Technology for the Home Building Industry: An Overview
By Jordan B. Zimbelman
The marketplace is filled with hardware and software that can improve your business. The following is an overview of the new business technologies available to the home building industry.
If you currently don’t use technology in your business, your first step should be to get your back-office operations in order. The more projects you work, the more paperwork — invoices, receivables, change orders and headaches ― you have. A simple, easy-to-learn accounting system can keep you organized.
Accounting systems enable you to know when you’re making money and when you’re losing it. They generate project reports itemizing the costs that you’ve paid as well as the money you’ve received. Accounting programs also provide a quick snapshot of each project’s production cycle status.
Accounting systems are quicker and more accurate than balancing your books by hand and can help you avoid costly and embarrassing mistakes.
Also, accounting software alone can speed up your budgeting process by providing an easily-referenced database of past projects and their associated costs.
Estimating software can integrate with an automated accounting system and with computer-aided design (CAD) software to create project plans that are detailed down to the number of boxes of nails needed for a certain project. Automating the process saves time, guards against data entry errors and assures integrity among different management reports.
Imagine a system that keeps you in complete financial control. First it estimates each project and finalizes the budget with actual bids. Then, as you purchase materials and pay trade contractors, the software updates the budget in real time. The system projects future cash flows and required reserves on a companywide basis. It generates easy-to-read management reports that help you track your business liquidity. Using such a system is almost like having your own CPA and chief financial officer.
For more information on estimating software, read Jim Girardi’s Tech Talk article in the Business Management Tools section of the NAHB Web site (link available to NAHB members only).
Project Management Systems
As your business continues to grow, communication between the office and the field becomes more complicated. Just think of how much effort it takes to issue and track a typical customer change order — especially when the customer changes his mind more than once.
Fortunately, wireless technology makes it possible for superintendents to process information electronically. This saves the trouble of making phone calls and reduces or eliminates cumbersome paperwork.
Project management software maintains an online database that contains all purchase orders, variance orders (unplanned items usually initiated in the field) and change orders. The software also helps eliminate problems that may arise from the mountains of duplicate paperwork generated the old fashioned way.
With a wireless project management system, payment approval is moved from the back office to field personnel who receive material shipments and approve trade contractors’ work. With an electronic purchase order at his fingertips, your superintendent has a quick checklist to compare against invoices. Handheld communications devices can help shorten cycle times and reduce mistakes, which results in happier vendors and ultimately a bigger bottom line.
For more information on project management systems, read Bill Allen’s Tech Talk articles: "Managing Purchase Orders," "Managing Selections and Change Orders" and "Improving Scheduling and Cycle Time" (links available to NAHB members only).
Technology can help you in the sales office, too. With the help of CAD software, your customers can take digital walkthrough tours of your models at a computer terminal. Virtually any options (elevations, floor plans, finishes, etc.) can instantly be swapped out and displayed on the computer screen.
You also can use your company Web site to usher customers through the building process. They can view images of the construction site, ask questions and post product selections and change orders.
A customer-oriented Web site is an effective way to differentiate your business from others. If you want your customers to be involved in the home building process, they can and should be. Happy customers produce smoother closings.
For more information on marketing technology, read Allen’s Tech Talk articles: "Product Design and Development" and "Managing Prospects and Buyers" (links available to NAHB members only).
Technology cannot answer big-picture questions like, “What market should I enter?” or “How can I adapt to a changing customer base?” but it can make the decision process a little easier.
Online research can supply you with information about demographics, market potential and geographic confinement, as well as sales and existing inventory reports. You can also monitor labor and material rates across different states, making due diligence a little less painful.
For more information on strategic planning technology, read Allen’s "Stategic Planning" Tech Talk article (link available to NAHB members only).
Visit NAHB’s Technology Solutions Directory
When you decide to upgrade your technology, determine what type of software will benefit your business and how it will improve your operations. Then find a vendor to provide it. Visit the Technology Solutions Directory at www.nahb.org/tsd for a comprehensive listing of software and IT vendors
Jordan B. Zimbelman is a graduate student in finance at Kansas State University. He is working with NAHB’s Business Management Department as an intern this summer. For more information, e-mail Zimbelman, or call him at 800-368-5242 x8498.
Portions of this article are excerpted from NAHB’s Tech Talk article series. You can read the entire series by visiting the Tech Talk series listing link on the NAHB Web site. The series links are available to NAHB members only.
The NAHB University of Housing Offers Courses and Designation Programs
The NAHB University of Housing offers a variety of business management courses and professional designation programs that set builders and remodelers apart from the competition. For a complete list of current offerings, visit www.nahb.org/designations.
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