Tips for Calculating ROI for Construction Bid Management

Get your company to the next level

 

Your company has spent years doing things the same old way. You’ve seen the inefficiencies, know there’s room for improvement and that software can provide a solution. But it is expensive and difficult implement, right? Maybe not as expensive as you think. The average cost of Thunderbolt Pipeline is about $500 per month. You may be thinking to yourself “That’s reasonable, but it’s still a $500 expense.” And this expense may be the sticking point for not leveraging construction bid management software to improve your company’s efficiencies and reporting capabilities, which will give you a better understanding of your business’ past, current and future performance.

Below, I have outlined two common scenarios that most construction companies are impacted by. I challenge you to apply the concepts to your own business processes and begin benchmarking against them. I’m confident that if you do, it will justify both the value and expense of a construction bid management solution to help get your company to the next level.

Scenario #1:

Just last week I was sitting in a prospective customer’s office when his phone rang. It was the secretary telling him ‘Tim’ is on the phone and the secretary asked if he could take the call. My contact excuses himself and picks up the receiver. I can hear Tim talking. He’s at a town office and they are requiring documentation of a certain license from this company. Tim asks my contact if he can locate the document in question and email it to the town. He confirms he can and makes a quick note, so he can remember to take care of it once I leave. The phone conversation lasts about 1-minute.

How often does this type of request occur at your company each week? Once a day? Three times a day? More? Consider the time it took Tim to make the call, get patched through and have the discussion. What about the company’s secretary getting pulled off what they were doing to answer the call and put Tim through? And the lost productivity getting back in rhythm with whatever they were doing before the phone rang. How long did it take my contact to locate that document and send off to the town hall? I bet a good 5-10 minutes, because he already told me they don’t have centralized document management and things are a mess! Our meeting ended, but I’m willing to bet my contact had to call Tim back. Why you ask? Because I noticed my contact didn’t write down an email address for who he needs to send the document to at the town office!

Conservatively, I would say there was 20-minutes of personnel time wasted in this all-too-real scenario to play out. It doesn’t sound like a lot, but think about how many times this process occurs at your company each month. The time wasted really adds up quickly. Wouldn’t it be easier if Tim was able to access the document on his phone and provide it to the person he was standing in front of at the town office? It sure would be and can easily be accomplished with Thunderbolt Pipeline construction bid management, workforce planning, and compliance features.

Track this metric for a few weeks – since you’re busy it certainly doesn’t need to be down to the exact number of minutes, but perhaps you simply count the number of occurrences. Take that figure, factor it by a conservative amount of time for each occurrence and multiply by an average employee salary. Once you collect and evaluate the data, I bet you’ll realize you could be more than halfway towards breaking even on your construction bid management software!

Scenario #2:

Spreadsheets have your head spinning? They do for most. Does the following sound familiar? You’ve got a spreadsheet to track upcoming projects to bid on, bids that are being worked on, and bids that were just awarded this week. Your estimators are required to fill this out. Maybe they are good at keeping up with it or maybe they wait until the last minute after you remind them to do it again.

You’ve got another construction spreadsheet that you use for calculating the cost of a job and that information will be used for your proposals.

Alas, you’ve got a third spreadsheet to manage your existing projects: what is the project, who is the project manager, foreman, laborer and perhaps sub-contractor if you are in an industry where skilled labor is lacking. Read the What You Can Do About the Construction Labor Shortage blog. This spreadsheet needs to be updated on a weekly basis so you can see where your workforce is – do they have too much work, do they have too little work, is it more geographically conducive to having a certain person on a job vs. another, etc.

Wait. Another construction spreadsheet? Maybe you’re in an industry that requires your staff to be licensed and your company needs to track when those licenses expire, so they can be renewed, and you remain in compliance.

I’ll stop here, but chances are there are more spreadsheets being shuffled around your business.

Now, let’s think about the day-to-day with these spreadsheets. You and others in the business are constantly combining spreadsheets to bring information together onto one spreadsheet. But everyone works a little differently and it is very difficult to get all the information tied together and organized so it is easy to analyze. Other times you must transfer information from one construction spreadsheet to another and things are breaking because the formulas aren’t carrying over, or different version of Excel are being used, or some other mysterious technological reason.

And how about version control? You do work on a spreadsheet only to find out that another colleague has done some work but forgot to save the new version back to the shared drive. Now you must chase down that version and redo your work.

You know your business better than I do. But I expect if you reflect on your company’s daily spreadsheet chase, you’ll identify a huge time suck for the organization. These processes are another easy metric to benchmark and identify hard costs negatively impacting profitability.

By improving processes around information availability and eliminating construction spreadsheets, you’ll build a positive business case for construction bid management. The REAL value of construction bid management is providing business owners actionable metrics and tracking. This helps to grow their business: Metrics to win those extra jobs each year. Metrics to understand and focus on where your most profitable business is coming from. Metrics to keep skilled labor busy and happy so they are not jumping ship to a competitor and forcing you to use more expensive sub-contractors.

 

By | 2019-01-14T11:17:20+00:00 November 29th, 2017|Construction News, Technology, Thunderbolt University|