Ten steps to selecting construction software

Use this structure to select and implement software that works for your company now and in the future.

It’s a daunting task to select and implement a suite of software that can connect all facets of a contracting business. There are scores of construction-related programs out there, each and every one with distinct features that may – or may not – fit your type of work.

Christian Burger is the president of the Burger Consulting Group in Wheaton, Illinois. The company helps contractors select and implement the right software for their businesses. “The objective is to select a system that fits business needs while achieving organizational buy-in for the decision,” he says.

He uses a 10-step process that provides a framework for making a good selection decision.

1. Select the team. “Establish a core team of six to eight people. Team members could include a jobsite project manager, controller, equipment manager, estimator and other operational people. The group should represent the key functions in the company that will be most affected by the implementation.

“If you have an information technology department, it can be helpful on the core team, but the selection process should be driven by the front-line users,” Burger says.

He suggests a project manager from the field be dedicated to the implementation process full-time, if possible. “They have the communication, scheduling, delegation, consensus-building and decision skills for this type of job,” he says.

2. Set objectives. The team’s first job is to clearly define what it wants the new software to accomplish. “Work with upper management to identify the company’s business direction and goals, then determine the role of an information system within the business. From there, the group should develop near-term and long-term goals for the information system,” he says.

3. Analyze the company’s needs. This defines the key business processes the software must address. “Each functional area should contribute their key requirements during the needs analysis process. It is important to remember that not all of your processes will be duplicated when you have a new system. Some things are done the way they are because of the current system. Focus more on what you want from a new system.” he says.

The operational requirements will most likely differentiate one software product from another. Aside from payroll, many of the accounting applications do the same things. It is job costing, equipment management, billing and purchasing functions that really make a difference in a construction company, he adds.

4. Prepare the request for proposal. Your request for proposal (RFP) should succinctly outline everything the software must do. This process develops your shopping list. What are the key functions the program should cover? What is the volume of transactions in those functions? What software is already in place, and what are its shortcomings? Strong points?

The RFP is a document that outlines details about your company, the systems you have now, your desired systems, your detailed requirements, and how you want the vendors to respond. 

“This may sound like a small item but if you do not specify how you want the responses to come back to you, they will come in looking very different, making comparisons difficult,” he says. Make sure the software specifications differentiate between available, tailorable, custom and not available. “This is important because some systems are more structured and only offer a set of functions out of the box. Others may not offer all functions out of the box, but a few adjustments to the software or report-writing and form tools allow the system to be tailored more closely to your needs.

“If a feature is expected in a ‘future release’, the vendor should indicate the date that release will become available,” he says.

The RFP should go out to no more than five or six potential vendors. “You should have narrowed your short list based on some pre-qualification list of features. Vendors don’t want to take time to respond if there is a significant issue that will ultimately knock them out of the running, plus you don’t want to analyze any more responses than you have to.

“You will find that no one software program does everything well. When searching for software candidates, look for companies that have worked with contractors that do similar work you do and are about the same size or bigger than your company. They are more likely to have the software that fits your needs and the experience and interest to serve your needs,” he says.

5. Analyze the responses. As the software vendors respond, rank their proposals and capabilities. One team member should not drive the process because that person’s preferences may overshadow the needs of others. The analysis should help you narrow the list to two or three vendors.

Burger recommends getting demonstrations from these two or three vendors; any more than that gets very time-consuming and confusing. “Use a functional matrix to boil down the responses. Make sure you get a good handle on all costs in the proposal and if you don’t, call the vendor for clarification. The cost summary should include software, hardware, training, consultation and maintenance. Remember that maintenance is an ongoing cost and not all maintenance is created the same. Read the proposal language carefully,” he says.

6. Ask for demonstrations. Burger says the response analysis should lead you to two top vendors. “If you want to get demonstrations on more than two vendors, it becomes very complicated and overwhelming. Instead, do your homework upfront. It helps simplify the process,” he says. The demonstrations should not be in the same week, but they should be within a week of each other. “Prepare a demo script that outlines what you want to see from the programs. Having a script helps assure that you will be able to compare the two programs fairly,” he adds.

Make sure the people who will rely on the program in their jobs have a chance to participate in testing them. “You don’t just want accounting people trying out the program because they are less familiar with the nuances of what project managers want and need from a job-cost system,” Burger says.

7. Get feedback. Once the demonstrations are completed, get those who reviewed the software to share their opinions. Hopefully, they will favor one product over another, and will help identify any issues that should be addressed with the software vendor.

8. Call the references. Ask the top contender for references, then have various team members follow up with employees at those companies who do the same jobs. “You may also want to find some references on your own through trade organizations or associations. The software companies will give you their best references. A little additional research with other companies can give you a good idea about the software,” he says.

The reference follow-up also encourages employee buy-in because it helps those who demo’d the software, but weren’t on the core committee, to be a part of the process. From that input, you should be ready to make your final decision.

9. Review the contracts. Once you’ve decided on a software vendor, look closely at the contracts. What does the license cover and what level of support should you expect? If any customization is needed, is the level of customization and when that customization should be completed spelled out? Does the contract cover installation? What end-user training will be supplied? What support will be available in the first year? Thereafter?

“Get this identified at the front end, because the salesperson is often limited in his or her ability to influence the programmers in research and development to get custom work completed,” he says.

10. Make the decision to buy. With the homework listed in the first eight steps complete, now is the time to finalize your purchase, says Burger. Gather all reference call results and answers to vendor questions. If the references are positive and the vendor answered your questions to your level of satisfaction, work with the core team to develop a proposal to purchase the software and present it to your upper management team or board of directors.

Cost is often an issue with the purchase authority, and Burger shares some ideas to help reinforce the value of the new system:

• Typically, acquiring a business system costs between 0.15 and 0.30 percent of the annual business revenue. This will vary based on the number of users on the system, its complexity and how much new hardware is required. Complexity will affect the implementation budget.

• An average total cost per user is $4,000 to $6,000; show how this investment helps that user be more efficient and productive over a three- or four-year period.

• No one software package will do everything well. Typically, a good core system should handle General Ledger, Purchasing, Contract Management, Job Costing, Equipment Management, Human Resources, Billing, Payroll, Accounts Payable and Receivable, Inventory and Material Management functions. For construction-specific functions such as Estimating and Project Management, add-on programs that easily transfer data to and from the core system from other vendors may be the best option.

11. Implementation: Making it work. Just as the core team was important in the selection process, so is the implementation team. However, the implementation team members may be different than selection team members.

Like a building project, a successful software implementation needs a plan. Once the software and hardware is in place, core users must be trained, learning the ins and outs of the program to set up the proper reports, structure and information flow. This can take intensive training followed by substantial time to get the system working to meet company needs.

Once the system is set up, training operational people begins. While not as intense as the implementation team’s training, it must be done on a timely basis so it can be put it to work in others’ jobs.

“In the past, the selection and implementation process focused on the accounting side of the business. But as today’s software becomes more sophisticated on the accounting side, the selection criteria is becoming more driven by the operations side of the business,” he says.

Consultants can help
Burger’s specialty is helping construction firms develop practical information systems. With the help of a consultant, this process takes 10 to 12 weeks. If it’s done internally, Burger has seen the selection process take six months to a year. “If you want to use a consultant in selecting software, decide early on how much involvement you want. Do you want a facilitator or a turnkey result?” he says.

A consultant can help develop a detailed needs analysis which helps free up core members’ time for their regular jobs. The consultant can also help as a quarterback – or referee – as the search progresses.

A construction software consultant may also be able to help identify the brands of software that may likely fit your company. “Consultants can bring in fresh ideas from their work with other contractors,” he adds.

“Because of that knowledge, they may also be able to challenge a software vendor on a claim because they are familiar with the product,” he concludes.

Burger can be reached at 630-510-1875 or via e-mail at crburger@burgerconsulting.com.

Published in the July/August 2002 issue of Contractor Tools and Supplies magazine.

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