Finally...Technology Tools to Grow Your Company

The pace of technological change in the home building industry seems to quicken with each passing day, and that’s a problem. It’s easy to be overwhelmed by the array of computer applications, Web-based technologies and communications devices now available. And few of them come cheap, so it’s easy to overspend. Still, there’s a world of enhanced profitability out there for you if you’re ready to go for the gold.

The trouble is, much of this new technology operates at a level of business management sophistication that most builders have yet to reach. Our advice: Take off the rose-colored glasses and look critically at your company. Maybe even process-map all your operations. Don’t spend a nickel on new technology without thoroughly analyzing exactly how it will improve those fundamental business processes. To help you along that path, PB talked to builders of varying sizes, management consultants and technology pioneers who are developing systems and software. Here’s what we learned, along with profiles of how savvy builders are making technology pay off.

Don’t Skip Steps
“The bottom line is that computerized operations are nothing more than manual procedures made more efficient by putting them into seamless, automated practice,” says Redmond, Wash.-based management consultant Bill Allen, who advises a few of this country’s most advanced builders on their systems applications. “If those procedures are inefficient, no software will change it, no matter what package you run.

“For instance, if there’s no consistency in how salespeople process contracts and handle options and upgrades, how can you expect a sales office system to work when such a system must be based on standardization? What’s more likely to happen is total chaos, in the sales office and on the construction site.”

Perhaps the most troubling aspect of home builders’ current relationship to the software development industry is the tendency of builders to view the latest software innovations as magic solutions to all their business problems. They race to embrace whatever is new and then attempt to shoehorn it into a company where it might not fit. Or when a competitor installs something new, many builders will run to that vendor, thinking they must have the product to level the playing field. Never is an analysis done to understand exactly where and how the new technology actually affects the competitive balance, or whether it can do for them what it does for their competitor.

“The way most builders shop for software is a solution in search of a problem,” says David Miller, executive vice president of California-based Giant Shea Homes. “And unfortunately, most of the companies in this industry are very small, and the software vendors are also relatively small. That makes for a very volatile situation. When you’ve got builders with unrealistic goals for what software can do, the equation just doesn’t scale.”

The consensus of builders, consultants and software developers interviewed for this report is that less than 25% of American home builders are running computer systems with full integration of estimating, purchasing and job cost accounting functions. For custom builders, building five, 10, even 20 homes a year, this does not necessarily compromise their efficiency in dealing with customers or building houses. For larger firms and those with ambitions to grow fast into production-building operations, it is a recipe for disaster.

This is especially true as more sophisticated firms in the midsize range (50 to 300 homes a year) and Giants of the industry race to embrace interactive, Web-based technologies to enhance customer relations from sales prospecting all the way to warranty service after move-in.

One of the hottest new technologies involves the use of wireless hand-held devices by construction superintendents and trade crews to enhance automated scheduling of field operations. But builders who try anything involving Web-based or wireless communications might be in trouble if they don’t first put in place fully integrated internal systems — including sales, option selections, construction scheduling and warranty service as well as back-office functions such as accounting, estimating and purchasing.

Sarasota, Fla., builder Todd Menke (Fidelity Homes) will close 20 houses this year, but he and partner David Hunihan plan to grow their company into a major production builder during the next few years (see “From the Ground Up,” page 88). He is enticed by Web-based technologies but adamant that fully integrated internal systems must come first.

“We want to get our own house in order before we start looking at wireless or Web-based operations,” Menke says. “Less than a quarter of builders in our market even have partial integration of back-office operations. Our first step will be to integrate accounting and estimating. Maybe by the time we get our internal systems fully integrated, the industry will have progressed far enough for us to go to our trades and say that we want to tie them to us via some form of Web-based communication.

“Right now, I’m a technology geek, and I use a hand-held, but I can’t even get my partner to use one, much less my trade contractors,” Menke says.

Focus on Critical Processes
The essential business processes within a home building company are:

1. strategic planning
2. land development and project planning
3. product design and development
4. vendor selection and bidding
5. prospect management
6. contract approval and ratification
7. customer selections and change orders
8. job start and construction scheduling
9. purchase orders, payment approval and variance reporting
10. warranty and post-closing customer relations.

For most readers, automation of many of these processes — especially vendor selection and bidding, contract approval and ratification, and purchase orders, payment approval and variance reporting — is probably best handled with a fully integrated internal software package. Just because something can be done via the Web by an application service provider doesn’t mean it necessarily should be. However, Web-enabled systems are making major breakthroughs in prospect management and sales, customer selections and change orders, and warranty and post-closing customer relationship management.

The jury is still out on construction scheduling. Most builders don’t have existing scheduling systems or communication links to trades that are ready for automation. This is probably the area in which technology has most outpaced the housing industry’s ability to use it.

Technology in every business process is exploding at a pace that promises to revolutionize the way builders operate by the end of this decade, but acceptance is not as fast as the software developers would like. “Keep in mind that it took a decade for fax machines to be an accepted form of communication in this industry,” Shea’s Miller says. “If we don’t have trades who are ready for hand-helds, why force it? Our goal is always to simplify a process, then apply technology to it, not start with the technology and try to find a way to use it.”

With that in mind, we looked for builders who have found ways to apply technology to their critical business processes with positive results. Whenever possible, we sought builders close to the industry’s mainstream, growing firms with ambitions to be great. What we found was not always the story that cutting-edge software developers would like to see — some of the most effective systems builders are choosing what might best be described as low-tech rather than high-tech. But these builders and their technology choices represent an accurate snapshot of where the industry is and the route others might follow to grow.

Integrate Back-Office Systems
Fidelity Homes plans to sell 30 homes this year and close 20. Principals Hunihan and Menke want to more than double that production in 2002 as they add several new communities. With operations in both downtown Sarasota and the small town of North Port 30 miles away, Fidelity is already spread out geographically.

Menke and Hunihan are experienced production builders, and they immediately saw the need to move into integrated in-house systems as their new firm grows into its second year of operations. After shopping a number of systems, they chose a name familiar to Florida builders but less known on the national scene: Tampa-based Prosoft. As with most struggling small builders, price was a major consideration.

“We were able to rent the software with an option to buy,” Menke says. “That’s the kind of offer it takes to get a small builder into a fully integrated system. We didn’t have to write a check for $20,000. We couldn’t have done that. We paid $1,000 to get started. Wireless and Web platforms may be in our future, but right now what we really need is integrated accounting and estimating.”

Prosoft began as an integrated job cost accounting vendor in 1979. Five years later, the firm added an integrated estimating and purchasing package, and then a takeoff system. When the world went to the Windows operating system, Prosoft rewrote all its products in Clarion as a core language and created a stand-alone scheduling system. Eventually added was a client management package that includes sales tracking and follow-up, sales management, and option and upgrade selections, all of which integrate directly with purchasing. Scheduling was then brought into this system so that it creates one integrated sweep to feed directly into accounting to create job budgets with detailed purchase orders.

The most recent addition is a warranty management system. When a warranty call comes in from a homeowner, this module creates a file and sends nonbillable work orders to trades. If the work is not completed on time, it flags accounting to stop all payments to the delinquent trade.

Prosoft’s systems are modular, so builders can add functions as their companies reach a level of efficiency in each process that can deal with automation. Builders above 1,000 units a year might find Prosoft’s off-the-shelf systems less customizable than they would like. And such firms have many other options in the marketplace, but Menke believes this system fits his growing company like a glove.

The software has about 1,200 users at varying levels of integration. Its customer base is strongest in Florida and the Southeast, but Prosoft has clients in New England, the Midwest and Texas. Most build 100 to 1,200 homes a year.

“We have clients in Canada, Bermuda and Puerto Rico,” sales and marketing director Steve Cook says, “but we’re a fairly quiet company. Our growth is still one client at a time. We really specialize in companies building between 100 and 400 units a year. We want them all to be very comfortable with the software. We’ll put a fully functioning version of it in a client’s office at no cost. We let them run it for as long as they want to evaluate it. Then they can purchase, rent or lease it as they see fit.”

At Fidelity, “We’re now building our databases for both accounting and estimating,” Menke says. “We’ll be on the accounting program this month, and within 30 days after that, we’ll switch over to the purchase order system with estimating. We can’t afford the client management module yet, but as soon as we can, we’ll get that so we can track people from first contact right through to warranty.

“We have an ACT database in the sales office and a pretty good scheduling system on Microsoft Project. But when we get to 50 houses a year, we want to have all of Prosoft’s modules in place.”

Strategic Planning
In-house systems can’t help much in this area of builder operations, but the Internet is a hugely important tool.

Strategic planning, especially long-range, requires thinking outside the box of even metropolitan markets and into the future by as much as five years. Huge databases and the ability to drill into them to discover what is selling and not selling — when, where and why — make fact-based planning plausible, as opposed to the guesswork of the past. And the data is just a click away on the Internet.

However, finding it, accessing it and then analyzing it are still daunting tasks — especially for a small builder with a company to run and a shortage of time to devote to research. Fortunately for those in many of this country’s largest markets, housing data, research and analysis are available through local or national consulting firms that also might be only a click away. The best-known providers of such research and consulting services are Southern California-based The Meyers Group and Houston-based American Metro/Study Corp. Both can train huge technological resources on the strategic planning process. American Metro/Study is working in 20 cities, mostly in Texas and Florida. The Meyers Group is national but strongest in the West.

Michael Dwight, vice president of sales and marketing for California-based Giant The Forecast Group, and Pat Duggan, executive vice president of Houston semi-custom builder Parkstone Estate Homes, are at different ends of the housing industry size spectrum, but each finds the services of such a research firm invaluable.

“We probably spend $10,000 a month with The Meyers Group,” Dwight says. For a firm that will close 2,000 homes in California this year, for $500 million, that’s a manageable expense. “We use the market monitors they produce quarterly to get a handle on employment and pricing trends in the overall market. We also get their monthly reports that drill down to the submarket and project level and tell us what’s selling and not — floor plan by floor plan — and why. The final piece is the weekly traffic report. The combination of the three gives us an ongoing barometer on our markets.”

Forecast also employs Meyers to do private consulting. “An example would be a recent case where we have a huge master-planned community in the planning stage,” Dwight says. “We have thousands of pages of research to back up what we’re doing, but our venture partners asked us to have Meyers do a study on it. They bring that third-party credibility to the table.”

Parkstone builds only 100 homes a year, averaging $300,000 in price, in the Houston suburbs, but gets similar data and analysis from American Metro/Study, and without the hefty price tag that Forecast pays for all the private consulting work.

“We build on lots that are exclusively 130 feet wide or more,” Duggan says, “so we drill into American Metro/Study’s quarterly reports to see not only where lots of that size are available now — and who’s building what in those locations — but also what developments are in the pipeline that will bring more big lots on the market in the future.”

Duggan says he can even look at the floor plans competitors are offering at a particular location and superimpose those plans over Parkstone’s to see how they compare. “American Metro/Study goes out and drives every neighborhood to collect this information, and they put it in a format that makes sense,” he says. “They also go through the county records. A small company like ours could never do all that on our own.”

Both Meyers and American Metro/Study employ sophisticated software that allows builders to digest and manipulate data to turn it into information they can use. “You can drill down to run reports that utilize mapping features to show market and product trends visually,” says David Thikoll of The Meyers Group. “If you want to show how many two-story houses with four or five bedrooms, priced under $220,000, are on the market in a particular area, you can do it.”

American Metro/Study will give you subdivision absorption rates, inventory levels, lot supply projections and a graphics package that allows you to compare the price competitiveness of each builder in a community or group of communities.

Pick either firm, or search for a local provider of similar information. If this technology is available to you, buy it.

Land Development and Project Planning
Builders all over America swear that California CPA Arnie Dubin’s Deal Builder is the best software on the market for project planning, development phasing and feasibility analysis. Count among the converts Larry Persons, president of Pacific Harbor Homes in California, and B.J. Hinson, chief financial officer of Chicago-area Giant Neumann Homes.

“We use Deal Builder to do very detailed feasibility analysis,” Hinson says. “We run multiple scenarios to see how combinations of variables affect internal rates of return and bottom-line results over time. This is way more comprehensive than any spreadsheet. It’s the real world; spreadsheets are not. It gives you the big picture with equity participation assumptions, cash flows, all the financing variables. It’s a good program that saves a lot of time.

“We don’t do a deal without it. We’ve been using it for five years, and in that time we’ve grown from closing 300 homes a year to 1,200 this year. I guess we’d have to say it’s working for us.”

Persons is equally enthusiastic. “We were running spreadsheets like everybody else until I met Arnie at the Pacific Coast Builders Conference a decade ago,” he says. “I’ve used Deal Builder for 10 years now. It’s very powerful. We only build 20 to 30 houses a year, but we develop four or five projects at a time, all over California. And at any one time, I’ll have a dozen pro formas under consideration.”

Deal Builder works so well because it is structured to force a builder to consider every element and variable, Persons says. “We have a 250-unit development in Pismo Beach, which is a town of 11,000 people. Absorption there is never going to be what it is in Los Angeles, so we run a lot of ‘what if’ scenarios in Deal Builder to test the impact of varying levels of demand. It can change our whole plan for how we’ll phase the project.”

Most spreadsheets are not designed to the level of detail that builders need to do project planning, says Dubin, who is still known as “Doctor Deal” to old-timers in Southern California. “For instance, building a road has three components — underground utilities, base and top,” Dubin says. “In Deal Builder, we break it up into those three pieces, which allows you to break up that financial cost as well. You don’t need to put down the top until there are people living adjacent to that road. If you complete the road too soon, you have to carry the cost longer.

“Conceptually, we all know that there’s a cost associated with putting in four lanes of road before it needs to be four lanes. But in Deal Builder, you can see what that cost is and how it changes if you stage the completion in phases to meet the need.

“Deal Builder is a spreadsheet with 22,000 hours of my work in it. Is a 14-inch water line over a seven-year build-out cheaper or more expensive than two 10-inch lines phased at three-year intervals? Deal Builder will show you why the two are actually cheaper than one, and by how much at the end of the project.”

Deal Builder has allowed Dubin to spread his reach across the country. He has 350 active clients and will announce this fall that Deal Builder will become part of the curricula at a number of university graduate programs in real estate.

“The software is broad enough in design that it’s being used by builders who never develop land and by developers who never build houses, as well as by lenders and equity investors to evaluate projects,” Dubin says. “The smallest builder using it is a guy who does projects of about 30 lots at a time. Any smaller than that, Deal Builder is overkill.”

Dubin prices his product at $2,800 for the basic package, which includes a two-day class and unlimited technical support. “It can go as high as $10,000 if you’re using the master plan version to build a city,” he says. “That version has expanded features for 200 planning areas.”

He’s now working on the next version, Deal Builder Monitor, which he calls “the Holy Grail” of the housing industry. “It will allow you to download actuals out of the accounting/general ledger system, merge them against the Deal Builder original project plan and have DBM do a revised forecast to complete the project. I have the backing of some major home builders for the research and development to make this happen.”

Product Design and Development
For custom builders, who work constantly with buyers to design their homes, and even for many architects and small production builders, there’s a clear winner among computer-aided design (CAD) programs on the market. Chief Architect has a huge advantage to go along with its three-dimensional power — it’s priced at less than $1,300 even in its most elaborate form, proving that great software doesn’t have to cost an arm and a leg. No wonder Coeur d’Alene, Idaho-based Advanced Relational Technology is selling licenses by the hundreds.

Tom Grande, principal of Prebuilt Housing Technologies in Dillon, Colo., has been using Chief Architect for six years and watching it evolve into a powerful design tool. “We’re in the factory-built, site-assembly, modular housing business, and we’ve converted our whole operation to make use of this software,” he says.

Prebuilt produces everything from entry-level homes to custom homes valued at more than $1.5 million. “We have some very demanding architectural review boards up here in the mountains, and yet we can take clients from their sketch on the back of a napkin right through to floor plans, elevations and perspectives, and do it very fast,” Grande says. “It’s cut our pricing process time in half. We can do very accurate takeoffs and produce an accurate drawing for our computer systems in the plant.”

Sanibel Island, Fla., residential designer Craig Meyer explains Chief Architect’s attraction: “I’m designing in three dimensions, and yet I’m using building components to create the house rather than lines. You click on a wall tool, and you are designing walls that can be as simple as 2@4 with drywall on one side and plywood and siding on the other, or it could be block. It’s unlimited, and a simple mouse click to move from one to another.

“The program also takes its dimensions from wherever you tell it. If I say to dimension from the exterior of the block or frame, that’s the way it will be. At any time, I can click on a camera view and get a choice of full, cross-sectional, 3-D overview, or an interior wall elevation camera to use for detailing cabinets or built-ins. The floor camera removes the roof and ceiling and lets you look at any floor up to 10 stories. The framing camera allows you to do all the framing with the click of a mouse. Sets the studs at any interval. Sets header heights and sizes and inserts them when it frames the house. You can do a conventional roof or use trusses.

“That framing camera removes all interior and exterior finishes and shows every framing member in the whole house in 3-D. I’ve now got a library of wall section details that I use over and over. I’m using it to design everything from remodeling jobs to 6,000-square-aafoot custom homes on Captiva Island. I don’t use any other CAD program. I don’t need anything else,” Meyer says.

Chief Architect came on the market in the mid-1990s and has 25,000 licenses in use. A consumer version that sells for about $50 has more than a million users. “Chief Architect is very fast,” says Al Frey, ART’s director of product quality. “That allows a custom builder to sit down and design a house right with his customers. You show them exactly what you propose to do for them, and if they don’t like it, you change it right in the sales office — instantly.”

Frey says ART will keep modifying Chief Architect to increase its flexibility and incorporate new construction techniques. “We’re also getting into landscaping,” he says. “We now have a terrain modeler where you enter elevation points, and it will build the terrain for you.”

Prospect Management
Tampa luxury builder Charley Hannah (Hannah-Bartoletta Homes) believes he has found the ultimate technological toy to level the playing field with national builders and their interactive Web sites in sales prospecting and customer relationship management. It’s called BeeZip, a brainchild of Huntsville, Ala., software innovator Bob Cuffe (Interactive Homes).

BeeZip is a direct, private communication link that uses patented encryption and compression technology to allow a free flow of two-way communication — through the Internet — between a builder and their prospects or customers. It is not e-mail and does not require a Web site to operate, yet it can send text, graphics, audio, video, programs and applications. The link is totally secure and private for both parties. Customers access BeeZip messages by clicking an icon on their PCs.

“As a midsized builder (100 homes a year), I guess we make a good guinea pig for this,” Hannah says. “We’re the alpha site for it this summer. Bob says he’ll have it on the market for the whole industry in September. I’m pumped about it. The hardest thing for a semi-custom builder like us to do is manage prospecting and follow-up. But this gives us a customized follow-up system that’s trackable — without requiring extra staff.”

Hannah says the communication link is not instantaneous. “It uses the phone line when it’s not in use, and the message loads overnight. But if a customer in Chicago BeeZips me asking for an update on the progress of his house, I now have a $500 hand-held device I can use to take instant, on-site digital photos and record a commentary, and BeeZip it to him, so it’s there on his computer when he gets up in the morning.”

Hannah intends to purchase hand-helds for each of his communities so no salesperson will ever miss an opportunity for that type of follow-up.

“The first thing that happens when prospects or clients install BeeZip off the CD I send them is the BeeZip tells me they are there,” Hannah says. “It gives me their name and tells me how long they look at each element that I send to them. I know how long they review each floor plan, what products they are interested in, how many times they come back. There’s a huge reporting capability in this.

“I can photograph a model home on my end and BeeZip a walking tour through the house to my prospects, knowing they will see it on the other end of that link exactly as I see it, and they don’t need Acrobat Reader or Media Player. The engine to run it is in the BeeZip delivered in the CD I send to them. Whenever we have a model home looking really good, I will shoot it inside and out with that digital camera so I can BeeZip it to all my prospects.”

Customer Selections and Change Orders
Five years from now, if HomeSquared becomes a dominant technology for builders to handle customization and even sell houses directly on the Internet, you might want to drop a thank-you note to Shea’s Miller. Shea is the pioneer behind HomeSquared and Miller the driving force within Shea. Del Webb Corp. has a similar technology called “Build My Home Online” (PB, April 2001, page 42), but Tom Lucas, Del Webb’s vice president for e-business, isn’t sharing it with anyone.

“The roots of our engagement with HomeSquared go back two years,” Miller says. “A lot of technologies were being pitched to us. We just said, ‘Time out. Let’s go back and look at our own company and see what we should realistically do.’ When we looked at our processes, we found that most of what was out there really didn’t fit.”

Shea is conspicuously absent from many of the big builder technology initiatives grabbing headlines. The firm has its own “e-vision,” Miller says. “One of the central tenets is that no one ever gets between us and our customers. That’s why we passed on customer portal concepts.”

Shea also decided it didn’t like its sales and prospect management systems. “We decided to replace them with a buyer application,” Miller says. “If you build a system for buyers, they will use it, and salespeople can use it on their behalf. We don’t expect people to buy houses online like books from Amazon.com, but we want them to become part of an online process if they choose to do so.

“HomeSquared entered the picture when they approached us and their vision fit our objectives. We were probably three months ahead of them with what we were developing in-house, but we never wanted to be a software developer. We decided to pool resources with them and develop a system that really meets the needs of the housing industry.”

What HomeSquared is taking live within Shea will soon be available to builders large and small. It’s a Web-based technology that allows customers to configure a house online, right down to the last color selection. If they choose to go all the way to contract on a lot and a home, they can do it.

Miller thinks few will go that far, but he does see big changes coming. “I think we’ll see a lot more contracts signed during the week rather than on the weekend,” he says. “People will visit on the weekend, but they will go home and play around with floor plans and options online, then make a decision on a Tuesday or Wednesday.”

HomeSquared is designed to integrate with any back-office system in the industry. “We challenged ourselves and HomeSquared that it has to be flexible enough to scale down to small builders,” Miller says. “They’ve done a good job of creating modules that should allow small builders to get started. We can do this for a builder with different back-office systems or even no back-office systems. A really small builder could just input the data into the HomeSquared system by hand.

“However, personally, I think your advice is sound. They should probably get integrated back-office systems before they try anything like this. HomeSquared might speed up their processes to a point where they couldn’t cope. And one thing we know about customers is that they will hold you accountable.”

To build the system so it works in many different companies and regions of the country, HomeSquared includes switches and built-in customization options that allow builders to specify the way things occur. “We think it will work for most builders, but it is designed for those who build communities rather than houses on scattered lots,” HomeSquared president Kip Hallman says. “And our pipeline is likely to be full for the first year or so meeting the demand from builders of 100 units a year or more, which is our initial target.

“If we flash forward a couple of years, I believe you’ll see this technology become the dominant method for all production builders to interact with customers before and after the sale. When we go live with Shea, we’re going to leapfrog the competition.”

Online Permitting
It’s a simple idea, but one with the potential for a startling impact on productivity. If builders could get building permits online instead of by standing in line at city hall, how much time and money could that save?

Thanks to San Francisco-based NetClerk, Pulte Arizona project manager Tom McMaster can answer the time question; the money question might take a financial audit. “I’m building in Apache Junction, east of Phoenix, in Pinal County,” McMaster says. “To get building permits, we used to have to send someone, in person, on a 40-minute drive down to the county seat in Florence, just to get the process down below three weeks. NetClerk contacted me and said they could get us permits in a couple of days.

“They came down from San Francisco, put a team in there and got the county set up to do this, and now I get permits in two or three days online. I don’t have to pull anyone away from other work for a half a day. I don’t have to go to accounting and pull a manual check. Now I e-mail the forms in and get them back the same way in a couple of days. We’re charged a flat fee of $25 per house and invoiced at the end of the month. The most important thing is, we are never held up on a construction start.”

NetClerk president Jeff Kraatz is on a mission to drag both the housing industry and local governments into the e-commerce age. “In our experience, 90% of the small builders don’t even have Internet connectivity in their offices,” he says. “It’s obvious that the software industry is producing technology way ahead of builders’ ability to utilize it. We think small builders need a ‘killer application’ to lead them into using a PC as a communications tool.

“Cutting a week or more out of the permitting process for the average single-family home might be it.”

Kraatz should know. He already has 700 clients in the skilled construction trades doing just that. “We built our business on helping skilled trades file for permits. Now we’re moving up-market to provide the same capability to home builders that we now use for mechanical, electrical, plumbing and HVAC permits.”

NetClerk provides a tool called GovCentral to municipal governments without charge. It is a Web-based tool that allows city employees to view permit applications, comment on them and accept or reject them online. “For most municipalities, this is still a manual process,” Kraatz says. “After you stand in line to submit an application, it’s likely that someone at city hall has to key all that information into a record-keeping system and the finance department system. We now provide services to 1,400 municipal governments, but we have the GovCentral system in only 40 so far.”

NetClerk is launching its services in 54 governments in the Chicago area, sending teams to teach city employees how to use GovCentral. The other side of the firm’s offensive is to sell builders on the transaction fee, which he says is likely to average $60 in most cities.

What’s Next
The situation most builders face today — confronting a plethora of technology investment options, but not quite sure their companies are ready to handle any of them — seems much like the dilemma Miller faced at Shea Homes two years ago. Miller’s response is probably a good one to emulate: Call a timeout, take off those tinted lenses, and closely examine your company and its critical business processes. Ask questions such as: If we are not ready for cutting-edge technology today, what will it take to get us ready? Are there intermediate steps we can take — low-tech solutions that bring us closer to that cutting edge? What course will benefit our customers best over time?

The example of Fidelity Homes in Florida, aggressively upgrading in-house systems to prepare for future Web-based and wireless possibilities, also looks like a good one.

Finally, everyone in this industry needs to stay engaged in the education process as the software industry continues to change and evolve.

Additional research by Bill Allen and Senior Editor Patrick O’Toole