The State of Collaborative Technology
What factors will complete the adoption puzzle going forward?
There is a classic phrase that says, “You can tell the pioneers by the arrows in their backs.” Early adopters of any technology—the famous “arrows in the back” guys—claim to have the inside track to all the latent benefits waiting to be discovered in their chosen product. While some wait for the technology to catch up to their needs, these folks wave the flag of technology, while trying to find something to do with it.
In between are the realists who look for ways to use technology now while hoping it will grow to solve even more problems as it matures. In many ways, that is where we are today with online collaboration.
Web-based collaboration technology has been available to the homebuilding space for about 10 years. The appeal of such solutions centers on improved communication—having schedules readily available and giving all parties access to documents. The benefits can be mutual to both the builder and the trade partner. The builder can keep track of dollar amounts agreed to, manage profit margins, find out where slippage is actually happening, and help keep the trade partner, and thus the project, on time, on budget, and delivered with accuracy and with minimum mistakes.
It needs to be noted that even though Web-based collaboration technology has been around for more than a decade, the rate of mainstream adoption still leaves a lot to be desired.
According to Constructech’s 2008 National Construction Technology Survey, a combined 65% of residential respondents are either not using Web-based collaborative technology at all, or only on a select few projects.
According to vendors, the technology is in place, builders and trades are becoming more technology-savvy, and the cost to deploy systems is coming down. Given these factors, shouldn’t we see a more broad-based adoption of Web-based collaboration technology?
Is it Effective?
Getting right to the point, the question must be asked, “Just how effective is online collaboration?” The answer differs depending on who you speak with.
Speaking for the first group of early adopters is Erik Cofield, vice president, sales and marketing, BuildTopia, www.buildtopia.com, Rockville Md. “It is extraordinarily effective. Trades no longer have to waste gas and time, both more precious than ever, to go to sites on the wrong day. They no longer have to deal with a long bidding process. They no longer have to manage—babysit—the builder.”
Advocates point to the fact when mistakes do occur, such as the wrong countertop in the wrong unit, this technology makes it very obvious who made the mistake and where the process broke down, so it can be corrected. The typical benefits to the builder include a reduction in construction cycle time a reduction in profit loss due to mistakes and an easy way to manage multiple trade partners, documents, prices, scopes of work, all across a large geographic region, with both parties working anytime, anywhere.
That’s the good news side. But not the only side: “I’d say online collaboration hasn’t been effective at all,” admits Kenny Norton, COO (chief operational officer), SMART Builder Solutions, www.thesmartbuilder.com, Alpharetta, Ga. “That’s been my experience in attempting to sell our Web-based collaborative environment. I think that, unfortunately, builders up to this point haven’t had a need for it because they’ve been making money without it.”
Of course, the current market condition belies the “making money” part of that statement, doesn’t it?
“I think prior to the last two years, they’ve been making money without the need for it, just because they could,” says Norton. “Now things have changed, (and) more than ever there is a need for efficiency that is inherent to a collaborative, online, single database solution. We feel the way builders will advance into the future is taking advantage of that technology.”
In a similar vein, Tim Metler, president, BuilderHelper.com, www.builderhelper.com, Orem, Utah, states, “The technology is there, it works, and it works very well. The effectiveness is really dependent on the contractor and whether or not they use that technology. I have seen companies that are very successful in implementing this technology and others that don’t do quite as well. Basically when we look at the reason why, it is because they have purchased technology that they don’t use.”
Is it a matter that they don’t use the technology, or they don’t use it properly? Metler says the majority of time it is a case of the technology simply not being used. He argues the systems are simple to use, yet quite often it is a matter of companies deciding not to use them. That begs the question: Why would a company buy or sign up for something and then not use it? One answer is that it is too complicated another is that the users are not up to speed on the whole “computer thing.”
Matt Moritz, vice president, Eddy Homes, www.eddyhomes.com, Bridgeville, Pa., describes a situation that includes a little bit of both. His company selected a system from BuilderTREND Solutions, www.buildertrend.com, Omaha, Neb., with a belief it would be easier to implement and would require the least amount of upfront cost versus some other solutions in the market.
“It seemed like a pretty big risk to us to undertake some of the programs out there that are expensive to start operating,” says Moritz. “If it doesn’t work out, you know, you’re out all that cash. We decided we would start with this to see how it went.”
And how did it go? Did the team members that Eddy Homes depends on jump at the chance to use the product? He says, “We are using it with most of our trades. Not all of them, though. Some people just don’t use a computer. But our customers really like it. Really, to me, it is more of a sales tool than anything else. I think if you are going to try to use it with the subs and really try to schedule, it is still a ways away from being fully utilized.”
When looking for the best approach to get more trades and suppliers using the online collaboration technology, one of the first things to look at is training—and this is the point where vendors should step in. According to Metler, “Not only do we show them what the product does, we train them how to use it. We look at ourselves as ‘builder consultants.’ We show them exactly how they should use the product in relation to how they operate their business. We go through a step-by-step process and have an implementation schedule where we can get them set up on either bidding, or scheduling, or a number of other components.”
And the training doesn’t stop once the product is running. “We also regularly call them, on a proactive basis, not just waiting for them to call us with questions,” Metler adds. “We also help them with their trade contractors. If their trades have not been properly trained, then they are not going to use the program. That means it really won’t benefit the contractor as much. We actually go through proactively, calling their trade contractors, setting them up and training them.”
Of course, when determining the effectiveness of a solution, builders should have some metrics in place. Metler points to one customer that is gauging benefits via examining the schedule. “They have been able to go back and track historically how long approximately it was taking them to build these homes,” says Metler. “I’ve had one of our companies actually shave off 30 to 60 days on some of their home production compared to what they had historically been without the program. So I think comparing (the use of technology) against what current usage is, is a good way for them to establish whether the program is really doing what they would like it to do or not.”
In a more general sense, Cathy Hayes, industry market manager, Autodesk, www.autodesk.com, San Rafael, Calif., says the most effective measure for determining benefits is to look at hard cost savings: reduction in printing and shipping costs.
She says, “The soft cost savings of productivity enhancements greatly outweigh the hard cost savings. Many of the manual tasks of printing, collating, shipping, and following up are automated so they are nearly hands free.”
The Right Tool for the Job
Among the collaborative products online today, there are differences in what features are available and how they are intended to be used—and who they are aimed at.
Norton says SMART Builder focuses on production builders. “Our market is the production builder we are not fit for custom builders. A builder can use our system to take advantage of a single database, online schedule driven product to reduce overhead by working with fewer employees and increase profitability by keeping a close eye on all of the hard costs. They improve construction schedule time by reducing it through improved efficiency.”
A general contractor using technology from SMART Builder, would have as its team a purchasing agent, or chief operating officer, a backoffice person, probably in accounting, and then everybody else in the field, including subcontractors. Dan Houghton, executive vice president, BuilderTREND, looks to a slightly different market. “It’s specifically for a small to medium-sized builder, both on the new residential and remodeling side. It’s a niche product, built by builders for builders”
He adds the product is used by three levels of the construction project: the builder and staff, subcontractors and vendors, and then the customer. He says there are also opportunities to get lenders, real estate agents, and insurance agents involved using the tool.
A Need in the Field
The growing use of handheld digital technology, such as the BlackBerry from Research In Motion, www.rim.net, Waterloo, Ont. Palm, www.palm.com, Sunnyvale, Calif. or iPhone from Apple, www.apple.com, Cupertino, Calif., allows field supervisors and managers to communicate in realtime. Some vendors focus collaborative tools on this market segment. Cathy Kotsopoulos, marketing manager, Constellation HomeBuilder Systems, www.constellationhb.com, Markham, Ont., points to the company’s OnLocation product as an example.
“OnLocation-Schedule is a mobile device application that lets the superintendents manage their building schedules, and some of our customers have created vendor portals or are using automatic reporting mechanisms, also using the handheld device, to send information and their schedules out to their suppliers and trades.”
Such systems allow builders to enter the data and make it available to anyone that needs access to the information. In the case of OnLocation, the scheduling application is on the device and is primarily an application designed for the BlackBerry. The rest of the system, however, such as accounting and accounts payable, is on the office computer system. From the device, you not only can manage the building schedule, you can approve payments and view all the purchasing information in the backoffice system.
Tim Alexander, construction supervisor, HPH Homes, www.hphproperties.com, Birmingham, Ala., uses Constellation’s OnLocation-Schedule. Alexander comments, “From an operational standpoint, we’re implemented across the board in operations with Constellation software—for generating our purchase orders, our estimates, our bid processes, and everything that piggybacks onto that. From the production standpoint, the superintendents have BlackBerry devices in the field and they are updating their schedules that way. We’re using the ability to send out schedule notifications to our trades, automatically, by email. That stops our superintendents from having to make a lot of phone calls to schedule their jobs. Now their schedules are generated by email and the response has been tremendous.”
Using wireless devices is a growth point when it comes to collaboration. Such applications have made it easy for the jobsite superintendent to manage typical processes, such as payment authorizations, warranty sign-off, walk-through sign-off, and the ability to trigger closing documents. It can also help homebuilders gain control over things that are often at the root of escalating job costs, such as variance purchase orders, sales contracts, and variations, right from the field. Eddy Homes’ Moritz believes collaboration technology needs to become more mobile overall.
“If I were going to start from scratch, I would design (technology) to work first with the handheld, because it really is only as good as the people,” says Moritz. “There is a data entry lag there. The system only works for the customer if the information is correct. If you are sitting here in the office, you have no idea what is going on out in the field. So you really need the people out in the field to be on board in using it.
“Right now it is kind of hard. You almost have to be out in the field and come back in to enter things in. I feel like most systems are kind of that way, even the ones that say they are mobile. (With) BuilderTREND you can go and look at stuff, but you really can’t interact with the software. I think that is kind of normal,” he continues. “Unless you went out and made a major capital investment and got something like a production builder would use. But as a custom homebuilder, you really can’t afford that kind of overhead.”
Looking Forward
Other factors to consider when determining the future of this technology include flexibility and expansion of the collaborative environment. Hayes says, “Collaborative technology in the homebuilding industry is a need that is here to stay. Many started using collaboration tools for the bidding process alone and have expanded the use to other areas of their business, such as purchase-order processing, bid tabulation, and sharing design and engineering information with architects. We are also hearing a lot about BIM (building information modeling) from our homebuilding customers. They are clamoring for smarter ways to understand building materials through BIM and how to collaborate on that rich data up and down the supply chain.”
BuildTopia’s Cofield adds, “Our users are telling us they want more, deeper, and even broader functionality. That is significant because many builders still feel the trade partners won’t catch up, but that is not the case from our experience.”
HPH Homes’ Alexander points out real world benefits of collaboration online, and on a variety of devices. “One thing that is important is quality control and checking—checking the job, not when it’s done, but checking it as it’s being built. Constellation contacted us to automate that and it’s going to enable the superintendents to schedule their jobs and to pay their trades with a handheld device and use the same device to conduct their quality control program and not have to manage two systems or two separate entities, one being hard copy, one being digital. We’re very excited about that.”
And the environment will also benefit, according to Alexander. The automated system will replace one that was very comprehensive but very paper intensive. Various checklists were done at each stage of the construction process but would require HPH Homes to print hard copies of the checklist to go out with each start package—think of the resources for getting those printed, put together, sent to the field, and then having the superintendent keep up with those through the duration of the construction.
So what will it take to push the adoption of Web-based collaboration in the homebuilding space overall? BuilderTREND’s Houghton says, “I’ve heard people in the past say it takes ten years for things to become mainstream I would say we’re getting to that point in this movement now. More contractors are starting to realize that the Internet is a powerful tool they can use to interact with their internal staff, their subcontractors, their homebuyers—really anybody that’s involved with the process. So, it’s one of those things where I think it’s caught on but it still needs to become more mainstream.”