By Jeffrey Nesbitt Manager CliftonLarsonAllen Email T. 602.604.3565
- Construction industry challenges have changed over the last decade.
- Today, the biggest challenge is the communication gap that exists between the field and office.
- The first step in finding a solution is to recognize where the communication gap exists and understand its cause.
- The right technology can help bridge the communication gap, but not without the right processes.
Prior to COVID-19, the last decade provided the longest economic expansion in U.S. history, which brought on a boom in construction. Along with it, technology infiltrated the construction industry, bringing new challenges.
Now, it’s no longer a matter of wondering where jobs might come from, knowing how to design and construct a certain building, or understanding financial statements. Today, perhaps the biggest challenge for construction firms is the communication gap between the field and the office, which can cost time and money.
Recognize the communication gap
The communication gap between field and office is a significant contributor to profit fade. But how can you recognize it? Simply understand what the gap looks like. Let’s start with an example.
You have a project that brings extra, unplanned work. The project manager in the field creates a change order, but that order isn’t relayed back to the office. The company has no visibility into the commitments made under the order. Without a process to track the order, there’s a chance it goes unbilled.
This hypothetical situation isn’t at all unrealistic. Employees in the field often use paper orders. If paperwork doesn’t flow effectively through the proper channels at the right time, there’s a missed opportunity for billing. When there’s a disconnected project management process, the accounting department and project manager could lose 15 – 20 minutes weekly trying to reconcile these differences.
Timekeeping and tracking actuals in the field, like man hours or quantities complete, is usually done manually on paper spreadsheets or by email, phone, or mobile apps. In this scenario, it typically takes 20 minutes per timecard to process, from submission to when payroll processes it. The math is easy — this time spent to process payroll weekly can be substantial.
The effects of this communication gap are felt by all departments. Time is wasted when a highly paid project manager has to find, reconcile, and complete these inefficient tasks. The average time spent finding project data and doing duplicate work is around 8 – 12 hours per week, resulting in hidden losses that can mount quickly. The secondary cost is misinformation and not understanding your job status or company financials until it’s too late.
Understand what causes the communication gap
The root of the communication gap is a lack of visibility. Do all departments have accurate, updated data necessary to best fulfill their jobs? Inefficient systems create data silos, where information is easily missed, duplicated, or inconsistent across different departments. It’s easy to understand how this might happen — each department has its own needs and obligations.
As technology has become more prevalent in construction, many companies try to combat this gap with software. But for some, this approach has fueled the communication gap, becoming death by a million apps. Companies have taken department-level approaches that fail to offer enterprise-wide solutions. Without full enterprise visibility, technology solutions not only fail to bridge the communications gap, they widen it. So how do we solve this communication gap?
Build an information bridge
The key to bridging the gap with technology is using the right technology for your business. What’s right for your business may not be the same for the firm down the street. To solve the communication gap, don’t add technology right away. Instead, pump the brakes and look in the mirror. Ask questions like:
- Do we already have best practices in place?
- Are we efficient internally before we apply technology?
- Do I have the right people in the right roles?
- What things are manual or in spreadsheets?
- What are the integration points?
Applying technology to a broken system provides no value. You can’t determine the best solution if you don’t know who is doing what and why. That’s where an outside perspective can help. A consultant with experience in the industry can bring insights on internal processes and share what successful companies are doing.
For instance, a contractor’s workflow and internal processes are often dictated by the software they chose years ago, which may not work in today’s environment. The “real” work often takes priority, so companies continue using software with broken processes, spreadsheets, manual inputs, or workarounds. This isn’t the correct approach. Temporarily remove technology from the equation and ask, is this the best way to be doing this?
Before you can select a software, identify the processes and internal controls you need to create an efficient system. With that blueprint for moving your company forward, you can shorten the list of software vendors to review and choose software applications that make sense for your business. Don’t settle for software that doesn’t support internal processes.
Plenty of vendors offer plenty of solutions, but choosing the wrong solution can set your firm back instead of moving you forward. The best consultants are vendor agnostic and most loyal to the clients’ success.
How we can help
Your passion is building things, not reconciling spreadsheets or conducting labor-intensive, manual practices. At the organizational level, bridging the communication gap is about aligning your construction firm with industry standards. From an internal perspective, it’s about making your job easier, so you can be more successful and focus on growing your business.
CLA was named the No. 1-ranked national construction accounting firm in 2019. More than 7,000 construction clients choose CLA for their strategic needs. Contact us today to learn how our construction professionals can help your firm move forward with a personalized and strategic approach.