Our societies couldn’t continue without the built structures construction companies create. These businesses always seem to achieve amazing results in spite of forbidding circumstances and unique challenges.
The right technology can help construction companies grow and succeed now and in the post-pandemic future. In this blog, we discuss how Sikich’s construction management software, Business Central for Construction, can help you address typical industry challenges. We also make a case for Sikich as your single partner for technology and business consulting services.
The global pandemic has temporarily paused many construction projects. When economies reopen, construction companies must adjust to the evolving operating conditions in states and counties. That may mean having to reassign people and equipment faster and more flexibly to accommodate clients’ changed priorities and budgets. However, some long-time industry conditions remain the same—and aren’t helping builders move forward.
Firms compete intensely to win the business of demanding clients, who may impose stringent compliance and reporting mandates together with budgetary parameters. Margins are tiny—hovering around 2 percent for many construction companies—and unlikely to change.1 Construction firms therefore have to avoid additional costs and delays as much as they can. Industrial equipment needs to run reliably; skilled people and contractors have to be available when they’re needed and without waiting for their next assignments; and managers have to remain in control of project activities as well as financial performance.
According to some estimates, only about 20 percent of construction companies can assess their actual margins. The others may well know that they are not as profitable as they would like, but lack a way to measure and manage margins and performance.
In most companies, business managers are at a centralized office, whereas those who are in touch with the pulse of projects are at various job sites and may only have a view of their current project. Communications between these teams may not always be timely, efficient, or reliable.
The software tools used in many construction companies don’t always make things easier. Specialized estimating, design, or project management applications typically require user training and practice. Even some popular software products do not integrate with the finance, HR, and sales systems many companies use. Information then has to be manually copied and transferred from one into the other, which takes time and can easily lead to errors.
In many companies, a spreadsheet program like Microsoft Excel is the standard way of managing finances and projects. We often see businesses use hundreds of spreadsheets, sometimes in conflicting versions, to record information. When project leaders or executives need business data to understand how profitable certain projects or accounts are, they need to ask for assistance. Under these circumstances, visibility is difficult to achieve and frequently lags behind events.
For project and team leads on job sites, physical remoteness and a lack of reliable connectivity can make it even more difficult to use the company’s software tools. Not all developers of construction and project management software offer mobile or offline-enabled versions. Information exchanges between offices and sites may require phone calls and emails, or can force people to travel to an office location.
When technology will barely support everyday activities, it becomes more cumbersome yet when important, less frequent events happen. For example, if a construction company acquires or merges with another and systems have to be consolidated, or when it’s necessary to respond promptly to client needs, balky software tools can get in the way. As people find workarounds of their own, these may lead to a variety of informal, undocumented, potentially risky practices or shadow IT.
We recommend that construction companies replace their aging, inefficient software and rethink how they want to use and manage technology. You might accomplish more with the right software applications. For example, what if software tools could help you assess, control, and improve margins? If they could make it easier to manage project costs and resources? Or, if they could help you get teams and equipment to construction sites sooner, or without project downtime?
Commonsense, technology-fueled improvements in how you run operations and serve clients could give you an edge over the competition. If some of your clients are large construction companies which hire you as a subcontractor, a technology refresh could make it easier and more attractive for them to work with you, and could expose you to more project opportunities.
For construction companies, there will probably never be a better time to upgrade their technology. It’s important that your construction management software deployment truly fits the your requirements and does not disrupt your work. As Sikich has shown in hundreds of projects, we know how to accomplish that. When we work with you, we keep processes and systems streamlined and focus on helping you address your challenges.
Larger construction companies may run more than 160 different software applications to manage their business. Even many smaller firms use close to 100 systems.2 While all these software tools fill important needs, it can be a staggering effort to keep them running flawlessly, secure, and current in terms of functionality
and licensing.
Sikich takes a different approach. Our Business Central for Construction is an integrated solution that combines Microsoft Dynamics 365 Business Central with ProjectPro, the leading industry software. Together, the two products are a complete construction management software system. Our construction software can also benefit companies that perform a subset of building construction, like HVAC specialists, and firms that function much like construction businesses, such as installers of security and surveillance systems.
Business Central is a cloud-based, comprehensive enterprise resource planning (ERP) system, available in several versions. As with all Microsoft Dynamics 365 solutions, developers have developed many industry and process-specific applications to extend the software.
Companies can use the edition of Business Central that best fits their requirements. Usually, they do this with expert guidance from a consultancy like Sikich. The ERP system includes a range of capabilities that provide most of what you need—it helps you manage finances, projects, sales and services, distribution, warehousing, and the supply chain.
ProjectPro closes Business Central capabilities gaps for construction companies. Many of its features extend the jobs module in Business Central. In addition to such essential activities as job quoting, subcontract management, resource management, progress billing, and project management, it enables equipment management, retention tracking, inventory and materials management—and lots more. Only qualified, carefully vetted partners like Sikich resell and deploy the solution for customers, so you don’t run the risk of inadvertently engaging somebody who lacks the appropriate expertise.
To highlight how this construction management software can help you, let’s consider some important areas of the business, starting with subcontractor management.
In Business Central for Construction, you can record the contract conditions you establish with contractors, including the details about payment milestones or the tasks for which they are responsible. You also can document which materials are purchased by subcontractors and how and when you reimburse them.
You can let payments depend on specific conditions, such as certain requirements met to your satisfaction. With these details recorded in the construction management system, more timely and accurate progress billing to your clients can bring in revenue faster. Even better, you can automate invoicing to clients or, if you’re a subcontractor, to general contractors.
Maintaining liens and lien releases can be a headache for general contractors, who need to keep lien documents securely accessible and make sure that payments that impact a lien are properly recorded. Business Central for Construction lets you track lien-related information with all its dependencies. The system generates lien documents, expedites them to the right parties, and records and files them once they are signed and returned. When all these steps are automated, contractors can receive their pay much faster.
By managing subcontractors, payments, and liens in the contractor management software, you can do away with spreadsheets and other ancillary mechanisms. Instead, you rely on a single resource for all management actions. Information is recorded just once, not repeatedly. Nobody has to remember or look for a certain document, and nobody has to keep spreadsheets current and secure. You immediately eliminate a lot of distracting busywork, saving time and expenses.
There’s more to it: you get to transform how you work and communicate with subcontractors. The focus can shift to a collaboration based
on shared interests and away from a series of potentially fraught transactions. You can discuss what’s best for clients and projects instead of talking about invoices or liens. There may also be a direct financial benefit: subcontractors often invoice higher amounts when they know that the general contractor’s payments are likely to be late. Many will offer a general contractor better terms when efficient lien management accelerates their payments.
At the same time, both general contractors and subcontractors minimize the risk in their business. When you manage finance and contracts in a centralized construction software system, the likelihood of errors and inconsistencies declines. You don’t need to take special steps to ensure that payments happen on time, because the system can prompt you automatically, based on the projects and contract relationships you configure. By documenting what matters, you can avoid contentious ambiguities.
If you want to evaluate how engagements with a general contractor or subcontractor contribute to your business, you have a complete, reportable record of every project in your contractor management software. When you assess them based on data and actual events, business relationships may look quite different from your impressions of the most recent project.
With powerful equipment, high elevations, and a lack of people-ready structures, conditions on construction sites can be dangerous, with many potential causes of accidents. A bad safety record will jeopardize a company’s ability to stay in business and win new clients.
Many types of insurance apply to construction operations. Complex, risky, and protracted projects require more extensive coverage, or need contractors to procure special, additional policies for certain phases of a project.3 Builders’ risk insurance, liability insurance, and insurance for vehicles and equipment can comprise a variety of policies. Workers’ compensation insurance is another critical coverage which contractors need to purchase.
Certificates provided by insurance companies allow contractors to prove that they have acquired coverage at the right level. Often, these are still paper forms, although more and more insurance providers also distribute them electronically. Contractors have to record and safeguard these certificates and remain alert to their expiration dates and renewal periods.
One important step general contractors can take to reduce the risk in their business is making sure that subcontractors have all the insurance coverage they need. It’s not just prudent, it’s also financially sound, because enforcing subcontractor coverage can reduce the insurance premiums general contractors themselves need to pay.
However, tracking subcontractors’ insurance certificates can mean a huge workload for a contracting company. Larger construction companies work with hundreds of subcontractors, and even smaller ones may use dozens. When construction companies use manual processes and stand-alone software tools to manage insurance certificates, the visibility and manageability of activities and data can quickly degrade. Many construction businesses are thus challenged with ensuring error-free, streamlined tracking of insurance certificates.
In our construction management software, Business Central for Construction, you can archive and track all insurance certificates—your own and those of your subcontractors—with their coverage details, premiums, and expiration dates. They are easily searchable and always available. You receive automatic notifications if insurance is tied to subcontractor payments that should be processed or put on hold. The system also reminds you when an insurance certificate is about to expire and needs to be renewed.
The insurance certificate management functionality in Business Central for Construction alone can generate a solid return on investment (ROI) for the solution.
Sikich construction clients save millions of dollars every year with automated, electronic management of insurance certificates. Several factors play into this:
Discussing insurance certificates offers a smooth segue to invoicing, because you can connect invoicing and billing milestones to insurance certificates and insurance costs in Business Central for Construction. That allows you to be aware of and manage dependencies between the two—and invoice accurately, at the right time.
You can configure invoicing in your construction software to reflect project milestones, percentages of completion, and just about any other invoicing criteria you establish with clients and subcontractors. Depending on how you define a project, invoicing can incorporate labor hours and the purchasing and delivery of materials as line items with appropriate markups.
Many contractors use the billing practices and document formats developed by the American Institute of Architects (AIA), and most
clients who commission construction projects are comfortable with AIA standards. Business Central for Construction supports AIA billing along with the also standardized, associated reporting that your clients may request. Some operational details, such as union types, prevailing wages, and work class codes, feature in AIA billing and can also be useful in your workforce management or other reporting. Business Central for Construction lets you add these options when you define project conditions.
The retainage often stipulated by clients in their contracts allows them to withhold a portion of the contract price until the work is substantially complete. General contractors may do the same with subcontractors. Retainage (or “retention”) provides assurance that a construction business will honor its commitments.
If your construction software does not support retainage, you may erroneously invoice for full amounts when you shouldn’t, or accounts receivable managers may think that customers are delinquent. You can document retainage conditions in Business Central for Construction to avoid such errors in invoicing and customer communications.
Project management and invoicing can become challenging when you need to consider clients’ change orders or additional requests. When you manage change orders in your all-in-one construction software, they will become a component of jobs that are in progress, along with appropriate resource and project management as well as billing. Change orders are immediately reflected in project reporting, for example, in your profitability analysis. You can run a profitability analysis per job, client, region, or other parameters, and be confident that Business Central for Construction reflects current conditions.
Traditional construction software products may fall short when you plan to offer services to generate predictable, recurring revenue and when you acquire or spin up additional business entities. When you get to these junctures, Business Central for Construction can prove its value as a management platform with a wealth of capabilities and vast scalability.
In our construction management software, you can configure and
add as many business entities as you like—even in different global regions. For instance, you can create and brand a new business group for a type of construction that’s new to your company’s portfolio. Or, if you acquire or merge with another business, you onboard it to Business Central for Construction by using standard functionality. You can run finance management and generate reports per business group, line of business, region, revenue type, or according to other criteria, or in a consolidated, all-up manner.
However, especially the first time you bring another organization onto your construction software platform, Sikich can make sure that the undertaking will be successful. Configurations of new entities or business groups are not necessarily difficult, but can easily become unwieldy when you also need to accommodate different lines of business or
new user roles. We help you keep these activities on track without complicating your life.
For many construction companies, providing clients with valuable services is an efficient, sustainable way to create revenue and balance the volatility of the market, especially at a time when projects may be delayed or reduced in scope. You can rely on Business Central for Construction to manage service contracts and service delivery, including workforce management and dispatching properly skilled people to field assignments. You flexibly configure contracts and service types in the system. Those could include warranty or maintenance services; electrical, plumbing, or other services provided by third parties in a partnership with you; and entirely new services you create.
Inventory management can pose challenges when a construction company launches services that require parts and supplies. Business Central for Construction as your materials management software takes the pain out of inventory management. You configure items with their costs, mark-up, status, and attributes, such as data about material fatigue or time remaining before a likely failure. You allocate inventory to client projects or services, and track it in transit. And, if you decide not to keep inventory around and prefer just-in-time procurement, you set up purchasing and delivery schedules in Business Central for Construction to ensure the flawless continuity of projects and services.
When you adopt our construction management solution, you don’t need to discard favorite software tools that serve you well. Business Central for Construction can integrate with Design 2020 and other industry software that many companies have used for years. Many common integrations are easy to configure, and Sikich can help you overcome any integration challenges.
Your in-house technology managers will be able to take care of most use cases for the applications on the Microsoft Power Platform. Sikich will help you refine your approach and provide hands-on assistance if you don’t have the right skills in your organization or if there is just not enough time.
Many of our construction clients integrate Business Central for Construction with Microsoft Teams, the cloud-based collaboration software. In most construction businesses, people at office locations and project sites need to exchange information, documents, architectural drawings, and other files. They have to meet to discuss project and client challenges, complex bids, subcontractor issues, and lots more. Many companies also offer employees skills development through meetings and webinars.
With Teams, your employees and other contributors can securely meet in a digital space, where they can talk and see each other. Communicating that way tends to be much more productive than using the phone line alone or time-delayed communications like email or text messages. For most people, it’s easier to participate and remain engaged in Teams interactions than in more remote channels, and ambiguities and misunderstandings won’t get in the way when they can immediately be cleared up. In Teams, you can also connect to other resources, such as your libraries of architectural drawings or contracts.
When construction teams work at sites where internet connectivity is not available, Sikich can configure Power Apps for offline data lookup and data collection. Our field service application also offers offline capabilities. Workers won’t by stymied by connectivity issues, and the system can sync whenever they are back in a connected environment.
It takes the right technology provider to configure software functionality to drive transformative business initiatives and achieve strong results. Sikich offers a unique combination of business and technical expertise and a broad range of consulting services. We aim to deliver tangible, measurable value for your construction business. There are several reasons why working with Sikich to deploy and manage your construction management software and support your business may be in your best interest.
Sikich industry practices like construction, manufacturing, and professional services are led by people who have spent a large portion of their careers in the respective industry before they joined our consultancy. We know the construction industry and what matters to construction firms. We also understand the challenges your clients face—the public- and private sector entities that commit to construction projects as well as the firms which may hire you as a subcontractor. Construction is an essential industry that so far has been underserved by most technology leaders. Business Central for Construction—our integrated solution comprising Microsoft Dynamics 365 Business Central and ProjectPro—can meet your technical requirements. Our consultants, building on hundreds of successful ERP projects, will make sure it also fits your unique operational conditions.
For many clients, the first step in a Sikich engagement is a Business Process Alignment (BPA). You can benefit from a BPA even if you don’t want to go any further with us. During a BPA, we assess your business processes, identify inefficiencies and discontinuities that slow your success, and help you make the right changes to address them. We review processes from the perspective of your leadership, managers, and business groups, and offer suggestions to empower the key roles in your firm. Without this initial focus on process improvements you may simply transfer existing inefficiencies and wasteful activities into a new technology environment.
If your BPA becomes the foundation for your software deployment, Sikich ensures a seamless transition. We implement Business Central for Construction and assist your users in becoming comfortable with their new technology tools. The Sikich team also performs data migrations and integrations with your other systems or Microsoft Power Platform solutions.
Many construction companies don’t have a large IT staff, and using construction software in the cloud may make it possible to reassign IT team members to other than purely administrative tasks. Some companies contract for Sikich Managed Services, outsourcing technology management and support entirely to us. If you want to make sure that your office-based employees and everybody at construction sites or delivering client services can enjoy the capabilities Business Central for Construction to the fullest, that may be the way to go. As part of our services, we onboard new employees and ensure a productive, high-quality user experience for everybody in your organization.
Depending on your goals, a Sikich virtual CIO (vCIO) can be part of our services. The vCIO can offer guidance for a transformative use of technology. If you anticipate rapid growth or organizational change, your vCIO can help you develop an effective technology strategy. Sikich vCIOs assist many businesses to manage through fast, dramatic change that forces them to evolve quickly. We know how to achieve this without distracting you with disruptions and uncertainties.
