The Next Frontier in Service Solutions

Post-sales and warranty management technology offer builders a solution to meet raised service expectations.

In recent years, challenges and competitive pressures in the residential market have led homebuilders to evaluate every aspect of service delivery, with stepped-up assessment of the warranty and post-sales processes. The role of warranty management can be both promotional and “protectional” for the builder—helping decrease future homeowners’ claims while ultimately lowering the final cost to the builder.

According to the 2007 New-Home Builder Customer Satisfaction Study, from JD Power & Associates, www.jdpower.com, Westlake Village, Calif., builder’s warranty/customer service is the leading factor driving overall customer satisfaction. With builders still searching for ways to sell their backlog of inventory, service and warranty management are increasingly garnering attention as known contributors to business growth.

Pardee Homes, www.pardeehomes.com, Los Angeles, Calif., for example, discovered one common denominator during 2006 customer surveying: a need for realtime response to homeowners’ questions. The construction company answered the call with implementation of CorrigoNet service management software, from Corrigo, www.corrigo.com, Wilsonville, Ore., that streamlines maintenance operations and service management by coordinating realtime information flow between all the players in the service delivery process. CorrigoNet is a Web and wireless enterprise work order and service management technology application, and it works with mobile devices—Pocket PCs or BlackBerry devices—for in-field warranty issue disposition and dispatch. 

“This has revolutionized our business,” explains Doug Cazin, corporate director of customer service, Pardee Homes. “It’s done two things: It’s a ‘wow’ for homeowners, and it also establishes buy-in from our service reps—this is a really important part of a successful system.”

There is a clear opportunity today for those builders continuing to maintain customer service standards beyond the buying experience and into the ownership phase. And builders are finding real value in solutions that coordinate management of the punch list phase, dispatch subcontractors to service warranty work, and interact directly with homeowners on service and warranty issues for their new homes.

“The industry is paying a lot of attention to the post-construction lifecycle, and it deserves that focus,” says Andrew Smith, CEO, AxisPointe, www.axispointe.com, Lehi, Utah, which handles the complete post-construction continuum, with third-party warranty to provide immediate customer response. “Builders need help with meeting new standards of customer service, and they are outsourcing to the experts.”

Among AxisPointe's growing list of single-family builder customers is K. Hovnanian Homes, www.khov.com, Red Bank, N.J. The builder uses AxisPointe's HomeProfile product across many of its divisions to help assemble and deliver closing documents and manage warranty requests and other post construction calls from homeowners.

With the system service requests can be managed online, allowing owners to find information they need about their home quickly, while also reducing the amount of trivial warranty calls the builder fields on a daily basis.

Tools to Support Stellar Service
Today’s post-sales and warranty management technology is equipped for varying levels of service. Many such solutions are operational out in the field—where service and warranty information is most valuable.

Builders and subcontractors can now bring warranty management into the field for realtime work management and information access. At the same rate, post sales and warranty software is evolving at an accelerating pace, with an increase in capabilities and performance.

Compendia, www.compendiainc.com, San Diego, Calif., recently changed its company name from Master Manuals to reflect the breadth of its technology solutions and signify the changing IT (information technology) demands of the industry. The company’s Master Archives is a document retention program that includes technology and deep domain knowledge, including auditing. It provides support from land acquisition through construction, sales, and warranty.

Compendia collects, audits, digitizes, and hosts data via the company’s Master Archive ASP (application service provider). Compendia’s Home Experience is a comprehensive homeowner resource available online, on CD, or in print. Steve Fabry, CEO, Compendia, says the warranty management package integrates into a builder’s system, and the products are ASP-hosted.

With so many different aspects involved it can be hard for builders to get their arms around the post sales portion of a construction project.

Luckily technology vendors are offering the automation for these varying parts of the process, including service requests, work list and punch list entry and update, dispatch management and tracking, homeowner portals, and integration into information technology systems, such as project management or accounting. A quick run-through of these areas and how some vendors play a role includes:

Service Requests: Vela Systems, www.velasystems.com, Burlington, Mass., works primarily with commercial contractors but also with residential developers and multifamily builders. The company offers a mobile software suite that allows field personnel to use a mobile computer, or tablet PC, to work within a number of software modules. This software creates and manages service requests, including a multi step workflow for verifying, fixing, and signing off on completion of tasks, including signatures on the tablet PC for an electronic record of the successfully completed work. All service requests can be turned into work orders, which are tracked back to the relevant location, trade, and cost, so that users can track performance across multiple trades. AxisPointe and CorrigoNet also provide this feature.

Outsource Service: AxisPointe’s WarrantyResolve offers trained warranty professionals that provide immediate customer response, coordinate and dispatch subcontractors, and manage work orders to completion. Generally, homeowners are given subcontractor preference, and this is, in most cases, those companies tracked in the AxisPointe Home Profile software as the original subcontractor. To make sure items are managed in realtime, AxisPointe takes advantage of tablet PCs with any high-speed wireless service, namely Verizon Wireless, www.verizonwireless.com, Basking Ridge, N.J., and Sprint Nextel, www.sprint.com, Reston, Va.

Dispatch Management and Tracking: This is one of CorrigoNet’s core competencies, as its dispatch management and tracking technology works with mobile devices—Pocket PCs or Work can be assigned to different subcontractors and tracked within the context of the homeowner’s overall service request. CorrigoNet works with mobile devices, and subcontractors can access CorrigoNet directly via a Web-based vendor portal.

Work Order and Punchlist Entry and Update: AxisPointe offers a third-party walkthrough, orientation, and punchlist management service called BlueTape. A team of customer-serive professionals, local to the specific builder, handles the entire walkthrough process with owners. These professionals act as a third-party advocate for the builder and buyer, documenting the final punch list items.

Homeowner Portal: As the gateway to customer satisfaction, homeowner portals are a highly visible service advantage, a feature that allows the homeowner to share some control of the post sales process. With the Web portal, builders provide homeowners with direct access to the process, which in turn makes them feel more connected to the project.

Systems Integration: Integrating warranty management software with backoffice technology is essential. Establishing consistency from the front to the backend of a transaction can be the difference in improving margins and reducing cycle times. AxisPointe integrates with Sage Timberline, www.sagetimberlineoffice.com, Beaverton, Ore., and Builder MT, www.buildermt.com, Lakewood, Colo., and QuickBooks from Intuit, www.intuit.com, Mountain View, Calif. CorrigoNet, which also connects with BuilderMT, supports integration with a builder’s sales system to receive initial homeowner information. After a sale is complete, information about the homebuyer and lot is transferred to the CorrigoNet system.

Additionally, many of the leading ERP (enterprise resource planning) packages offer warranty applications. The benefit here is the applications are already directly tied to key functions. For example, having warranty directly tied to the purchase order system means builders can instantly look up which trade contractor worked on a certain aspect of the home and instantly generate a PO for warranty work.

Some ERP providers also provide the supplementary applications described earlier, such as buyer portals. For example, Constellation HomeBuilder Systems, www.constellationhb.com, Markham, Ont., offers a Web portal add-on to its FAST or NEWSTAR called HomePlate for a cost.

Return on Investment
Managing the warranty phase is a function that is gaining newfound attention. Once an afterthought by many, a well-managed warranty is now seen as a tool to control costs. It is not uncommon to see builders spending upwards of $140 million annually in warranty costs. Using post-sales solutions, says Compendia’s Fabry, can reduce this figure by up to 20%.

Integration with builders’ own data is an important sell, Josh Kanner, vice president of marketing, Vela Systems adds. “When you’re working with the work list and punch list, you are capturing the information in a way that brings the process to a whole new level of efficiency,” he says. “At any time, our customers can pull up the amount of potential back charges to the dollar and the exact location of all issues.”

Pardee Homes’ Cazin says, with focus on post-sales and a new system, Pardee reduced average cycletime by 72% and reduced backlog by 62%. “This is extremely important today, because if our backlog is down we can respond to new requests that much quicker.”

“Builders need to be creative to protect and build their brand in today’s market,” adds Fabry. “In order to take care of your brand in a down market, you can rely on outsourced service solutions.”

AxisPointe’s Smith projects more and more builders turning to warranty and post-sales solutions support. “Customer satisfaction is increasingly important, and you have to outsource to the experts,” he says. “It’s the best way to lower overhead, improve your bottomline, and protect your margins.”

When navigating the options, builders should look to systems with an eye on the horizon. The right software requires capabilities to meet your future needs as well current ones. “Make sure you are looking at a future business model,” Cazin advises. “Business strengths and requirements change over time, and it is important to take that into account.”

Cazin adds, ironically enough, today’s technology plays a significant role in supporting good, old-fashioned customer service. “Back in the day, the quicker the response time, the better, and that is still true,” he says. “And, it also still holds true that the key to a positive service relationship is having the time to develop relationships with your customers. Quite honestly, good customer service is all about emotion and how your customer feels about your business. When you have a system to handle that final phase of your service, you can spend the time on that relationship.”

Tracy Cox is a contributing writer for Constructech.