Profit Clue – On-Site Technology and Information Mobility

Posted on January 1, 2013 by djb | Posted in Highlights

Construction has always been in motion.  For most, a single head office is in charge of many different job sites at the same time, rarely the same ones from day to day.  The majority of employees work outside of the head office and on some days they work on more than one job site.  Large, expensive equipment is continually moved from site to site to maximize the return on investment.  The very nature of construction is mobility and in today’s world the information needed for a construction organization to be successful should be just as mobile.

Cell phones have been standard equipment on job sites for many years as the industry was quick to identify the benefits of instant communication with site supervisors.  Technology and software advances in recent years have provided new opportunities to increase profitability through increased efficiency with job site information.

Labour cost administration

In many cases, labour is the largest cost on a job.  Because of this, many construction companies run their payroll weekly to ensure job costs are in line with the budget.  In a typical situation, time cards are filled out by employees, manually approved by supervisors, then transported back to head office (hopefully none get lost in transit).  From here, they are keyed into payroll, double-checked again for accuracy and finally posted.  From start to finish, the typical turnaround in this scenario would be two days, only to be repeated three days later.  Now re-think this scenario with the availability of information in the hands of the site supervisor through the use of a mobile device.  The supervisor is able to clock in all employees on site each day and approve the time before submission.  This information can then be pulled immediately into the associated jobs, allowing project managers next day information. In addition, the time flows to payroll for processing without ever being re-keyed.  Not only is there a significant reduction in payroll processing time, by making actual vs. budget job cost information available each day, there would no longer be a requirement to utilize weekly payroll resulting in further reduced administration time and processing fees with financial institutions.

Job design modifications

Consider the typical scenario where job site information is kept in the site trailer, in the supervisor’s truck, or at head office.  Regardless of the case, current information may not be easily accessible when certain people need it.  On-site decisions are made on a daily basis, some of which can have a widespread impact on both timing and cost.  If a job site needs to be halted while information is retrieved from head office to make a decision, it can have a serious impact on the profitability of a job.  Every job is different, however the cost of idle labour and equipment is very tangible.  With mobile connectivity, detailed information regarding the project, such as contracts and site plans, can be pulled up for review while walking the site.  The result is the ability to make quick and informed decisions that keep the job moving forward with minimal delay. Additionally, any changes can be documented and approved on site, while digitally adding any comments that may be relevant for future reference.

Purchase order modifications

Occasionally an invoice will be received at head office that exceeds the original purchase order placed for that portion of the project.  Although the approval for the modification was indeed made on site, the updated purchase order information was never communicated back to head office. Since an internal control is in place preventing invoices from being paid if they exceed the approved purchase order, the accounts payable clerk needs to chase down the site supervisor to approve the invoice for work that was performed months ago and they may have limited recollection of the specific details. This back-and-forth not only wastes the time of the office clerk and the site supervisor but also will likely delay the subcontractor from being paid promptly.

We understand that this specific example can be fixed with simple changes to communication policies within a company. However, by ensuring all project information is maintained and updated digitally, these individuals, as well as other project managers and engineers at head office, are immediately able to obtain  up-to-date information to help them access how jobs are progressing.

The scenarios we have described above will naturally vary from company to company, however the underlying theme remains the same.  Greater efficiency leads to reduced costs and/or the ability to grow with fewer resources.  Timely information and immediate availability leads to better and quicker decisions being made, thereby maximizing resources and minimizing costly delays.  Higher efficiency and fewer delays result in quicker billings and improved cash flow.

Perhaps the best news of all is that this functionality is not reserved only for bigger construction companies. Many offerings on the market have the ability to run on today’s smart phones, which most construction companies already employ.  Tablets have exploded onto the market in the last few years, providing a lower cost alternative to laptops that are also easier and more efficient to use. As cellular data continues to improve both in coverage and in speed, the available functionality of these tablets continue to grow. Whether it is just job cost reporting or full project management, mobility is something that construction companies of all sizes should consider to help increase their bottom line!

If you are considering increasing technology in the field in your organization or you want to discuss some of the current solutions available in the market, contact your DJB professional to help find a solution that meets your needs and fits your budget.