Two sessions at Groundbreak 2019 highlight the future of our industry—and it is all about integration.
Mark Fly of ConstructConnect presented his top five bid management practices that construction companies need to modify or abandon completely. Put on your marketing hat cause here we go!
1. Stop working in severed silos.
Divisions of a company often don’t talk to each other, so the bidding department often doesn’t have all the necessary data. It may not know what’s going on at current job sites, how many jobs a subcontractor has going, or which subcontractors are underperforming. Leveraging systems that talk to each other and assist in communication across sectors or divisions is a must for construction companies going forward.
2. Stop qualified communication campaigns.
Stop blasting invitations to bid (ITBs) to all the subcontractors on your list. As a matter of fact, most subs won’t even open the darn thing. Fly recommends working with your marketing department, as a few tips from them could help you improve your response rate.
Here are a few quick ideas:
- Personalize the subject line since people are more likely to open an email that is addressed to them.
- Add a video as this also increases response rates.
- Schedule bid invite emails to arrive around 10 am or between 8 pm and midnight, especially on Thursdays and Sundays. This way your messages will arrive when most emails are opened.
- Format your email to be easily viewed on a mobile device—more than half of emails are read that way.
- Use a split test to see if tweaking something in the invitation increases response.
Fly also suggests sending ITBs to a preferred vendor base. Make sure that the project includes the scopes you are sending it to and your consistent performers are included.
3. Stop tasking the TriCorder.
A TriCorder is a scanning device from the original Star Trek TV series. It was able to scan, record, and analyze data. Using analytics, you can choose the best projects for your team to bid on. These projects, in general, offer the biggest profits and promote a successful relationship with the owner or general contractor. By looking at your data, you can filter searches to only bring up opportunities that fit your expectations, thereby increasing your chance of success.
4. Stop segregating data.
Similar to #1 above, using pre-integrated systems will help you increase efficiency and reduce double entry and errors. Many software programs have open APIs (application programming interface), allowing other applications to integrate with them easily. Look for this when evaluating your current systems or looking at upgrades.
5. Derail disparity in data.
When pieces of data are stored in several different locations, trying to put something together from all those sources becomes cumbersome. For example, many of us rely on the Microsoft suite of software for much of our daily work. We take it for granted that information in one platform can be copied into a virtual clipboard and pasted into another platform. What would it mean if that wasn’t possible? Look at how you can use your current solutions more efficiently and actively look for integrations so you can stop the plague of double-entries and lack of information.
Getting Paid Faster
Everyone in construction wants to get paid faster and easier. The hoops companies must jump through to get paid can be downright onerous. Katie Rapp of Procore, James Benham of JBKnowledge, and Scott Sanders of DE Harvey Builders tried to tackle this crucial topic and provide insight into what construction payments will look like in the future.
A 2018 report from GEP stated that automating the invoice payment process was the most important initiative companies could implement to help their businesses going forward. Many have already begun doing that, grabbing on to available technology like ACH, wires, electronic filing of liens, and automated invoice approval processes.
The use of technology affects invoicing for all companies.
If a company doesn’t invest in it, that can lead to the use of costly manual processes (workarounds), wasting valuable time and creating siloed information. Worse still, this can lead to preventable mistakes, which require rework and cause delays. Ultimately, it means decreased cash flow and profits. Now, when times are good, is the time to address these issues. Thus, proper procedures will be in place when the economy takes a turn. When that happens, companies will be forced to get by with fewer resources and cash flow will become even more important.
Here are some steps you can take today to start improving your invoicing and payment processing:
- Begin the electronic creation and submission of invoices (both GCs and subcontractors). This doesn’t refer to printing your invoices, scanning them, and emailing them; it means developing a system where invoices are generated and sent digitally. This may mean working with key stakeholders to negotiate the need for wet signatures.
- Integrate a digital lien solution. Many companies offer electronic creation and signature of lien notices and waivers. Integrate these solutions into your workflow.
- Look forward to the future of payment technology. This may include such emerging technologies as blockchain funding, real-time payments, and one-time credit card numbers that disappear after the transaction is complete.