Exceptional costs are managed through variances, as are schedule changes and customer additions to contracts.
Integrate Front Office Processes
The next natural move is to integrate automated front-office processes and systems. In this scenario, production schedule milestones automatically update the payment approval process, while sales office systems automatically update the sales and closing backlog and the customer care process. Hand-held computers replace whiteboards and a computerized database replaces file cards containing information about prospects and buyers.
Builders have struggled mightily to get to the point above. Integrated systems and software require everyone in the company to adopt a common set of procedures. Tasks must be standardized so that data used by a variety of systems is perpetually updated — not duplicated or corrupted as is often the case with manual systems.
To a small-volume builder, just the process of synchronizing a Blackberry® to Microsoft Outlook® is a big job but has obvious benefits. Integrating every process of a home building operation is a daunting responsibility even for a mid-size builder, but consider how many redundant steps the payment approval process described above saves.
Communicate Effectively With Trade Contractors, Vendors and Customers
Process and systems integration does not stop there. The next dimension is to go outside the office and allow your automated systems to communicate with trade contractors, vendors and customers. Many builders are now opening up their Web sites to these “outside parties” with password-protected portals. The Web site is no longer an electronic billboard. It has become part or an extension of the virtual private network.
This is not simply Bill Gates dictating what the future will be. The whole point of process integration is accomplishing more in fewer steps — with less paper and redundancy than ever before. It’s also about service to the customer. If you don’t embrace this evolution, your vendors and customers will demand it.
Follow These Steps to Make Integration Work Smoothly
Here are some pointers on making process and systems integration work for your home building company:
- Examine your current processes. Determine how external users (e.g., trade contractors, suppliers, home owners, etc.) could benefit from integrated processes. Just because you save time and redundancy doesn’t mean you’ve made life easier for your external customer.
- Determine which action steps in your processes affect which internal users (or employees, in this case). Figure out the point of control (the point at which a human decision or intervention is needed; e.g., approving a purchase order, checking a bid list to make sure it’s complete, etc.) in each action step.
Explain to your staff how automated processes work and the benefits of automating yours. Get your employees’ buy-in (and be sure to listen to their concerns) before converting manual processes to automated ones.
Explain to your external users how you plan to automate the manual processes they participate in. Ask them if they agree that integrated processes will get the job done better. Give them training and guidance to use automated processes properly and effectively.
Evaluate whether or not you still need paper. Could your integrated process work just as well — or possibly even better — if you used electronic documents, databases and records?
If you incorporate a feature into your company Web site (such as allowing trades to submit bids online via password-protected portals), figure out how the information collected will automatically mesh with your integrated back-office system. If you have to re-enter the bids into your estimating system, you’ve put the cart before the horse.
There’s only so much business you can transact via Web sites, e-mail and other electronic communications. Identify those aspects of your processes to be automated that require “high touch” (that is, interpersonal) communications to ensure that the end product meets the customers’ expectations. Examples include vendor purchasing negotiations and customer selections. Make sure automated processes include prompts as well as a way for users to get in touch with you (or vice versa) for those all-important face-to-face conversations.
How will you handle an exception to the planned cycle — e.g., an emergency customer service call, a schedule delay or a purchasing variance? How will such an exception affect other integrated processes and systems?
Test your automated, integrated systems in-house before you make them available to your external users. Don’t blow the cover until you are ready and able to. This applies to any new system initiative, but especially to something you are asking an external user to interact with.
Don’t be afraid to abort a process that is not delivering expected results. Have a backup plan in place and know what procedure to return to. My deceased father was a pioneer airline pilot. Another pilot once told him that the greatest maneuver in flying was the 180-degree turn.
Systems Integration Lets You Compete With the Big Guys
The exciting part of integrating systems and processes between the field, front- and back-office functions, and end users is that smaller builders can compete with larger builders using the same arsenal of speed and services on a level playing field. So keep up the grass drills and wind sprints and be agile. It’s a new world out there.
Earlier Articles in This Series
To read, "An Effective Purchase Order System Enhances Efficiency," Part 8 of this series, published on July 21, click here.
To read, "Don’t Fix New Software If It Isn’t Broken," Part 9 of this series, published on November 24, click here.
To read, "Beware Software Consultants Who Are Salespeople in Disguise," Part 10 of this series, published on December 8, click here.
To read, "Eight Ways to Drive Internet Leads and Sales," Part 11 of this series, published on January 12, click here.
To read, "Excessive Web Site Graphics Can Stunt Sales," Part 12 of this series, published on February 2, click here.
To read, "Don’t Let Your Comfort Level Dictate Future Tech Changes ," Part 13 of this series, publiched on May 17, click here.
- To read, “Know Your Technology Needs Before You Invest,” Part 1 of this series, published April 14, click here.
- To read, “Strategic Planning Software Can Help Focus Your Business Model,” Part 2 of this series, published April 21, click here.
- To read, “Does Your Planning Software Match Your Project's Sophistication?” Part 3 of this series, published May 5, click here.
- To read, “Don't Put the CAD Before Your Product,” Part 4 of this series, published May 26, click here.
- To read, “Manage Prospects and Buyers More Efficiently With Technology,” Part 5 of this series, published June 9, click here.
- To read, "Automate Your Selection and Change Order Processes,” Part 6 of this series, published on June 23, click here.
- To read, “Scheduling Software Can Improve Your Cycle Time,” Part 7 of this series, published on July 7, click here.
Note: Various software products are mentioned throughout the tech talk series. The intent is not to recommend these products as being right for you, but to identify some fairly well-known players and to note a few new ones. My apologies to vendors who are not mentioned — the omission was not intentional.
Bill Allen is president of W.A. Allen Consulting and a member of NAHB’s Business Management & Information Technology Committee. His company, headquartered in Redmond, WA, provides information technology consulting services and process management assistance to the home building industry. Allen can be reached at 425-885-4489 or via e-mail. Or visit the W.A. Allen Consulting Web site.
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The NAHB University of Housing offers a course on business management designed to help builders improve their business and profitability. For a list of current offerings, click here. Search keywords: “Introduction to Business Management.”
Business Management Publications Available at BuilderBooks.com
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