Business Process Innovation

Do Bigger Projects mean Disconnected Teams?

It’s always very interesting to me how much difference there is between how organizations structure the management of major projects.  Naturally, the bigger the project, the more bodies they’ll need for project controls, construction project management, procurement, etc. Adding more people of course, adds more complexity (to anything). When you add more people, those people need to be organized into groups and disciplines; each requiring key inputs and outputs and deliverables. In defining this organizational structure; I’ve found that there is a tendency for major to mega projects to disconnect these groups into individual silos. Working in silos, they coexist with each other, but with minimum interaction. No-one wants this to happen, of course, and any person would tell you that healthy communication is vital for streamlined success. As a company that builds construction project management software to handle the intricacies of keeping construction projects in a happy place, we often find that the additional role we take on (besides providing technology) is to also provide tools for improving the interactions and cooperation between the various groups charged with project cost management. These groups can be: Project Controls, Procurement, Engineering, Project Management, Accounting, IT etc. If we can create an environment where, for example, the Project Controls group have a solid level of co-habitation and healthy collaboration with the Buyers in the Procurement department, we’ll see that as a mini win. Even if that cohabitation is in a digital sense. I can safely call that a win because we hear the periodic grumblings from people in all groups about the challenges they face in managing complex projects.  Looked at objectively, the underpinnings of many of their challenges are rooted in the fact that they live in

The WIP Report – It’s CFO Candy

Why the WIP Report is so Important In addition to effectively managing the costs and schedule of your project, it’s critical to stay on top of your Work in Progress or WIP.  WIP is critical to monitor. You, your CFO and your investors need to know just how profitable your project is, how much of the project has been funded by your customer, and how much has been financed by you.  Combining WIP information with project profitability and performance metrics, will give you a complete picture of the financial health of your project or your program.   Work in Progress looks at the following key metrics on either a single project or a portfolio of projects currently underway: Total estimated cost Total estimated revenue Total estimated profitability The revenue earned to date Estimated cost to complete Estimated remaining revenue The costs spent on the project(s) to date All billings that have been completed for the project(s) and billable remaining   Regularly reviewing your Work In Progress allows you to quickly identify any under or over billings that may be taking place in your project.  If your project has been financed by the bank or an underwriter – or when your CFO needs information on your project for his financial forecast – your WIP Report is going to be a critical report in your arsenal of effective project management tools. If you can produce a detailed WIP report and send that to your CFO on a regular basis, you'll make their life way easier - it's like filling their candy jar.   The WIP report in 4castplus combines the above mentioned metrics along with much more to give you a complete picture of your organization’s work

People Hate Change – 6 Tips for Making it Easier

  People Hate Change? People generally like the idea of change, but they really hate the effort that goes along with it. The idea of change brings with it feelings of hope, opportunity and the promise that things can get better. But sometimes it can be hard work and require a lot of perseverance. The challenge to any organization is to get good at change – because as your company grows, change is going to have to happen, whether you like it or not.  You might as well get used to it, and get good at it.     I’m probably like most people in that sometimes I can be good with change and sometimes I’m pretty crap at it. I recently, for example, had to get a new laptop. I was avoiding making the change for a long time because: I was dreading having to reload applications and transfer all the data from my old laptop I hate shopping So, I suffered with my ancient laptop (4-yrs old) as it gradually fell apart.  I could visualize that day in the future when I had that shiny new machine that was fast and clean, but I just couldn’t bring myself to go through the hassle of making the transition. The defining moment came when the cooling system broke down and it overheated. Disaster.  After that, I could only run it for ½ hour at a time before having to shut it off for 20 minutes while it cooled down. You could say I left it a bit too long. It started seriously affecting my work and life.   Most organizations behave pretty similarly. They know they need to upgrade their technology, systems and processes, but

The Innovative Customer

Having worked in technology for many years, I’ve come across numerous diverse opinions and positions on how best to make roadmap decisions on a software product. Well, in fact, I’ve come across a lot of opinions about a lot of things. Most people, I find, are quite full of opinions.  You might find this odd, but I actually get a lot of enjoyment out of listening to people’s opinions – regardless of the topic: politics, religion, food, music, the latest tablet, parenting, books, movies, sports and whatever else comes to mind. People can be quite interesting if you give them a chance to rant-on about any topic they feel passionate about. I don’t always agree with them, of course, but for the most part, it is interesting to listen.   Being in the business of delivering innovative technology solutions, the prioritization of new software features to build into a product is a very important aspect of our business. So listening to people has become a vital part of making those prioritizing decisions. Many in the technology world will however, strongly advise us to not listen to customers when it comes to setting the urgency of one feature over another. The thinking behind such a stance is that customers who are using the software on a day-to-day basis are only going to make suggestions/demands for features & fixes that will make their own little world a bit better. They’re not too concerned with long-term strategic planning.  So, as the thinking goes, if we expend all our development resources on tiny items that will help a handful of people - but will have negligible effect on the broader customer base (both current and future) - our software

Top 4 Construction Invoicing Tips to Accelerate Cash Flow

 Accelerate Your Cash Flow You’ve spent considerable time and effort in running your projects well.  You make sure that your customer is kept very happy during project execution, and you’re expertly handling the multitude of challenges that come along with a complex project.  Your project is going well, your customer is happy. But you still can’t seem to get paid on time. What’s with that?   There’s no doubt about it, keeping your project healthy and well managed has a huge impact on achieving healthy cash flow, but that's really only part of the overall strategy of getting cash flowing happily into your organization.   The other half of it – the half that can really bite you – is making sure that you invoice efficiently, and your customers pay you efficiently.  Many construction organizations spend a great deal of cost and effort towards invoicing their customers in an attempt to improve their cash flow performance. The challenge, however, is that they’re using the same old process, the same old tools, subject to the same old risks.  And they’re getting the same old results: accounts receivable aging stretching to 120 days, accountants and auditors insisting on an allowance for uncollectable accounts, board members and bank managers tapping their fingers waiting for the latest receivables schedule.   It’s no wonder when you consider the inherent challenges that practically all construction companies have to deal with in getting their invoices out the door.  Those challenges, however, can be minimized, and cash-flow significantly accelerated by implementing the following four cash flow management strategies. Consolidate information. When your key project data resides in multiple systems, there is great risk in access, ownership and status of that data. When you consolidate

The Walk of Shame

About a year ago I bumped into a former work colleague who I hadn’t seen in about 6 years. It prompted us to go have lunch to get caught up on life, family, business and everything else. His name was Dan. And since leaving our former employer, he went on to become CFO at a large construction & manufacturing company.  It was quite fortuitous for us to have reconnected because he was having a lot of struggles with his company’s projects suffering disastrous cost overruns & delays. “I get so frustrated,” he said as he knifed his steak sandwich. “it’s like they [the project managers] deliberately leave it to the end to figure out where things are at with their projects.” He was referring to how information flows to his financial group about the status of the various projects on the go in his company. “What’s the point in that? Why can’t we have those conversations six months earlier?” He waved his hands dismissively in the air as though he was at a complete loss as to what to do. “I used to think they were avoiding me.” He continued. “I figured they knew all along that it was bad news, and they didn’t want to have to face telling me. But now I know that they simply have no idea what’s going on until pretty late in the project. Essentially, until all the invoices have come in. Then it’s like, they just add up all the invoices and figure out what we owe. Then they come tell me. Is that normal?” Sensing that he was waiting for an answer at this point, I told him that it really isn’t all that uncommon for projects to

To Get Paid on Time – Organize Your Job Billing

End-of-month or end-of-week scrambles to get invoices together to bill your customers can be a soul-wrenching hassle. Especially when the systems you have to do your job billing are spread out between spreadsheets, paper, a stack of invoices & purchase orders and some reports from financial.  Sitting in a dark office on a Friday night, trying to reconcile it all into invoices while your buddies are at the hockey game – isn’t the best use of your time. On top of that, you’re faintly hoping that, fingers crossed, your customers don’t dispute or find discrepancies with them this time – and you can for once get paid within 30 days. Chances are, though, if everything doesn’t line-up perfectly, there will be phone calls, corrections and the payment will end up being over 120 days.   Invoicing in construction projects has its share of complications that aren’t found in other businesses. Progress draws, holdbacks, time & material transaction billing, retainage, flowing through 3rd party direct costs, split-billing, all the complexities around markup on materials & equipment, and much more. Add to that, the knocks to a company’s reputation that go along with invoicing mistakes, double billing or missed billing. To get it right and keep it simple requires a highly organized, flexible and thorough solution.   Ultimately, everyone’s in business to get paid, and to get paid on time.  Companies and projects can come to an abrupt and grinding halt if they struggle with cash flow issues.  A number of years ago, a very smart man – a man who was seasoned in building many businesses – pointed his fat, hard-working finger at me and said, “You can get a lot of things wrong, but you

Mike is an Excel Pro

When I first met Mike he was a senior project manager at a seismic services company that operates large 3D seismic shoots all over North America. Mike was an Excel pro. He planned & tracked those seismic shoots with pretty decent precision considering the size of the projects – and especially considering he did it using a collection of about 6 spreadsheets. Unfortunately for Mike however, he had no idea that he was spending about 30 extra hours every week just on spreadsheet management. In addition to the extra time, it also wasn’t clear to him that there was very little ROI on that effort since the solution that he’d built was achieving only minimal results. The challenge for Mike – and many others like him – was that he had invested so much time and personal emotional equity in the creation and management of his solution, that the idea of abandoning his dear spreadsheets for a better, more efficient solution was like asking him to drown babies. In our first meeting, he presented his solution to a boardroom full of his colleagues as well as a couple of us 4castplus guys. His presentation took just under an hour, and during that time, there were surprisingly few questions asked. It became clear why by the end: everyone in the room had a jaw-dropping stunned look on their face at the sheer complexity and enormity of his solution. He, on the other hand, was excited and quite proud of his major accomplishment and appeared to be expecting a round of applause.  It was practically impossible to truly understand his whole process. There were so many parts to it; and so much movement of data, and copying

Do you Face the Pain?

  When you see something wrong in your organization, do you fix it? Or are you more the type to ignore it and hope it goes away? In our business we come across quite a number of people who are more the breed that put off making any needed changes in their organization until they’re drowning deep in pain and frustration. It’s bad enough sometimes that they reach a point where they need a rescue line to bail them out. It’s not uncommon for organizations to go through a period of growth where they become far too busy to address the numerous challenges that go along with that growth.  Instead of confronting the creeping deficiencies as they appear, they side-step the obvious and hope for the best. That is – until these deficiencies result in what I call a “Defining Event”. A defining event could be any number of undesirable results (catastrophic even) such as: a project that went way over budget; a legal dispute with an owner or subcontractor; an embarrassing shortfall in productivity or performance; loss of business; safety incident; etc.   There are a load of reasons why people avoid addressing the pain head-on.  First of all, people are born procrastinators. It’s pretty rare for someone to fix something before it becomes a real problem, even though they know that the longer they dodge the issue, the bigger problem it becomes. People also fear change. Even though they may be very aware that their current methods are inefficient, difficult, error-prone and time-consuming, these failing methods are a pain they know. A familiar pain that they’ve just learned to deal with – and for some reason the perceived pain of fixing it seems

Top 5 Advantages of Cloud-based Construction Software

  With all the buzz recently about cloud based construction software, I’m sure many business owners and project managers are wondering if it’s the right fit for their business. So I thought I’d jot down a few of the considerations with adopting software in-the-cloud. You might first be asking why it’s suddenly emerged that the cloud is all the rage. The answer to that is it really comes down to timing. The idea of cloud computing has existed for many years; but it was only about five or six years ago that the technology and infrastructure were in a mature enough state to truly support complex applications that were web-based and hosted in the cloud. Prior to that, software like Facebook, Gmail and online trading systems were about as complex as you’d want to go. Today, however, that’s all changed. With new more powerful browsers, huge advancements in underlying software development tools and a proliferation of high-speed data centers; we now have the capability to do anything a desktop (or, thick-client) software solution can do. Construction software typically manages a lot of data and varying workflows such as: project estimating, earned value management, project accounting, change management, project cost tracking, procurement, etc. So, the demand it has on the server, as well as the client browser, is much greater than the typical website. But today's cloud software systems can easily handle it - and it just keeps getting better. So then, what would be the downside of cloud computing? Well, depending on what your priorities are, it’s hard to find a downside – especially in the world of construction project management software. The biggest concern that people express about cloud software essentially boils down to