Most industries (and most jobs) have benefited greatly from advances in technology. The construction industry, however, lags behind most other industries in this area, particularly in the adoption of new software platforms.
While “construction technology” is a hot topic and ubiquitous buzzword for CFOs and Construction Financial Managers (CFMs), the technologies actually used are generally cumbersome, or unsuited for the particular task at hand. New, existing software platforms have the potential to simplify the responsibilities of those in the construction finance realm. Unfortunately, many are unaware of these benefits: a more clean, efficient process for securitization and collection, which can be leveraged to improve receivables.
Current Process
The current processes employed by CFMs and others involved with construction credit are generally outdated, slow, inefficient, and error-prone. Using software specifically designed to assist with these people’s responsibilities is not the status-quo, but it should be. Many construction industry participants are stuck in the Excel loop – attempting to shoe-horn Excel into places it doesn’t fit, using it as the device by which data is communicated between disparate platforms.
In a recent JB Knowledge survey of construction companies, when asked if they used “accounting technology,” 33.1% of respondents said they used Excel (the second most popular choice). Further, 78.8% of respondents said they are not using a client relationship management (CRM) platform, but among the companies that are, 43.4% are using Excel. Excel is not a CRM platform.
Finally, when asked how their company transfers data between software that doesn’t integrate (which is the majority of software for construction participants), the answer was again Excel, with 52% of the response.
Excel is a great product. There’s a reason it’s so well-known and widely used. However, these functions are not what Excel was designed to do.
The Available Next Step
In order to provide clear and tangible benefits to the construction industry, a receivables monitoring solution should perform several key functions, including:
- Provide access to information
- Store and intelligently display data
- Communicate with other software applications
- Monitor and track security rights and the steps needed to remain in a secured position.
These particular features can already be found in current construction technology offerings.
What Can Smart “Construction Technology” Do For You?
Computers are good at performing many tasks. Particularly, they’re good at analyzing data, and applying specific actions based on conclusions from that data analysis.
Take marketing automation software, for example, such as Hubspot. (Note: Levelset is a Hubspot customer, but we’re not getting anything for mentioning them. We just like them a lot.) Hubspot can observe a lot. It knows when somebody clicks a button on your website, when they download a form, when they view a page, how many pages they have viewed. As users interact with your website and submit forms, Hubspot will trigger workflows that design–it can send a specific email, place somebody on a list, remind you to call the person, etc.
Now imagine you have thousands (or tens of thousands) of people visiting your website every day, clicking things, submitting forms, requesting information. What sounds better to you: a team of your employees digs through all that data, making decisions about how to respond to each individual user, and they personally take an action for each one. Or, your employees design a small number of workflows, setting trigger events and follow-up actions, that Hubspot can carry out for you?
Automation Software for Construction Finance
Now apply Hubspot’s capabilities to the construction finance world. What would you prefer? A small team of people digging through A/R data, trying to make sense of it and performing repetitive tasks. Or would you rather the assistance of a computer, that can make sense of your data, give recommendations, and tell you exactly when to execute such tasks.
The implications for the construction industry, and specifically, for financial and credit managers, are huge. At their heart, the core functions of Construction Finance Managers (CFMs) are driven by data. CFMs are (admittedly or not) in the data business – and the data business is in a computer’s wheelhouse.
And since most construction industry participants are still stuck with paper-heavy manual processes, or Microsoft Excel, the possibilities presented by computer-intelligence are incredible. Moreover, this presents the opportunity to be an early adopter of game-changing technology. To make outdated processes more efficient. To make your company more money.
There’s a reason that industries of all types are concerned about efficiency. It opens up time for people to do things that need people to do them. Allowing technology platforms to take away the parts of a job that can be automated, and improved by that automation, creates opportunities for more business, and can help companies get paid for the business already accepted. As said by the authors of The Gifted Technology Driven Contractor mention, “[t]echnology is not a necessary evil, but rather a competitive differentiator.”