All Abroad

CAD software usage, too, is growing. Eighty-two percent of big builders said they used the software in 2006, up from 71 percent the year before. Among small builders, however, usage jumped to only 54 percent, compared with 51 percent in 2005.

One real disappointment: The number of small builders that maintain a public Web site is still pretty low, at only 68 percent. That's up from 59 percent in 2005, but even though builders that have Web sites are doing more with them, there's still about a third of the group that have yet to jump in.

Builders aren't spending a lot of money on CRM software. One big builder explains why.

One confounding survey result that persists from 2005 to 2006 is that our group isn't doing much with customer relationship management (CRM) software, typically referred to as a sales front end, or simply sales software.

When asked which CRM software their company uses, 73 percent of respondents answered “don't know/don't use CRM software.” That breaks out to 81 percent among small builders but only 35 percent among big builders.

One reason for such high numbers is that many small builders outsource the sales process to Realtors. Another reason is that a good CRM system can cost several thousand dollars, and many builders don't want to spend more than a couple hundred dollars on a QuickBooks accounting package. Still, Mike Rulli, director of information systems for Drees Homes in Fort Mitchell, Ky., offers another explanation.

“We looked at the available sales software and found that they are mostly order-taking tools,” says Rulli. “What we're looking for is something that will be customer focused that can be integrated with part of our Web site.”

What Rulli has in mind is putting a link up on the Drees Web site that would let a home buyer select a house plan and elevation, a lot, and structural options. By structural options, he means family-room extensions, media rooms, or a two-story foyer instead of a one-story.

“Side-entry garages take wider lots, so some of the lots may not allow for that option,” Rulli says. “The tool will tell the customer that, and we'll provide a place on the site where the customer can save that information. When the customers come in for a visit, the salesperson can retrieve that data and bring it into Drees' sales tool.”

What's interesting is that Rulli says Drees has no plans to let home buyers make upgrade selections on the Web for items such as appliances, countertops, and carpeting.

“We're really more interested in producing a tool and catalog that showcases our products, not GE refrigerators or Whirlpool dishwashers,” Rulli says.

“On larger homes, [buyers] still have to come into the design center and make selections on carpeting and flooring and paint colors,” Rulli says, adding that Drees' main goal is to simplify the process so that when customers meet with a salesperson, they have a ballpark idea of what the home price will be.

Builders have a long-standing reputation for being unwilling to spend money on information technology. Part of the reason for this reluctance is the high number of IT failures in our industry. On the other hand, some home building companies have successfully deployed sales, back-office, and warranty systems. Home builders mired in paper-based systems face a serious challenge from such competitors.

Can a builder compete in 2007 without IT? Please share your thoughts on home builders and information technology on senior editor Steve Zurier's Z-Tech Blog at www.builderonline.com.