Construction Software Quick Summary
Construction software helps firms automate critical processes such as takeoff, estimating, project management and accounting and integrates various applications and stages of the project life cycle, from pre-sale through building and final billing. These tools can help firms modernize, grow their business and operate more efficiently.
Benefits of Construction Software
Implementing construction software can benefit your business two key ways:
Win more bids. Performing takeoff and estimating calculations by hand is not only time consuming, but error prone as well. Construction software can read a blueprint and perform these calculations in less time and with greater accuracy because it syncs with an online database of labor and material costs), saving you time and helping your firm win more bids.
Provide an audit trail. The sheer volume of documentation—Blueprints, quotes, contracts, purchase orders, RFIs, change orders, punch lists, invoices—needed for any construction project is enough to make your head spin. Construction software acts as a centralized database, allowing users to upload and store this information in a single, searchable location. This database provides firms with a virtual paper trail for every project.
Competitive Advantages of Construction Software
Here are a few examples of how these tools can help you gain a competitive advantage in the marketplace:
Scale your business. If you're trying to manage multiple jobs and coordinate paperwork across job sites, mistakes are likely to happen. Software helps avoid costly legal fees and offers a more disciplined approach to managing projects, especially as you take on more projects and complexity multiplies.
Operate more efficiently. Whether you're looking for a best-of-breed estimating software, or an integrated suite to manage the entire project life cycle, construction software can help you standardize processes and automate tedious functions, which ultimately increases the productivity of users.
Provide more value to clients. Even if you outbid a competitor, should they provide an itemized quote detailing every cost and outlining various "what-if" scenarios, they may have a better chance of winning a contract than you do. Construction software helps standardize your processes, increase efficiency and provide more value to clients.
Business Sizes Using Construction Software
Among things that will influence your construction software purchase are the size of your business, your availability of IT resources and your trade specialization.
Business size and IT resources typically breakdown as follows:
Single user: Less than $1 million in annual revenue. This is likely a small, family firm with no IT department and a single software user.
Small business buyer: $50 million or less in annual revenue; 2 - 100 employees; likely no IT department; requiring 2 - 10 software user licenses.
Medium business buyer: $100 million or less in annual revenue, 2 - 100 employees; IT department; 11 - 100 user licenses.
Midsize - enterprise buyer: $100 million+ in annual revenue, 100+ employees, IT department; 100+ user licenses.
Common buyer demographic segments and trade specializations include:
According to our 2016 SMB buyer report, buyer segments most interested in purchasing construction software are general contractors (30 percent) and home builders (18 percent). Trade specializations most represented in our sample include electrical (12 percent) and concrete (5 percent).
Combined, 80 percent of construction software buyers are from small to midsize firms with $25 million or less in annual revenue.
Software Related to Construction Software
Construction software is designed to help you manage the entire project life cycle, from blueprint to billing. Here are some related tools that focus more on one stage in the project life cycle:
Construction project management (PM) software: This software helps contractors manage the entire build process, from scheduling through to client billing. These tools provide firms with the the oversight and document control needed to monitor RFIs, change orders and purchase orders, so project budgets and timelines aren't disrupted.
Takeoff: Takeoff is a pre-sale process in which the estimator measures construction plans (blueprints and drawings) to determine the amount of materials and labor required for a job. Takeoff software is commonly sold as a standalone application or grouped together with estimating, or as part of a comprehensive, integrated suite.
Estimating: Estimating software is used to calculate the material costs and labor takeoff to produce bid proposals. It's sold either as a standalone system or grouped with takeoff or as part of a comprehensive, integrated suite.
Bid management: Bid management, in which a contractor solicits bids from subcontractors and suppliers before submitting a job quote, is a process that helps bridge the gap between pre-sale and project management. Bidding can be found as an application within many construction systems or can be purchased as a standalone software.
Accounting: Construction accounting software helps firms manage their job costing, core accounting, fixed asset accounting and payroll. It's common to find some job costing and budgeting in construction PM software; however, if the PM systems you're evaluating don't offer core accounting, you should look for integrations with general accounting systems, such as QuickBooks or Xero.