Do You Really Need Construction Management Software?

The Answer Might Surprise You

Generally, if you ask any software sales rep “do I really need construction management software?”, the answer is almost certainly going to be, “of course you do.” However, the reality is that not every contractor needs construction management software. Ultimately, the need and value often boil down to the growth, size, volume of transactions, type of work performed, and reporting requirements of a company. Although construction technology has been adopted and implemented at the highest rates ever over the past few years, it isn’t for everyone. In this article, we’ll explain why.

Justifying the Cost of Technology

Technology value often relates to the savings of time, money, integration, access to vital project information, and tools that increase productivity, profits, customer service and competitiveness.

A contractor’s transaction volume is also very important. If you are a commercial/industrial contractor and have fewer than 10 employees, self-perform most your work, have basic billing, payroll & financial reporting requirements, generic accounting systems such as QuickBooks and Sage 50 likely work reasonably well. Home Builders & Remodelors often need to build 8 homes/yr or generate more than $2M in revenues to justify a software change.

Often times, if you have even a few unique construction requirements based on the type of work you do & meet the volume/transactions minimums, it is definitely worth a look at construction-specific software.

When is the Right Time for Industry-Specific Software?

Following are some of the most common reasons that smaller construction firms decide they need software that’s more powerful and industry-focused than most “off the shelf” options can offer.

Commercial and Industrial Contractors

• Generating over $2M in Revenue
• Have over 10 employees in the field
• You lack a totally integrated system
• Perform AIA, Progress or Cost+ Billing
• Need “True” labor costs posted to jobs & cost codes
• Union or Certified Payroll requirements exist
• Everyone doesn’t have access to all the important information as needed
• WIP, Bonding & other important reporting is needed
• Accurate, Timely & Detailed Job Cost is important
• Service Department isn’t automated or integrated
• Desire for mobile field tools, paperless technology & automated invoice approval
• Project Managers can handle tools that create, track & manage all job info

Home Building and Remodeling

• Build more than 8 homes/yr or do > 2M in remodeling projects
• You lack a totally integrated system from estimate thru punchlist
• Use excel too much
• Want to create & track lien waivers, worker comp expirations, etc.
• Do loan draw, Progress or Cost+ Billing
• Want to properly account for WIP, overheads, burden
• Know the importance of getting “true” labor costs to jobs
• Need a more efficient, organized and professional way to handle change orders
• Could automatically create budgets & subcontracts from the estimate in seconds
• Don’t have accurate, timely & detailed job cost information
• Project Managers can handle tools that create, track & manage all job info

These are just some of the items that programs such as QuickBooks and Sage 50 do not address. Add change order, subcontract and PO management or managing job correspondence, RFIs and automated invoice approval and paperless technology, and it becomes clear why generic software and construction programs are apples & oranges.

It Comes Down to YOU

If there’s one thing we’ve learned here at Software Consultants in the 25 years of helping contractors with technology, it’s that not everyone needs construction software or gets enough value out of the investment.