Construction Software

There are well over two hundred construction industry software solutions on the market. In fact, construction is one of the most complex and fragmented markets we cover at Software Advice. There are systems for different size contractors, systems for most every trade or division, and there are multiple technology platforms and deployment models available. We’ve written this buyer’s guide to support the construction industry buyer as they assess their options.

Here’s what we’ll cover:

What is Construction Software?
Construction Application Categories
What Type of Buyer are You?

Market Trends To Understand
Benefits & Potential Issues

What is Construction Software?

Construction software is a catch-all term to describe the wide range of applications available for contractors, building owners and construction managers. There are full-suite software solutions that can automate an entire construction firm from estimating, to project management, to service management, and finally to accounting. There are also hundreds of specialized departmental tools that address one or more of the aforementioned functions.  

Construction Application Categories

What Type of Buyer Are You?

Before evaluating construction systems, you’ll need to determine what type of buyer you are. Over 90% of construction software buyers fall into one of these three groups:

• Full-suite buyers. These buyers value the seamless integration of data and processes that comes from having one system for all functions. For example, a full-suite system for estimating, project management and accounting can automatically turn and estimate into a budget for project management, and then match invoices to project status and allocate job costs. These buyers favor complete suites like Sage Timberline or Maxwell Systems ProContractorMX.
• Departmental buyers. Specialists in one function, such as estimators, project managers or finance managers, may value the feature depth of best-of-breed solutions designed for their function. For example, an estimator for an electrical contractor might require a highly specialized electrical estimating system. They are less likely to be satisfied with the modules offered in a full-suite system.
• Small contractors. Small organizations often have limited budgets and fewer IT resources to dedicate to software. In many cases, they may be deciding between a new system and a new piece of equipment. These buyers need cost-effective solutions that are easy to implement and use. Some will prefer full-suite systems, while others may just want one application, such as estimating or project scheduling.

Market Trends to Understand

As you evaluate construction systems, a number of trends should be considered. The viability of vendors will depend on how they address the following trends.

• Collaboration. Building owners, clients and general contractors are demanding a greater level of collaboration with subcontractors and other project participants. As a result, contractors need to embrace more modern systems and web technologies. This includes responding to web-based invitations to bid, sharing cost data, managing project documents on the web, and submitting electronic invoices. Contractors with aging systems - or no systems at all - will be left behind.
• Software as a Service (SaaS). SaaS, a model where software is hosted by the vendor and accessed through a web browser, is gaining in popularity. The most common SaaS, or cloud, construction applications focus on project management. SaaS is less common in accounting and estimating; few viable SaaS applications exist for those functions. Buyers looking for new project management applications should absolutely evaluate SaaS offerings.
• Consolidation of vendors. Larger construction software vendors such as Constellation, Sage and Maxwell Systems continue to acquire smaller vendors. While these vendors have continued to extend and support acquired products, buyers will generally want to work with consolidators rather than those vendors likely to be acquired. Buyers should carefully assess vendor viability and corporate strategy.
• Technology evolution. While many vendors are moving forward aggressively with modern software development technologies and SaaS computing, others are lagging badly. These vendors may be left behind over time. Old technology limits a product’s ability to integrate with other systems, share data and address modern requirements like web and mobile access.

Benefits & Potential Issues

Construction firms that adopt construction software effectively can realize a range of benefits, including:

• Winning a greater share of business by submitting faster, more accurate, detailed, and professional bids;
• Realize a larger profit on jobs because bids are estimated and marked up more accurately;
• Complete projects on time and on budget through effective project management and scheduling;
• Gaining greater insight into project profitability and status by tracking up-to-date and detailed job costs in detail; and,
• Ensuring compliance with regulations and requirements related to prevailing wage, union jobs, and insurance tracking.

Unfortunately, some firms fail to achieve these benefits, typically as a result of:

• Selecting the wrong system for their size of business or functional requirements;
• Failing to improve underlying business processes as they implement the new software system;
• Not gaining buy-in from the eventual users of the system, who then fail to adopt the new system and revert to manual methods;
• Not investing enough in end-user training and change management and therefore failing to gain broad adoption of the system.

Have an opinion on this guide? Email the authors. We appreciate the feedback.