The construction industry has been clamoring for an efficient collaboration platform that connects firms to their project partners. CMiC Collaborate Project Gateway is a breakthrough Cloud service that changes how general contractors work with their sub-contractors and venture partners to deliver projects on-time and on-budget.
Unlike other sports contractors, Paragon self-performs 95% of their work, from the base work below the fields to the installation of the natural or synthetic grass turf itself. Recently, Paragon expanded their building portfolio with small stadiums, which includes notable projects for Baylor University in Waco, Texas. However, Paragon knew that if they wanted to successfully support future growth, they needed to upgrade to a unified ERP system.
Founded in 1978, Art Gautreau, Inc., dba AGI General Contracting (AGI), is a full-service commercial general contractor specializing in the retail food, drug and medical industries. Currently owned and managed by the founding family’s second generation, AGI continues to deliver on its founder’s vision of quality workmanship delivered on schedule and at a fair price. They have been successful at taking care of client needs while growing their company for the past 40 years. This is evident in their continual repeat work with existing clients and the ability to obtain new clients based predominantly on referral.
To run a profitable operation, your resource managers and schedulers strive to achieve as close to 100% utilization as possible. Estimating resource supply and demand with a high degree of accuracy is key to your success. When resource planning estimates are reliable, they materially enhance a firm’s ability to optimize utilization and to quickly adapt to changes.
Breakthrough growth created the need for Moss & Associates to scale rapidly: they needed a more efficient system that could scale along with them. Before CMiC, Moss used two separate systems for operations and accounting—information had to be re-keyed, wasting time and money. The firm was looking for total unification of capabilities into a system that could adapt as they grew. They wanted an easy-to-use web-based software platform that could save time. The firm soon met with two CMiC representatives who, according to Moss & Associates’ Sasha Seco, “showed confidence without the bells and whistles.”
The global construction industry is set to grow at a compound annual rate of 4.2 percent for the 2018-to-2023 period, Research and Markets found. By 2023, the sector will be valued at $10.5 trillion. Opportunities for business expansion are apparent, but the sector isn’t exactly bursting at the seams. The businesses with an operational edge could put themselves on the fast lane to a market advantage, but that raises the question: Are you one of those businesses?
The answer is complicated, but we can assure you of one thing: You won’t keep up with the industry’s changing demands if your enterprise resource planning system can’t scale with your needs. You can’t afford to run into project delays, fiscal headaches and procedural nightmares because your legacy ERP isn’t fit to adjust to your changing business demands.
Does Your ERP Have What You Need?
With the wakeup behind us, an introduction is in order. We believe construction firms need ERP solutions built for their specific workflows. The days of getting by with QuickBooks or trying to fit a traditional enterprise ERP into your operational model are fading. But we know that an ERP migration can be a long and complex process. Given this situation, we’re here to offer some advice on when it’s time to migrate.
In this five-part series, we’ll explore how you can identify the need for an ERP migration. To start, we’ll look at the problem of limited scalability and—if you’re experiencing it—you’re not alone.
Traditional ERP Systems Falling Behind
The ERP sector has gone through a transition in recent years with more solution providers embracing the cloud. The rise of cloud computing isn’t news, but it’s a big deal for ERP platforms, as organizations have long considered their data to be too precious to trust to such a technology setup. Now, organizations are realizing that stagnant legacy ERP systems are holding their businesses back, while cloud computing keeps maturing. The balance has shifted to the cloud in the ERP sector.
Michael Guay, research director of ERP strategy for Gartner, told CIO magazine that businesses need to rethink how they handle ERP decisions. In the past, organizations had to balance getting solid base functionality with adding best-of-breed components. In essence, companies had to sacrifice what they wanted because significant customization wasn’t feasible. That’s changed in the cloud.
“The reason a lot of people were dissatisfied with their ERP system [was because] the decision was not ‘Should I buy from one or two vendors’ – if you were an Oracle shop you bought from Oracle,” Guay told CIO. “Often, that meant you had a functional app that didn’t suit the needs of the business, so you had to customize a solution and that leads you down a very bad path.”
In construction, you may have resigned yourself to adapting your workflows to ‘generic’ account software or ‘traditional’ ERP configurations. With cloud solutions, such as CMiC Enterprise and CMiC Field, you don’t have to make those kinds of sacrifices.
How a Scalable Cloud ERP Platform Changes the Sector
When your ERP model isn’t able to scale or adjust to your business, you often have to modify processes and practices, adding workarounds and operating with exceptions to what would otherwise be an optimal set of workflows. Across multiple complex, interdependent processes, this adds up to chaos.
You can’t have one project manager updating a bill by emailing accounting while another logs into Quicken at the end of each day and a third hands your accountant a paper form. Sustaining business growth in fast-moving industries requires standardization, and digital technologies are empowering construction firms to connect data and users across teams. Now you’re stuck trying to manually track all of this information in an ERP interface that isn’t well-configured for construction workflows and lacks the management tools you need to keep up with all of the projects you have running. This situation isn’t tenable.
If your ERP system can’t scale, you will inevitably run into problems trying to grow your business. Want to learn how an ERP purpose-built for construction can change this dynamic? Contact us today. If you still aren’t sure whether you need a new ERP, be on the lookout for part 2 of this series, where we’ll discuss how unnecessarily complex document management procedures can quickly undermine projects, and what an ERP & Field platform can do about it.
Over the past decade, the lean approach has taken the world by storm. From manufacturing to marketing, businesses have used lean principles to improve efficiency and increase profits. In construction, the lean approach has included strategies for streamlining workflows, decentralizing decision-making and paying greater attention to project-level processes instead of individual tasks.
To better understand the lean movement and its potential for transforming the construction industry, it’s important to trace it back to its roots. The lean movement began with lean production, a revolutionary manufacturing process developed by Toyota. The goals of lean production are simple: minimize waste and maximize value. To figure out how to best to do this, Toyota used Japanese philosophy, which describes three different kinds of waste: muda, muri, and mura.
Defining and identifying waste may seem like a straightforward task, but waste is actually a nuanced concept. Breaking waste down into the three categories above allowed Toyota to distinguish between value-added and non-value added waste. For example, only the last turn of a screwdriver actually tightens the screw, but the previous turns were a necessary part of completing the overall task.
Muda refers to work that does not add value to a particular process — it’s completely unnecessary. In construction, re-keying data is an example of non-value added work. Additional manual data entry typically happens when firms have multiple software systems that aren’t “talking” to one another. When employees must manually enter data across multiple applications, it wastes a lot of time — as does correcting any data entry mistakes made in the process.
In contrast, unified ERP platforms have the data-transferring technology, which ensures that project data is accessible to all applications within the ERP system and documents are auto-populated with relevant, up-to-date project information. To reduce muda, construction software should:
- Store all information in a single database
- Automate processes
- Self-check for errors
Muri refers to processes that are excessive or overburden the system. Usually, muri manifests in placing too much stress or demand on employees who become less efficient and accurate. In construction, a common cause of overburden is poor communication. When employees on the job site don’t have all the necessary information they need to complete tasks correctly, safely or on schedule; it creates mistakes, delays and injuries.
Lean construction relies on better communication which is key to ensuring that employees are well prepared to do their jobs. This is an area where technology excels. Construction software like CMiC Field allows workers to report issues from the field using their mobile devices. They can attach documents like photos to the RFI so that project leads can remedy the situation — ASAP. Mobile construction software also allows for change orders to be communicated quickly, which avoids re-work.
Mura refers to uneven or irregular processes. Rather than progressing a regular pace, work is completed in bursts, with lots of downtown time in between periods of productivity. Mura can happen easily on the job site when equipment or materials aren’t available at the right times. The good news is that this can be easily solved through materials management software. CMiC, for example, has materials tracking software that allows project managers to automate purchase orders and anticipate delivery schedules assisting in lean construction.
These three types of waste helped Toyota identify parts of their assembly line that were holding up production. By approaching the construction lifecycle like an assembly line, lean construction can help firms to evaluate their workflows, identify non-value added waste and determine where they need to make changes.
We recently discussed the value of big data in our post How to Turn Big Data into Real Insight. In the article, we looked at the value of collecting data about construction operations, but we also discussed the hurdles involved in processing and analyzing that data. For most firms, hiring full-time data specialists is out of the question. But there are many other ways that construction companies can tap into the insights and foresight that data mining provides. The first step to developing a big data plan for your firm is to start with the basics.
Data, Analytics & Intelligence
On its own, big data is useless. In order to use big data, it has to be turned into either business analytics or business intelligence. You can think of data as the raw building material that produces the final constructed building. Big data is collected about a firm’s operations (time logs, temperature readings, sensor data, digital plans, and RFIs for example), and intelligence and analytics help to put it into context. For example, ROI represents an analytic that is determined by gathering and analyzing raw financial data.
Now, it’s important to differentiate between business analytics and business intelligence. Business intelligence focuses on developing a clear picture of the state of the company. In contrast, business analytics are used to determine why a particular phenomenon is happening. Business intelligence is typically done manually by those involved in strategic leadership positions, while business analytics are produced by construction software and other data mining technology.
Intelligence and analytics are both integral to a firm’s success, and knowing what you want to learn or investigate your company will help you match the data insight type to the right task. Business intelligence is more qualitative and is best for exploring areas of operation that are not as easily measurable, such as the state of day-to-day operations or customer satisfaction. Analytics, on the other hand, are quantitative and therefore useful for making predictions about future trends, analyzing financials or evaluating productivity.
How Construction Firms are Using Big Data
Big data can be used in many different ways, but here are some of the most popular ways that construction firms are using data to streamline operations:
1. Sensor Data
Many construction firms are investing in sensors, which they install in various places across the job site. Sensors can measure temperature, humidity, noise levels, vibration, toxicity levels and more. Gathering sensor data from the job site allows firms to predict the longevity and effectiveness of building materials and techniques. It also allows companies to ensure that workers aren’t exposed to harmful levels of noise, vibration or toxic chemicals.
2. Construction Safety
In Construction Safety: 4 Things You Need to Know, we looked at the safety issues the construction industry is currently facing. Data is an effective tool for ensuring that job sites adhere to the strictest safety standards. Data can help predict risks, avoid hazardous environmental conditions and monitor the maintenance and repair of vital safety equipment.
3. Field Data
In the field, paper is still prominent. Unfortunately, when firms use paper, they’re not able to collect the rich and valuable data that’s generated on the job site every day. Information about change orders, task completion, safety issues and time logs can provide construction executives with valuable information about areas for improvement.
4. Materials Tracking
Conserving materials is an integral part of keeping construction projects on schedule and under budget.
Project Controls included in construction software systems like CMiC have tools for tracking materials inventory, allowing firms to:
- Automate purchase orders and requisition management
- Anticipate delivery schedules
- Forecast supply needs
- Automate general ledger updating
Turning materials data into actionable insights about the availability of supplies is one of the best ways for firms to gain an edge over the competition.
Flexibility & Adaptation
By transforming raw data into analytics or intelligence, construction firms gain a flexible, well-rounded view of productivity, efficiency and financial performance. Both intelligence and analytics allow construction executives to gain a bird’s-eye view of operations as well as a more detailed, zeroed-in look at the individual elements that impact the big picture. Data also allows companies to predict emerging trends and prepare for industry changes. In short, data allows companies to change and adapt quickly in a time where competition has never been fiercer.
The technology coming out of Silicon Valley has dramatically transformed several major industries in recent years and some say construction is next. Venture capital firms are expected to increase their investment in construction technology and this could dramatically change the landscape of construction as we know it. Firms looking to grow or stay ahead of the pack would be wise to keep an eye on evolving technologies.
The construction industry has never been a consistent trailblazer when it comes to technology. This is in part because contractors are typically focused on maintaining profit margins rather than investing in new technology, according to McKinsey & Company. In that past, this approach made sense but advancing technologies are becoming too valuable to ignore.
In fact—with the help of world-class innovators—the construction industry could be the force that brings about major changes in robotics, cloud computing and other cutting-edge technologies. Self-driving technology, a long-standing goal of the automotive industry, is expected to hit construction sites long before the vehicles are ready for public roads and highways, according to Built Robotics founder and CEO, Noah Ready-Campbell. Construction sites are ideal places to launch autonomous vehicles because they are closed areas rather than open roads.
This is excellent news for the construction industry because few technologies could revolutionize the worksite as significantly as a self-driving Bobcat, which is exactly what the engineers at Built Robotics are creating. Using LIDAR technology to view and interact with the world, their autonomous track loader digs holes on its own. Operators simply enter the location coordinates, specify the size of the hole to be dug and stand back.
The Semi-Automated Mason (SAM100) is another example of how technology and robotics are helping to eliminate heavy lifting and increase productivity. SAM can lay six times as many bricks as a human per day and reduces lifting by 80%. SAM is the first commercially available robot of its kind and already has an impressive portfolio of work.
But, even with major developments like the self-driving Bobcat and SAM, robots are not set to “take over” the job site. However, one area of technology that is expected to become widespread is 3D modeling and drones. Construction firms are already using drones fitted with high-tech cameras to inspect structures in dangerous and difficult-to-access locations, which is especially useful at extreme heights. And 3D modeling software is allowing construction teams to recreate the real world on a digital platform.
Advanced construction robotics and other technologies are reshaping the construction industry and change will continue to accelerate. The best thing that construction executives can do is keep their eyes on hardware and software advancements if they want to keep up in the years to come.
Cloud technology has become an essential differentiator for many of the construction industry’s top firms, and it’s no wonder: cloud solutions offer powerful flexibility when it comes to data storage and analysis. Specifically, the cloud makes it possible for construction firms to maintain a single, reliable database that is easy to access from both the field and the office. Considering that the construction industry remains one of the least digitized sectors, firms gain a major advantage with cloud adoption.
The benefits of cloud technology aren’t exclusive to construction, however. Across all industries, use of the cloud is widespread and on the rise, In fact, by 2020, it’s expected that cloud spending will reach an estimated $200 billion, according to IDC. Contributor Louis Columbus rounds up an assortment of recent studies in his Forbes Roundup of Cloud Computing Forecasts. He points out one particularly impressive finding from a 2017 BDO Technology Outlook Survey, which found that 74% of CFOs said cloud computing will have the most measurable impact on their business in 2017. The Internet of Things (IoT) came in a close second, with AI, 3D printing, virtual reality and blockchain technology falling far behind. While all these technologies are promising, cloud computing is proving itself the most useful across industries.
In the construction industry, the cloud has helped firms store and manage the massive amounts of data that construction projects generate. In the past, there was no way for contractors to make use of all past and current project data. Firms typically used pen-and-paper methods to track ongoing data, which meant that any big data analysis would require massive amounts of manual data retrieval. When digitization began, data could be captured and stored, but it was often scattered throughout folders and spreadsheets. Managers and executives were basing decisions on old document versions with outdated data, and they couldn’t get a bird’s eye view of operations.
The cloud also helps construction firms avoid having to purchase expensive hardware. With on-premise server solutions, companies only have as much hardware as they pay for. Servers need to be purchased, powered, housed and maintained by internal IT, which requires a significant upfront investment and ongoing costs. It’s also possible for firms to over-purchase on hardware if their growth predictions turn out to be false. Pay-as-you-go cloud services eliminate this issue and make it possible for companies to change their storage plans as business increases or decreases. As a result, construction firms have been able to use the cloud to scale more smoothly and with less risk.
The benefits already seen by adopters of cloud technology are only expected to continue. Serverless architecture will allow IT infrastructure to be more flexible and responsive, data security is expected to increase exponentially and advancements in IoT technology will provide businesses with new ways to make use of databases, software and networks. In the coming years as cloud technology advances, it’s expected that all businesses will have made the switch to the cloud. In other words, transitioning to the cloud is not a matter of if, but when.
Are you considering a cloud implementation? Don’t do anything before you read The Most Common Mistake in Cloud Adoption.