By Stephen Morgan, Senior Account Executive
Equential - a division of ICS
With today's headlines, it would be redundant to say that the economy is pressuring construction companies, contractors and field service firms. Like many other industries, these companies are increasingly under pressure to decrease costs and to operate at lower profit margins. Competing now and into the future means that construction firms must find ways to increase efficiencies while maintaining margins, quality and safety.
Construction companies are rapidly employing mobile technology to take advantage of simplifying and automating the capture of information in the field and integrating the data back into company systems. Reducing inefficiencies on any single active construction project can significantly raise productivity, reduce costs and positively impact the bottom line. After all, corporate results are determined by individual project results.
A profitable construction job or project often hinges on the accuracy and timeliness of tracking job-related costs - particularly labor hours, equipment utilization and daily production data. Manual, paper-based processes require field supervisors to spend hours collecting and verifying multiple pieces of information for each employee every day.
A mobile solution replaces paper timesheets by enabling a supervisor to record employee hours against jobs, cost codes and other necessary field information, and then wirelessly send the information to the office. Beyond saving a supervisor hours each day doing paperwork, streamlining the timesheet approval process and seamlessly integrating this information into the company's enterprise system virtually eliminates the inaccuracies and inefficiencies of paper-based time keeping processes.
By automating the collection of labor, equipment and production in the field - using handhelds, PCs, PDAs or Smartphones - supervisors can accurately clock workers in and out, virtually eliminating phantom payroll costs of up to $1,200 per field worker, per year.
Lloyd Kuehn, CFO for Scott Contracting, saves 3% - 10% of labor costs by using real-time scanning to track actual clock-in/out times. "At $35 per hour (fully burdened), saving 10 minutes per day per person adds up fast."
If a solution adds tracking equipment utilization, materials, and receipts, supervisors now have the daily visibility into production needed to more quickly make course corrections while they can still change the outcome.
"It's a great advantage for us to be able to track production as it occurs. This way, we know early in the project if we will meet our production and profit objectives," noted Kuehn.
Once data is transmitted to the office, payroll staff or managers can review, change and approve the information and then seamlessly import it into their enterprise data and billing systems. Payroll staff no longer has to decipher handwritten timesheets, manually key information or validate data and cost codes to produce payroll checks. Project billing becomes much more accurate as well.
Within several weeks of implementing the Equential software solution, SelectBuild's accuracy of employee time data and the associated job and cost codes increased by 15 percent. These and other documentable savings from mobile field solutions are easy to find.
It is not unusual for a company such as the InfrastruX Group- a national leader in infrastructure construction services for the gas, electric, water/sewer, and telecommunications industries - to reduce back-office processing costs by 40 percent. Furthermore, they have achieved hard results from increased accuracy of billing equipment, materials and labor to correct job codes and will reap these benefits throughout a large, 10-year project.
For many construction companies, the immediate benefits of automating time, labor and production capture in the field can include:
- Reducing data entry costs by 50%
- Increasing field supervisor productivity by eliminating manual time keeping
- Increasing field supervisor productivity by eliminating time spent looking up employee numbers, jobs, cost codes and other necessary information
- Improving equipment utilization by recording daily use
- Enabling better financial decision making and improving margins by providing daily production and job visibility
- Saving 5% or more on payroll costs by accurately recording hours worked and eliminating other errors
Construction contractors can achieve a quick Return on Investment (ROI) with mobile solutions. The following highlights functions that bring the most bottom-line benefit when automating data capture in the field:
- Entering/tracking time by account, work order or job
- Associating people and equipment to crews and jobs
- Tracking time for temporary employees
- Reviewing detailed reports for labor, job cost, etc.
- Comparing budgets vs. actual
- Accurately calculating job cost
- Daily job reporting to record job notes and important information.
Companies looking to go mobile also should expect these software solutions to simplify data entry processes (not just mimic the current manual process), enable a seamless pull of current data directly from the enterprise system, and most importantly, they should expect the solution to be easy to use. In addition, companies should insist on a simple, in-the-back-office management tool to enable managers or office staff to review data and set up the information flow easily.
Increasing effectiveness in the field will save companies time, resources and money. By using a mobile solution to capture real-time information in the field, companies can review and monitor costs by project, cost code and location on a daily basis so that they can manage more proactively. It gives companies better control over labor and material costs, equipment usage and job cost tracking.
With significantly improved data accuracy and same-day visibility into active projects, construction firms can lower production costs, increase productivity and ultimately realize greater profitability.
Stephen Morgan's recent experience with the Equential software solution for field services has exponentially increased his knowledge of field data capture and garnering ROI for construction and other field service companies. He is a combined Finance/Management major from Lipscomb University, and is an active member of CFMA both nationally and locally. Additionally, he has more than 10 years' technology sales experience with national firms as Cisco and Keane.