ConstructionPro Week, Volume: Construction Advisor Today - Issue: 141 - 01/13/2012

Consultant Reports Increased Demand for Cutting-Edge Construction Software

By Steve Rizer

 

The demand for cutting-edge construction software is increasing, according to a new report from CTS Inc. President Sheldon Needle, a construction industry consultant. The report examines the business drivers behind the jump in construction technology investments and makes a case for buying construction software this year.

 

“When the economy tanked, many construction companies put technology investments on hold,” Needle stated. “But that trend seems to be coming to an end. New technologies that support lean business operations are driving a surge in construction software purchases.” He noted that to remain competitive in the still-fragile market, contractors are seeing new technology as a cost-effective way to increase productivity while keeping overhead costs down.

In making a case for buying construction software in the coming year, Needle drew from his first-hand interactions with software buyers, vendors, and his consulting colleagues. He pointed to cloud computing applications, enterprise resource planning (ERP) software for construction, and a desire for increased collaboration as some of the factors that are creating a paradigm shift in construction software adoption.

“Due to downsizing, many contractors aren't prepared to handle a significant increase in workload,” Needle said. “These contractors understand that their options are to add staff or improve their construction-management software systems. Contractors with an eye on the future recognize the long-term value of investing in new technologies, including Web-enabled applications that better support their project managers in the field.”

Needle Provides Additional Details to CPC/BIM

In an email interview with Construction Project Controls and BIM Report (CPC/BIM), Needle provided the following additional details:

CPC/BIM: You reported that the demand for cutting-edge construction software is increasing. What statistics, if any, can you provide to support this statement? What sales figures, if any, would you be willing to project for the entire year?

Needle: My guesstimate is that vendors can expect about a 10 percent increase in sales over 2011 (a breakeven year for most vendors).

CPC/BIM: In your opinion, which will be the most significant construction software programs introduced this year, and when this year are they expected to be introduced? What revolutionary features will they have?

Needle: I think it will be mostly about upgrading systems to add bidding programs, more links to ERP type functionality like CRM and more cloud solutions. Jonas and Dexter Chaney have recently announced cloud solutions. There are also more vendors with Web-enabled capabilities to support field labor collection.

CPC/BIM: For what types of construction projects will new purchases of software programs be used the most? High-rise office buildings?

Needle: It’s mostly about an end to end solutions that handles not only basic job accounting but bidding, estimating, purchasing and inventory control, handhelds for capturing service billing and collecting field labor. More  companies doing construction management are looking for collaborative project management solutions that support owners, architects, engineering, subcontractors and any other stakeholders in the construction project.

CPC/BIM: What general estimates, if any, can you provide on the typical costs and ROI of hiring more staff versus investing in construction software?

Needle: I always suggest a full return on investment on a software purchase within 18 months of installation to qualify as successful. In a small – mid-size company, the benefits will mostly [be] about making more timely decisions with more detailed information and less office chaos and frustration than saving payroll dollars per se.

CPC/BIM: What new trends regarding construction software purchases are surprising you the most and why?

Needle: More interest in CRM integration and take off software.

CPC/BIM: I know that your company makes personalized recommendations, but what general recommendations for various types of professionals (i.e., architects, schedulers, etc.) within the construction community can you share with us?

Needle: It really depends on the vendor customer profiles. GC, HVAC, specialty, heavy highway, design-build construction management, and it drills down from there. I cannot give specific vendor recommendations; too much depends on size and specific requirements.

CPC/BIM: When will your company publish a follow-up report, if at all? Is this an annual report?

Needle: We continually publish blog articles.

[Construction company owners, managers, and consultants are invited to read the report on the CTS website (http://www.ctsguides.com/default.asp). Visitors can also download a CTS Construction Software Selection Kit, which includes personalized software recommendations from Sheldon Needle. To access the report and download the Construction Software Selection Kit, visit http://www.ctsguides.com/case-for-buying-construction-software-in-2012.asp.]

 

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