By Charles Wardell. The technological priorities of the nation's bigger builders can be summed up in a word: connectivity. Nearly all have turned to the Internet to link their central offices with their sales offices and field workers. A typical first step is connecting the back office to the front line.
Compared to other industries, builders' obsession with connectivity is new. "Three years ago, people would have laughed at the idea that construction guys and salespeople needed e-mail," says Jonathan Smoke, chief technology officer for Beazer Homes in Atlanta. "Now the challenge is to give everyone in the company access to e-mail and other applications at any time, wherever they are. The name of the game is connectivity."
But the game is proving a tough one. According to Smoke, one of the most basic problems is the far-flung nature of many builders' operations. Communities under construction on the outer edges of rapidly growing cities like Las Vegas often lack high-speed data links. To keep such communities connected, Beazer is experimenting with satellite and microwave communication systems, so far with varied results.
Linking remote sites can also be expensive. "Getting data lines and other things you take for granted when you are dealing with a construction site at the edge of town isn't easy," says Felix Vasquez, CIO of D.R. Horton in Arlington, Texas. "You have to find a way to get information out to the sites without beating up the IT budget. That means making your systems available in different formats," whether it's on a home computer or on a wireless device like a Palm or a cell phone. "You have to do whatever it takes."
But while wireless seems a natural solution for areas lacking a good data infrastructure, wireless has its own access problems. "There really isn't a reliable wireless device out there yet to enable the main office or regional offices to talk with our contractors in the field," says Tom Kuzma, vice president for information services at Arvida/JMB Partners in Boca Raton, Fla. "We've tried several wireless systems, but they're limited by proximity to cell phone towers or access to satellites. We really haven't found anything that works well, consistently." Kuzma says his best hope is that emerging technologies will prove more reliable.
Until then, production builders are loathe to place too much trust in wireless. Steve Pardee, CIO for Standard Pacific Homes in Irvine, Calif., has given up on wireless and instead gives supervisors laptop computers with standard modems for use in the office rather than on site. "It might be another year before we have the reliability we need in Internet-capable, hand-held systems," he says. Divided highways
Adding to the complexity is the lack of consistency within companies. Rarely do all divisions use the same systems and processes. The problem is exacerbated by merger activity. "One thing you find when you buy a smaller builder is that often they are using antiquated computer systems in the back- and front-ends," says Pardee. "So, the challenge is not just merging the corporate cultures, but getting their back-office system to talk to yours, or replacing theirs if you cannot."
Not all systems need to be standardized. "Products, buyer behaviors, and vendor behaviors vary so much by geographical areas, that you have to be careful when you come in and decide to replace an older system," says John Ulen, CIO of K. Hovnanian Enterprises, in Red Bank, N.J.
On the other hand, he says, there's no reason not to standardize back-office functions such as accounts payable. Sometimes, he adds, builder IT staffs look at a new acquisition's computer software and decide to leave well enough alone.
Despite these complexities, Ulen doesn't see integration as a huge obstacle. "If you are willing to spend the time and effort, often it is easier than you think to get everything to work together," he says.
The people factor
A successful integration is likely to require a lot of staff training. "You've got to get to a level of understanding and consensus about what it is you are trying to do, and you have to get there quick," says Ulen. "Once you have done that, you can focus on tougher challenges such as converting their data to align itself with yours."
One of the industry's more ambitious integration projects is underway at Morrison Homes in Alpharetta, Ga. Morrison is implementing SAP in its finance control, materials management (purchasing and estimating), project systems (scheduling and vendor communications), and in sales and distribution.
According to Greg Goldenberg, the project manager overseeing Morrison's effort, the biggest part of the job is getting staff up to speed. "We have sales and accounting systems that do not talk to one another, which will change now. The key here is getting our staff trained to be able to seamlessly integrate these very different systems once we get SAP in place," he explains. To get everyone on the same page, Goldenberg assembled key staff from all the home builder's divisions, so that they could define their business processes and identify best practices. "When people from Phoenix start talking to people in Atlanta about how they do things, it's surprising how quickly they agree on the best practices in each area."
Under Morrison's new system, trades will be able to connect to the builder, but not in an interactive fashion. Each trade will have its own Web portal that they can access to find out a job's status and the schedule for the next day.
Trade contractors still tend to be the technological weak link. Many lack even basic e-mail, and those who have it tend not to use it efficiently. "The disparity in the technological sophistication of your trade partners, as compared to your staff, still hasn't changed," says Ulen. "The variety of people that builders have to deal with daily runs from big vendors with sophisticated computer systems, to guys who work out of the back of their trucks. It will take at least another couple of years to get subs up to speed."
"Subs, for the most part, just are not technologically oriented," adds Kuzma. "We can buy them devices and train them to use it, but we find even then that most would rather do business as they always have," he says.
Any way they look at it, builders' IT managers have their work cut out for them in the coming year, as they try to merge disparate systems and get data out quickly to their far-flung sales offices and work sites.
Charles Wardell is a senior editor for BUILDER magazine.
BIG BUILDER Magazine, April 2002