By Joe Stoddard. "Software integration" is all the buzz, but even big builders who have spent millions of dollars on complex integration projects still have problems with fireplace mantles showing up for homes that don't have fireplaces. Such problems could be avoided by keeping few key things in mind.
Count the returns
I worked with a builder whose purchasing department manually edited over 200 purchase orders every time a home was sold, because sales and purchasing systems couldn't talk to each other. The president decided to move to a $300,000 integrated system, which would have taken a year or more to choose and implement. He was sure the project would pay for itself in a year or two.
Yet when I dug into the situation, I found that staff spent only a few minutes editing purchase orders for each home and were adept at spotting mistakes. At most, (and I'm being generous) automating the process would have saved one hour per home, or around $12,500 per year. An unacceptable 24-year payback!
Tie loose ends
Another builder client wanted to use a popular Palm OS PDA system to let superintendents accept or decline invoices against purchase orders and send the information wirelessly to the office. The real-time information would help executives schedule closing new-lot releases. Or so everyone thought.
Photo: Richard Tuschman
One problem was an outdated, inaccurate scheduling system. The schedule had two or three weeks of "air" in it; a 45-day project carried a 60-day schedule that everyone at the office thought was tight. Projects considered ahead of schedule were actually finishing weeks later than necessary.
Another glitch was that while superintendents could tap their PDAs when an item on a purchase order was delivered, nobody was checking to see that quantities were right on the P.O.s to begin with. There was also no placement list indicating what piece of lumber went where, so framers could burn up a 20-foot rafter for cabinet blocking. Extra materials were lumped into one "variance P.O.," which was rolled into the next home's budget. Voilá--zero percent variance. No matter what the reality, budgets and actuals always matched, rendering the automated PDA system useless as an analytical tool.
The moral: If you automate the P.O./purchase/accounts payable process, make sure to close the loop between field and office.
Don't trust critical management issues to technology staff. Furthermore, if the people who will use the new technology (think project superintendent) are left out of the decision-making process, the project is doomed. Just because you like the latest hand-held gizmo doesn't mean it's practical for your superintendents. Find out what they really need.
Watch your back
A big automation project puts your key staff on notice that they might be integrated right out of their jobs! I've seen key staffers put up roadblocks ranging from general discontent with the project to refusal to share knowledge to knowingly providing bogus information. What's worse, if key people become disgruntled they're apt to resign suddenly, taking corporate knowledge with them.
Joe Stoddard, a technology consultant to the building industry, separates the Bytes from the B.S. Reach him at [email protected].