HOME BUILDERS LOOK FOR MUCH MORE IN back-office software than simply cutting a salary line or two in the company's accounting and purchasing departments.
Yes, the software reduces data entry and paperwork, but the latest software from companies such as HomeSphere, Constellation HomeBuilder Systems, and Builder MT lets builders deploy cost analysis and Web-based collaboration tools that can help them more effectively balance pricing and staffing.
By tweaking costs and staffing levels, builders can add revenue to the bottom line, keep growing with the same amount of people, and, in some cases, put experienced building industry people in more productive jobs.
Brian Ennis, president of Ennis Homes, a builder in Porterville, Calif., which builds about 400 homes annually, says the Builder 360 construction system the company deployed last year from HomeSphere—the upgrade from BuildSoft enterprise—lets him set up cost codes so he can analyze profits on both the base house and options. In the past, the company only had one budget line for revenue. He says that by having access to this enhanced view of the company's costs, Ennis Homes learned that certain options were being sold at a lower margin than the base house.
“Now, we're looking at revenue separately for the base house and options,” Ennis notes, adding that the company caught at least $200,000 in options that weren't priced properly.
“With Builder 360, all the information is integrated,” Ennis says. “This lets us quickly analyze our costs and make changes and adjust the pricing accordingly.” Ennis Homes has been able to turn the situation around and now prices options at higher margins.
Work The Web The Web is a proven technology for improving relations between business partners and suppliers, but success stories in the home building industry, particularly among mid-sized builders, are still rare.
Jay York, president of Damascus Homes, a home builder in Loganville, Ga., which builds about 275 homes annually, has had his people do some nifty work converting NewStar data into a format that can be posted on the Web so suppliers can check the production schedule to find out where they need to be from week to week. The supplier extranet was built with Macromedia's ColdFusion software.
“We don't e-mail, fax, or print purchase orders,” says York. “The subs pull the P.O. online,” he says. “They can go on the Web site and pick up directions to the jobsite and map information about the job. They can also bid online and look up checks paid on jobs for up to two years.”
Since one of York's other businesses is a computer company, he has access to an e-mail server. This lets the company easily issue Damascus e-mail addresses to its subs. “We want our subs to have e-mail,” says York. “The basic goal is to touch an item one time and be done with it.” Encouraging its subs to use the Web has cut down on phone calls at Damascus Homes by 75 percent to 80 percent.