Even as the U.S. and the world struggle with coming back from COVID-19 and the related disruptions to public and private life, contractors are planning for the resumption of business at something close to pre-pandemic levels.
The project-based nature of the construction industry has forced this forward-looking perspective: It’s important for contractors at all levels to be thinking about jobs planned and already underway to keep a solid cash flow. Accurate projections about what will happen and when are important, though currently very difficult to make.
The timeline for recovery could be fitful, with the true crash in construction projects coming several months down the line, caused by an interruption in new job starts while the pandemic was at its early height. The Architectural Institute of America reported a huge reduction in architecture billings in April and little pick-up in May, which points to the potential for disruptive aftershocks affecting contractors for a long time to come.
So how can your contractor firm stay active and effective in this difficult and uncertain time? Technology can play an outsized role in determining efficiency of your workflows and finances. Many companies have already taken advantage of the present fraught moment to improve their technology and future-proof themselves.
The following are a few of the most prominent trends affecting construction leaders’ thinking about their workflows during the pandemic recovery period. These issues point toward a single solution: Cloud-based software that is purpose-built for construction.
Scheduling Visibility Is Set to Remain Essential
Having a high level of visibility and control over project scheduling is essential for efficient contractor management. Especially when dealing with job sites in heavily populated areas that can only be active during precise windows of time, scheduling accuracy is vital to successful operations, as is the ability to react immediately to changes.
Especially when dealing with job sites… that can only be active during precise windows of time, scheduling accuracy is vital to successful operations.
That level of proactive response becomes even more essential when pandemic conditions are causing confusion and uncertainty regarding the timeline or scale of jobs. If a regulatory change, a regional infection rate increase or an owner’s decision forces one job to shut down on short notice, contractors benefit from being able to immediately record the impact and shift personnel and equipment to places where they will be more useful.
Contractors Need a Top-Down View of All Projects
Closely related to the need for effective scheduling is a more general requirement to know the status and completion percentage of every job in progress, along with related information such as cash flow. Contractors that have numerous projects at various stages of completion have an especially acute need for a top-down view that can then drill down for detailed examination of each of those assignments.
Balancing the time, materials and resources allocated to each job enables leaders to craft the most effective and efficient possible approach to completing each one. In the type of difficult economic circumstances created by the COVID-19 pandemic, cash reserves may be low and margins tight – this adds more urgency than ever to this process. A comprehensive ERP construction platform is essential to give the flexible and functional views contractors need.
CFOs Want to Streamline Their Backend Systems
While there’s never a bad time to make a contractor firm’s tech deployments simpler and more consolidated, such revisions are at their most important during crises and challenging circumstances. When times are good, it’s easy for companies to place technology upgrades on the back burner, potentially staying with inefficient legacy solutions for too long because they “aren’t broken.”
When margins tighten and work dries up, priorities must change. Companies looking for quick and repeatable ways to save money begin to think about consolidating webs of interconnected technologies into single deployments. An ERP suite purpose-built for construction, with modules for vital functions such as human capital management, asset management, accounting, project management and more can provide the value leaders seek.
The positive impact of getting the right technology for the job goes beyond a simple matter of consolidation.
The positive impact of getting the right technology for the job goes beyond a simple matter of consolidation. For example, a new enterprise planning cloud-based capability can support construction firms’ efforts to operate more remote, dispersed workforces. This is especially important when considering the possibility of future viral outbreaks and related office closures.
Human Capital Management Comes with Extra Challenges
Human resources tasks in construction always come with unique demands, even when economic conditions are at their most positive. The project-based nature of contractors’ labor arrangements means leaders are best served managing their teams through HCM systems purpose-built for the construction industry. Keeping a close watch on contracts and payment matters is especially vital due to unions’ role in the industry: there is no flexibility around reporting, payroll and other mission-critical functions.
In the unpredictable labor market of a pandemic and the related uncertain economy, this need for careful record-keeping only intensifies. The Bureau of Labor Statistics observed that hiring in construction is far from normal – the industry shed over 900,000 jobs between March and April, then gained back over 400,000 workers in May. In this volatile climate, contractors must keep a close watch on their workers’ status and availability.
At least when dealing with specialized and experienced construction workers, contractors have hesitated to engage in permanent layoffs, due to the scarcity of trained professionals in the job market. Maintaining a workforce that can keep all active jobs on track while also navigating a very thin profit margin and meeting all union requirements is a challenge, and a reliable, purpose-built HCM software module can be an important tool for contractors.
Contractors Need Reliable Technology in Uncertain Times
Quick data visibility and access across departments help businesses stay agile and proactive, helping them thrive in uncertain times.
Starting new projects as the pandemic recovery continues – fitfully and unevenly by region – is a high-risk proposition for contractors. Project owners may be canceling, scaling back or rescheduling jobs due to their own financial challenges, while construction companies must maintain their cash flows and retain their skilled workforces.
Thriving in the midst of these difficult conditions calls for specialized technology tools, designed for the construction industry and created to enable effective data sharing and use. The right deployment will be built from the ground up for construction and combine the essential record-keeping and communication needs for every department within a contractor firm. Quick data visibility and access across departments help businesses stay agile and proactive, helping them thrive in uncertain times.
At CMiC, we have already witnessed companies gravitating to new ERP deployments now, replacing aging legacy systems with effective new technology offerings that can provide the solid back-office framework they need to stay efficient. In such a volatile economic climate, it pays to be ready for further unexpected changes, short and long term, that may affect the industry.
Visit our resource center to find out how the CMiC platform, purpose-built for construction, cloud-based and able to scale alongside your operations, may keep your company effective during the recovery period and beyond.