EMR Software Buyer's Guide

Introduction to construction software

Running a construction business means managing a constant flood of information. Between tracking employees and contractors, handling accounting, creating job estimates, and managing schedules across multiple projects, the administration can be almost as challenging as the actual construction.

To help you get it all done, construction software packages integrate a wide range of features that address some, or all, of these tasks. You can choose software that focuses on your most important needs, or one that handles everything from start to finish.

Construction software packages are available for all size companies, from off-the-shelf software designed for tiny firms to highly-customized, multi-faceted systems suitable for the largest corporations.

Because there is so much variety and such a wide range of features to choose from, it's important to carefully consider what you need before you start shopping. This BuyerZone Construction Software Buyer’s Guide will help you:

• Learn how to assess your needs
• Understand which features to look for
• Determine how to choose among multiple providers
• Know how much you're likely to pay.

Once you have the information, BuyerZone can connect you with leading construction software vendors in your area – free.

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Understanding the basics

Construction software packages span almost the entire breadth of your business. They can address accounting, job costing, estimating, project management, human resources, service scheduling, document imaging, fleet management, and more – so much that it can be hard to tell where to start.

Because of this, selecting exactly which problems you want to solve and improvements you want to make are important first steps in making a purchasing decision. Some common areas to address include:

• Improving your bidding process
• Catching cost overruns more quickly
• Reducing back office paperwork and processing
• Enhancing communication with clients, contractors, and vendors
• Finding opportunities for reducing costs
• Better scheduling of employees, contractors, and equipment
• Organizing permits, plans, and other documentation
• More thorough tracking of requests for information (RFIs) and change orders

Knowing which areas are the most important to you can help you find the right type of software. Vendors typically provide systems that address several of these areas, but most often they specialize in one or two. A company that focuses on job costing may not offer full-featured back-office accounting, and one that adequately handles accounting may not offer estimating at all.

The challenge, then, is to consider how to get all the pieces you need. Choosing a soup-to-nuts system from a single vendor reduces the integration challenges you might face if you used multiple applications from different vendors. However, the functionality or usability of each individual module in any one package may not offer everything you need.

Ultimately, the best management system for your construction firm may consist of multiple software packages. If your emphasis is on job costing and estimating, you may be better off choosing a job costing system that works with a general accounting package, along with a stand-alone estimating package. Be prepared to consider multiple approaches as a way to reduce your total costs.

Additional questions to consider
The functional decisions – what you need the software to do – are important, but you also need to consider several questions about your business and environment.

• Is your focus residential or commercial? Most construction software will handle both, but look for a software package that focuses on the same type of construction you do.
• What's your specialty? Just as each type of contractor faces different challenges on the job site, they also have different needs from their software. Highway construction firms, plumbers, electrical contractors, general contractors, and every other specialty have their own terms, parts, common projects, and more.
• What is your existing hardware and software environment? Basic considerations like your computer operating systems and network will impact your purchase. Be sure to gather all the relevant technical details before talking to vendors. That way, you can understand whether it's possible to integrate a particular system with existing systems, such as payroll, project management, reporting, or enterprise management software. Or, if the new system will replace your current one, you can start planning for how you'll transfer data between systems.

One highly recommended approach to buying construction software is to make sure you gather input from people in all parts of your business. In particular, involve the site managers or superintendents who will use the system in the field: their concerns might be quite different than yours. By providing a solution that helps everyone who uses the software, you can get the most out of your investment.

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Financial features

Once you've decided which areas are most important to your firm, you can start comparing the feature sets offered by competing software manufacturers. Here are some features to look for in two key financial areas.

Accounting
There are two aspects of accounting to consider: traditional accounting functions, like accounts payable and receivable, and job costing, the day-to-day tracking of all labor, material, and other expenses related to specific projects.

• Traditional back-office accounting needs of a construction firm aren't dramatically different than those of any other business: journal and ledger entries, income statements, payroll, and a variety of detailed financial reports are essential, but fairly standard across many software packages.
• The job costing component, however, deserves more careful consideration. First, the access requirements for job costing are very specific. Information is often entered in the field, whether by a project manager working on a laptop from a truck or a superintendent using a PDA while inspecting the project. Look for a system that takes these usage patterns into account and offers features to support them.

In addition, job costing has many feature requirements unique to construction projects: tracking labor and parts expenses, monitoring schedules and completion status, and managing invoices, contractors, subcontractors, statements, change orders, and more. Make sure the packages you consider offer flexible reporting and status tracking tools so you can stay on top of all of these areas.

If your emphasis is on saving money and improving efficiency, consider this area carefully. By implementing a new system, some firms see immediate returns of 4% to 5% in reduced costs.

Estimating
Another area important to many construction businesses is estimating. Submitting the right bid is essential to many jobs: bid too high and you won't get the job; bid too low and you may get the job but not make any money on it. Many elements of creating the right bid can be handled by estimating applications, allowing you to generate accurate bids more quickly and easily adjust the scope or materials to see how they impact your bottom line.

The right construction management software will make sure your estimates are competitive without jeopardizing profits. This is another area where the initial cost of the software can easily be recouped through improved revenues.

For the best estimates, you may need to access third-party cost data on similar construction products. Sources like RSMeans and Reed Construction Data can provide the data you need.

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Other features to compare

In addition to the financial aspects, there are other important features to consider when evaluating construction software.

Project management
Project management components for construction software combine several functions. At a minimum, they should offer the features of standard scheduling software such as timelines, daily logs, dependencies, and notifications. It should also be easy to view your most urgent tasks and the overall scope of the project.

Contractors who manage multiple jobs that share resources should choose software that provides scheduling and tracking for equipment, employees or teams, and suppliers or vendors. For jobs with service components, look for software that lets you schedule appointments for your technicians, as well.

The project management functionality can also provide communication benefits. It can make it easy to notify all members of a team if a schedule changes, as well as allowing you to track the reasons for all changes.

Maintenance management
Some construction software packages include maintenance tracking modules that can dramatically improve scheduling of routine tasks. Fleet management features can provide scheduling and maintenance tracking for your vehicles and equipment, while other maintenance applications focus on building systems, such as tracking HVAC maintenance or roofing inspections.

While these features can be included in construction software, they're often marketed and sold as stand-alone maintenance management software. Depending on your budget and maintenance tracking needs, you should consider focusing on the job costing and estimating features for your construction software, and adding a maintenance package later.

Reporting
A package may include dozens or even hundreds of standard reports. They can range from high-level overviews of an entire project to detailed reports on specific activities.

The sheer number of reports can be overwhelming, so don't try to investigate every one. Instead, look carefully at the top level reports and "dashboards." These reports should give you the essential information you need about the job at a glance.

The ability to customize reports to your liking is a big benefit. Most construction software supports this, either through built-in editing and configuration, or by supporting external reporting software. Look for a system that lets you export data in a format you can use, whether that's Crystal Reports, Excel, or some other format.

Security
Any computer system that contains your confidential accounting information needs to be reliably protected against unauthorized access and malicious attacks. Reputable construction software should have passwords and other security measures as a standard layer of security. Many software packages also offer audit trails that track all changes and who was responsible for each.

More flexible systems offer multiple levels of security. Users can be assigned to groups that have varying rights: managers may be able to change information on any job they're assigned to, while contractors can only view the current info, but not update it. For wide-ranging implementations that are used across different departments or companies, this is an essential feature to look for.

Integration
Chances are you'll need your construction software to work with some other software you're already using. This may include your existing accounting system, payroll tracking software, or any type of construction software you currently use. As we mentioned in Understanding the basics, you'll have to take the time to think through all the integration points you're looking for.

However, don't just ask the vendor if their software can be integrated with your existing systems – ask how they'd do it. Some companies provide built-in APIs or plug-ins to connect to popular software but may charge steep hourly or project fees for more complex or customized integration.

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Locally-hosted software vs. ASP

Another important decision to make when choosing construction software is whether you want to run the software locally, on computers in your office, or use a hosted version that you access via the Internet.

Locally hosted software
Most construction software is locally hosted – the program runs on your computer and stores the data either on your hard drive or on a network server in your office. Sometimes called a client-server configuration, this setup ultimately gives you the greatest control over the system. In some cases, local solutions may also offer more extensive feature sets than ASP versions.

However, installing and maintaining the software requires technical expertise. In addition, keeping the data in-house gives you the responsibility of creating daily backups and securing the system against hackers and viruses.

If you choose the local hosting route, the majority of your costs will be tied to the upfront purchase and installation fee, and new hardware if needed. You may also pay smaller ongoing fees for support and access to upgrades.

ASP-based solutions
Hosted versions, or application service provider (ASP) solutions, provide some distinct advantages but aren't appropriate for every business. In an ASP solution, both the application and all your data reside on the vendor's servers. Your staff accesses the service via the Internet using a web browser or specialized client software.

The main advantage of ASP solutions is that they are maintained by IT professionals at the vendor's office. Multiple layers of firewalls and security, uninterruptible power supplies, failover (instant switching from one computer to another in case of a crash), and reliable backups are all standard operating procedures for these vendors. Together, they virtually guarantee that your application and data will always be secure and available.

ASP solutions offer another big advantage for remote workers. Because the system is accessed over the Internet, employees with a wireless connection or network access on-site can use the full features of the software, the same as if they were at the office.

The biggest risk of online solutions is that they require a broadband Internet connection. Since no Internet connection works 100% of the time – your internal network may fail, your ISP may experience an outage, or an Internet worm may cause congestion – you may not always be able to access the system. These types of outages are quite rare but possible.

A more common connectivity problem is for workers at remote job sites: wireless access isn't always as consistent as your internal network. Look for systems that let remote users enter basic data offline, then upload it when a connection is available.

Payment for ASP solutions is based on a smaller setup fee and ongoing monthly payments based on usage, a percentage of the project revenue, or a flat per-project charge.

Which is right for you?
Locally hosted software is a much more familiar setup to most users, and the most popular choice for construction firms. Because the data is so critical to day-to-day operations, many firms are simply not comfortable having it reside outside of their networks.

However, the ASP model is gaining popularity, particularly among smaller firms. Here are some areas you should consider when deciding between ASP and client-server construction software solutions:

• Do you need remote access? ASP solutions make it easy for off-site employees to access the software while locally-hosted solutions may be expensive and require difficult configuration. Consider remote office access and job site access separately, as they have different requirements.
• Are your employees tech savvy? If your IT staff already runs a company network, they should be able to maintain your chosen construction software. Smaller companies with little to no computer expertise are probably better off choosing an ASP solution.
• What's your budget? While an ASP model requires a lesser up-front investment, the ongoing costs of ASPs catch up to and can even surpass those of locally hosted versions.
• Can you pass on the costs? The general conditions line item commonly found in construction contracts can often be used to cover the costs of ASP services that are billed on a per-project basis. This gives you get the benefits of the system without any of the costs. And if your contract specifies "costs plus," you'll get your markup on top of what the ASP charges you.

You can also start off with a hosted service then move to an in-house solution: ASPs should offer a seamless migration path that allows you to easily export your data. Some vendors offer both hosted and in-house systems, making the transition easy. This approach can be an easy way to get started without committing fully to either option.

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How to run your evaluation

Once you understand the basics of what type of software you need in terms of size, features, and basic design, it's time to start comparing different packages. Submit a BuyerZone request for construction software quotes and you'll be matched with several qualified providers based on your requirements.

Start with basic phone conversations and web site visits to get a general idea of what each vendor has to offer. However, you should be prepared to spend the majority of your time evaluating the software itself.

Because the scope of these systems is so large, the most effective approach is getting a guided demonstration by the vendor. Most often, the vendor will connect you to some sort of trial account and use web conferencing or telephone conferencing to walk you through the ins and outs of the software.

Avoid "canned" demos if you can – pre-recorded videos of the software in action provide little value. While they can provide some basic information, the real benefit of a live demo is having the vendor demonstrate the features you want to see and answer your questions. Be prepared with questions about specific scenarios or processes that are important to you.

Some vendors will provide a limited version of the software you can try for yourself, while some ASPs will even let you access the full application. Investigating the capabilities on your own is useful, but because these systems cover such a huge range of functionality, a vendor-led tour is the best way to get a strong understanding of the software as a whole.

Ease of use
When evaluating software packages, don't concentrate solely on features. Getting your staff to adopt a new system can be difficult, so it's essential to choose software that's easy to use. Of course, every salesperson will tell you their construction software is easy to use. You need to decide for yourself what "easy to use" means, but here are some examples:

• Is entering information intuitive?
• Can you skip sections if they're not applicable, or include non-standard information?
• How much is automated for you?
• Can you easily see specific information about projects and budgets?
• Are the various screens easy to understand?
• Does the "flow" from section to section match your workflow?
• How many steps does it take to perform basic actions?
• Does the system have an interface appropriate for field personnel, as well as office staff?
• Is there an auto-save function to help prevent lost work?

No matter how easy the basic functions are, users will always have questions, so investigate the built-in help features as well. How much contextual help is included? Are there pop-up "tool tips" to explain various buttons? Is the help system useful? Make sure your employees will be able to get the help they need.

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What to look for in a construction software vendor

When you buy a construction software solution, you're also selecting a new partner for your construction operations. Choosing the right vendor is just as important as choosing software that's easy to use and includes the right features.

First, remember that all construction software packages have different strengths. Look for a vendor who takes the time to understand your needs and works with you to come up with an appropriate solution - not one who just pushes their product as a one-size-fits-all answer.

You'll usually purchase directly from the software company, so it's important to select a provider who will be around for years. In addition to a track record of success, a large installed base offers stability, ensuring that the vendor will continue to upgrade and improve the product. In addition, a construction software purchasing decision is one that you should stick with for many years, so choosing a company you're comfortable with is essential.

Recent updates and new releases also indicate a commitment to the software. Ask how the provider handles bug reports and feature requests, and how often they release new versions.

As with any complex software, you should expect occasional problems or outages. While "guaranteed 99.5% uptime" and other vendor assurances are fine, more important is how they react when something does go wrong. Inquire about their support policies: when do they have live support staff available by phone? Do they guarantee a specific response time? What kind of training do their reps have? Are there fees for support?

The vendor should offer training for everyone who will use the system. Many businesses prefer having a trainer come to their office, but that's not always possible. Web-based training can also be effective, if done properly. Regardless of how it's conducted, training should take users through the basics of entering data, running reports, and troubleshooting typical problems.

A related question is installation: what assistance does the vendor provide to get you up and running? If you're migrating existing data, this question is even more critical. Also, find out if installation is an additional charge, or if it's built into other costs.

Finally, the vendor should be able to connect you with references who use their software. Ask for references to customers similar to your business in size and specialty, if possible. Call the references and ask questions such as:

• Has the system improved your operations? How?
• Does it do everything you expected? What is missing?
• Are your employees satisfied with it? What do they like or not like?
• Has the software helped you stick to schedules and budgets?
• Has it helped you reduce expenses? How?
• How does the vendor react when you have problems?
• What do you like least about the software?
• Overall, was it a good investment? Why or why not?

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Pricing construction software systems

How much you'll pay for construction software depends largely on what type of system you choose to buy. Since prices can range from $500 to $100,000, the type of system you choose is pretty significant.

The extreme low end of the scale is off-the-shelf packages that primarily handle one focused area of your business. Self-contained estimating software, for example, is frequently purchased as a standalone application, and can cost between $500 and several thousand dollars. These type of purchases involve little installation help, training, or customization.

Systems that include high-end HR and project management functions, along with bidding and job costing, cost much more: often between $10,000 and $50,000, including installation and training. For companies with revenues between $3M and $50M, this large initial expense can be recouped in a year or two thanks to improved bidding and reduced expenses.

ASP pricing is typically based on monthly or annual user fees, but there are other creative pricing models out there. Some ASPs charge a percentage of the project value they're used for, while others charge a flat fee per month per project.

In addition to which modules you choose, you may face additional fees based on the number of users. Don't skimp! Make sure you get the right number of licenses to avoid hassles down the line. Often you can get volume discounts for larger purchases.

Don't buy on price alone
Choosing the right construction software should involve careful consideration of your needs, evaluation of features and capabilities, and comparisons of dealers. Specifically, it's about more than just price.

If you're comparing three solutions with fairly similar price tags and a fourth that's half the price of the others, you can bet there’s something lacking from the discount package. Placing an undue emphasis on price can lead to a purchase that ultimately fails to deliver the benefits you should expect. Moreover, skimping on price early on can cost you more in the future.

Support and training costs
Make sure the pricing information you get from each vendor details what training and customer support is included - and how much additional help costs. Some vendors provide unlimited telephone and online support; others charge by the minute or per incident after a set amount of free support.

Training sessions for your employees are more commonly priced separately. You may be able to choose from on-site, off-site, web-based, or video training, all at different price points. It's usually worth having at least some training to get your staffers up and running. Once you see how the system is working, you can then decide if you need more advanced training.

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