It’s typically not until the end of the day at the construction site that the field personnel sit down to collect and enter all the time & expenses for their crews, equipment and other charges for that day. They’re tired, hungry, and this is likely their least favorite thing to do. They’re in a rush to get it done and they don’t often have the greatest computer skills – so it’s inevitable that mistakes are made. Things get coded to the wrong place, charges are missed, incorrect rates are used, etc. And then all this error-filled information gets compiled and submitted and ultimately is routed to the back-office finance team for processing. And this is where the nightmare begins.
If you put 5 site foremen in a room with 5 finance people, how much do you think they’ll have in common? Finance types are by nature very detailed, fastidious and are usually the ones responsible for making certain that everything is precisely correct before billing clients, paying vendors or routing charges through payroll. It’s not that a site foreman can’t be detailed by nature – it’s just that he or she has a very different spectrum of priorities; especially at the time of entering the LEM data. What this translates to, is that it’s often the finance group who are left with the cleanup job of correcting and adjusting the chaos that’s recorded from the Jobsite.
Shifting the Burden of Responsibility
We refer to this as “shifting the burden of responsibility” to the last guy holding the bag. It’s really a flawed approach from so many aspects – not least of which is that you end-up with a bloated finance group full of people whose sole job is to chase down project managers & construction managers, so that they can fix errors, fill-in blanks and figure out whether a vendor invoice is valid or not.
But what if you could shift that responsibility upstream – and in fact distribute the responsibility among the various different parties involved in the whole process? What if you could setup the LEM tracking environment so that the field personnel – such as Site Foremen for instance – are given a much more pre-configured and contained list of codes, tasks, resources, rates, etc. to enter their daily LEM against? What if you could significantly reduce the probability of errors occurring in the first place, so that what gets pushed downstream to the back-office is 99% complete and error-free, rather than 60%?
Use LEM Tracking Software – Don’t use Spreadsheets or Paper!
By utilizing a LEM tracking system that enables your project team to pre-configure all the details of what gets tracked from the jobsite, your company can realize tremendous improvements in efficiency, significant cost reductions and greater financial accuracy. The good news about this upstream shift in responsibility, is that it can mostly be absorbed by the LEM tracking system itself. Once the system is configured with all the correct information, the jobs of all the players – from the jobsite to project management to finance – is greatly simplified, and the chance of errors is all but eliminated.
While the software system can take on a large chunk of the effort, part of the responsibility should also be shifted up to the project management team. Project managers are the ones who should be the most in tune with what should and shouldn’t be happening, so this is a much more viable place to focus another slice of the responsibility. Ideally therefore, the project manager will leverage the necessary tools available in the software system to make adjustments on a daily basis as to what the site personnel are tracking. Adjustments like available tasks, resource assignments, etc. Most of this information should be known ahead of time anyway, so why not just set it up once and ease the load off the construction guys at the jobsite? When you give the field personnel too many options, you’re just opening up the chances of them getting it wrong.
Here are some more concrete examples of the types of pre-coding, pre-configuring and setup that I’m talking about:
1. Cost and Billing rates should be pre-configured in the system. There’s no need for the site foreman to have the responsibility of knowing the hourly rate (cost or billable) for each member of his/her crew, or equipment, or subcontractor, or materials. All of this should be administered from the office. If you click on the screenshot to the right, you’ll see that, using this system, all the site foreman has to enter is the quantity, and the rest is automatically filled-in for him by the system.
2. Labor Rate Rules should be pre-configured. This means that the system should possess the logic to know how to allocate, for example, overtime hours. We call this Composite Rates: click here to learn more about this.
3. Tasks should be pre-assigned and pre-coded. Project Managers should have the ability to limit the tasks available to the site personnel to track against. While there may be 50 tasks on a project, only a handful of those may be relevant on any one day. Additionally, all the tasks should be pre-coded so that the site guys don’t have to be burdened with accounting codes.
4. Expenses like LOA & mileage should be pre-configured. Who gets LOA and what’s the dollar value? Is that LOA paid through AP or Payroll? Who gets reimbursed for mileage, fuel or hotel? All labor expenses should be pre-assigned, and the rates configured.
5. Resources should be pre-assigned and pre-coded. To avoid the chances of entering the wrong guy on the wrong task, the project managers should be able to pre-assign their crew to the right tasks for the right guys.
6. Uploaded Documents should be dropped into pre-defined document categories. There are normally a variety of documents that are important to the day’s activities: photos, safety meetings, drawings, reports, etc. The system should provide an easy upload mechanism for the field personnel to drag & drop documents into the right buckets. These ‘buckets’ should classify the documents and tag them with the appropriate metadata for easy retrieval.
7. There should be Minimum and Maximum hours constraints. To further reduce errors, the system should provide min & max for the number of hours entered for each labor resource. For example, you may want to ensure your crew onsite have at least 4 hours and at most 12 hours. No more, “Whoops, I forgot about Eugene” situations.
8. Provide a checklist. The system should provide the field staff that are entering LEM with an easy way to check what has and hasn’t been entered for the day.
9. Some things should be mandatory. The LEM entry should not be allowed to be submitted until certain core items have been entered. The system should therefore have mandatory data fields.
10. LEMs should be submitted to a Multi-level approvals workflow. To make sure things are correct before they get to finance, there should be at least a second set of eyes on the entries by way of approval. The field staff should “Submit” the LEM for approval, so that the project staff can double-check for any errors & omissions.
But The Jobsite is a Very Dynamic Place
I realize of course, that the construction site can be a very dynamic place and stuff can happen on-the-fly that can’t be accounted for ahead of time. So, while it’s important for the LEM tracking system you use to provide the necessary presets and constraints to reduce errors, it also needs a few backdoors to provide the flexibility to accommodate the sometimes unpredictable nature of the jobsite. That being said, those backdoors need a few controls too.
I’d like to hear about how you tackle these challenges, and whether you’ve found innovative ways to contain the errors originating from the construction site. Feel free to leave a comment, or send a note directly to Jason.firstname.lastname@example.org.