How will the technology initiatives of public builders impact the industry as a whole? By BUILDER Magazine Staff
Most builders are just beginning to understand the full ramifications of the Internet, according to Scott Campbell, vice president of equity research for Raymond James and Associates, a St. Petersburg, Fla., home building research operation. But Campbell says public builders' use of advanced technology is already yielding results. He sees four main areas of impact:
Financial reporting. Many home builders are fully integrated--linked from divisional level to corporate offices--allowing many teams to have as close to real-time information as you are going to see. Being able to see what floor plans and what products are moving allows builders to make quick adjustments.
Sales and marketing. Fifty percent to 60 percent of consumers use the Internet to search for information on new homes. The implications are phenomenal. The possibility of reducing commissions and Realtor costs could eventually save home builders a considerable amount.
Construction and operations. While the integration of builders with suppliers is in its infancy, some big builders are already using PDAs to track construction, materials, and schedules. Such systems could also let them track the prices of materials, see what materials are holding up better than others, and help identify where to cut costs or improve efficiency during slow periods.
After-sale service. The ability to provide ancillary services such as broadband or cable service, home security, and home maintenance did not exist 10 years ago. Some big builders, such as Lennar, already generate profits from these services. However, ancillary services won't have much impact in the near future--they're still a minuscule part of overall profits. But builders should consider such services in their technology plans.