Selecting the Right Construction Project Management Software

Article By: Bassem Hamdy

When a company starts out, business needs are usually met by a simple accounting application. But as the company grows, a solution is added for project management, then later a more sophisticated solution for financials, perhaps another solution to handle customer relationship management information and an imaging application to process invoices and drawings. This leads to a collection of different systems, none communicating very well with the other and each requiring resources to maintain. Eventually the company arrives at the point where executives realize that more time is spent on running this non-integrated set of systems than on completing projects. It's at this stage that executives recognize that they need to span the gap between financials and project management by using an integrated system, one that will also keep up with the company's growth.

A crucial step before selecting a software solution, whether it's integrated or non-integrated, is a thorough examination of the company's current business processes. The processes can be divided into two sections-integrated and non-integrated. The non-integrated processes are ones that are usually performed by one department, such as site management or the process of turning financial budget into financial statements. The integrated processes, however, touch different departments and are often filled with unnecessary steps and wasteful procedures. Though the terminology may differ for each contractor, the seven main integrated processes can be called:

  1. Job Initiation
  2. Estimate to Job Cost Budget
  3. Estimate to Subcontractor/Purchase Order
  4. Payment Management
  5. Contract Billing
  6. Potential Change Item to Posted Owner Change Order (PCT to PCO)
  7. Job Forecast to Work In Place (WIP)

A key factor in successfully examining these processes is to map out each step, how long each step takes and the factors and systems involved. It's quite common to have a "sense" that processes are not being performed efficiently, but it is crucial to have quantifiable numbers to demonstrate inefficiencies. Very often executives are surprised at how much effort goes into a process, particularly effort done behind the scenes. Many companies have processes being performed off-line, which creates stacks of paper and opens up the possibility of mistakes being made. To determine the true cost of each process, the time required for each step needs to be added, but it is often difficult to put hard time values against individual processes. Generalizations can be made, and after completing this examination, companies will be able to identify areas where improvements can be made by either reducing the processing time through automation or moving processes online and have them performed in the system.

Out of this evaluation the identification of key risk areas occurs. A true return on investment analysis of implementing a new software system requires dollar values to be applied towards the time each process currently takes and compare that with the time savings a new system will create. However, this doesn't tell the whole story. Software can help an organization lower risk in areas that are hard to quantify in numbers, such as increasing the reliability of project data and enhancing the access to data. A software system with a collaborative function can also help contractors prequalify subcontractors by providing the ability to store past work performance, verify insurance and track and approve vendor applications online, so a subcontractor can be vetted before they start work on a project. This function could lead contractors to potentially saving millions in losses by choosing the right subcontractor over a wrong one, but this situation is difficult to quantify in hard numbers.