Choosing Computer Software
An integrated software system is a must for making the most of a computer
echanical contracting is a tough business. And, unfortunately, many , mechanical contractors make things even tougher for themselves by using inefficient methods to monitor project costs, track revenues and handle billing/accounting.
Make it easy on yourself: install a computer system that meets your specific needs. When considering a computer system, contractors should make time a critical factor in their purchasing decision. A single software package that can efficiently handle financial management, project management, payroll, accounts/receivable and other variables is essential. There's no need to waste time and money on multiple software programs that require duplicate entry of identical information.
Instead look at software that meets all of the financial reporting, project cost monitoring and accounting requirements in a single package with single entry of data. Remember your software should be flexible so it can be made to fit your procedures and reporting requirements, rather than you adapting your operation. Also, the software should be easily modifiable at a low cost so it can keep pace with your changing company.
Package Purchase: Here's a situation that will sound familiar to many of you. XYZ Company invests thousands of dollars in the latest software package for job costing, project management and financial reporting.
XYZ's accounting people enter information from the field to produce accurate financial reports, process payroll and pay the bills. However, the project manager discovers the system can't produce the information he needs-costs to date, amount billed to date, etc. Without this information he can't do his job.
So the accounting staff re-enters the same data into a format that can be used by the project manager. While they're at it, they enter the information a third time to produce spreadsheets for top management.
In the end, everyone is happy- everyone that is except for the overworked data entry people in accounting. However, the happiness is short-lived. Data entry errors start showing. What was supposed to be identical information doesn't match.
Business and job requirements also keep changing, and XYZ's software package can't keep up. This means even more spreadsheets and duplicate work.
To top it off, the company's in-house computer guru-the only one on staff who knows how to make all of the software programs, spreadsheets and other financial and project tools work together-leaves the company. It would take countless hours of training by an outside consultant to get someone else up to speed on the entire system.
Too many contractors accept this inefficiency and extra cost because the alternative is to throw away old software and convert to an entirely new system. Of those that do bite the bullet and purchase new software, chance are fifty-fifty they'll make the same wrong choice. In two years it will be deja vu all over again.
Total Concept: Mechanical contractor Stirrett Johnsen Inc., (Silverdale, WA) knows the importance of doing it right the first time. A medium-sized firm with customers in Washington and Alaska, Stirrett Johnsen doesn't have time to enter the same information into the computer system more than once. The office staff is too lean and the jobs are too many to allow for that.
Controller Clarence Westby knows his accounting/finance staffers have better things to do with their time. Westby, who's been with the firm four years, replaced the company's construction management software with the Forefront Construction management software from Dexter & Chaney within six months of joining Stirrett Johnsen. He also had used it at his previous company.
Westby's critical factors for software are:
Look for an integrated program. One person does all of our payroll using data input by different field and office personnel," says Westby. "Our field crews are covered by seven different union contracts in two states, and even with all those variables, one accounting assistant handles all of the payroll work, including printing and mailing the checks, in a single day."
"At the end of each year, our Work-in-progress job costs, both materials and labor, balance with the actual ledger," he boasts. "Our accountants like that as much as we do."
"Keep in mind the total concept of the software-one aspect doesn't make a system. For example, don't buy a system simply for its job cost capabilities. Consider other functional areas: how user friendly it is, support from the software manufacturer, etc."
Keep it simple. "Reports must be readable for top management, project managers, field foremen and accounting/finance staff It must 'speak the language' of each or else it doesn't meet their needs," says Westby. "Be sure you can set up the system to isolate areas of interest to specific individuals."
For example, with a multi-level highrise, the field foreman wants job cost information at his fingertips according to specific work phases-rough-in sewer, rough-in water, fixtures for specific floors, etc. The accounting/finance staff will want that same data but for completely different purposes.
Support from the software manufacturer is critical. "Pick someone who'll offer you unlimited support," advises Westby. "Anyone who makes that offer is either stupid or has a good product. You need a company that will stand behind you after the sale."
It's important a software system has a short learning curve. "Employees come and go," says Westby. "If software is hard to learn, the person Profitability knows it can essentially hold your company hostage."
Profitability Tool: Like Westby and Stirrett Johnsen, mechanical contractors should view software as a profitability tool. It's like a piece of heavy equipment; purchase the right one, use it properly and you'll earn back your investment in no time. PM
John Chaney is co-founder of Dexter & Chaney, producer of construction management software for mechanical and other contractors. Dexter & Chaney is located at 3200 NE 125th St., Seattle, WA 98125-4517; phone: 800-875-1400 or 206-364 1400; fax: 206-367-9613.
"Nine Ways to do it Right"
1. Start by asking yourself, "How many spreadsheets do we need to: get the necessary information to run our business?" Avoid systems that require you to keep spreadsheet programs up-to-date manually.
2. Pick a system designed for single entry of data that can "flow" to any of the sub-categories (job : cost, payroll, billing, accounts receivable, etc.).
3. Make sure that the program :: can be modified easily. Software written in a fourth-generation programming language, which many people in the construction industry thought was something of a luxury only a few years ago, is becoming more widespread. Fourth-generation language means software can be modified easily and quickly needs change.
4. Pick a date-sensitive system that allows data entry and reporting to be processed continually, even at month-end or year-end closing.
5. Be certain that anyone, can particularly project managers, can 3 have direct access to the system at any time from their personal computers (PCs) without disrupting other users.
6. Look for a system that can be updated with minimal disruption to your company while still maintaining programming developed specifically for you.
7. Choose software that runs on all of the open-system hardware technology, primarily UNIX, DOS or Novell network systems. Software using a fourth generation language will run on: any new hardware platforms (computers and operating systems): that become available and take advantage of their enhanced speed and capabilities.
8. Consider after-sale service when making a purchasing decision. Choose a company whose service personnel are knowledgeable about their software and about accounting.
9. Always ask for references. Do your homework just as you would when buying a car or other major equipment. Insist on a full featured solution for your specific problems today for those yet to come.
Reproduced by permission from: PLUMBING & MECHANICAL November 1994
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