By Jenn Said
The construction industry collects mounds of data that when effectively tracked and analyzed can reduce risk, lower costs and lead to higher profit margins. Without the ability—and the right tools—to dive into and analyze that data, however, many contractors are leaving money on the table.
Frustrations that range from waiting on IT to build a custom report to making critical business decisions without proper data have led a growing number of contractors to take a closer look at business intelligence (BI) solutions for construction. Fortunately, the problem is not the data itself but rather, how to turn data into actionable intelligence that improves business performance.
Some companies mistakenly think they’re leveraging BI because they’re using apps or other stand-alone software. However, that technology often serves only to silo data, making it difficult, if not impossible, to access and analyze for actionable insights. Even more challenged are contractors stuck in the outdated use cycle of manual entry, spreadsheets and CSV files, which restrict sharing and optimizing data.
What Exactly is BI?
In the simplest terms, BI is collecting data—largely produced through construction and project management software—then sorting and analyzing it to make informed business decisions.
The benefits of BI are far-reaching. Contractors like W. Soule, a multi-trade industrial contracting firm, are using BI to identify opportunities for increasing efficiency and improving productivity.
With multiple locations and divisions to manage, W. Soule wanted a centralized enterprise management solution and detailed, specialized reports to better analyze data. While true BI tools in construction were still in their infancy, the company’s CFO, Howard Dembs, knew he wanted more analytics power. This led W. Soule to Spectrum, a web-based construction ERP solution from Viewpoint with a built-in data warehouse and analysis platform.
Within Spectrum, an automated process refreshes the data warehouse with current construction data, organizing the information into data cubes. Once the data is aggregated, W. Soule can simply select the information they want to see from a host of data buckets, dragging and dropping data fields into an analytic report builder.
Detailed analysis reports allow W. Soule to compare and contrast project data over time, division, geographic mapping—virtually any configuration. “We created dashboards that provide an up-to-date view of our financial and operational health and can instantly drill down into the data for closer analysis,” said Dembs. “It’s given us the power of detailed reports and data analysis we needed but simply weren’t able to achieve before. Spectrum has opened up a whole new world for reporting.”
After it’s compiled and analyzed, W. Soule team members can save and share the data with other people, groups and project teams. Gaining better insight into data and processes has helped increase efficiencies throughout the organization—especially within the accounting department. BI solved one of the contractor’s biggest problems, slow customer payments, many of which were moving to beyond the 90-day mark.
“With Spectrum, it’s easier for our accounting team to pull together the data they need, bill sooner and get paid faster,” said Dembs. “Access to this information has made accounting more efficient and responsive. We can act more quickly and work smarter because we have real-time data at our disposal.”
In the Driver’s Seat
Today, applications, infrastructure, tools and best practices that enable analysis of data are bringing tremendous benefits to contractors. From in-depth reports to dashboards, creative charts, graphs and even geographical mapping of data, BI software puts contractors in the driver’s seat and takes away the headache of trying to manually make sense of the mountains of construction data.
BI can help contractors gain a competitive edge and optimize cost containment, risk management and collaboration to improve margins by:
Providing a global view of past and present projects. With BI, contractors can easily see how their operations fit together and gain a more detailed understanding of their business to uncover areas ripe for improvement. Without this insight, contractors don’t have a bird’s-eye view of current or past projects and often rely on their “gut” when bidding or making important project decisions.
Using real-time data to improve efficiency and margins. Too often, project managers don’t know what’s happening on a job site until it’s too late because they don’t have access to real-time BI. With daily access to data, contractors can discover problems or bottlenecks and address them immediately, before they diminish margins.
Standardizing reporting. Many firms allow project managers and others to use their own software which can lead to disparate reporting and make it difficult, if not impossible, to gain business insights and make strategic decisions. BI software standardizes reporting and provides access to data that might otherwise be siloed or unusable.
Better managing resources. Managing equipment and manpower is a crucial element of improving profit margins. But many firms don’t have a good handle on either because they lack insight into the data. Employing BI to manage resources can help avoid project delays due to better equipment scheduling, predict when equipment needs maintenance for avoiding breakdowns and job stops, track worker licenses, insurance and certifications and flag unsafe or poorly performing workers or equipment.
Monitoring Risk. Mismanaging risk related to safety, contracts, defects, costing and slowdowns reduces profit margins and puts firms in legal jeopardy. With integrated BI, contractors can track contract requirements, legal restrictions and safety issues by project, as well as analyze safety incidents with real-time data, hand over complete building data to owners and analyze suppliers of defective material to make better decisions.
By better understanding construction data and making actionable decisions to improve operations for today and the future, contractors are well-positioned to better manage their organizational risk in an ever-changing environment. The more serious a construction firm is about lean construction processes and innovative building strategies, the more business intelligence software moves from a nice-to-have to a must-have. It’s simply an intelligent business decision.
Jenn Said is a freelance writer covering the construction industry.