Construction Software State of the Industry from Software Advice

My friends at Software Advice have sent over another interesting original article that they have put together pertaining to software in the construction industry. This one comes from Houston Neal and it kicks off a series of reports the group is doing on trends within the construction software industry. Please visit their site at www.softwareadvice.com for the original report.

Construction Software State of the Industry Report

This is the first in a series of “state of the industry” reports in which we will share our observations on construction software industry trends. While reporting the recessive state of the industry is not breaking news, there are some interesting trends that we can share. Not everything is gloomy, and significant technological shifts are underway.

Our observations are based on roughly 6,000 conversations with construction software buyers over the past year. In these calls, our team listened to buyers’ “pain points” – the business problems they were looking to solve with new software. From there, we recommended what we felt were the best solutions. We later surveyed each buyer to find out if they ended up buying software, what they bought and how it all went.

Estimating and takeoff solutions are in demand

We’ve seen a very healthy level of interest in construction estimating software across all divisions. Over and over we hear contractors saying something to the effect of, “Bidding has gotten very competitive, which means I’ve got to be as accurate as possible.” As a result, we’ve seen a lot of estimators replacing their spreadsheets and manual processes with database-driven estimating systems.

We’ve also seen plenty of interest in on-screen takeoff software. We’ve seen three primary reasons for this:

• Increasing the speed and accuracy of takeoff measurements (see previous paragraph);
• Avoiding the printing costs of paper plans; and,
• Responding to increasing electronic plan delivery and use of online plan rooms.

While demand for onscreen takeoff appears fairly strong and growing, we have seen a considerable amount of downward pricing pressure in that market.

Software as a Service is in the right place at the right time

Software as a Service (SaaS) is gaining momentum in many software markets. In fact, we would agree with other IT prognosticators that SaaS is a major structural shift in software deployment and is here to stay. We’ve seen this model succeed in the project management segment where there is a clear need for the collaborative benefits of web-based software. Moreover, the current recession is making the SaaS model more attractive to contractors because:

• Subscription pricing can easily be added to a project’s general conditions;
• Low up-front costs allow project managers to avoid an onerous approval process; and,
• Faster and less expensive implementation makes the new systems more digestible.

We have not seen much demand for SaaS accounting, estimating or service management, although we do get asked about it now and then. We also have not seen many vendors emerge to deliver that sort of solution. We would not be surprised to see SaaS accounting and/or estimating solutions emerge over the next few years.

LEED credit tracking creates new demand

Another trend driving the adoption of SaaS project management systems is the increasing demand for LEED credit tracking. LEED certification has grown in popularity; so too has the need to track the detailed documentation requirements related to earning LEED credits. At their core, projects seeking LEED certification need document control and efficient communication. This is the core of what project management systems deliver. Going one step further, we are seeing a number of project management vendors building in specific LEED credit tracking modules within their system. Houston Neal wrote a great post on how to Track LEED v3 Credits in Project Management Software back in July.

Stimulus funds are trickling down, slowly

Government and other civil construction has remained healthier than commercial and residential construction. However, we have not seen the American Recovery and Reinvestment Act of 2009 (ARRA) have a big impact on software spending. We believe that the temporary nature of stimulus spending is not enduring enough to drive capital investment in software systems. Our hope is that ARRA will help accelerate the economy to a point where traditional IT investment levels resume. However, Chris Thorman recently wrote a quick analysis of the ARRA that showed that stimulus spending has had a nominal effect on putting roughly 1.6 million unemployed construction workers back on the job.

There has been speculation that Stimulus-funded construction projects would drive sales of project management software. The thinking behind the forecast was that ARRA projects would require a higher level of accountability. Project management software – known for strong document tracking capabilities – would provide the audit trail needed for this transparency. However, we have not seen this translate into a meaningful increase in sales.

Fewer accounting & job costing replacements

We’ve seen fewer firms replacing their core accounting and job costing systems over the last year. In prior years, we had seen replacement activity when company growth pushed existing systems to their limits. In the absence of growth, more firms seem to be staying put with their existing systems. Firms that are buying new accounting systems tend to identify one or more of the following three pain points:

• Inability to achieve detailed job cost reporting from “generic” accounting systems;
• Lack of integration to project management or service management systems; and,
• The need to accomplish same amount of work with fewer employees.

Outlook for 2010

As the construction industry begins to rub its sleepy eyes, we agree with most experts who say that 2010 will be a transitional yet slow year for the industry as a whole. Company budgets likely won’t fully recover in 2010, limiting the purchase of construction software. However, so far we’ve noticed more activity this quarter than any other this year. Hopefully this level of interest will carry over to 2010.

This article originally published at: Construction Software State of the Industry Report.

Phases of a Construction Project Life Cycle – Part 2

In Part 2 we’ll continue to look at the phases of a construction project as laid out in F. Lawrence Bennett’s book entitled “The Management of Construction – A Project Lifecycle Approach.” In this article, we’ll see how Mr. Bennett desribes the pre-project, planning, and design phases.

As I’ve already mentioned, I find this interesting as my experience has been almost exclusively with software development projects. If any of our PM readers are in the construction industry, I’d enjoy hearing your feedback and perspective.

Pre-project phase

A construction project begins with an idea, a perceived need, a desire to improve or add to productive capacity or the wish for more efficient provision of some public service. Whether the idea will be converted into a completed project will be decided during the planning and design phase. However, prior to that, among the first things the owner must do is to decide what sort of project delivery system will be used. How will the various parties be related? Will the owner engage a design professional to prepare plans and specifications and then contract separately with a construction contractor? Or, will a single entity be responsible for the entire project? Other possible options include several separate specialty contractors, each related by contract with the owner, the use of a construction manager as an advisor to the owner, the use of the owner’s own construction forces and the phasing of the project such that individual portions of the field work are commenced prior to the completion of all design work.

The other primary decision required by the owner early in the project relates to the type of contract to be used with the contractor. Will the contractor be paid a specified fixed price, regardless of the actual quantities used in the project and regardless of the contractor’s actual costs? Will the quantities of materials be measured and the contractor paid on the basis of those quantities and pre-agreed-upon unit prices for each material? Or, will the contractor be reimbursed for its actual costs, plus a fee, perhaps with an agreed-upon upper limit? The owner will also need to decide the basis upon which the design professional will be paid. Often these decisions are not made without consultation and advice. Depending upon the owner’s expertise and experience in administering construction contracts, the owner may engage a professional engineer, an architect or a project manager during this pre-project phase to advise on these important decisions.

Planning and design phase

The project is fully defined and made ready for contractor selection and deployment during the planning and design phase. It is convenient to divide this phase into three stages. The goal of the first stage is to define the project’s objectives, consider alternative ways to attain those objectives and ascertain whether the project is financially feasible. In this process of planning and feasibility study, a project brief will be developed, more details will be set forth in a program statement, various sites may be investigated, public input may be sought, a preliminary cost estimate will be prepared, funding sources will be identified and a final decision on whether to proceed with the project will be rendered.

In the second stage, the design professional will use the results of the planning efforts to develop schematic diagrams showing the relationships among the various project components, followed by detailed design of the structural, electrical and other systems. This latter activity is the classical hard core engineering familiar to students in the design professions, in which various engineering principles are used to estimate loads and other requirements, select materials, determine component sizes and configurations and assure that each element is proper in relation to other elements. The output from this design development effort is used in the final stage, wherein contract documents are prepared for use in contractor selection and installation work at the construction site. The design professional prepares not only the detailed construction drawings but also written contract conditions containing legal requirements, technical specifications stipulating the materials and the manner in which they shall be installed and a set of other documents related to the process of selecting the contractor and finalising the contract with the successful tenderer.

Next

In Part 3 we’ll look at Mr. Bennett’s description of the contractor selection and project mobilization phases.

Phases of a Construction Project Life Cycle – Part 1

Having almost exclusively only dealt with and led IT software projects throughout my career, I’ve always been intrigued by the area of construction project management. Though with my background, getting in the door – even on a consulting basis – to gain that experience just hasn’t happened or the timing was just never right – either in the Midwest or in Las Vegas during the housing boom.

So running across F. Lawrence Bennett’s book entitled “The Management of Construction – A Project Lifecycle Approach” peaked my interest. I’ve written about project lifecycle and methodology phases at great lengths in my articles and would like to present here Mr. Bennett’s parallel segments on the construction project lifecycle. Due to the length of the material, this will likely need to be shared over multiple parts starting with his general overview for the purpose of this article. The following text was derived from Mr. Bennett’s Management of Construction book.

Overview

Every project, not just those in the construction industry, goes through a series of identifiable phases, wherein it is ‘born’, it matures, it carries through to old age and it ‘expires’. A software development project manager, for example, might define the following phases in the project’s life cycle: initial proposal, process engineering – requirements analysis, process engineering – specifications, design, development, testing, deployment and support. Likewise, a project that results in the development of a new product might contain the following phases: conceptual, technical feasibility, development, commercial validation and production preparation, full-scale production and product support. Although there may be some overlap in the phases, the work generally flows from the first phase to the last, with the outcome of one phase providing the basis for efforts carried out in the phase that follows.

So it is also with construction projects. We will be identifying six phases in the construction project life cycle, each with its own purposes and characteristics. First, the owner must make certain pre-project decisions. Then the planning and design of the project is carried out. Next, the contractor is selected, after which the contractor mobilizes in order to carry out the field operations. The field work that the lay person often considers to be ‘construction’ can be considered a separate phase. Lastly, the project must be terminated and brought to a close; because these activities are distinct from the installation work, we separate them into a distinct, final phase.

To attempt to understand the management of construction by organizing the study on the basis of the project life cycle may be somewhat arbitrary, because there is admittedly some overlap between phases and thus some duplication in the presentation. However, this deliberate design of this text will provide a logical basis for tracking the project’s activities and understanding the roles of the people responsible for those activities, from the time the owner first conceives the idea for a construction project until that point when the contractor has vacated the site for the final time.

Structured in this way, each section provides a description of one of the project’s phases. The result should be an understanding not only of the importance of each phase individually but also of the way they interrelate to form an integrated whole project.

In Part 2, we will present an overview of each of the six phases of the construction project life cycle.

Construction Project Management: Bringing Your Punch List into the 21st Century

I was contacted recently by Chris Thorman, who blogs about contractor software at Software Advice (www.softwareadvice.com). Chris is working on an idea for software for the construction industry that would make project management and punch list management much less of a headache than it has been in the past. Following our discussion, Chris submitted the following information for me to make available to our PMTips readers.

Bringing Your Punch List into the 21^st Century

Whether you’re the general contractor of a major construction firm or a local home builder, the completion of a project’s “punch list” is the final barrier between you and receiving payment for your work.

The explosion in popularity of smartphones begs for a solution to the traditional, low-tech way of approaching a construction project’s punch list.

Punch list computer software has existed for years (even for mobile phones). But none of the current construction project management software is maximizing the technology available on smartphones today.

This is how we’d like to see smartphones and specifically a punch list app bring the traditional construction punch list into the 21st century.

What the Punch List App Would Look Like

Imagine you’re a general contractor and you’re entering the punch list phase of a construction project. Instead of lugging building plans, compliance codes, pads of paper or even a large tablet PC to the job site to record information, you’re able to slip an iPhone with a punch list app into your pocket.

As you conduct your walk through, you’re only seconds away from creating an entry to your punch list.  A couple of taps brings up 3-D floor plans; you manipulate the 3-D model with your fingers until you drill down to your exact location in the room; tap the specific problem area, tag it’s location, take a picture and quickly fill out a form describing the problem.

In addition to being able to draw on the plans themselves, the app would also allow you to draw lines or make marks on the pictures you’ve taken.

Because you’re using a smartphone to record information, you can log information more quickly than pen and paper and store more of it. Once a punch list entry is created, the information is shared with the appropriate subcontractor. To reduce the number of communications, punch list entries can also be grouped and sent out as one notification.

Information sent to the subs could include:

• Job site location
• Geo-tagged photos of issues
• Automatic voice-to-text transcription of audio notes
• Requested completion date
• Digital signature request
• Compliance notes for building codes
• Automatic schedule/calendar updates and notifications when tasks are completed
• Vendor price comparison for supplies

As subs complete tasks, the schedule is updated and notifications are pushed out to the other subs. This push notification would be especially useful for subs who are waiting on others to complete tasks. For example, as an electrician completes their work, they update the punch list app and the drywall company is immediately notified to begin work.

The app would also be great for organizing employees on large job sites. In fact, with a group of connected employees on site, a general contractor could tap into employee locations via a GPS-enabled punch list app and assign tasks to the nearest employees.

How impressed would a customer be if you addressed a problem by immediately tapping into a mobile punch list app and directing the nearest employee to solve it?

From Paper to Pixels

The technology of a punch list app would get the buzz, but the app’s true power lies in it’s ability to streamline communication and organize information.

Traditional punch lists are recorded separately, often using completely different recording mediums. Some take a pen and paper to the job site; others an audio recorder; still others snap pictures. Logistically and organizationally, this is a nightmare for all involved.

Take a look at the work flow of a “traditional” punch list process.

Opportunities for delays exist at nearly every stage of the process. Information is spread out among building plans, handwritten notes and stray photos. Not to mention dozens of people.

What if every one involved in the punch list recorded information in the same mobile program, communicated instantaneously and received updates in real time?

This is exactly what our mobile punch list app sets out to accomplish.

Take a look at how our app – a digital, centralized point for storing information – changes the project’s work flow.

Instead of each party waiting for updates from the general contractor, everyone is continually updated by the punch list app. More importantly, the updates are entered in the same way by each sub – through the app’s form. No more piles of paper and unorganized work orders while you try to interpret a subcontractor’s personal punch list system.

Subs can better plan their schedules knowing when jobs will be complete. GCs can check the overall status of a project by seeing how many punch list tasks have been completed. If a sub contractor hasn’t completed a punch list item, the app could even sync with a company’s accounts payable department to withhold payment.

Everyone is living in mobile harmony.