Tag Archives: employee time tracking

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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Click Play to Listen to the Podcast Now:

Episode Transcript:

Mike Merrill:

Hello and welcome to The Mobile Workforce podcast. I am your host, Mike Merrill. And today we are sitting down with the 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.

Also, if you enjoyed the podcast, please share it with your industry friends and leave us a five star review and rating, so we can continue to bring these valuable conversations to you and your organization to help improve your business and your life.

Not all Time Tracking Integrations with Construction Accounting Systems or ERPs are Created Equal

WorkMax Not all Accounting Integrations Are Created Equal

WorkMax Not all Accounting Integrations Are Created Equal

Not all Accounting Integrations with Employee Time Tracking Solutions are Created Equal
By: Mike Merrill, COO 

Activity-based cost coding is mission-critical for your construction company. Accurate time and cost tracking help you manage costs, identify profit centers within your business, and sets you up for sustained growth for the future. Are you tired of spending all of your time reallocating costs on projects because employees are reporting time on the wrong projects and assigning the wrong tasks or cost codes? Wouldn’t it be nice to have job or project-restricted cost codes based on the actual scope of work instead of just a full list of all the possibilities for employees to select on their time sheets or daily field log reports? Many cost accountants and project managers get frustrated that they have meticulously organized and logical project cost accounts set up based on the specific scope of the work and it seems that they can never get the labor hours or completed work to the right cost centers without a considerable amount of manual intervention.

There is now a way to make sure that all of the correct project labor costs and completed work feed directly into your detailed project cost accounts into your accounting system or ERP. You did all the hard work initially, making sure that the project cost accounts are based on the scope of work with only the relevant cost codes. When you’re partnering with an employee time tracking software vendor, you want to make sure that their product truly integrates with your accounting system or ERP, so that all of your actual costs are perfectly aligned with all of your project cost accounts. Because all integrations are not created the same, you want to make sure that you select a product that honors the structure you have set up in your accounting software to achieve the most accurate daily job costs while you also minimize reallocations or adjustments once the data comes in from the field.

The most important first step in achieving accurate job costs is selecting an employee time tracking solution that has true facial recognition to make sure the right employee is clocking IN/OUT of jobs. You will want true facial recognition that doesn’t just take pictures and force you to manually compare photos to see if it is the same person. True facial recognition compares IN/OUT photos with a source image and then automatically provides you with a match percentage between two photos. It also alerts you when the match percentage falls below your predetermined acceptable match threshold. By using facial recognition, you not only make sure the right employees are clocking IN/OUT of jobs; you can also see the true cost savings that are realized. Archer Mechanical saved over $141,440 in the first year using facial recognition and by tracking employee’s time in real time rather than having supervisors clock in their whole crew.

WorkMax Google Chrome 2019 04 04 15.55.21

On the left, the Clock IN photo is over a 98% match to his profile photo on the far right and his Clock OUT photo is over a 96% match. If the match was less than the acceptable 80% threshold, you would be alerted.

Now that you have confirmed that the right employee is clocking into the right job, you’ll also want to select an employee time tracking solution that allows you to capture your employees’ completed work progress easily in the same app as their employee time tracking. Here are the Top 10 Reasons to Track Production in Your Time App. With this solution in place, there are no additional reports to fill out when you’re tracking production units in the same app as your employee time tracking solution. Employees are prompted to enter their completed work as they are switching tasks throughout the day. If you only want completed work calculated at the end of the day, make sure you find a time tracking solution with multiple workflows to allow you to capture their completed work in real time or at the end of the day or week. To make sure your actual completed work matches up to the remaining work that needs to be completed in your accounting system, you also need a solution that allows you to personalize the units of measure to make sure your actual unit of measure fits your business and matches up to the budgeted amount of completed work in your accounting system planned for the project. This way you always know you’re comparing apples to apples for the same tasks and it all rolls up nicely into your accounting solution.

Now that you know the right person is Clocking IN/OUT of a job or project and capturing completed work, the next step is to simplify how the data is presented to your employees so that they can quickly and accurately assign their labor costs and completed work to the right project and the relevant cost codes or tasks as they are completing the work. You’ll want the flexibility to allocate labor hours and tasks or cost codes in real time or after the fact or a combination. Also, your company might have hundreds of project cost accounts or cost codes. When employees have too many options to select from when they Clock IN/OUT, the likelihood for mistakes that you’ll have to reallocate is pretty high.

Permission Profiles Connect Max Import Concrete Employees Cropped

With WorkMax’s ConnectMax integration with your accounting system, you can easily import your concrete employees into WorkMax to set up permission profiles to automatically show your concrete employees just the concrete jobs and cost codes for accurate job costs in real time.

 WorkMax Employee Record with Concrete Projects

 John S. Intendant is in the concrete department and he only has permission to see concrete-related jobs. Once the permission profile is set up, every time you add a new concrete department employee, concrete job, or concrete cost code, it will automatically be added to all the concrete employees.

 WorkMax Some Concrete Tasks Assigned to Concrete Project

In the third section, you will see a list of all concrete tasks and only some of them are selected. Permission Profiles allow you to pre-assign tasks or cost codes based on your scope of work for the job to get more accurate job costs.

Although getting one employee with 100% perfectly accurate job costs is great, but it would be far more beneficial if you could get almost 100% accuracy for all of your employees’ time tracking and job costs along with all of their completed work. In order to accomplish this, you need to make sure that you present the right data to the right employees on the right job. Automated permission profiles mimic your accounting software so that all existing and future employees assigned to a department or specific role can only clock into their assigned jobs or cost codes. By automating these permission profiles coupled with true accounting software integration, the process of getting the right employees entering the right job cost information is streamlined, while all of the data integrity is maintained according to your accounting system’s project cost and organizational structure.

To see a list of the WorkMax integrations with videos to show you how easy it is to integrate WorkMax with your accounting solution or ERP, click here. Check out how easy it is to honor your accounting system’s project cost and organizational structure to get the right data to the right people at the right time by automating permissions, click here.