. As he mentioned, I’m the client relationship director of Preferred Strategies but Reader’s Digest version of my background, I’ve been in the industry construction ERP-wise for 36 years. I’ve implemented just over 700 construction accounting systems, grew up with a solution a lot of folks know out there known as Timberline. That’s where I got my start. And what’s interesting is I’ve seen solutions evolve. Back then, we started early on, it was getting computers to process financial data. And then we grew from there and we started putting systems into other departments, project management, estimating, CRM and then we matured further to excellent field mobile applications to collect data in the field. Very important. 

So now just for one year, I’ve switched my career to where I think the industry’s evolving to now, which is we’ve got these systems in place. We’re collecting mountains and reams of data. How do we make it actionable information? So I’m having a lot of fun now for one year working on the data side of things, Mike. So that’s my background.

 

Mike Merrill:

Awesome. Ben, how about you? 

 

Ben Harrison:

Sure. Again, Ben Harrison. I spent about 18 years as a business analyst and then a business manager for a construction company, Heavy Highway Construction but did a lot of analysis, a lot of reports. We’ve watched the technology merge over time. But really the idea of how do you take that information and turn it into actionable data drove me in my path now to where I’m at a company that that’s all we do is business analytics. And it’s honestly an exciting job. It’s fun. We get to have fun every day.

 

Mike Merrill:

Well, that’s awesome. We are certainly in a period or an age I would say of information overload at times. So lots of data to look at and lots of things to analyze. So appreciate all that you gentlemen do for the industry. So a couple things I wanted to just ask about. So what’s the difference between front end and back end data? Those are terms that we hear. What are your thoughts?

 

Frank Di Lorenzo:

Well, I’m going to take a first stab and then Ben I’m going to ask him to take it a little bit deeper, but from a business application standpoint, we have our data sitting wherever it may be hosted. And I hope I’m answering your question, Mike, but I’ll go ahead this way, our data viewpoint or your ERP may be hosted in the cloud, private cloud, Azure, on-prem. How do we get to our data in a meaningful way to report on it? And what if I have data that is living in multiple places, some on-prem. So I’m in One Cloud, some in Azure. So how do I take all of that information, transform it into, I’ll call it a front end data cube that I could report on. 

So I think the difference is transactional data for processing, which is what all the ERPs are optimized to do and taking that data and transforming it into something that’s report friendly. So in a nutshell, that would be my first pass at that. And Ben, why don’t you add a little more color to it if you will. 

 

Ben Harrison:

That’s exactly would be my take that transformation of data from transactional to be aggregated suitable for analysis. There is a metadata layering that happens there that makes it more useful. But again, you think about data and information. I like to think of the front end data as information and the back end as all the detailed transactions. And so that’d be how I would define it.

 

Mike Merrill:

Okay. Great. So that’s a great foundation to start from. Now talking about that data, when you heard the term predictive data, how does that differ from flat data and maybe what are those differences once you have that data in store?

 

Frank Di Lorenzo:

Yeah. I have my thoughts on that, Ben, but I think you would have a deeper insight. So if you wouldn’t mind. 

 

Ben Harrison:

Sure. So often I think about what you hear these days in the articles I read about predictive analytics, right? Taking that data and understand how to predict it. And I think that has to be context, right? Context driven. When you think about what you want to analyze, you want to analyze backlog and everyone knows what backlog is. It’s your contract amount minus your earned revenue so far. But you can’t hope that the data model will discover the relationship between those. And so the predictive data is arranged in a way to where that backlog can be analyzed. The end result is that you get insights you might not have had before with predictive data. 

I know that at the company I worked for, we struggled for a long time at understanding housing stats, right? Housing was a big part of our construction business. And what you wanted to do is find what’s the smoking gun that indicates housing stats down the road. Is it on permitted land? Is it county permits? What drives that? But again, the predictive data is going to allow you to take something and use it to understand what’s going to happen. And there’s lots of ways that could be structured.

 

Mike Merrill:

Okay. So I’m thinking of the term maybe triggers, is that what you mean? Data triggers that would make you look at a certain thing?

 

Ben Harrison:

That would be it. Yeah. So predictive analytics is… So here’s another example. The company I used to work for used lots of diesel fuel, lots of it, or heavy highway, heavy iron usage heavy iron. Changes in fuel prices is a big deal, right? So the predictive data would say, “If fuel goes up so much, what’s that going to do to my cost of sales, right?” Because I know the type of work I do, the type of equipment I do, but that lets you prepare and plan for… The trigger would be the fuel price change, but the action is, should I buy futures? Does that make sense? So triggers is a good way to put it.

 

Mike Merrill:

Great. Well, all right, so we’ve got the data types, we’ve got triggers and things that are indicators. There’s another term out there, Frank, maybe you can answer this the term BI, what does that mean to a contractor for those that may not be familiar?

 

Frank Di Lorenzo:

We have our buzzwords that come and go in our industry. We’ve all lived that. It could be cloud it could be mobility. Now BI is a big buzz word, stands for business intelligence. And to me what that means and what I think it means to a contractor is being able to decipher my information and see the trends so I can act on them before it’s too late. So in other words, in construction, most of our teams still look at data in a very text printed 2D format. There’s a great book I’m reading. It’s what I could recommend. It’s called Data Strategy by Bernard Marr. And one quote in there is when you visualize data, you’ll see things that you never knew were they are right in front of you. 

So part of business intelligence I think is being able to see the data in a more meaningful, impactful way so you can act upon it. Now you take that and you’ve coupled that with some of the machine learning capabilities that AI, artificial intelligence that Microsoft provides, and there’s a lot of power that you can put in the hands of reporting. 

 

Mike Merrill:

Great. Great answer. So really in my mind, I’m visualizing maybe the difference between a paper report that’s just printed out and I’ve got to pick through the data to find out the details or dashboards and graphs and things that are more visually appealing and at a moment’s notice green or red or yellow means something to me that I can then act on is that visual.

 

Frank Di Lorenzo:

Yeah. And that’s part of it and even more. I mean, now that we’ve become truly a mobile world, just imagine having the power of all that data on your mobile device coupled with your location. Maybe whenever I’m near a certain client and they owe us more than X, I want that report to pop up on my phone and maybe I’ll go visit them. But it’s that actionable activities we can now put into play. 

 

Ben Harrison:

And I’d like to just add to that. BI is a term and it’s a ubiquitous term. But to contractors today, historically people thought about ERP systems and Frank mentioned to begin with were the financial business side of things, right? Just AR, AP, GL. But business intelligence, more and more includes operational intelligence, which is productivity rates over, under production. Right? So there’s a lot more to business intelligence. It’s a much broader thing now than it’s ever been in the past.

 

Mike Merrill:

Yeah. That’s a great insight. I think another buzz word that comes to mind is KPI or key performance indicators that you then have with that type of data. What types of KPIs or key performance indicators should contractors focus on specifically?

 

Frank Di Lorenzo:

Yeah, I’m going to answer from what I see from gaps currently clients are experiencing in their reporting and then I’ll ask Ben to take it with his actual experience a little bit further. So key performance indicators, another buzz word as you said, Mike. And it’s really a wide open loaded statement because it could be financial KPIs on our cash performance, could be operational KPIs on a project specifically. It could be productivity KPIs on how our labor is performing, how equipment is doing in the field. So there’s a number of KPIs but as an executive, maybe I want to be able to visualize a dashboard where I have several KPIs before me. I want a snapshot of how we’re doing from a cash standpoint and I want to know if we have any issues in the field, maybe from an equipment standpoint, so different KPIs but I want them in front of me and at my fingertips. Does that make sense?

 

Mike Merrill:

Yeah. Yeah. That makes a lot of sense. So to me, I’m picturing a front end and a backend to that side of the story. I mean, what do each take to be effectively managed?

 

Frank Di Lorenzo:

Well, one thing to consider is you got to get the information from the field, right? I mean, you ever hear the old adage garbage in, garbage out with all the cool stuff we have, that still applies. So provided that we put the tools in the, I’ll say the right procedures in place to collect information, make sure it’s accurate, timely. Now we can deploy all these reporting tools to establish our KPIs and our dashboards. And that’s something I know Ben, I think you’ve actually done in practice. So I don’t want to steal any thunder you may add. 

 

Ben Harrison:

No, I think that’s what I do see. You think about KPIs, think about an airplane cockpit. There’s a lot of indicators that are really important there. So it’s hard to say that altitude is not more important than how much fuel is left in the tank. But from a construction point of view, field productivity is where margins are tight. You estimate it based upon some assumptions to know whether it’s going bad or not. You can’t wait till the end of the month reports. You really need that daily productivity understanding. And then construction industry, that’s where I see the biggest benefits is that field business intelligence has given me insight into how did I do today so I can take action to fix it by tomorrow.

 

Mike Merrill:

Yeah, that’s great. I know in my world the term we like to use, and I think companies should be more focused on than they are today is live field data. And so I don’t know that that’s a buzzword yet, but if we can make it one, we’d sure love to because I think that visibility is really what everybody’s after, wants to have their finger on the pulse of the money if they can. 

 

Ben Harrison:

Yeah. 

 

Mike Merrill:

Go ahead, Frank.

 

Frank Di Lorenzo:

I was going to say, I mean, absolutely. Think about this for a minute. I could provide you the prettiest dashboard on the planet with the nicest, most vibrant colors but if it has a column that says hours yesterday, and it’s a zero, because I can’t get that information for three days, the report is pretty useless, frankly. So having that data stream in place is very important from collection all the way through to backend.

 

Mike Merrill:

Yeah. That’s a great analogy. And another thing, you talked about garbage in garbage out. One thing that we see and hear commonly is there are people putting numbers in that cell, in the spreadsheet or in the report that are guesstimated or estimated and maybe aren’t even accurate. So that could be worse than a zero.

 

Frank Di Lorenzo:

Could be worse. Because misinformation now is dangerous.

 

Mike Merrill:

Yeah. All right, well, so speaking of labor in the field, we all know today the crunch in the construction industry to find mid-level skilled labor, just everybody said, I just came from a large, the 99th annual AGC event here in Salt Lake City, just a great event. It was a live event, something fun to get to with everything that’s been going on and get back in front of people again. But that was the theme of every conversation I was in. Everybody was saying, “Our biggest gap right now is just finding enough good help. We were so backlogged. We just can’t find the labor and have a major shortage in skilled employees to come and help us work on these projects that we actually have locked in.” So how can having better data or more proper and appropriately managed data get ahead of that to a degree?

 

Frank Di Lorenzo:

Ben, do you want to take that one? 

 

Ben Harrison:

Yeah. Yeah. I think I that’d be good. So that’s a great question. And I think it’s something that every contractor struggles with as long as I’ve been in the industry and has been for a few decades now, where am I going to get the crews to do the work that’s been important. Part of that is understanding your crews and the company I came from, we had A-level crews, essentially your A-level crews, you kept busy all the time, right? If there’s no work for them, you put them down the yard cleaning stuff up because you just want to make sure they never go find a job elsewhere. Then you had your B-level crews who are pretty good and then your C-level crews. So part of that is if you don’t have good analytics, you can’t understand your true capacity. And I think contractors need to have that understanding of what’s possible and even turn work away because it can be expensive to get the wrong crew on a job that you’ve been with really tight margins. Right? So does that help? I thought that answers for me the question.

 

Mike Merrill:

Yeah. I think that’s great. And you both spoke about just getting that predictive data or that trending, the productivity ratio. So I think some of what you spoke about also would be helpful in knowing in two months we’re going to have a major shortage. We better start getting ahead of that if you’re doing that.

 

Frank Di Lorenzo:

I’ll just add really quickly. One other thing, I think it’s one thing to find quality talent but to retain it is another thing. And I think part of that retention is the employee’s experience at that company and providing them proper tools to do their job is one. I can’t imagine, some young talent in the industry going to work at a company and saying, “Okay, your reports are paper-based.” Or, “Start writing your time on this notepad and we’ll collect it later.” That causes stress that reduces that employees, I think, job experience in total. So I think data helps you enjoy a better experience on the job because you know where you are, there’s less surprises, less angst and the proper technology tools help with that retention as well.

 

Mike Merrill:

No, that’s great. You mentioned reporting and it just makes me think, I was a contractor a couple of decades ago, used to be a general contractor. We self-performed a lot of work of our own also. And the capabilities in reporting today versus back then, or I mean, it’s just two completely different worlds. So how has BI changed reports that contractors can actually enjoy today, for the last decade or so?

 

Frank Di Lorenzo:

Ben, I think you could share with us that one.

 

Ben Harrison:

Sure. I’ll jump on that. I obviously, I think the most important thing is mobility, right? The idea that technology… I can remember our first laptops we gave to Formaway long, again, decades ago. And that adoption level changed a little bit but it was still you’re filling out a time card and an Excel sheet and sending it in. But the idea that I now have a tablet, the phone or a mobile tablet that’s always connected, not only allows me to provide that real-time data back to the main office, safety data, punchless data, just anything that’s there but also allows me to see data back consolidated from other people in the same job site, so that the biggest thing to me that has changed in the last 10 years is the expansion of what we can expect to have in the hands of a foreman or a project engineer who’s out on the job site.

 

Mike Merrill:

Okay. So I’m hearing like a loop basically. Is that what you’re saying? A data loop where that’s actually getting back to the field instead of being trapped in a file cabinet in the office?

 

Ben Harrison:

Yes.

 

Frank Di Lorenzo:

Data feedback loop. I like that, Mike, I think that’s spot on.

 

Mike Merrill:

And from there, what’s the value of having the field plugged into that information to make those decisions?

 

Ben Harrison:

Well, there’s all sorts of implications. I think one of the things I saw most of the company I worked for was improving on safety, right? So we did lots of near miss recordings and you look at compliance of not safety but even environmental compliance and not being shut down for a day for whatever reason drives all sorts of things. So I guess for me, it’d be hard to say, how could you not live that way now? Right? If you’re going to be in business and you don’t have that visibility on the job site, I don’t see how you stay in business.

 

Mike Merrill:

Certainly you have to be competitive. So one of the other words that’s been floating around in the conversation, we’ve talked about data visualization, what are some options within that term that relate to construction today?

 

Frank Di Lorenzo:

Yeah. I’ll take a first pass Ben and then certainly I know you can add some more color to it. But when you’re visualizing your data and there’s some favorite charts we have, one’s called a waterfall chart. So if you’re looking for, am I above or below the line, if you will performance over budget, under budget is an example, that’s where a waterfall visualization can really help illustrate that. Visualizations are really meant to make the data pop, stand out, show trends, show outliers and think about this, when you combine some of the AI and machine learning capabilities of Microsoft with those visualizations, I can now say, “Okay, here’s all my data, Power BI, what do you think?” And it will actually draw up some visualization. Some may be meaningless but others might become part of my dashboard package. So visualizations is just a new, and I think more complete way to see inside our data, if you will.

 

Ben Harrison:

Can I add to that then as well? We are getting more sophisticated, not we me and Frank, but we as a society are getting more sophisticated on visualizations. I can remember as a young engineer, pie charts were how people thought of visualizing data. And so then there’s bar charts, there’s stacked bar charts and all of these new capabilities. And now there’s these key indicator charts that break down components that you can drill through. That brings to question some sophistication that’s not natural, not natural does not explain what I mean, it brings the idea that I need to bring to the table some willingness to understand, right? Pie charts, people got led away. Some of these more advanced charts give you really, really good insight but you have to stop and struggle with them. And so that’s what I’m seeing is that the more sophisticated visualizations provide very powerful insights but you can’t just look at them right away always and see exactly what you need to see. You have to engage in them.

 

Frank Di Lorenzo:

It’s a good point, Ben. Part of our data journey and working with clients in this whole data experience is training around that, how do you take your data and visualize it? What does that mean? Where should you start? So there’s a bit of training I think that helps with that adoption. 

 

Mike Merrill:

Yeah. And I think back to something that you mentioned earlier, Ben, now that the field has this data and they have the ability to see what’s going on in a more real-time manner, like you spoke Frank, I think the decision-making capability is enhanced and the field is now more empowered than ever to make good decisions without waiting for approval and extra unnecessary steps and bottlenecks. Wouldn’t you say?

 

Ben Harrison:

I would. And I would emphasize that one of my bosses early on wanted to measure performance and posted on the room in the lunch room, right? So that every form is rated. And I said, “Isn’t that going to de-motivate people?” And he said, “No, no.” He says, “Nobody wants to be the last person. Some of them want to be the top person, but the fact that you’re measuring people, inspires them.” People want to excel. That’s what I believe is true. And so one of the beautiful things about better analytics is that lets people be proud of the work they do, it lets them be engaged in becoming better. And that visibility drives process improvements that you wouldn’t have dreamt of if you didn’t allow people to see that data.

 

Mike Merrill:

Yeah. They say when things are measured or when performance is measured, performance improves is a phrase I like.

 

Frank Di Lorenzo:

It’s a good phrase. I like it as well.

 

Mike Merrill:

So one of the terms that I’ve used over the years too is businesses really need to try and find a way to look through a windshield to manage this information instead of the rear view mirror, see what’s coming at them, not try and figure out what the pillar of smoke is behind them, that they just pass by as the job blew up, so to speak. So in talking with that, so I know I’ve heard Frank say before that most of the data that’s used, I mean, its around 90% of the data, whatever some large number goes unused. How does data visualization help leverage and tap into more of that information that does exist within the company? It’s just siloed.

 

Frank Di Lorenzo:

It’s a great question, Mike. And I think part of it is having a better data strategy. So visualization is a part of that strategy. But if somebody out there is looking for just prettier dashboards, that means they’re thinking I need a report. If culturally they’re ready to say, “We need to be a data driven company.” The reason why so much of that data goes unused, I think is because they don’t have the bandwidth or the ability to get their arms around it in a meaningful way. So having a data strategy in place, allows us to greatly improve that, having access to much greater data, hopefully accurate data makes those visualizations much more impactful and value adds. 

 

Ben Harrison:

I’d jump on that as well. Frank, I agree with you 100% that that idea that you’ve got all this data and if it’s just unstructured and there’s no thought put to it, then it’s really hard to get insight out of it. But if you have this data and you actually put a little bit of work into creating a data model, and honestly, that’s one of the things we do as a company, that model now provides a framework so you can do the same type of things that Netflix does or Amazon does, right? So you’ve got a structured data set that now you can actually use tools that are available in something like Power BI to do some artificial intelligence, digging through it, where it’s as Frank said, and analytics is about trends, correlations and outliers. 

Machines do that really well. But they do that really well on a structured data set. So really we’re saying put 100 million records into a data set, structure it well, and then let a computer sort through that. And that other 85% of the data that you’re saying never gets used, it could be used but people probably won’t be doing that. Machines are going to be doing that. They won’t tell us the answer but they’re going to help ask new questions we didn’t think of before.

 

Mike Merrill:

So ask better questions because we got better data there. Interesting. So what I’m hearing then you gentlemen do not subscribe to the idea that Excel is BI.

 

Frank Di Lorenzo:

You know what? I would say Excel can be… Well, yes. Short answer, yes. But Excel can be a part of the BI. I mean, Excel is a great reporting tool. Where I say no, no, no is when I see Excel used as a data silo. So if I’m starting to depend on Excel spreadsheets where I’ve typed in standalone data, or it’s static downloaded from two days ago, not a great use. If I’m using Excel as a part of my data-driven strategy to work with data and visualize it and do what if scenarios, then it has its place I would say. Ben, what would you think? 

 

Ben Harrison:

Yeah, absolutely. Excel is a great slicing and dicing tool. It’s not a good database. And so use Excel one for what it does well, and it will serve you well. Otherwise you’ve got a maintenance nightmare.

 

Mike Merrill:

Yeah. Yeah. That’s a great point. So speaking of automated processes or tools, how have you gentlemen seen AI have an impact on job sites today?

 

Ben Harrison:

I think it’s just coming online. For myself, I haven’t seen it have a major impact yet. I think we’re on the leading bleeding edge of it will soon but not so much adopted yet. Ben, how about you? What have you… The successes that I’ve seen again, I think it is early still. I think construction industry particularly has not figured out how to use these tools well, but from a safety perspective, I think that I’ve seen some AI looking at what are the trends where you’re looking at a lot of data and trying to understand what are the things that work? I’ve seen a few successes in that area. But we’re just beginning with AI and construction. 

 

Mike Merrill:

Yeah. And I think maybe some steps towards that, or at least some technology steps that I’ve seen a lot more active would be BIM or maybe virtual reality, VR. Those are some things that I’m starting to actually see out on projects. And we’re hearing about from our customers. Are those things more common and a part of what you service your customers with?

 

Ben Harrison:

I’ll take that. We do see the, particularly the GCs and the AEC companies doing that. Our customer base is more of the operational install and we’ve not been seeing that as much, but I do think those technologies do slowly filter out. But that’s again, I haven’t seen that.

 

Mike Merrill:

All right. Great. So one of the things, and even it’s the same for me too, with anything new, you hear about the fear of technology especially on the lower end of the labor perspective where people are afraid, this AI or these new tools are going to take my job. We even hear that with our mobile data collection systems, people think, well, my whole job is to key in reports all day and key in payroll manually all day. If you take that from me, I’m not going to have a job. Do you think it’s justified to have those kinds of fears? Or what would you tell people that might be worried about that?

 

Frank Di Lorenzo:

Mike, it’s a good question. I think it’s understandable. I wouldn’t say justifiable but certainly understandable. Since the first time someone hit post on a keyboard and things started happening automatically, people started to be concerned about their job security. And I’ve heard that multiple iterations of new technology when GPS came out, I’m being tracked in my truck. My gosh. You’d hear stories of techs trying to disable it or take it out. They were afraid of that tracking. Now that it’s become mature in the industry, people have adopted it, they know the value of it. And I think AI is just going to be another case in point of that. So with AI, I think there’s some unknowns, fear of the unknown but as it becomes more mature in the field, it will be something they don’t want to live without.

 

Mike Merrill:

Great. So what I’m hearing if I read between the lines, change is good as long as that change is improvement.

 

Frank Di Lorenzo:

Change is good. Change can be feared. It’s okay to have a certain amount healthy but work through it for a better end. 

 

Mike Merrill:

Yeah. I like that. So speaking of these tools automated and more digital really, if we think about our cell phones or a machine and they do certain things like a robot might do. When we talk about labor law compliance, especially, I know you gentlemen, both happened to be from the state of California which is famous for some pretty stringent labor laws and compliance laws, Department of Labor, work comp, all these other things for safety, not bad things but certainly very specific. So why do you think it’s imperative that companies find technological or automated tools or solutions for their employees to record and document this data like time and labor or activities or safety out in the field to help mitigate those risks on the job site?

 

Frank Di Lorenzo:

I would say one just the pure cost of an error can be so egregious that you just don’t want it to happen. So that would be the first one that comes to mind. And then Ben, I’m going to call on you just because of your experience in collecting that data. What would you add? 

 

Ben Harrison:

Yeah. I think that the benefits and I think you’re pointing out the cost of an error is so expensive. And I can think of the types of things that I’ve seen companies try to do of, “Did you take your rest break?” In California you got those laws to do that. Those laws are meant to protect employees. In California it can be 106 degrees outside on a hot day, and you need to know, did you go and drink some water? Are you hydrated? So I’ve seen systems that are starting to put a heat sensor in a hard hat to see, is your body temperature over temperature, a heat stroke again, terrible thing to have happen but also shuts down the job site. You can’t afford to risk noncompliance. So having your tools that help you manage the compliance is important. You just have to do it. It’s the right thing to do. 

 

Frank Di Lorenzo:

Yeah. And from my experience companies, that don’t do it, it only takes getting stung once then suddenly it’s a big priority and they do it. 

 

Mike Merrill:

Yeah. Both great points. And I love what you said there Ben that it’s the right thing to do. It’s a safe thing to do. And then even from just an accountability standpoint, I know I’ve said it for years and I hear others say it in construction, we’re really risk managers, we’re data managers and we happen to build things and we need that data to help drive the revenue and to make our business run. But essentially, every day you wake up and take a step out the door, you’re at risk from a liability perspective. 

 

Ben Harrison:

Yeah. 

 

Mike Merrill:

So to just wind things down a little bit, just going to maybe do some rapid fire questions and maybe we can just alternate here. So Frank if I were to ask you, what’s one skill that you’ve really mastered or that you feel like you’ve got a great handle on and made a positive impact on your business career?

 

Frank Di Lorenzo:

Mike, I love the question. It’s a good question. And I would say it’s a skill that I continue to hone and will improve for the rest of my career. And that is relationships with my clients or with my peers, building and maintaining and earning the trust and friendship I like to call it of our clients. So to me, that’s an important skill I think that they trust you and that you can be an advisor. You have some value to convey. And that’s a skill that I’d like to think I’ve brought in a positive way to this team and continue to work on because it’s important to me personally. 

 

Mike Merrill:

That’s a great one. I’ve seen you do it for years and you embody that. 

 

Frank Di Lorenzo:

Thank you, Mike.

 

Mike Merrill:

All right. So Ben, for you, what’s one activity or something that you feel is your wheelhouse or your super power that you’ve developed?

 

Ben Harrison:

Well, it’s interesting and picking one is hard. I feel like I’ve learned a lot. I feel like I still continue to learn and maybe that’s it is that I’ve realized I don’t know all I need to know. And so if there’s something that doesn’t make sense to me, I’ve learned to stop and ask why? Try to essentially have a humility that I don’t know everything that I need to know and someone else might have some insight for me. So I guess that’s super power sounds, antithesis to humility. But if humility is a super power and I’m not saying I’m that good but being willing to question yourself and your judgements, I think is a really important thing.

 

Mike Merrill:

Yeah. That’s a great one. If we’re not growing, we’re dying, right? If we’re not learning, we’re dying. Love it. All right. Frank, how about this? What’s the most powerful thing that data has done for your business?

 

Frank Di Lorenzo:

Good question. I would say transparency because in our business, we can’t hide. We have experts with data, so everything’s in a Power BI dashboard. And what that I found has led to is no surprises, nobody thinks anything’s not being displayed or hidden. Anybody in our team has access to every piece of data that they should to stay in their lane and do their job properly. And it goes back to your superpower question. I’ll just mention this because I think the superpower I found here is the beyond the power of one, it’s the power of our team. We’re a super team, not a super individual. And having the data just makes it all the more powerful and collaborative.

 

Mike Merrill:

Fantastic. Love it. All right, Ben, one more then I can ask you each one final question. What is one mistake in business that you have made that you wish you would have been able to avoid and would like to help others avoid?

 

Ben Harrison:

I feel like Frank and I are on a similar theme here. So for me, it would be on that collaboration side, right? Of my mistakes have usually been when I thought I had a great solution, I’ve planned it carefully. I plotted it all out and I come and present it to the team and it doesn’t work. They have no buy-in to it. They didn’t understand the context. And so my biggest failures have been when I did not get adequate buy-in from the people around me so that it wasn’t a Ben solution. It was our team solution. And my biggest successes were honestly when we collaborate well, and the solution we come up with is better because more people contributed to it.

 

Mike Merrill:

Collaborated, team, solution, better, people. I heard all those words in your last sentence and that’s awesome. Well, it sounds like an incredible organization to work for and with. You guys obviously have a great team. So one final question, let’s start with you Frank and then Ben if you can finish it out. What’s one thing, Frank, that you hope that our listeners can walk away from hearing this conversation today?

 

Frank Di Lorenzo:

Sure. Yeah. I think that 2021 is the year of data for me. If you look at the investments being made by the construction industry in tools and training and procedures to manage the data that they have, it’s really exciting. So take a step back. Don’t just look at your next report but look at your data strategy from a big picture standpoint. And then the other piece of that is, it doesn’t have to be us but find a partner that’s going to treat you the way you should be that you expect, that’s going to partner with you, bring the expertise and the collaborative spirit that you need to make this work. So a multiple mic thing. Hope that helps. 

 

Mike Merrill:

Fantastic. How about you, Ben? 

 

Ben Harrison:

What I would like you guys to take away is that this is a journey. It’s not something that you’re going to buy an analytics tool and install it in a number of weeks and then be masters of it. This is something that’s going to take effort, purpose, training, budget, time, transformation. But expect that and honestly the results can be astounding but you can add to your bottom line, you can add to your job satisfaction but it’s going to take some intent.

 

Mike Merrill:

That’s great. 

 

Frank Di Lorenzo:

Put it this way, Mike. Rarely, if ever do I hear, I hear people say, geez, we’ve got to get our arms around our data and it’s going to be hard. I’ve heard that in the beginning of the journey. The clients that I’ve had the good honor to work with that have made it through that journey, I’ve never heard anybody ever yet say, “Yeah, we got to remove this stuff. This is not important. It’s not helpful to have BI and visualize our data.” Once they’re there, they don’t want to give it up for a good reason.

 

Mike Merrill:

Love it. Great stuff. Well, what a wonderful conversation. I sure appreciate you, Ben and Frank for joining us today. It’s been fantastic. And hopefully we can do it again down the road.

 

Frank Di Lorenzo:

I hope so. Thank you, Mike. We appreciate it. 

 

Ben Harrison:

Thanks for having us. It was great to be here.

 

Mike Merrill:

You bet. So thank you all for the listener for joining us today on the Mobile Workforce Podcast, sponsored by AboutTime Technologies and WorkMax. If you enjoyed the conversation today that Ben and Frank and I had, please follow us on Instagram at WorkMax_, follow us on LinkedIn or join our LinkedIn group of WorkMax, and also subscribe to the podcast on your preferred platform. If you really enjoyed the conversation today, please give us a five-star rating in review and leave a comment on what you enjoyed or learned from the podcast. And this will help us to continue to bring these types of episodes and conversations to the industry, which will hopefully improve your business and in turn your life. 

Innovation in Construction: Using Tech to Tackle Its Bad Rep

Innovation in Construction: Using Tech to Tackle Its Bad Rep

There are a lot of stereotypes about the construction business, such as all projects go over budget and delays are inevitable. Most of them are dated and untrue, but these misconceptions still weigh the industry down. How? For starters, by making it harder to attract good workers and increasing skepticism by prospective customers. The good news is there’s never been a better time to work in construction, with technology at the helm of significant changes that improve how companies budget, report progress, and track issues. Fortunately, technology and marketing are the answer to freeing the industry from outdated stereotypes once and for all.

In this special crossover episode with the Bridging the Gap Podcast, host Todd Weyandt breaks down common stereotypes about the construction industry and shares ways to reshape construction’s image in 2021 and beyond.

 

Key Takeaways:

  1. Contractors should partner with their local trade organizations on community initiatives. The industry will be able to change the general public’s perception if everyone works together for the greater good. By working together on projects that give back to the community and unify to recruit for job fairs, contractors will begin to be trusted and respected by the community and each other. Trust and respect for the construction industry and the different trades benefits the entire industry. 
  2. Promote soft skills on the job site. Construction is not a muscle-only industry. The need for soft skills and tech savvy is only increasing. On-the-job training and fast tracks for promotion give anyone willing to do the work the opportunity to succeed. As an industry, we need to show that making a career in construction is rewarding, does not require extensive college debt to get into, and has unlimited upward mobility. 
  3. Sales and marketing are a huge part of the process today. Studies show that 85% of all purchasing decisions are researched beforehand online. If you do not have an online presence with a website and social media, especially LinkedIn, you are missing the opportunity to set the expectation for new clients. But having a website and social pages isn’t enough. Show off your diverse team, the technology you use and the quality of the jobs you have already completed. 

Make sure to check out the second half of our conversation on the Bridging the Gap Podcast! We discuss actionable steps to build a new reputation for your business by promoting the processes and technology you use on the job site and online. 

 

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Episode Transcript:

Mike Merrell:

Hello and welcome to the Mobile Workforce Podcast. I am your host Mike Merrell and today we are recording part one of a specials crossover series with a host of the award-winning podcast Bridging the Gap Todd Weyandt. Thank you Todd for joining us. I’m excited to sit down with you and have this discussion today.

 

Todd Weyandt:

Absolutely. Thanks for having me on.

 

Mike Merrell:

You bet. So before we get into the conversation too deep, would you give our listeners just a little bit of an overview in your background and experience?

 

Todd Weyandt:

Yeah, absolutely. So my official title is Director of Creative Marketing at Applied Software and we are AEC and manufacturing systems integrators, so we tackle pretty much anything under the sun with AEC, whether it’s software or custom development or workflow enhancements, we probably have it covered there. And then through that, I get to host the Bridging the Gap podcast which focuses in on the innovation and the innovators out in construction and MEP. So we focus a lot on kind of what are those foundational elements to make technology adoption successful whether that’s on the culture side of things or business process side or the innovation and growth mindset that is needed to not only just survive the future of construction and the changes happening, but really thrive in that new year.

 

Mike Merrell:

Oh, that’s awesome. Yep. I applaud your efforts and enjoyed listening to your podcast episodes so far and love what you’re doing for the industry. It’s a great resource that can be really helpful to our brothers out in the field.

 

Todd Weyandt:

Thanks.

 

Mike Merrell:

You bet. So I guess kind of to get things started off, I just thought maybe we could talk about one of those quote unquote elephants in the room that sometimes happens in conversation about construction people and workers, just the stereotype that it’s grunt work and people that are less skilled in other areas end up working construction because that’s all they’re really good at. What are your thoughts on that?

 

Todd Weyandt:

Yeah, I mean it’s for sure a prevalent stereotype and I, true confessions, I have fallen guilty of that in the past myself, that it’s maybe just a job, it’s not a real career path. Some of the other stereotypes of it’s a dirty job or slow to change, stuck in the past, no tech. What I have learned though, I’ve been at Applied Software for almost seven years and doing the podcast for about a year and a half, and what I’ve learned over that time is that’s just so not true. There are so many cool new technologies coming into the construction space and there are so many people that have their arms wide open for embracing that technology, they’re just not good at sharing what they’re doing and talking about it. And that probably stems from a whole bunch of reasons. Chief among them is that the construction industry is full of a bunch of really humble people, which is great, and their head down, get the job done. That’s all they’re focused on, which is definitely, I’m not knocking that. That has its place and its advantages for sure, but they’re not great at sharing their stories.

 

Mike Merrell:

Yeah. I think I would agree with that completely. I mean I grew up in construction company industry and, did some pretty cool projects, but when I go out and about and travel throughout the country and even the world sometimes internationally, I am just amazed at some of the structures that I see and some of the architecture that’s happening in this day and age. And I really tip my hat to the trades that are able to create these beautiful structures and incredibly, just almost inspiring buildings that are also structurally sound and built with quality.

 

Todd Weyandt:

Oh for sure. Yeah. I mean some of those are pretty just mind blowing, especially when you add in how modulars coming into the industry and that the offsite bringing in manufacturing principles. I mean there’s some just really cool mindblowing stuff out there.

 

Mike Merrell:

Yeah. You mentioned a minute ago just kind of the stereotype that construction doesn’t necessarily adopt technology. What are some examples of some things that amaze you from the guests you’ve had?

 

Todd Weyandt:

On the technology side of things?

 

Mike Merrell:

Mm-hmm (affirmative).

 

Todd Weyandt:

Well I think what I just mentioned there with modular construction coming in and the industrialized construction that’s starting to overtake the industry, I think that there’s just really cool processes that they are able to get a lot more efficient, move projects a lot faster, and then really increase safety just by shifting into a different workflow with offsite and kind of pulling in those manufacturing principles and turning a construction site into a factory for all intensive purposes. Yeah. I think that’s some really cool things going on there that, it’s not a majority of jobs doing that right now, but I think that it’s going to be growing in popularity for sure.

I think another big thing is the construction industry proved over the last year especially that they can adopt technology at a rapid clip when they have to and start to put in place all those digital workflows, whether it’s as simple as getting on a Microsoft Teams application or something and having that chat functionality and collaboration within that platform. I think the construction industry has really proven that they had the chops to adopt the technology. It’s not as foreign as some might have you believe.

 

Mike Merrell:

Yeah. And these younger generations that are coming into the trades and advancing in management roles as some of the baby boomers retire, we’re seeing waves of new technologies being adopted in all types of industries and companies that I’m seeing.

 

Todd Weyandt:

Oh for sure. Well they’re demanding it. The younger generations, it’s not a nice to have, it’s an expectation here. The company would be very strange and weird if they didn’t have the technology for millennials and gen Z as they’re coming into the industry now as well.

 

Mike Merrell:

Yeah, I like that. And you mentioned something a minute ago about safety and I think that’s another area that I’m very, again coming from the trades, I’m just very impressed with not only how incredible these structures are becoming and the methodologies that companies are building these buildings and that the engineers are putting them together, but these things are being done very safely at record rates and safety percentages that we haven’t seen in the past. So amazing.

 

Todd Weyandt:

Yeah, for sure. Especially all the COVID curveballs that have been thrown the way of the construction, for them to keep the jobs going this last year I think really speaks volumes to the grit and determination of the industry, but also the can do, get her done mentality of the industry.

 

Mike Merrell:

Yeah. I think, like you mentioned a minute ago, that just generally the attitude and even the humility, the quietly just get to work, get their elbows dirty and just dig in and figure it out. I mean that’s definitely something that construction companies are good at doing.

 

Todd Weyandt:

Oh for sure.

 

Mike Merrell:

So what about when you hear things like when people talk about oh the projects are always late, they’re always over budget, you can’t trust a contractor as far as you can throw them. I mean what do you say to those types of stereotypes that also get thrown around on occasion? Or maybe shown on a TV show or something?

 

Todd Weyandt:

Yeah. I think that there’s such a broken cultural and communication aspect in the construction industry right now. One of the things that we talk about on Bridging the Gap is how to embrace those soft skills and what does that really mean. And I think, going back to the generational aspect of it, this is not a knock on older generations by any stretch, but millennials and the gen Zs are coming in expecting a little softer edge than what the industry has typically been accustomed to, which I don’t necessarily think is a bad thing. If you take it to any extreme it’s not great, but…

Now I’m not saying everybody sits around all day and just sings Kumbaya by any stretch, but I think focusing in on the trust factor and having that as an undercurrent between those different teams is a really big opportunity for the construction industry because there is bad blood, whether you’re talking about between the architect and the GC to the subs to the owner, there’s so much people talking past each other and not really sitting down and saying, alright, where are you coming from, what are you trying to get out of this project. I don’t necessarily have to agree with where you’re coming or your process, but I have to know where you are at so that then I know what I need to bring to the table and how to communicate back with you. There’s so much of the industry of it’s just easier to push it down to somebody else, blame somebody else and really contracts are set up that way as well, too. You look at contracts and it’s if something is going to fail, it’s when it fails this is what happens.

And so that is just an environment that sets it up for that mistrust and all of that has a huge impact on delaying projects and slowing projects down because everybody’s now in this super cautious cover yourself mode instead of offering and really embracing that true collaboration. So I know that’s a big buzz word that means a lot of different things to a lot of different people, but that’s because people have that mistrust and aren’t really taking the time to sit down and hear the other person’s point of view.

 

Mike Merrell:

Yeah. You mentioned a lot of really powerful things there. And I recently just came from an AGC event, Associated General Contractors, for the state of Utah and it was their 99th annual conference. So really cool, big year, a hundred years next year. And it was an in-person event so with everything going on that was a lot of fun. And we spent a couple of days up there with a lot of our team members. And one of the things that was so inspiring, in our local chapter there’s a building, I think it was between $7 and $8 million cost for an AGC training center, and the vast majority of the labor, the materials, and the money to build that facility were donated by the contractors in the state of Utah.

And so there were a lot of what I call frenemies or competitive companies working side by side in tandem donating time, labor, money, resources for the greater good. And it’s all in the name of safety. It’s a safety training center for members of the AGC. So it was so inspiring and I was truly proud to be a member of AGC and to be a technology partner for companies that are members and just to see that incredible brotherhood that existed in that environment. I think that’s kind of what you’re talking about. We need to broadly do a better job of those types of things working together for the greater good.

 

Todd Weyandt:

Oh for sure. Yeah. I’m a big proponent of just having those conversations and humanizing the other person. I think that goes a long way. And that can sound super corny, but it’s effective.

 

Mike Merrell:

Yeah. Yeah. And then one of the things too that was a big push, they have a hashtag, we build Utah was the hashtag. They had a really inspiring video clip of probably a dozen of these construction projects, highways, bridges, buildings of all the different contractors and little outsert quotes from different team members that were out there working in the trenches. And it was just incredible to realize the impact that the construction industry has on society in general. And I think sometimes we in construction even take that for granted and need to be reminded of this new term of being an essential worker. We’re all essential for sure. We all equal our part of society, but construction is just a critical component, especially the services trades and people that keep things going. And so it’s inspiring to be a part of it and we need to do a better job of reminding ourselves and others of that at times I think.

 

Todd Weyandt:

Yeah. More than agree with that.

 

Mike Merrell:

So tell me, within the industry, do you think sometimes we’re our own enemy a little bit or kind of need to be better proponents of this as we have dialogue within our organizations?

 

Todd Weyandt:

I think within the industry we are most definitely our own worst enemies there. And really the blame starts and pretty much ends within the construction industry on this marketing problem. Because if you’re not telling your story, who is? And you’re leaving that up to somebody else that does not know what is really going on. And that’s just silly.

 

Mike Merrell:

Almost like the TV sitcom persona of a construction worker?

 

Todd Weyandt:

Yeah. And they have no idea what actually goes on in construction. Most people within the industry doesn’t really fully understand the scope of what all is going on. Like what you were saying there about construction and the essential worker, maybe it stems back to that humility again, that construction is so just head down, let’s get this project where we’re all in on the specs and the criteria for this one thing that it’s hard to stop and kind of lift your head up and see that bigger picture of the impact that construction really has on society at large. With the, I’m going to get these stats wrong, but with the population booming as what it is worldwide, it’s something by like 2050 there’s going to be like a couple of hundred more New Yorks in scale and size that are being built within the world. That’s insane. And that doesn’t get done without construction. So I think being able to see that bigger picture in mind is huge for the construction industry and it’s something that, as a whole, we’re not very good at.

 

Mike Merrell:

Yeah, we’re building the homes that Google’s employees live in. We’re building buildings that Google operates or Facebook or Microsoft or Apple. We have a customer that has worked on all of those large projects in the electrical trades and it’s amazing how busy they stay in expansion of some of the world’s largest and most successful businesses that depend on them in construction to allow them to grow their business and advanced technology that we’re all enjoying today. Even that we’re recording this episode with.

 

Todd Weyandt:

Yeah, absolutely. I mean who would have thought that data centers would be the end all be all this past year, but that became an essential building because with everybody going digital and remote, it’s all about the data center now instead of office buildings.

 

Mike Merrell:

Yeah. And all the buzz with green energy and solar. We have lots of customers that do solar or cellular towers or all these other things that we’re using to power our homes and our offices, our communication systems. I mean just, there’s no end to construction’s impact on every facet of our lives.

 

Todd Weyandt:

For sure.

 

Mike Merrell:

So with what’s been going on in 2020, do you think the notion has been shattered of technology isn’t really needed on the job sites or maybe some of the old school mentality that maybe existed a decade or so ago?

 

Todd Weyandt:

Man, I’d like to hope so. But I’m really curious about it because I think in large part, yes, it has. But I’m curious if when things fully open back up, do you start to see a slow creep back to that mentality and, oh, well that was good as a band-aid for what we needed during that time, but now we can get back to the way it used to be. I think that the longer everything is happening, that probably diminishes and people get used to it. And once you’ve had that taste of tech and efficiency and you’ve learned that it’s not super scary, I would think that that’s a hard thing to give back up. But I think it’s a really intriguing open question for sure.

 

Mike Merrell:

Yeah. I know we had another episode, in fact one of our first episodes of, the very first guests that we had on our show was Brian Kaskavalciyan from a company called gFour marketing and he was sharing a sentiment that I’ve said for a long time too that we are not contractors, we are businessmen and women in the construction business essentially. And one of the most important things that can happen to advance that business is marketing our ourselves properly and appropriately. And that’s definitely one of the big gaps that I see even still in construction companies.

 

Todd Weyandt:

Yeah, absolutely. And admittedly I’m very biased in the role of marketing has that it can play, but in my mind it really goes back to what I was saying about if you’re not telling your story then you’re leaving it up to somebody else. And at the end of the day, marketing is all about storytelling. People are visual. They want videos, they want pictures, they want to be able to relate to the human success stories that are in the industry.

And in my mind, at the end of the day construction is a people-driven industry and we just have to do a better job communicating what does that really mean, what’s the impact of that? You hear all these stories of the guy going into the trades, not going to college, he’s not getting $100,000 in debt and he buys his first house by the time he’s 24, 25 and he’s doing awesome and making a killing compared to the college grad that comes out a $100,000 in debt and gets a remedial entry-level job right out of school and it takes him years to catch up to where the guy who started in the trades is. So I think being able to tell that in a more compelling way is crucial to the industry moving forward. And really with the skilled labor shortage and all that stuff, I think this is a key component to that.

 

Mike Merrell:

Yeah. There’s some very, very well paid employees in the construction industry in this day and age. No question about it. I think that’s a fallacy that a lot of people maybe don’t understand. What do you think about the younger generation coming through college and maybe coming out of high school now. What can we do to do a better job of recruiting and getting some of them involved?

 

Todd Weyandt:

Yeah. Great question. So I think being able, going back to those stories, I think that that’s huge. Find the people that have done it and help make them the spokesperson for it. Because it’s one thing to say that it’s possible, it’s another thing to show somebody that it was possible with, this is maybe controversial. I’m a Tom Brady fan. So if you would tell somebody that it’s possible to win seven Super Bowl titles and go to the Super Bowl 10 times in your career, you probably wouldn’t really believe that that’s true until you hold up Tom Brady and say, this dude’s done it. It is possible. That’s way more impactful than just necessarily saying the stats of what could be. So I think finding the poster boy, poster girls for lack of a better phrase is crucial. It humanizes that story.

 

Mike Merrell:

Yeah. And if you pick Tom Brady out of a line of football players, he’s probably not the first or even the 10th through the 20th guy you’re going to pick by stature or his chiseled physique, yet any team in the NFL would absolutely love to have him, right?

 

Todd Weyandt:

Yeah, absolutely.

 

Mike Merrell:

No. So there are, again, so we’ve talked about some of these things. There are a lot of things to be excited about that are happening in the construction world and in the industry. What are some things that you wish people were more aware of? Or if you could shine a light on something, what would some of those highlights be?

 

Todd Weyandt:

Yeah, great question. I think what excites me about the construction industry right now specifically is it’s at the start of its own industrial revolution for sure, which is really exciting. It’s already starting to take place and we’ve seen that, but there’s still a whole lot more of that curve left to go. And I think the technology leaders over the next decade, meaning what you have thought in the past of as the technology leader of the Apples or the Googles of the world, I think over the next decade or two you’re going to see construction being thrown in the mix. There’s going to be a construction company that rises up and kind of takes that mantle from one of those companies. And in my mind, construction is really the tip of the spear with all the innovation coming, all the tech that’s happening and that growth mindset and the hunger for getting better, getting more efficient, getting faster, getting safer. All of that is just an incredible soup that is being mixed in, is boiling up, and it’s just going to explode here in a little bit, which is, the potential there is what I people would latch onto more, that it’s an exciting time to be in construction.

 

Mike Merrell:

Yeah. Do you think social media has a big role to play in raising that awareness?

 

Todd Weyandt:

Absolutely. Yeah. I think. So LinkedIn is my drug of choice. I like to tease. Yeah. I think LinkedIn is huge because back to the story element and kind of raising up those poster childs of it’s possible, I mean that’s where people are going to find those stories right now, is on social media. So whether it is LinkedIn or Instagram or Facebook, whatever, telling those stories and relating to the personal aspect of it, that’s huge. And that happens on social now. Love it or hate it.

 

Mike Merrell:

Yeah. We have a local, it’s a welder actually, that did some work for my partner that’s our CEO called Yeti Welding here in Utah and he invested a while back in a drone and posts stuff every day and it’s fresh and it’s fun and it’s him rising his guys or him doing aerial shots of a really cool project they just did or some huge plasma cutting table just doing something intricate. And it’s very fascinating and entertaining. And they’ve, I don’t know how they have 14, 15,000 followers at this point and it’s just a small welding shop. They do some incredible work, but if you look at just even their Instagram page, it’s very impressive and you wouldn’t think they’re small at all by the projects that they’re doing. And so that’s an example to me of where he’s doing a fantastic job of marketing a great product that’s still maybe a little bit of a secret just because of their size and scope currently.

 

Todd Weyandt:

Yeah. And the great thing about social media is it allows you, what may have been a regional player can now spread their message anywhere. There’s no limits. And that I think is a really cool, exciting thing. Opens up a lot more competition, but it also opens you up to a whole lot more customers and clients as well.

 

Mike Merrell:

Well everybody says they have the best quality or they have some tagline that’s the same as a thousand other business cards say, but it is another opportunity to differentiate yourself. And if you believe in what you’re doing and you’re passionate about it, I think that shines through and that will resonate with them more than just another marketing slogan.

 

Todd Weyandt:

Yeah. I totally agree. And then you get to compete against the best and that’s something in and of itself there.

 

Mike Merrell:

There you go. Yeah. We actually have him scheduled to be on the podcast here in the next couple of weeks. So pretty excited for him to tell that story and share his vision of what they’re trying to accomplish and how it’s helped them win more jobs.

So we’ve talked about social media, LinkedIn, different mediums that companies can utilize as tools. I mean it used to be just, oh, we’ve got a website and you immediately were in the upper echelon of a construction company. And so I think we’re well past that, but are there some other things, I mean commercials, radio stuff. I mean, what other kinds of things do you see companies doing that you think are helpful?

 

Todd Weyandt:

Yeah. I’m a big proponent of videos. Whether you can release them on the website, you can do in email campaigns or social or a ton of variety and people are growing more and more and more to be visual creatures. And we always have been, but the video allows people to see it in real life and put themselves into that story and kind of latch onto it in a different way. So any chance that you can do a video, and right now everybody has the power to do really good videos just on their cell phones. The quality there is, that’s all you really need so don’t overthink that. Everybody can be a videographer now.

 

Mike Merrell:

Well that’s a great point. And even as a learning tool for within the trades. I built a fire pit in my backyard of my home a few months back and I just looked it up on YouTube. I had a friend that had done it and I was laying cinder blocks and running gas piping and cutting out sheet metal, every step. Grouting, laying stone. And I come from construction so I’m pretty candy with some of those things, but I’d never physically done that. And it looks like I paid somebody three or $4,000 to do something that cost me about 800 bucks in materials and some labor.

 

Todd Weyandt:

Yeah. Nice.

 

Mike Merrell:

And it’s YouTube, right? So video can be a powerful tool to get the message out whatever it is you’re trying to do.

 

Todd Weyandt:

Oh for sure. YouTube is, if not the biggest, it’s second as far as more people are searching for anything on YouTube even than Google too. I mean YouTube dominates search results.

 

Mike Merrell:

Yeah. How important do you think sales people are in construction companies? I know a lot of companies adopt that and have them and then a lot of smaller companies it’s the owner or really the upper management are the only ones really actually selling directly. But what are your thoughts?

 

Todd Weyandt:

I think that there’s obviously a place for sales reps hands down. It’s a personal business in construction and that handshake or fist bump in today’s world, virtual fist bump, that goes a long way for sure. But you see the stats of most people, like 70%, 80% of people have done 90% of their research online before they ever want to talk to a sales rep now. So if that’s the only thing that you are doing is just investing in sales reps, well you’re missing the vast majority of your people and your potential customers. So you have to, whether you like it or not, you have to have a digital presence in this world. You have to have the website, you have to have social because that’s where people are going to look for you. And if you’re not there, you might as well have your closed sign hanging out because nobody’s finding you.

 

Mike Merrell:

Right. Yeah that can only reach as far as their vehicle or an airplane can take them, right?

 

Todd Weyandt:

Right.

 

Mike Merrell:

So one of the other things, and this just popped into my head, I mean a lot of the messaging that you’re sharing and the ideology is also that everyone’s in sales, even in the field, right?

 

Todd Weyandt:

Sure.

 

Mike Merrell:

They’re all a part of that sales arm and marketing arm whether they realize it or not. How do we help the field recognize their role in establishing that reputation and helping the company look as good as possible?

 

Todd Weyandt:

Yeah. I think it’s a great, important question. And it starts with telling them that they are and having that conversation. Because a lot of times, I don’t think that it stems from the people out in the field don’t care about it or they don’t want to embrace that, but they don’t think about it. They don’t, back to the head-down mentality, they’re like that’s somebody else’s job. This is my job that I’m getting paid to do.

And so to communicate that out, that goes a long way. And then follow that up. It’s not a one and done communication, it’s a consistency effort there. And then it’s a live by and set some examples. Have people throughout the company showing what that means. And maybe going back to the culture aspect as well too as I’m thinking through it is, in order to really market it well and to represent that well, you have to take pride in the company and the brand and what it all represents, which is the culture aspect of the company and making sure people are feeling heard and feeling included and feeling like they are valued in what they are doing and know the why behind what they are doing. And when they know all that and all those boxes are checked, a lot of that’s going to happen on its own. People are going to naturally start sharing what they’re doing and naturally start posting it out and talking about it more.

 

Mike Merrell:

So what I’m hearing is start the conversation and allow that message to bounce around in people’s minds so it’s top of mind and then you sort of go from there.

 

Todd Weyandt:

Yeah. Start with something and then share it consistently.

 

Mike Merrell:

So for a company that isn’t doing a good job of this or maybe for one that is, what are some things that they can do to start really marketing themselves better? After they have the conversation, what are some steps or things that you would recommend?

 

Todd Weyandt:

Yeah. Pick a platform that you want to do. Don’t try to eat it all at once. If you’ve got a website, great. What social can you add in next? Then start sharing something. I know that there’s some people that are uncomfortable talking about themselves and putting themselves out there and that’s okay. You don’t have to. Brag on an employee, brag on a client, take a picture on a job site and share what you appreciated. It doesn’t have to be anything super complex or super intense. It takes you 60 seconds to do a post and just tag somebody and let it go from there and you’ll be amazed at how it takes off.

 

Mike Merrell:

Yeah. And I think, I mean one bit of advice I would share with the listeners, just last week for the first time I posted something on LinkedIn that I like to trail run, get up in the mountains, and I was on a trail run and I thought, you know what? I’m just going to introduce myself as Mike Merrell the trail runner today that works with WorkMax and is a part of the team here. And I actually had substantially more engagement and interaction and comments and different dialogue from all kinds of people that I’d never heard from when I just posted a normal thing about our product or what we’re doing or an event where at. It was clearly more interesting and also stood out to them to just share a little bit of me even though it was on the personal side. So there there’s maybe another tidbit that the companies could try.

 

Todd Weyandt:

Yeah, for sure. Love it. I think one of the things to think about and have in the back of your mind is what makes you stop and catches your attention when you’re on social. Chances are if it’s making you stop there’s probably something there to it to use that as inspiration and an example.

 

Mike Merrell:

I love that. That’s a great point. So take note of the things that catch your eye is what you’re saying.

 

Todd Weyandt:

Yeah, absolutely.

 

Mike Merrell:

Love it. Well great. Well so to kind of wind things up a little bit, just like ask kind of a few questions here at the end and get your feedback on. So what’s one skill that you’ve mastered or that you feel like you’ve been able to really take advantage of that’s made a positive impact on your business life?

 

Todd Weyandt:

I don’t know if I’m a master at anything. But I’d like to think of telling those stories and championing the innovation in the industry and maybe tie that with because I think they all play hand in hand with the healthy team culture.

 

Mike Merrell:

I love it. Good. What about something that you do regularly that’s become your go-to kind of your superpower, something you’re really good at? What’s your one habit that you lean on to help you be productive?

 

Todd Weyandt:

I lean into conversations. So I will sit down and talk with pretty much anybody and really seeking to learn insights there. I am not the smartest person in the room, I will fully admit that, and I want to learn from smart people.

 

Mike Merrell:

I love that. Yeah. Always be learning, right?

 

Todd Weyandt:

Yeah.

 

Mike Merrell:

Is there a mistake you’ve ever made or something that you wish you would’ve done a little bit differently that you could help steer others away from and maybe avoid?

 

Todd Weyandt:

Just one mistake?

 

Mike Merrell:

Yeah

 

Todd Weyandt:

Lots of mistakes. I think my biggest one is fighting the desire to control every aspect and details. I can be a bit of a control freak and perfectionist that I have to reign that in and learn that there’s beauty in relying on the team and trusting them to handle things even if it’s different than how I would go about it.

 

Mike Merrell:

Valuable advice. I think I could surely take a lesson from that. So the last thing. So if the listeners are to walk away from this conversation with one thing in mind, what would you remind them of here at the end today?

 

Todd Weyandt:

Perception is reality and don’t underestimate the power and potential that that holds. One of my mentors always says, “I’m not what I think I am. I’m not what you think I am. I’m what I think you think I am.” Meaning it’s all about perception. So it’s how I’m seeing the world through your eyes, which there’s a lot of gray in there, but keep that in mind. Perception is important to tell your stories. Don’t leave it up to other people’s perception. Paint that picture of what you want them to do and look for those ways to innovate even small things. And there’s always ways that you can improve and up your game there.

 

Mike Merrell:

That’s awesome. Love it. Well thank you so much for joining us today. I really appreciate the conversation Todd. Looking forward to the second half of this.

 

Todd Weyandt:

Absolutely. Thank you.

 

Mike Merrell:

And thank you guests for joining on the Mobile Workforce podcast today, sponsored by about Ten Technologies and WorkMax. If you enjoyed the conversation that Todd and I had today, please give us a rating and review on your favorite podcast platform and a five stars works great for us. Also you can follow us on LinkedIn or Instagram at WorkMax_. And also please make sure that you listen to the conclusion of this two part series with Todd on the Bridging the Gap podcast which Todd hosts also. And he’s got a lot of other wonderful episodes to share there so encourage you to check those out as well. Thanks again and we look forward to continuing to bring you these valuable episodes. Again, those ratings and reviews really help us to bring these valuable conversations to help you improve your business and your life.

 

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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      WorkMax YouTube Channel

Click Play to Listen to the Podcast Now:

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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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.

Maintaining Construction Management Mobility in All Situations

Maintaining Construction Management Mobility in All Situations

Today’s construction projects and job sites require teams to be nimble and agile so they can handle any surprises that come their way. But these capabilities don’t just happen. Construction leaders need to be proactive, encourage their employees to be ready for the unexpected and help set everyone up for success. 

In this episode of the Mobile Workforce Podcast Jeff Gerardi, the president of ProEst Software, shares how to build a company that can adapt to changes on the job site and in the market. 

Key Takeaways:

  1. Executives have a leadership responsibility to move their company to the next phase with technology. Executive teams should carve out a more functional place in the day-to-day workings of their companies by being involved and supportive of new initiatives, while also empowering employees to be more proactive.
  2. Automation gives employees time to analyze and collaborate on what is happening in the field. Manual processes often lead to human errors and lost administrative time. By automating processes, leaders give their employees workflows that streamline processes and eliminate data silos by giving the entire workforce access to the information, increasing collaboration. 
  3. Transparency gives way to the best outcomes in the long run. Transparency can be a painful thing and lead to some tough conversations. But once a team gets over that hump, they will begin to experience higher levels of productivity and effectiveness. 

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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 the president and CEO of ProEst, Jeff Gerardi. Jeff has been running ProEst since 1992. And today, we’ve asked him to join us, to talk about growing your business while keeping quality that you are known for. Welcome Jeff, we are so happy to have you on the podcast today.

 

Jeff Gerardi:

Thanks Mike. Glad to be here with you.

 

Mike Merrill:

Thank you. So first off, I got to know, tell me more about your experience of working your way up from the very bottom in a company, as a new employee, to eventually taking the leap and becoming the CEO of the company.

 

Jeff Gerardi:

Yeah. So I was in a unique position when I started, way back, multiple decades ago. Where I actually started as a salesperson, and literally after a year or two, the owner was just at a position where he was ready to retire, and asked me if I wanted to buy the company. And that point, I had one mouth to feed, so it was an easy decision. And I jumped in, and now we’re three decades into it, and it’s been a fun ride, but it’s been the most fun these last couple of years with the cloud and everywhere we’ve gone.

 

Mike Merrill:

Wow. That’s really awesome, and I think it gives hope to a lot of other people. If you’ve got big goals and dreams, you can make it happen, right?

 

Jeff Gerardi:

Just got to be open for the opportunity.

 

Mike Merrill:

Very good. Awesome. Well, as a software provider, especially cloud-based software, it’s easy to see how technology can help us to solve problems across the board. But what I want to talk to you about today is more about helping your clients create those processes and structures within their organization, as it relates to the pre-construction management phase. So in your mind, where’s the biggest breakdown that typical contractors have when trying to create the standardizations for a pre-construction management process?

 

Jeff Gerardi:

Yeah. So today, and I’m going to go back to who my biggest competitor is, and that’s Microsoft Excel, we like to call the big green giant, right? Every one of us on the phone uses it. We use it for multiple things, but it’s power is also all the risk that comes along with it. It’s really flexible, we know that. We’ve all used it, we’ve all built formulas and we’ve all looked at Excel and built things within it, and it’s really powerful. But it’s a silo, it’s a silo of information.

And for us, our client’s biggest hurdle is going from that 100% control over my silo, my Excel silo, to saying, “Now, there’s a company standard. Now, as we bring people onboard, we onboard new PMs, new estimators, new directors of pre-construction management, that there is a process that our company has developed that is a new standard within our business.” And as we start to put quotes out, there’s a standard we come to expect of what every one of them looks like, and what is the workflow every single estimate goes through. But certainly, letting go of that security blanket called Excel is one of the biggest hurdles, and not knowing what that journey is going to mean, right?

 

Mike Merrill:

Yeah. Yeah. Excel, I mean, we always refer to it as our spreadsheet addiction around here. It’s that safety net.

 

Jeff Gerardi:

We call it a monster, but I like that you call it an addiction. That’s a different twist.

 

Mike Merrill:

Yes, it is. Yeah. So in some cases it’s worse than paper because it’s so easy to erase and re-type whatever you want, and it looks cleaner, and it feels better].

 

Jeff Gerardi:

And hit a space bar, right? Hit a space bar, wipe out a formula. Now, all of a sudden a line which might’ve cost 50K is no longer being totaled into the summary at the bottom, and there goes my two, 3% profit.

 

Mike Merrill:

Yeah. Yeah. Great point. Very valid, and certainly something that we’ve all heard horror stories about, or hopefully not too many of us, but some of us have probably experienced first-hand.

 

Jeff Gerardi:

Yah, it’s normally when we get the call, right after that day.

 

Mike Merrill:

Yeah. And so the listeners know, Jeff, again with ProEst, it’s basically a cloud-based estimating system. So what he’s talking about is putting those controls in place, so that people don’t have data siloed and at their fingertips ready to be kind of destroyed, or used in a way that’s not helpful to profitability.

 

Jeff Gerardi:

Yeah. And the lack of visibility. So if I have three, four people putting estimates together, and these days, obviously we’re all mobile for a need of what’s going on in the world, but having the visibility at a corporate level of seeing what’s our pipeline look like, because in essence, we’re a sales tool. What does our pipeline look like? What estimates are being produced? What estimates are coming due this month, this week, this hour? All that visibility, within a dedicated estimating platform is possible, with individual Excel silos, is not possible.

 

Mike Merrill:

Yeah. Great point. And everybody in construction management is familiar with the estimating side to some degree, whatever process they go through. But as it relates to your business, I’m sure you have tools within your business, technology tools, things that help you to keep on top of things, what things do you have in place that help you to avoid that communication breakdown from one person to another?

 

Jeff Gerardi:

Communication within our business ourselves?

 

Mike Merrill:

Within ProEst yourselves. Yeah.

 

Jeff Gerardi:

Yeah. That’s a great question. So do we talk the talk? So we’re certainly preaching cloud technology mobility. We internally, went to Salesforce to control our entire platform. Our entire company is run off Salesforce, and it has since 2006-2007. So we’re 13 to 14 years into being 100% cloud-based ourselves. So when COVID hit us all, six months or so ago, we didn’t miss a beat, we didn’t miss a call. Our employees were mobile the next morning, 100% up.

So, I mean, we’re walking what we’re preaching as well. Where we need to be mobile, we need to have technology, where we can access it from a browser but as well as from our phone. We can do that with ProEst, we can do that, obviously with Salesforce. And operationally, we are using Salesforce across the board. So not only our sales, but our client construction management, our tracking of customer support cases and feature requests, it’s all happening through a single cloud-based platform.

So I think we’ve even gleaned some lessons from that, that we’ve incorporated into our platform, like configurable workflow. What’s the process? What’s the process an estimate should go through? From coming in from a business development person, to going to a PM maybe, to validate it, to going to an estimator, what does that process look like? Is there a review process? Can we control and define a company-wide process that every estimate goes through? Just like for us, I mean, every lead goes through a certain process, every support call goes through a certain process. And it’s controlled at a corporate level, and we can get complete visibility.

So right now, I could look at a dashboard and see how many support calls there were today, how many got answered, where they done in the allotted amount of time, and are we meeting what we’ve set our bar to be a great customer service company? Are we meeting that bar? Well, I’ve got that visibility. I’ve got that data to back it up.

 

Mike Merrill:

Yeah. And our organization’s the same. We haven’t been down yet, since COVID or not. We’re using all of these tools. And we did it by accident. We didn’t mean to. We built our own CRM initially, and then eventually got on Salesforce also. And we use a different tool now that has some other options within the platform.

 

Jeff Gerardi:

Yeah. And we went down that path as well. So originally mid ’90s to mid 2000s, 2005-ish, we created our own CRM. We’re like, “We’re going to control this.” But that’s no different than having an Excel silo. So we quickly realized that this is not our expertise. Let’s bring in a system that could help us control this, so we can really put all of our efforts into making software, and products, and platforms that our clients could benefit from, and not build their own back-office stuff. So same type of good versus evil that our clients are going through, Excel versus a standardized estimating platform.

 

Mike Merrill:

Yeah. So what I’m hearing here, I mean really to circle this back to our listeners and some of the things, even running their own business, those communication breakdowns, it sounds like they occur when data of any kind is in a silo. It’s not what others can see, its what you can see, right?

 

Jeff Gerardi:

Yep. Yeah. I mean, if I get a report from an account manager as an example, and it’s in Excel, I’m not a happy camper. It better be in Salesforce as well, because otherwise there’s data being produced that could be helpful for our teams to help a client outside of our operational platform, which is Salesforce. So want everything there, so we can access it and help the client as a team, not just as an individual.

 

Mike Merrill:

Okay. Yeah. That’s great. You certainly are speaking my language on that.

 

Jeff Gerardi:

Good.

 

Mike Merrill:

When we’re looking at standardized data across the whole user base then, what you’re saying is that eliminates gaps, that helps us be more efficient, helps us make better decisions. And so for a construction company, not only when it comes to software, but any process, it sounds like having that inner-office, inner-field visibility with the same data.

 

Jeff Gerardi:

Yeah. I mean, what is the process from a business development person bringing in an opportunity to a construction company, an estimate being created, and now that estimate’s been awarded, and is it in their ERP or the accounting system to properly now track the job costing? What’s that process like? It needs to be automated, especially as you scale. There has to be an automated process where the CEO or the executive team at that business could always look in there and see, where is this opportunity in our process? Is it an estimate? Has it been awarded? Is it being built right now? And if so, what’s the job costing data? Was the estimate accurate? Was it high? Was it low? Did we miss the mark on anything? But that visibility at least allows you to use data to make some real business decisions.

 

Mike Merrill:

So basically, better data collection tools. And then as far as workflow, I mean, when you talk about automation, what does that mean to you?

 

Jeff Gerardi:

So we built a configurable workflow. So I mean, in Salesforce terms, we can create a workflow that when an estimate gets started, first of all, who are the team members involved in it? Someone’s doing the estimating. Is there a director of pre-construction or someone that’s doing a review of that estimate? Does it go to an executive team for a sign-off, depending on the dollar amount of it potentially? Well, that can be automated, so that people automatically get emailed when an estimate’s ready for it to review. There could be an escalation involved as well. It needs to get reviewed in two business days, otherwise flags are thrown up because there’s a due date we need to make.

So that whole process, what’s involved in it? Could there be an escalation? And we want to make sure that there’s no bottlenecks. And if an estimate goes to someplace for a review and it sits there for a week, well that’s a problem if the bid was due in four days. So making sure that we have complete visibility into that, so we do not miss a bid due date. And there’s accountability across the board. And they can define their own. So how many steps does it have, and where does it go? How elaborate is it? We have clients that have three simple steps, estimate, to review, to send to client. We have clients that are controlling billion dollar construction budgets, like the City of New York as an example, and their workflow is much more elaborate because there’s different levels of review, there’s potentially 20 people involved in an estimate, could be a GC, could be 15 subcontractors, could be internal people as well. So as long as it’s definable, we have the ability to build a process, that’ll work across the business.

 

Mike Merrill:

So with that, what have you done, or have you seen done, or what are you trying to do to try and help adoption become more prevalent?

 

Jeff Gerardi:

Yep. I mean, adoption is really the key here. So from the beginning, during the sales process, we want to make sure that there is executive level buy-in to start with, because if they’re not driving the ship, it’s very easy to go back to Excel or to go back to old methodologies, and we want to make sure that never happens. So we want to make sure upfront that there is a serious commitment to technology. There’s a serious commitment to the next level of their growth. So as they scale, obviously things need to change to make sure that as they put 10, 20, 30, more people into their business, that there are systems and standards in place, so there’s not a huge load on them. They’re simply plugging people into an already defined process.

 

Mike Merrill:

Yeah. So you’re talking about helping them feel more comfortable with the tool, getting executive buy-in, so there’s a driver behind it. This isn’t optional. And when you’re talking, and it’s the same with software of any of the vendors that you would see in the construction marketplace, these things are key for any company to recognize is we got to have top-level down, not only support and buy-in, but actually motivated by whatever means necessary, mandate that this is what we’re doing. The bus is going, and it’s going that way. And you need to get on the bus if you want to be a part of it, right?

 

Jeff Gerardi:

Right. Yeah. I think that’s certainly important from the top down, that if there’s a new direction in terms of technology, that there has to be certainly a mandate from above, but buy-in straight down through. So getting as many people involved during the presentation or demonstration phases as possible is important to get feedback, to get buy-in at that level. We think it’s imperative to making sure that a implementation goes live on schedule. Because after we sell a client, we go through an implementation. And we put a stake in the ground and say, “This is our go live date. So who’s responsible up until then? Now who’s the implementation lead on both sides? Who’s the executive sponsor on both sides?”

We have weekly check-ins. We automatically are sending these out because we want to make sure that the project stays on track, just like a construction project, no different. There’s a due date for the bids. And then there’s a start date for the project, it’s the same thing. And we’re excited to… We’re at the point now where we’ve defined the process over our decades of experience. And we feel like we’ve fine-tuned it enough that we know upfront, we’re going to present this implementation plan even during the sales process, so they understand what’s the level of commitment on both sides, because it’s a level of commitment. We’re not kidding anyone here. It’s new technology into a business.

I mean, we’ve even shifted gears where we used to charge per user, and we went away from that because we want company-wide adoption. So now we’re charging based off of a platform versus just a individual user. Because we want the estimators, the PMs, all pre-construction people on the platform. As well as, who else needs to touch it? The executives want to see the dashboard, the accounting department needs to grab estimates for our job costing. So the further we can reach our users, I mean the further within a company, ultimately, there’s no limitations. You can control your own users, and the securities around them, right?

 

Mike Merrill:

Yeah. So what I’m hearing is you completely changed your delivery method of your system to companies, and there must have been some really specific reasons why you would do that major change in your business. What is that? So people can avoid it.

 

Jeff Gerardi:

That goes right into workflow. So we defined what we thought was this amazing workflow, but then we charged per user and no one’s going to pay a per user cost. So that Mary, the head of accounting gets an email that a project was just awarded and there’s a bid coming her way. So the whole per user costing, we wanted more visibility of the estimate data throughout an organization, not just the estimating team, which might be three, four or five people, depending on the size of the company.

So we didn’t want people to be restrained by only certain users in the system. We want it to be full open, again, trying to eliminate silos. We created our cloud platform, which is now we’re, I don’t know, six years into this. We went live about six years ago. We wanted to make sure that we were not a silo. Because what we saw in the industry was an estimating silo, a takeoff silo, a CRM silo, an ERP silo, and it doesn’t help anyone. Certainly doesn’t help our end users. So vendors like us should open their gates, and say, “Here’s the data. Where does it need to go next? Does it need to go to timekeeping? Does it need to go to ERP?” Well, we’ve got complete tools built, so vendors can grab all that data and it never disappears within our platform. No more double-entry, triple-entry, thing of the past.

 

Mike Merrill:

Yeah. So really, it sounds like your decision to make it readily accessible to whoever, anybody who needs to see it… so the City of New York uses ProEst, not this department, this division. Is that right?

 

Jeff Gerardi:

They have north of 1,000 users in the same account.

 

Mike Merrill:

Wow, amazing.

 

Jeff Gerardi:

All collaborating on estimates, all access to the appropriate data that they’ve been invited to. So there’s still control around it, but it’s still wide open. It’s still wide open. And I think any technology, even if we were to implement a new technology at our business, we would certainly make sure that the data is accessible by all departments, that the data goes where it needs to go, and it’s not siloed in a single individual product. I wouldn’t bring a product in our company that is not first of all, cloud-based and forward-thinking, so that there are APIs and tools to allow us to grab data, to put it elsewhere if we need to.

 

Mike Merrill:

Yeah. So essentially, what you’ve done is you’ve helped contractors get out of their own way. In construction, we’re master negotiators, right?

 

Jeff Gerardi:

Yep.

 

Mike Merrill:

We are always looking to work the deal the best we can. And so I may shave off a few users by not letting Mary in accounting have that license, to try and save money. But in the end, we’re getting in our own way and we’re forcing data into silos, because as a business, we’ve decided we’re going to tighten up that spend on our estimating system.

 

Jeff Gerardi:

Yeah. Yeah. Why not define rules at a user level of what they can and cannot see, what they can and cannot do, and have it be full wide open? And for us, it was freeing. It’s like no longer do we think we have to charge a user for an individual license. It’s more us helping them adopt and drive our product and our platform throughout their business. Because we know it’s going to be more beneficial if it is widespread and everyone has access to the data.

 

Mike Merrill:

Yeah. Well, and when we have these discussions internally at our organization, it’s the same thing. We want to be one of those apps it’s on their home screen. Something that they’re used to using, they need it often. If we can do that, and get a brain share of the users. Then when somebody moves to a different organization, or there’s turnover, or a company slows down and has to have layoffs, those skilled workers are going to go somewhere else. And when they do, and they run into an Excel-based system, or paper time cards, or some other non-software, non-technological system or silo, like you’ve been talking, they’re going to say to their new employer, or to their new foreman or superintendent, “Hey, where I was just at, we used XYZ,” or, “We used ProEst.”

And there’s an opportunity now where a user that maybe otherwise wouldn’t have had that visibility, now actually has a voice and an opinion, right?

 

Jeff Gerardi:

Yeah. And I mean, we’re doing the same thing in our business. So certainly we have to be honest with ourselves and say, “We should bring the same idea to our client base. Of kind of open doors, and cloud technology.” And we started a new education program where we’re trying to get our platform to be utilized and taught at universities, to now teach new cloud technology. What’s going to move the industry forward? Well, it’s cloud technology, and ultimate collaboration between those tools as well, is really necessary for an industry that’s really slow to adopt technology. But that means there’s a lot of space for the executives in the industry to step up and say, “It’s time. It’s time to adopt technology that’s going to help us scale, and help our business work more efficiently and more productively, ultimately.”

 

Mike Merrill:

Yeah. So going back to you as a CEO now, and the journey you’ve been through as an employee. What advice would you give to people that are trying to move up in their role? Or they’re entrepreneurs at heart, they got to start somewhere. What have you learned in your decades of experience?

 

Jeff Gerardi:

I think ultimately, always being just thirsty for knowledge, thirsty to learn more. You’ll notice things in other industries that will help you, as long as you’re open to it. I mean, my first estimate, I’m 17-years-old, working for a guy in New York, I think we were painting or wallpapering contractor. I grew up in construction. And we walk into this room, his name’s Sal. He’s got a cigarette hanging out of his mouth that wasn’t lit. You know that guy, we all know that guy. We walk in the room, he looks around, he’s got his arms on his hips. He goes, “What do you think kid?” I go, “I don’t know, five grand?” He goes, “Let’s do it.” That was my first estimate.

But from then, everything’s kind of evolved. And as long as you’re continually learning, continually looking at new technologies, even if you look at another product, not necessarily a competing product, but a product that’s helping you schedule something in your personal life. I have three children, I have to schedule all their sports, and everything that’s involved in that, so I have a busy life. So what has been beneficial in other platforms that I could bring to my users, that will help their lives as well? Because we’re scheduling products, and we’re scheduling construction meetings. It’s all kind of combined. It’s something that we could learn from other tools and other applications as well, I think.

 

Mike Merrill:

Well, and even, how many of us are using Amazon Prime? Or maybe you have an Autoship subscription. There’s so much of our lives, the bank accounts, the bills, the mortgage. I don’t even have a paper check book that I carry anymore for anything.

 

Jeff Gerardi:

Yeah. I’ve been banking online probably for 10 plus years now. So if I’m okay with my financials being online, I should be able to be okay with my estimates and my construction data being online as well.

 

Mike Merrill:

Yeah. So then… Oh, go ahead.

 

Jeff Gerardi:

You’re typing your credit card into Amazon every day, so if you feel comfortable doing that, and we’re all hosted on Amazon servers, and Rackspace is are our tier one support, so we certainly have the best security available in the industry right now. So that shouldn’t be a concern at this point. Obviously, security is always a concern, but if you make sure that the vendor you’re going with has those types of credentials and those types of securities in place, then that should be put to the back-burner. And now it’s about, how am I going to adopt this technology? How am I going to drive this thought throughout our business of how this will help us be a better company over wide?

 

Mike Merrill:

Yeah. Yeah. I think generally the populace within North America, of course, and even worldwide, has moved past those general initial concerns. Thank goodness. Because I remember 15-20 years ago when that was not the case. It was a hard sell, and they wanted it on their server, in their office, right down the hall. But-

 

Jeff Gerardi:

And we’re a technology company, we don’t have a server, okay? We do not have a server in our office. Everything we utilize is 100% browser-based.

 

Mike Merrill:

Yeah. So that’s something to be said for sure. So saying that now, going back to the market that we service, and that we work in and with every day, what are some of those objections that you get that you feel like kind of stall companies from moving forward with not only just estimating, but… Obviously, that’s your wheelhouse, but it effects everything.

 

Jeff Gerardi:

Yeah. if I think about the potential clients that have stalled a decision, I think most of the time it’s the fear of unknown. What does implementing a new platform even mean? And we’ve tried to set up a implementation plan, which has, we call it the six steps to success. So we tried to be as transparent as possible, so they know what they’re going to go through, they know how much time each step is going to take. But there’s still an unknown, there’s still a leap of faith. First of all, with a company, and do we believe in the company? And I think secondary, it’s the product and the platform. And will all the employees within my business agree to utilize it?

That’s… above, and the excitement has to come from above. That there’s a technology change that’s going to help us move forward into the future. Yeah. I think it’s an exciting time, where we can make some changes. And I think the executives of the world, there’s a leadership responsibility now to help move your company into that next phase of technology. And there’s a lot of really cool technology out there now for the construction space, that wasn’t there even three, four years ago.

 

Mike Merrill:

Yeah. And I think to your point, they’re being forced. You’ve got religious services going on Zoom or online, right?

 

Jeff Gerardi:

Yeah.

 

Mike Merrill:

There’s talk of the presidential debate being online. It’s interesting.

 

Jeff Gerardi:

I have three children at home doing Zoom school right now. We had to double our bandwidth, but it’s working.

 

Mike Merrill:

And if your kids are like mine, they’re done in about an hour and a half.

 

Jeff Gerardi:

Now what?

 

Mike Merrill:

But yeah, it’s more efficient at this time.

 

Jeff Gerardi:

It’s more efficient, and it’s a different world. Even at that level, at the education level, there’s more accountability. You don’t have as much in-person teacher communication. So now there’s more accountability to do a lot more work by yourself. No different than our clients having to make a decision, ultimately by their self. It’s their decision. But knowing that you have some support services to help back you up. And wherever you’re going, find the company that’s done it before. They’ve already sold clients that are your size, that are your stature. Make sure you talk to those clients. Ask clients what an implementation looks like. Call a client that’s only six months in. They just went through implementation, it’s fresh in their mind, either going to be fresh good, or fresh bad, you’re going to know about it right away. But I think that’s invaluable information to talk to a peer that’s just gone through it.

 

Mike Merrill:

Well, and I think too, and kind of to your point, your business is booming and you’re having unprecedented success. And part of it’s just because of that cloud visibility, that people, they can’t hide behind that rock anymore. They’ve got to get online, they’ve got to be on one platform, they have to have visibility. They got people working all over the place, some people working from home. The way they can do it. So in some ways this has really helped, I think the construction industry to get more online, get more mobile and really get on one platform, so they know what’s going on every day, on a daily basis. As opposed to a week at a time, when they have their round table meeting.

 

Jeff Gerardi:

Yeah. I think it’s time to get more creative when it comes to how we use technology. It’s time to take off the gloves and say, “Okay. What do we need to do to grow to the level we want to grow to?” You’re a $20 million company today, you want to get to a 50. What does that mean from a technology standpoint, and a systems, and a process standpoint to get me there? And it’s just one example. But certainly, when we all scale our businesses, there’s certain things that we need to do to make sure that we’re ready for that scaling and for that growth. So I think cloud technology certainly helps that, because it scales up and down really easily. It’s flexible. You can control the scaling hopefully, if you pick the right vendor.

 

Mike Merrill:

Yeah. Yeah. I’ve read a lot of different studies and reports, and construction is a laggard for sure. They’re second only to the agriculture industry in technology adoption.

 

Jeff Gerardi:

Oh, we got the farmers beat? Is that what you’re telling me, Mike?

 

Mike Merrill:

That’s it.

 

Jeff Gerardi:

Okay. So we’re not last, I’m happy about that.

 

Mike Merrill:

Yeah. We’re only second to last. But if you ain’t first, you’re last.

 

Jeff Gerardi:

So we didn’t get picked last at dodge ball, that’s a good thing.

 

Mike Merrill:

Yeah. But yeah, we meet with companies all the time that say, “It’s time we get innovative.” And the narrative has almost changed now to where I’m thinking, “You’re not getting innovative, you’re just catching up. You’re actually behind. Your competitors have already done this, and it’s time to kind of get current with the tools that are available to you now.”

 

Jeff Gerardi:

Yep. I agree. And there’s so much more technology out there than there a couple of years ago. So I think now is the right time. There’s a lot of… I mean, on the ERP side, there’s multiple cloud-based options now, where there weren’t three, four years ago. So yeah. Being cloud-based now across a construction business is possible. So I think everyone owes it to themselves to do some research, dig deeper and find out where they could potentially gain some efficiencies in their business.

 

Mike Merrill:

Yeah. I think just like anything that we do that’s scary or new or different, there’s greater benefit on the other side of this fear than we’re going to get by holding back, doing the head in the sand thing.

 

Jeff Gerardi:

Yeah. But maybe talking to some of those people that just implemented, or looking at some true case studies that some of your peers have done, it will help lessen that fear a bit. And say, “Hey, why can’t we do this? Our peer just did it. Let’s give them a call, and see what challenges they went through and talk through it.”

 

Mike Merrill:

Love it.

 

Jeff Gerardi:

And we got good guys, like you and me, here to help.

 

Mike Merrill:

There you go. That’s right. And like you, my background, I started in construction. It’s the same thing. Most innovative businesses were started to solve a problem that they experienced firsthand, and it’s no different here with ProEst, obviously. So in winding things up here, I just had one question I wanted to ask, and I like to ask each guest towards the end. So has there been a hack, or a shortcut, some kind of a process that you’ve come up with that’s helped you in business? That’s become your coined superpower for lack of a better term?

 

Jeff Gerardi:

My superpower?

 

Mike Merrill:

Yeah.

 

Jeff Gerardi:

I mean, my superpower, my wife would say is my crux too. And that is my kind of never-ending drive. You can call it a superpower, but always looking for new ways to improve my business, and improve my client’s experience with our platform has always been at the top of our list. Our core values for our business start with integrity, which is truly important, but also transparency. We want to be transparent with our clients and take them through everything we’re going through. We have challenges as a business as well, just like anyone else, we’re scaling now, added multiple employees this month. So we’re going through some of the same kind of challenges that they’re going through, and hopefully we’ve defined processes along the way to make it as painless as possible. And make things just fit together, and it be an easy process.

Because with enough pre-planning, it should be. And maybe I got to it there. Being able to look ahead, think about what your struggles are today and think through and plan for improvements. Whether that’s a technology, whether that’s another employee in a certain place, whether that’s a new process, whatever that process may be. But as much planning upfront is going to help the backend in terms of implementation and adoption, and everything that goes along with that.

 

Mike Merrill:

That’s great. So really, what I’m hearing is almost having a plan to execute and implement the plan.

 

Jeff Gerardi:

Yeah. And hopefully, we’re going to set it up for success. We’ve gone through it many times, where we’ve certainly had good implementations, and we’ve had not so good implementations. And hopefully we’ve learned from those not good implementations to continually improve our process. And I think it doesn’t matter if we’re talking about technology, or business, or your family life, we can glean something off of every experience to improve moving forward.

 

Mike Merrill:

Yeah. I love that. And that’s a great note to end on. So thank you so much, Jeff, for joining us today. Sure enjoyed the conversation.

 

Jeff Gerardi:

You’re welcome, Mike. Talk to you soon.

 

Mike Merrill:

Thank you. And again, thank you listeners for joining us on The Mobile Workforce podcast today, sponsored by AboutTime Technologies and WorkMax. If you liked the conversation or learned anything new and insightful that you can implement in your business, and you are interested in hearing more, you can look at us online or on Instagram at workmax_. Or please subscribe and rate us on your favorite podcast platform. Those five star ratings and reviews will help us to continue to provide this valuable service to the industry that we love, and hopefully help you improve those results in business and in life.

The Unseen Cost of Your Construction Process Problem

The Unseen Cost of Your Construction Process Problem

No one in the construction industry is sitting around on their hands. And if being busy equals success, then every contractor would be a millionaire. We invited Jeffrey Nesbitt, the director of consulting services at CLA, to come on the show and talk about productivity and the costs of not buttoning up your processes and procedures.

In today’s episode of the Mobile Workforce Podcast, learn how to take a new look at your processes and determine what needs to change. Jeffrey gives contractors actionable ideas on how to implement new processes and how they can make sure that the new habits stick for the long term.

Key Takeaways:

  1. Your problem is costing you something. Inefficiencies in business are unavoidable and some are easier to ignore than others. But don’t assume because it’s out of mind, that it isn’t costing your bottom line. 
  2. Profit fade is a great indicator of issues that need to be fixed. Profit fade is the gradual loss of profit over the course of a project. Contractors should identify sources of trouble –– and address them –– to keep their profit levels steady. 
  3. Assign a point person ownership over new process implementations. Before launching a new construction process – whether it’s a technology solution or a time tracking requirement – put one person in charge of owning the implementation to ensure the rest of your team does their part. 

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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 Jeffrey Nesbitt, the National Director of Consulting Services at CLA. We asked him on the show today to talk about the cost of not fixing your business communication problems. Welcome Jeffrey. We are grateful to have you on the podcast today.

 

Jeffrey Nesbitt:

Thanks Mike. Appreciate you guys having me on looking forward to our time.

 

Mike Merrill:

Awesome. This’ll be fun. First off, why don’t you tell us a little bit about kind of your background, your company and the day-to-day for you?

 

Jeffrey Nesbitt:

I started off in this crazy industry, I don’t know, 16, 17 years ago. Did some estimating and project management for a masonry company. And soon discovered, although I love the work, that it probably wasn’t for me. From there actually jumped into the construction technology sector. Spent the better part of my career in the technology specific around construction for a decade or so before moving into CLA’s role here. Helping them head up their construction practice for our clients around best practices, operations and utilizing technology.

 

Mike Merrill:

That’s awesome. Well, you have a very diverse background for sure. I’ve seen you around the “circuit”, so to speak, for most of those 17 years.

 

Jeffrey Nesbitt:

Yeah, we bumped in more than once. That’s for sure. That’s why I was looking forward to chatting with you guys today and sharing with you a little bit about what we’re doing and seeing.

 

Mike Merrill:

Awesome. Well, that’s great. Every week we try and have some meaningful conversations, things that hopefully we can bring some aha moments to people in the industry and in the trades. One of the things that we wanted to focus on with you today is really, what is the cost of companies not addressing or fixing their technology issues or challenges that you teach to companies?

 

Jeffrey Nesbitt:

That’s a great question because that’s really what drove me to move to CLA. There’s a certain point in time when you’re on the software side or the operations, or being an actual contractor, where we have to merge these worlds together. We just saw at CLA that there was a gap there, if you will, that needed to be filled. We have over 9,000 clients at CLA and over 350 employees focused specifically in construction. We’re another verticals, but really in the construction, we’ve been voted number one by Construction Executive Magazine the last two years in a row. We’re really excited about that because, as a services firm, we want to bring more than some just traditional services. So, for us aligning operations and best practices and technology has been a key differentiator.

When we work with our clients, I know you guys see it too, contractors are busy. Everybody’s busy. There’s no one sitting around on their hands. We’re short staffed. We’ve got a lot to do. We all see challenges or things broken in our own companies or in our own lives. We’re so busy, we don’t have time to fix them.

To your point, there is a cost of not fixing problems. It’s the cost of what are you losing? That’s really what we try to focus on and share with our clients is, “Yeah, we can get better if we implemented a new mobile app.” That’s a true statement. But if we don’t have time to implement it, what is it costing us not to do that. That’s really where I help share with our clients that there is a cost to do nothing. A lot of times that cost outweighs actually doing something.

 

Mike Merrill:

Yeah. Very insightful. Again, with your background, you would know, no question about it. I guess if I’m trying to break it down, it sounds like you use the example of the mobile app. It sounds like communication tools are one area of improvement that companies could take, to kind of fix those communication gaps. What are some examples of things like that the companies can adopt to improve?

 

Jeffrey Nesbitt:

Yeah, the biggest hurdle in our industry is that communication and within communication is really data, isn’t it? That’s what communication is. We’re sharing information back and forth. And as contractors, if someone tells us, you’re a data company, we go crazy. “What are you talking about? No, I build high rises or I lay asphalt.” And all that fun stuff. But the truth is, you’re collecting data.

When you don’t have a way to get that information from the field to the back office, that’s where I see with our clients, profit fade happening. That’s what the big challenge is. We are so busy and a lot of times we understand we have challenges. It’s just not the technology piece, Mike. I think more importantly, it’s the process piece. That’s really where we focus our efforts, because if we can’t fix our processes, it doesn’t matter what technology we apply. It’s not going to help it, or in some cases, it’s going to make it worse.

 

Mike Merrill:

That’s a great point. You mentioned a word, you talked about profit fade. What does that mean for our listeners?

 

Jeffrey Nesbitt:

The simplest thing is margin. In our industry, we’ve got some of the tightest margins of any industry in the world, but yet we build the most complex projects. So, profit fade is when we take that very, very small margin and we start shrinking it down and down and down until there’s almost nothing there, because we’re not communicating effectively. We’re wasting time looking for project data information, that’s maybe causing conflicts out in the field, that may be causing reworks.

All this stuff adds up to time. Time is money. When we sit down with our clients and go through sort of, “What is it you’re doing today?” That’s where we really find out what’s the cost of doing nothing, Mike. When we find out, “Hey, what happens when a project manager’s got approve an AP invoice? What does that process look like?”

What if he has a change order and doesn’t submit it in a timely manner? It’s sitting on a notepad in his truck. Because mobile office. That’s the stuff that we look at. There’s been studies done by FMI, PlanGrid, even anecdotally myself, it will show that, in a typical week, there’s almost 35% of people’s time spent on non-optimal activities. That’s the cost of doing nothing. That’s hours. If your PM’s losing four to five hours a week, that’s money. If you’ve got five, 10 PMs, that could be another full-time employee. Who wouldn’t love to find a full-time employee in this market.

 

Mike Merrill:

Yeah. Right. Great point. Yeah. A lot of construction companies have those resources. They’re just not leveraging them properly, because they’re wasting time on tasks and efforts that don’t bring revenue.

 

Jeffrey Nesbitt:

Yeah. It’s really clean up those internal processes first. The old Michael Jackson song, The Man in the Mirror. You got to do that first look inside and say, “What am I doing, Mike?” I’s hard as a contractor, we’re proud people and we love to just do it ourselves. “Yeah, I know what the problem is and I’ll fix it myself. Who’s got the leakiest roof in the neighborhood, it’s the roofing contractor. Why? Because he doesn’t have time. There’s just no time.

That’s why I always encourage people. If you can bring in somebody to help you to actually manage this process of, “Hey, how do we clean up some of these internal things and figure out what is best practices?” That’s when you can apply technology. Otherwise, you’re just buying technology, for the right purposes. People have good intentions in their hearts. Owners are buying mobile applications, whether it’s a project management, mobile timekeeping, forms in the field, things like that. But if they don’t implement a process that the technology can support, then you’re really losing user adoption. There’s no ROI for these folks, unfortunately.

 

Mike Merrill:

What I’m hearing and something that I always like to say too is, “Software to work properly and to be of value requires users.” That means they have to use, if they’re not opening the app and leveraging the tools within it, then there’s no value.

 

Jeffrey Nesbitt:

I haven’t seen an app yet that’s like a genie bottle where you rub it and unicorns and rainbows shoot out and everything’s wonderful. It still takes people and processes. The technology is that last piece. You have to do those other two things first in order to leverage technology. Then again, it’s consistently reinforcement and training. Configuring that technology to mirror your processes also helps in the user adoption, because this is the way we work.

 

Mike Merrill:

I love that you talked about people and processes, because again, software can be the magic bullet, but without people utilizing it properly, it’s shelfware collecting dust.

 

Jeffrey Nesbitt:

Yeah.

 

Mike Merrill:

What are some of the challenges that you see most prevalent in construction companies today to avoid adoption or to kind of knock the adoption into a rut and then what can companies do to help avoid those pitfalls?

 

Jeffrey Nesbitt:

Well, it’s all about commitment. It’s like anything else in life, if you’re not committed to something or the activity or the task at hand, it’s not going to be successful. You have to have commitment from senior leadership first, then you have to have a plan in place that supports that commitment. Which is, how do we utilize this technology? How do we leverage it in our day-to-day functions? Then furthermore, it’s making sure that they’re doing these things.

If you’re going to buy a project management solution or a mobile timekeeping solution, when you’re having your weekly or monthly PM updates, are you reviewing the reports that the software generates? That helps encourage people that, I have to utilize this tool, because every Friday I’m going to sit down and the boss is going to pull it up and say, “Well, where’s the data? Where’s the numbers?”

You sort of have to build that into your management processes to encourage people getting on board and utilizing the technology. If there’s no accountability there, if we’re not referencing the tool or we’re using it to manage our projects or processes, then you’re exactly right, it can get thrown on a shelf. That’s what happens with mobile stuff. I know you see it, Mike, most of all. It’s not like an accounting system where, “Hey, we got to run payroll, so we have to do it.” It really forces it. You have to take that same thought process and apply that to your field tools.

 

Mike Merrill:

That’s great advice. I think one of the things, I always hear this phrase, “You can’t manage what you don’t measure.” I love that and agree with it. However, just because you’ve measured it, doesn’t mean you’re done. You’ve got to execute and apply that measurement to that process. Then, now you’re leveraging the data. People are depending on it and counting on it. There’s kind of a plan to execute the plan. So, here’s what we’re going to measure. Here’s what we’re going to do to review and be accountable and report on those findings. Then, you can actually invoke change is what I’m hearing you saying.

 

Jeffrey Nesbitt:

Absolutely. When I look at our clients and we talk, the people that aren’t learning today from that data that they’re collecting and the information, those are the ones unfortunately probably won’t be around tomorrow. We used to be in a market where we could throw more people at a problem and fix it. We don’t have that today. If we can’t take these tools and utilize them to turn 1:00 PM into 2:00 PM, have a field supervisor be able to manage just one more project on his plate. We can have the revenue going up without adding the headcount. We can make more effective decisions as an organization. I joke with contractors, I’m like, you’re a data management company and a learning organization. If you’re not, you need to be, because your competitors are.

 

Mike Merrill:

I love that. I’ve heard of contractors referred to as risk managers. That’s what they are. I love that you are calling them a data organization. I haven’t heard that phrase before. I hope you don’t mind if I steal it a little bit.

 

Jeffrey Nesbitt:

No, just don’t trademark it.

 

Mike Merrill:

Okay.

 

Mike Merrill:

Helping each other out. What I’m hearing though, is that there are some costs to put these processes in place. Some of it’s money, that’s the obvious one, your time, a consulting firm’s time, a software provider’s time. Then, when we get an investment in a process or a solution that we feel like is going to be beneficial, hopefully there’s an ROI or return on investment on that technology, right?

 

Jeffrey Nesbitt:

Yeah.

 

Mike Merrill:

How long have you seen some of those take, for example, maybe a couple of different systems or process you put into place? Maybe you can share some generic examples, so people know what they’re looking at.

 

Jeffrey Nesbitt:

When you talk people, process and tools and software, that really is that triangle of truth, if you will, of when we put things together. For me, the ROI on the people, process and software is probably the most easy thing to measure. If I look at mobile timecards. I just was at a client last week, they’re still using paper timecards. We’ve got over 9,000 clients. A lot of them are still using paper timecards. That’s one example where I look at it and I say, “Okay, it’s taking you 20 minutes to get a timecard processed.” That’s from the time that they get it to the office, to them entering it into whatever accounting system they have, to being able to update their job cost reports and then print checks. Well, you know, a simple tool like a mobile timekeeping, that could save you 15 minutes.

That’s like an easy ROI. “Okay, well, 15 minutes times how many employees?” I mean, that’s simple math. For me, it goes so far beyond the ROI, which I think in any application nowadays it’s a year or less, it’s six months or less in some of these mobile apps, quite honestly. But what’s the real value, is visibility. It’s visibility into your job, a snapshot, a look in a window at any point in time. That to me is way bigger than anything I’m going to spend on consulting and or software. Because, I want to know from the time of an occurrence happening to the field, what does that cost impact realized in the office, so I can make a decision. That is shortening that cycle. That’s profit fade. How do we get it down?

For me, it’s about having confidence in my numbers, visibility to my organization, to make decisions about the future of where we’re going to go. Forrester Research, they did this study that said you have only 12% of the available data executives doing decision-makers, were making a decision on their company. That, to me, is the value. Can you imagine in this world, something we can all relate to, COVID-19. When you go into your doctor, are you going to accept 12% of his diagnosis only. Where in life is this acceptable?

 

Mike Merrill:

Or some kind of a bad illness and they say you got a 12% chance of living. Not very good.

 

Jeffrey Nesbitt:

Yeah, exactly. Only 12% of the solution. To me, that’s the bigger picture. Owners and executives, when I talk to our clients, I’ll be honest, that’s what keeps them up at night. Is not understanding or having that visibility on what’s happening in a project, or even having confidence in it.

 

Mike Merrill:

I read another report, it was McKinsey and Associates, they said that according to that one, it was a certain segment of questioning, but they said that only 6% of the data was being leveraged. This is a few years back. Whether it’s six or 12 or even 20, it’s horrid.

 

Jeffrey Nesbitt:

Let’s say 40%, congratulations, it’s still not good enough.

 

Mike Merrill:

Yeah. Yeah. Unbelievable. What I’m hearing is really data is the key to not only improving, but really making those decisions that are not only going to make you around next week, next month, next year. There’s a huge opportunity to widen the gap between you and the competition if you can harness this data, even a fraction more.

 

Jeffrey Nesbitt:

Yeah, absolutely. I think, again, it all just walls back into that, “Hey, how do we clean up our internal processes?” Because, when we go out and we talk with our clients, one of the commonest things I hear is, “I work with the estimating department. I work with the accounting department. I work with project managers, the field, the sups.” The reality is, it’s the way we estimate a job, it’s not the way we account for a job, which is not the way we manage or build it in the field.

But everyone in that company is touching a job at any given point in time. You have to connect those bridges and those dots together to get the full picture in your organization. For companies that are productivity driven, this is really, really important. The units in place, the quantities, the linear feet, square feet, all that type of measureables. If you’re not seeing that in real time today, that’s the real challenge in the market.

 

Mike Merrill:

Real time productivity tracking and trending, I guess, is what I’m hearing.

 

Jeffrey Nesbitt:

Yeah, absolutely. It’s the hugest risk that contractors are facing right now. Especially when they have separate estimating, accounting, project management tools. If they’re not all talking to each other and you’re still having to do data entry from one to another, that’s definitely a red flag or an area for risk.

 

Mike Merrill:

Okay. So, integrating that data, letting it communicate with other systems or sharing of that data, I heard the real time component. Does that mean cloud-based solutions are kind of where you try and push that or-

 

Jeffrey Nesbitt:

This is not a personal religious belief of mine or anything, but it’s all to the cloud. It’s trending there. It’s all there. The reality is, is even the ones that are still sell on-prem, you host it and that’s what they push. The market wants that. I know our clients at CLA want that. They’re not looking to become IT companies. The thing I always hear most is, is “I bought my last server. What do I need to do?” Because no one needs those any more in the storage closets and all that fun stuff.

Yeah, having a cloud-based software is more important now than ever. I encourage the contractors listening that whatever product you pick needs to be like Switzerland. It needs to play well with others. Because, it’s about the best solution for the right department to achieve what they need to do. But, as an organizational holistically, ownership needs to say, “Hey, do these things all play well together, because I’m not buying four applications that have four people have to type in information into each one.”

 

Mike Merrill:

You sound like a guy that’s been around the block a time or 10.

 

Jeffrey Nesbitt:

I have. I’ve got a weird background. I try to use that to leverage to help the contractors. I have a passion around the industry, because we get to see it everywhere. Isn’t it exciting when you walk out your door and you see our industry and the homes you just locked out, the bridge’s tolls you’re going across, the highways. It’s an exciting industry. I do have a passion around making sure we are efficient in what we do and profitable.

 

Mike Merrill:

Yeah. I love that. It is everywhere and it touches everyone. I live in a home somewhere, an apartment or condo, whatever it is.

 

Jeffrey Nesbitt:

Right.

 

Mike Merrill:

You’re living in a structure and somebody had to build that thing and has to maintain it.

 

Jeffrey Nesbitt:

Yeah.

 

Mike Merrill:

And the roads you drive down, the bridges, like you say. It’s what attracted me to it. I always wanted to get into construction, because I wanted to be able to do those things. I don’t know my path to get there, but it unfolded before me. I took those roads that led me down the path. Those led me back here where I’m helping growing a software company. But, that company serves the construction industry because just like you, that’s where my expertise and my passion have been. It’s great to have friends in the industry that feel passionate and excited about it like I do.

 

Jeffrey Nesbitt:

Yeah. It’s an exciting time, I think in our industry. I think it’s been trending that way as you know, for probably the last five to seven years, but really here in 2020, it’s really picked up with the pandemic. I know within our clients, if they weren’t stressing about PPP, they were reaching out to me to say, “Jeffrey, in this, no, on-premise no touch world, how do I know what’s going on with my projects? We can’t drive timecards into the office anymore because the payroll clerk ain’t there to pick them up.”

 

Mike Merrill:

If they are, they may not want to touch the paper.

 

Jeffrey Nesbitt:

Right. Exactly. We’ve been trending this way, but really it’s been kicked into overdrive this year, because of the pandemic. I don’t think it’s ever going to go back. I think organizations are learning that this is where the efficiencies are in operations. You can make your accounting department a little more efficient, but usually they’re running pretty lean. It’s in the operations. It’s in the project management. It’s in the field. It’s in the crews. It’s in time keeping. It’s in solutions around those areas.

 

Mike Merrill:

Nobody gets paid until somebody built something or put something in place. That means the dollars can either stack up or be siphoned out at that point. So, leveraging that data in real time as those things are occurring, so you can make those decisions. It feels like you’re saying that’s kind of the low hanging fruit, is kind of capturing that at the source initially, then let everything else, all that data roll through the process where everybody else can make decisions based on that.

 

Jeffrey Nesbitt:

Yeah. It’s at the source and the source of it, it could be anything. It could be at the estimating level, it could be at the field or the accounting level. As I mentioned earlier, everything’s interlinked. So as the life cycle, the job happens, the right person should be entering the right data at the right time, so we can use that to make better decisions.

 

Mike Merrill:

Yeah. That’s great. All right. We’ve talked about some of those gaps, some of those challenges. Are there any stories you can think of, generically, you don’t have to name clients, but where somebody actually put something in place, like these things we’re talking about, and actually shared their surprising results with you and excitement or enthusiasm of “Oh, wow”, anything that comes to mind? Yeah.

 

Jeffrey Nesbitt:

Yeah. The low-hanging fruit I always find is in the payroll piece. I find it in accounts payable, believe it or not. Then I find it in project management. Sometimes, when we look at a payroll process, like I said, “Hey, if we can cut 15 minutes off, it could save us all this time.” A lot of times, with the mobile apps, there’s more things than just the payroll. There’s different forms out there that they’re filling in, or they’re taking pictures that could relay problems to offset.

I can tell you on the payroll side, I’ve seen companies save literally millions of dollars, a large contractor that had lots of employees, 10,000 employees. Let’s just say they could save, it was $3, $4 million annually every year, year after year after year. But more importantly, what happened is, is it gave them that visibility into some of those job cost reports like we were talking about. Where they were starting to see some of these labor overruns happening quicker on their jobs than they were previously doing. When they weren’t blowing out the truck window or being stuck under the seat, they were missing those opportunities. Depending on the size of contractor you are, it could be substantial.

 

Mike Merrill:

In those cases, were those companies surprised?

 

Jeffrey Nesbitt:

Yeah. Like I said, Mike people recognize they have challenges or problems. It’s the whole, “I don’t have time to fix it.” That’s why I like to say, “There is a cost of doing nothing” Again, that’s both fiscally money lost, but more importantly, I think it’s opportunity and visibility. Right?

 

Mike Merrill:

Yeah. Opportunity costs, meaning, I guess if we put this in maybe a trades contract or context, if you’re framing 50 homes a year, one a week or something. That takes you 600 man hours to do it on paper. What I’m hearing is maybe they could do it really in less hours that are now paid and documented because of a real-time app, as opposed to pencil with a timesheet.

 

Jeffrey Nesbitt:

Significant. You could figure it out or you have a consultant come in who can figure that out. But the truth is, is I would imagine, it could add up to several or a dozen extra homes a year.

 

Mike Merrill:

Wow. It could even be a month.

 

Jeffrey Nesbitt:

Yeah.

 

Mike Merrill:

Wow. Yeah. Big opportunity. Really, when I hear that and I put my contractor hat back on and think about when I was in business trying to do this same thing, this same hustle, that’s exciting that most businesses today are profitable in their current processes and market. If they could make these changes and invest that little bit extra money in a system and a little bit of their resources, you said six months, or maybe even less on some of these things.

 

Jeffrey Nesbitt:

Oh, absolutely. Yes, absolutely. It used to be a year, an average sort of, when we looked at across different tools. Let’s just say, whether it was estimating, accounting, the field, it’s down to six months. Like I say, timecards and AP processing, even billing, quite honestly, is improving cash flow and forecasting, when you could tie in some of these mobile applications that let the PM do the billing out in the field.

 

Mike Merrill:

You mentioned before, you talked about change orders and maybe it was on somebody’s book, in their mobile office, their truck, sitting on the seat, now they missed the window or opportunity to submit that bill. Maybe there’s unbilled labor that you’re spending the money on investing and getting nothing for. So the opportunity is gone, the cash is gone and you can’t bill anybody to replenish any of that. Right?

 

Jeffrey Nesbitt:

Yeah. I worked with a contractor to be nameless and they had some good tools. They had the good software application. They had a good project management software application. Like I said, if it’s not like Switzerland and it doesn’t play well with others, it doesn’t do you any good. Because, when I went in there and sort of did the review, you go in and you find a $300,000 change order for a job that’s been closed for a year. Right? Again, it’s knowing that, and knowing it in a timely manner is more important, isn’t it? What we thought we had winners on, we sometimes have dogs. We didn’t get an opportunity to fix it, because it wasn’t integrated.

 

Mike Merrill:

Interesting. When you hear that pushback, have you had companies that pushed back then maybe came back down the road later and said, “You know what, I think we just got to bite the bullet and do this.” What are some of those experiences?

 

Jeffrey Nesbitt:

I would say for the most part, by the time it hits my desk or my team’s desk, there’s a fair amount of pain. Through some conversations, they realize, “Yeah, we need to do this because we can’t keep kicking the can down the road” type of thing. Yeah, absolutely. Where we talk to them, we share some challenges that we’re seeing in their market or their industry or their local, as I mentioned, got 130 offices. Each sort of market has its own unique individual challenges. They’ll come back and say, “Yeah, you’re right.” Unfortunately, it’s after they probably lost on a job somewhere by not addressing it and said, “We got to do it now.”

 

Mike Merrill:

You’re more in the emergency room level of care, not the clinic down the street?

 

Jeffrey Nesbitt:

Sometimes I get brought in, when the fire is on the fifth floor as opposed to the ground floor sometimes.

 

Mike Merrill:

They’re coming in, in an ambulance.

 

Jeffrey Nesbitt:

Yeah. Exactly.

 

Mike Merrill:

That’s why it’s just best to… “When’s the right time? No time like today” is what I say.

 

Jeffrey Nesbitt:

Like planting a tree, they say.

 

Mike Merrill:

Yeah.

 

Jeffrey Nesbitt:

When’s the best time to plant it? 20 years ago.

 

Mike Merrill:

Yeah, exactly. They’re starting to feel, with this pandemic, these different challenges. I think it’s bringing it sort of to the forefront a little bit, which, if there’ll be one good thing out of 2020, maybe that’ll be it.

I’ve heard that from a lot of companies, actually. They said, a lot of this stuff has been long overdue. This is just forcing our hand. Even with the social distancing and kind of the safe environments they’ve got to create, so maybe they don’t have as much labor. They’ve got to do more work with less people. They’re just being forced to get rid of these extra steps and processes and make decisions that give them visibility that they didn’t never put the time into or the money into before.

 

Jeffrey Nesbitt:

I think it just leads back to the labor shortage. Like I said, we used to throw people at the problem and we had a bunch of them. We could overcome it with manpower. We just don’t have that today. How do you overcome some of these challenges of getting projects done efficiently and timely when you don’t have people to sort of toss at it? I think that’s been a big driver for folks is, “I can’t find another PM qualified. Maybe I find a junior PM, but how do I support him?” You can’t just give him a note pad and a pencil and tell him, go at it and talk to the 10 other PMs you got, because they’re all doing things differently. There is a way to solve that problem.

 

Mike Merrill:

It also to me, brings up another interesting point you just talked about, kind of these younger PMs are putting somebody in new. I continue to hear out there that there are less and less people entering the trades out of school, if they’re even going to school. The blue collar worker is going the way at the Dodo, it seems by statistic. We’re going to need, as an industry, to invest in tools that can replace the lack of people that we probably aren’t going to have moving forward.

 

Jeffrey Nesbitt:

It’s really about automation, business process automation. So automate where you can in your processes and that’s what we help companies with a lot. Which is, this is a process we can automate, so we can free up people to do the things that we can’t automate today. Shifting people around organizationally to get better value out of them and taking away some mundane processes. Then again, you have to develop the tools for this market and industry, because the labor force is changing. It’s not a guy coming in saying, “I want to do this manual job or drive a backhoe.” You know, what’s real interesting, is flying a drone over my job site and tracking productivity that way or using it for security measures. The workforce is changing and they’re expecting some of these tools to be there. We really do need them to help recruit these people in.

 

Mike Merrill:

Yeah. I’ve got a daughter, she’s in ninth grade, she’s my youngest, even in elementary school, she was able to check her grades on a daily basis online. That’s all she’s ever known. I remember we’re a similar age I think, I remember not knowing until the day grades came out, necessarily what I was going to get because there was no-

 

Jeffrey Nesbitt:

All you get is a manila folder that the paper you pull it out. All the carbon copies that went to the parents and teachers and stuff.

 

Mike Merrill:

You’re right. I think society, generally the youth, have been conditioned to not only be fluent with these applications and with mobile technology, they depend on it. They count on it and they expect it.

 

Jeffrey Nesbitt:

Yeah. Scary enough, Mike. They don’t even do spelling tests anymore, because kids are all using technology and they’re not learning to spell. Everything-

 

Mike Merrill:

We all have spell check.

 

Jeffrey Nesbitt:

Auto-correct as you go. If you’re like me and I always encourage the field guys, I use the microphones. I’ve got big fingers. So if you can’t type it, do the speech to text.

 

Mike Merrill:

Perfect. Well, that’s great. I’ve had a great time talking with you. There’s a lot more we could dive into and we’ll have to try and schedule another call coming up and do some more of this. I guess before, as I kind of wind up here, one question I’d like to ask towards the end of these conversations is, what’s one hack or skillset or process, something that you’ve kind of learned through your years of experience, that you count on regularly, if you had a superpower, what’s that thing that makes you, Jeffery?

 

Jeffrey Nesbitt:

I think it’s understanding, I don’t know if it’s a super power as much as it is nose to the grindstone type thing, which says, “If we want to achieve X and Y, and that’s what we’re saying as a company, let’s work backwards from that to today and put a plan in place of everything we need to do to achieve that goal. Then let’s all agree on it and then commit to it, set measurable KPIs and hold each other accountable to achieve it.”

Just like software. It’s no magic bullet. There’s no magic bullet to success. It’s hard work. It’s planning for success and following the plan.

 

Mike Merrill:

I love it. Boy. Well said. That’s a great way to end. Thank you again for joining us today, Jeffrey. This is very enjoyable and I think not only the listeners, but myself, I gained some valuable insights from you, so I appreciate it.

 

Jeffrey Nesbitt:

Thank you and don’t forget that trademark, we’re splitting it 50/50.

 

Mike Merrill:

Sounds good. All right. Well, thank you to the listeners for joining us today on the Mobile Workforce podcast, sponsored by AboutTime Technologies and WorkMax. If you like the conversation Jeffrey and I had today, or were able to learn anything new and insightful, we encourage you to please follow us on Instagram at WorkMax underscore and subscribe to the show on iTunes or your preferred platform for listening to podcasts.

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