Managing a contracting business relies on a network of systems and processes that are efficient but also flexible. Processes require careful scrutiny and evaluation to insure they include the best tools and solutions with the right processes and procedure. The art of tweaking your processes to improve operations is critical to embracing change, building success, and staying competitive.
If we probe inside the operations of a commercial contracting business, we would typically find many different processes that include dispatching, invoicing, billing, training, and work-in-progress management and tracking.
Monitor, Measure, Correct Course with Feedback
Steve Wiete is the chief financial officer of Atomatic Mechanical Services in Arlington, Ill. Atomatic prepares monthly and annual budgets in conjunction with weekly, monthly and annual performance reports. For Atomatic, tracking gross profit at a granular level, is crucial to help manage operations and insure accountability. This means managing job order to category and salesperson to division.
"The financial process that tends to require the most attention is our job cost system," explains Wiete. "With many large and small construction jobs, tracking estimates to actual costs and calculating job gross profit on a monthly basis tends to require the most maintenance."
Job status is key for project managers and sales personnel. When they know the financial status of their jobs, they can insure that change orders are addresses and jobs move forward, on track. Monitoring work in progress is key.
When Atomatic rolls out a new process, they begin with a small group. They work through a beta test and gather feedback. They adjust the process before company-wide implementation.
Effective monitoring requires using available metrics produced from installed software and applications. The user interface of an application often provides valuable analytics and metrics to monitor progress and drive management decisions.
Give Voice to Employees
But another valuable and oft overlooked source of information comes from employee feedback.
"Employee feedback is very important, since the best systems in the world don’t work well if the employees do not buy-on to its use and value," says Jim Bartolotta, who recently joined Atomatic as executive vice president. "During the implementation of our Field “MobilTec” software, we worked very closely with the techs on its implementation, and constantly provide feedback to [solutions provider] Wennsoft/Key to Act on enhancements/modification that were needed. If the employees don’t buy in, it’s difficult to get them use the systems effectively," Bartolotta says.
When Atomatic rolls out a new process, they begin with a small group. They work through a beta test and gather feedback. They adjust the process before company-wide implementation. This incorporates important features and practices important to those that will be using it. It reduces challenges and costs that would have been incurred on a much larger scale.
Right Tools. Right Place.
Many processes are supported with technology solutions. Selecting and implemented such technology must focus on a reasonable return on investment. This return may logically be manifest in added operational efficiency.
"I think they are all important in their own right, although we concentrate on the ones that have the biggest bang for the buck. For example, when we were reviewing and making our software Purchase in 2008," says Steve Wiete of Atomatic Mechanical Services. "We felt that improving our service operations would have the biggest impact on our bottom line so we looked for software that we felt had the best Service management package coupled with mobile computing. Although job cost and management software is important, if push comes to shove, a good service module has the bigger impact on operational efficiency"
Selecting and implemented technology must focus on a reasonable return on investment. This return may logically be manifest in added operational efficiency.
Software solutions change so rapidly. What worked last month may already be superseded by a better application. The application may be web-based or installed on your own servers. For a contracting company this means careful vigilance to find the right tools and put them in the right place. This is a journey over time.
"Our process in finding software began in the late 90’s, with the fear of Y2k consequences," explains Wiete. "At that time we were using two separate packages, One for Construction - CS2000, and one for service. At that time many contractors that had both significant Service and construction components were forced to use two systems since there was not a wide availability of ERP packages that were equally strong in both operations. Again, at that time both packages worked very well for the specific purposes outweighing the negatives of certain redundancies of using a separate software for our service operations."
The software market has changed and continues to change significantly. What worked previously may not work so well in present times.
The software market has changed and continues to change significantly. What worked previously may not work so well in present times. New tools become available that bring new value and efficiency and must be observed and utilized.
"With the development of Window’s in the 1990’s software was now being developed in a graphics environment," explains Wiete. "As It became increasingly more costly and inefficient to maintain two systems coupled with the fact that more and more software providers were now providing solid combined service management and construction modules, and the need to transition to a graphics based software solution, we purchased and installed the Wennsoft/GP Dynamics software solution in 2008. We looked at many of the Industry leading packages at the time and felt that their commitment to continued enhancements, the SQL Database platform as well as Microsoft’s GP Dynamics backbone on the financial side convinced us to go with Wennsoft. To date, we are very happy with the software."
Change Management.
Over time, the right tools at the right time, in the right place, changes. The software market responds to wide scale customer needs and demands; vendors offer new and better solutions Subsequently, competitors invest in technology for a strategic advantage.
This causes decision points for leadership: stay the course, or react; embrace the better application. This decision point may be difficult, as it requires financial resources to procure. However, failure to adapt and change could be problematic if change is not properly managed.
A valuable determinant of when to change and how much to change by tweaking a process or procuring a technology solution or tool depends on what your market demands. Managing change should be based on what customers need and want.
The instant need by our customers for information and feedback has been driving our systems more than in the past. Our response times have to be faster than ever before, and as such, we need to be more efficient internally to manage those requests.— Jim Bartolotta.
"Probably the industry change that comes to mind first: the instant need by our customers for information and feedback has been driving our systems more than in the past. Our response times have to be faster than ever before and as such we need to be more efficient internally to manage those requests," says Jim Bartolotta. "Information and the speed in which we can provide it to both clients and our service team is paramount to success. With the implementation of hand held devices our service technicians have the tremendous resource of both technical and history site and equipment history which allows us to more efficiently and effectively provide service to our clients."
Bartolotta ads that for construction installations, the advent of new technology and tools - all designed to improved efficiency, have made it necessary to break away from status quo. This is something that many businesses battle.
Processes are expedited with tools and technology. Smart businesses always examine their processes and operations and search for ways to improve their efficiency with available tools and technology. If you don't, your competition will.
"Without a good system to track tickets, installs, provide new quotes, there is no way to keep track of the business flow," says David Hinshaw, vice president of sales for Sandler Training in Norfolk, Va. — whose clientele includes many HVAC contractors. "Selling features and benefits will only make them shop your competitor. You need to take a different approach that focuses on the customer, not what you can provide to them," Hinshaw says.
Focusing on the customer is always a best practice, as is aligning your systems and processes to meet your customer needs and ultimately enhancing your customer service.
Says Bartolotta: "The real leaders embrace change, and realize that growth, development, and the willingness to embrace change is the key ingredient to sustained success."
Jim Romeo is a freelance writer based in Chesapeake, Virginia.