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Specialized Construction Software vs. Integrated
Which Works Best?
BY FRED ODE
In a perfect world, contractors could select just one construction software
product, from one vendor, to run all aspects of their business:
estimating, accounting, project management, scheduling and
so on. In reality, many all-in-one enterprise software systems available
today can be too expensive, complex or functionally deficient
to be of any real value to contractors.
Contractors continue to debate the
merits of vertical, best-of-breed construction software
solutions (such as stand-alone accounting,
estimating or project management applications)
and horizontal, fully integrated
enterprise construction software solutions.
Twenty years ago, technology experts
predicted that stand-alone construction software products
would be replaced by fully integrated
systems—thinking a single software would
solve all of a contractor’s business problems
in a more efficient way.
Today, only a fraction of contractors,
usually the largest, use a single, fully integrated system
to manage their businesses.
An Integrated system, while promising
greater convenience, fewer overall technology
costs and efficient data sharing,
have downsides for the average contractor.
Expensive integrated software solutions
may have more features than most
contractors need.
Best-of-breed construction software systems, meanwhile, are
designed specifically to excel in just a few
applications. Providing rich functionality
and sophisticated features, these vertical
construction software solutions continue to gain ground
among contractors despite the challenges
of maintaining separate, often disconnected,
systems.
Adding Construction Software As They Grow
Not many contractors would be willing to
buy a whole new fleet of equipment when
all they really need is to replace a few outdated
models. The same goes for their
technology investments. Most contractors
look for software solutions to help them
improve productivity or efficiency in an
area that is causing problems. Chances are,
the problem is not widespread. They may
be using one or more software applications
to save time and solve problems in other
areas of the business. And, if employees
know and use those applications efficiently,
why would they want to replace them?
Such was the case at Beard Construction
Group, a growing excavating and sitework
company located in Port Allen, La.
When Jim Beard and his partner, Keith
Coleman, started the company in 2004,
they purchased an estimating and bidding
software product designed specifically for
heavy construction. Their experienced
staff of estimators already used the product
extensively, and it was well-suited for
their trade.
Within six months of starting the business,
however, Beard Construction realized
the basic off-the-shelf accounting system
was incapable of keeping pace with the
company’s rapid growth. “We saw that we
had to have something more capable of
handling the size company we appeared to
be growing into,” Coleman says.
Beard sought a best-of-breed accounting
package to handle the company’s
labor-intensive job costing and reporting
requirements, as well as an upgraded system
capable of integrating with the estimating
system for greater efficiency and
productivity.
Why didn’t Beard choose a fully integrated
system from the start? Before
launching the company, Coleman had
negative experiences with enterprise systems,
which included applications for
accounting, project management, estimating
and other business functions.
“They were, in my opinion, somewhat
complicated, and required an IT department
to support them,” Coleman says. “We
spent a lot of time implementing new systems
and getting the systems to function
properly.”
Functionality Versus
Shallow Features
Likewise, HTH Companies, a mechanical
insulation contractor based in Union, Mo.,
did not consider an integrated construction software
system because of the unique requirements
of its business. According to Controller
Susan Hellebusch, the company looked
at a few products that offered combined
estimating, accounting and project management
applications, but none contained
the right functionality.
“Because we are a very specialized trade,
it’s impossible to find something that has
the specialized features we need, without
paying an exorbitant price,” she says.
Instead, HTH Companies uses a takeoff/estimating system specific to mechanical
insulation contractors and a construction-specific job cost accounting system
designed for labor-intensive contractors
that includes a basic project management
module. Having separate software
products that handle specific functions
is a major benefit, Hellebusch says, not a
liability.
“The real measurement of our technology
success is the impact it has on overhead,”
she says. The fact that HTH Companies
has added minimal support staff in
the past six years—during which time the
company has doubled in employee size
and revenue—“is a good indicator that our
software has the capabilities we need,” she
adds.
How does a contractor decide which
software solutions will best serve the company?
Is an à la carte best-of-breed solution
or a buffet-style integrated system better?
Here are some key considerations:
• Cost: As with any business investment,
costs must be balanced against benefits.
In other words, three or four best-of-breed
applications may cost more than
one integrated system, but will higher
functionality and time-saving efficiencies
result in greater savings?
• Business risk: Fully integrated enterprise
systems are riskier because they are less
likely to meet all the requirements of a
business. Contractors that choose to use
best-of-breed solutions, however, need
to consider the technical risks involved
in keeping users trained and maintained
on separate systems.
• Business processes: To successfully
implement any software solution, contractors
need to review current business
processes and align them to work with
a new system. This is especially critical
with an integrated system because the
implementation generally requires more
resources than a best-of-breed solution.
• Integration and data sharing: While
an integrated system should offer data
sharing advantages over disconnected
software products, many so-called integrated
systems are actually the result of larger companies acquiring specialized
best-of-breed systems so they can claim
to offer end-to-end solutions. However,
many sophisticated best-of-breed products
provide easy integration (and more
data-sharing capabilities) with other vertical
software products, thanks to open
database structures and vendor collaboration
initiatives.
• Usability: Rather than selecting a software
product based only on features,
functions or integration capabilities, contractors
must consider how easy and efficient
the product will be to use. Unless
end-users buy in to the product, the solution
has little chance for success.
Despite how far contractors have come
in using software technology to their
advantage, the push for greater productivity
continues—and so does the debate on
best-of-breed versus fully integrated construction software.
While larger contractors slowly test
the waters of fully integrated enterprise
solutions, small and mid-range companies
are creating their own end-to-end solutions
through the use of best-of-breed
products that offer appropriate integration
and data-sharing capabilities.
Ode is CEO of Foundation Software, Brunswick,
Ohio. For more information, call (800)
246-0800, email fred@foundationsoft.com
or visit www.foundationsoft.com. |
