Last month, I attended NAHB’s midyear meeting in Miami and had the pleasure of sitting in on a presentation by Daniel Swift, president and CEO of Des Moines-based architecture group BSB Design.
Change. It's the only constant in life. In technology, the only constant is rapid, frustrating, expensive, maddening change. And if a builder really wants to make life difficult, he should change his integrated technology system. Adding a new system or updating an existing system can seem more like guess work than management.
Change. It's the only constant in life. In technology, the only constant is rapid, frustrating, expensive, maddening change. And if a builder really wants to make life difficult, he should change his integrated technology system.
Adding a new system or updating an existing system can seem more like guess work than management. Experts, though, point out there are certain steps builders can follow to reduce the risk of this time-consuming process.
What is an integrated technology system? Sometimes called integrated software systems, integrated technology is a system that interlinks all software programs within an organization and can be accessed by everyone within that organization. For a builder, interlinking accounting, sales, scheduling and change order programs makes sense. Accounting folks need to know sales projections and change order revenue and expenses, all which tie back to scheduling, thus allowing the processes to flow on time.
Because integrated systems work in every area of a business, implementing one can be as disruptive to operations as having the entire staff take sick leave. The most important element of implementing new technologies, however, isn't the process, but who does the work and how it affects the organization. Experts agree that teams are the solution to making the transition run more smoothly than a traditional one-person, IT-driven implementation.
For most organizations adding new technology is a cultural change, too. New technology brings on new responsibilities and new processes. Consequently, training is the key to the implementation process of any integrated system.
Begin with research. Integrated technology systems aren't cheap and the costs can escalate quickly so hard research must be done from the start. Of course, any major purchase requires research but an integrated system demands even more.
Builders who have been through this process recommend forming a team to do the research. Whether it's employees within the company or an outside consultant team, it could be one of the most important parts of the project. "If you try to evaluate new software with a couple people in the room that you think know the business, you'll miss things," says Ed Bobrin, director of corporate and home systems for DeLuca Homes.
Research begins with understanding the environment. Why does the company need to change its system? "You need to have business managers understand why the business is changing and support you on it," says Ken Knorr, vice president of quality assurance and business solutions for Pringle Development. "You can't have people within your organization that are fighting the change."
Form a technology change team. Each department should assign one person to become part of the team. Once the team is formed, look not at the new software, but at your company's processes. Make sure every element of sales, production, marketing, accounting, etc. is documented (see Process Definition Checklist above). "You'll be able to quickly find gaps in software that you're evaluating when you have documented your business processes on paper," Bobrin says. "Sometimes you get caught up in the bells and whistles the software offers and you need to focus on what you need."
During this evaluation, the technology change team should also look at where the company plans to go within the next five years. "Think to the future," says Dan Smoulder, estimating/administrator coordinator for Petros Homes "What your needs are right now may not be your needs in five years or even three years from now."
After documenting the processes, the technology change team can start the selection phase. Gather information by attending trade shows, reading technical magazines and talking to other IT directors.
Beware of biased opinions, though.
"Don't always believe what you see at the trade shows," says Robert Kohl, IT director for Monte Hewett Homes. "Of course they have all the glitz and glamour, but there are so many other products out there than what you see. What you really need to do is get into a company where the software is being used."
Knowing what other builders use is very important, but don't base a final decision strictly on that basis. Remember the company's best practices may not match the processes of the other builder currently using the system under consideration.
Because each company has slightly different wants and needs when it comes to an integrated system, it's important for the technology change team to weigh all of its options. Keep in mind, the software or system doesn't play the major role, the business and its processes do. "The most common mistake I have observed is the assumption that new software alone will bring about the improvements for which a company is looking," Eric de Jager, director of Microsoft Dynamics SL (formerly Solomon), Microsoft Corporation says. "The "magic of software" can help bring about amazing results, but the solution is owned by the customer [builder]."
Once the research is complete and options are chosen, the technology change team should narrow down the finalists by using several techniques. The simplest technique is to make a list to compare the different systems. "We had an importance level rating 1 through 10 that told us how important that feature was," Knorr says. "We figured out what each had or didn't have and multiplied that by the importance level and gave a score to each system, then we were able to narrow it down with their scores."
Another evaluation process is to walk through the company processes with the software vendors. Find out what exists within the new software that can be implemented with current software the company is already using. Will all the company processes be able to implement into this new system? "Check through the processes and get the details because you'll really need them and have problems during the implementation if you don't," says Ty Roden, director of IT for Pringle Development. Another important feature of integrated packages is reporting; it is essential to determine the type of reports the company needs. "Define and determine the reports you want on the backend before signing a final contract to buy the system on the front end," Stuart Siegel, consultant for G2 Technology says. "When all is said and done, everyone is going to judge the reports from the system. If those reports aren't out there on day one, everyone thinks the system isn't really working."
Smoulder took an innovative approach to his evaluation process. He used a group of graduate students to narrow down his search. The group mapped out the company's software processes already in place to match up with its business practices. "They also went and looked at the three software companies we were considering," Smoulder says. "We even had them demo the software."
Finally, be aware of the reputation of the software provider. While the days of fly-by-night providers seems to be a thing of the past, new software packages and short-tenured businesses could be less reliable. "It's important where they came from and have they been around for a long time," Smoulder says.
After purchase comes the real expense and time drain — implementation.
The technology change team should begin by gathering all company data that will be implemented into the new system. "It's hard to prepare your company for something like this," Smoulder says. "No matter what system you go with, it's very painful to implement a new system into your company." Training is key. "Training is the most important element to your success," Knorr says. "Invest in the training. We spent more money on training than on the system itself."
As a rule of thumb, include training within the overall cost for the implementation project. "I use a rule of .05 percent of annual sales as a technology budget," Allen says. "If you have a company that's doing 10 million a year, then that's $50,000. This is everything — technology consultants, working help, equipment, support fees, licenses and training."
Most vendors offer training, but it's not free. The cost should be budgeted into the overall expenses of the implementation project. "You really have to make sure you don't fall short on the implementation plan and how it's going to affect people," Bobrin says.
There are two types of training — implementation training of the new system and training of the entire business process realignment. When a new system is added to the mix, each business process — sales, scheduling, change orders, accounting — may need to change the way it was originally processing its work. The new system will "change the way you do your business for your entire company and each position within the company changes," Knorr says.
Because implementation is a major culture change, it makes sense for the technology change team to walk through a pilot test of the new system. Knowing what the company should expect in specific situations with the new system is helpful. "We did a conference room pilot," Knorr says. "We brought all our data and information into the system. We pretended with the system through every major discipline within our organization. We built houses in the system as though we were building them for real.
"Every 20 or 30 minutes we made it a new day and advanced forward," Knorr says. "We would run numerous scenarios so we could understand how we were going to provide training to our people." The pilot program provided the information Knorr needed to develop an effective training program for implementation.
Of course, anticipating every worst case scenario is impossible, but you can prepare for the unforeseen. Create a team to pinpoint future system issues.
"Our implementation committee represents every department in the company," Knorr says. "The committee meets every week to discuss issues with the system, and we can discuss interrelated issues that are cross departmental."
The vendor is also an option for technical support. When selecting the system, make sure "you can get application assistance," says consultant Bill Allen of William A. Allen Consulting. "It may involve having some kind of network resource that you can call on the phone or have on call to be there to answer questions."
One of the major mistakes builders make is fast-tracking implementation. Each phase must be taken at a deliberate pace. Zipping through the process may only lead to problems later. Complete each phase before moving to the next.
Change, especially change in technology, can be frightening. But implementing an integrated software system should be good for everyone in the company if it's done properly. The result will reflect positively on the business image. The key is technology change teams.