Improve your ERP implementation

The estimated rate of adoption in construction tech is only 66%, making adoption the riskiest part of investment. Subcontractors specifically, have a more difficult time finding best fit tech and succeeding in adoption for 3 reasons:

1. Contech is often designed around generalist workflows, yet subcontractors work in endless VUCA scenarios (Volatile, Uncertain, Complex & Ambiguous).
2. Subcontractors often cash flow phases of projects, limiting their ability to invest.
3. Subcontractors often have tight schedules leaving little time for adoption.

Tips for finding best fit tech and mitigating risk of ERP adoption:

• Section 1: Tips to #buildTRUTH in tech selection.
• Section 2: Tips for due diligence.
• Section 3: Services to ensure ERP adoption and business continuance.

Section 1: Tips to #buildTRUTH in selection process

1.a: Discovery and demos with detailed job info (with YOUR data)

Teaching vendors about your unique traits and workflows is critical, but HOW you teach them has big impact and will #buildTRUTH into the sales process.  

We strongly recommend having vendors use your data to build a proof of concept. This can eliminate Smoke-stacking, which is when vendors oversell integrations and partnerships with other vendors. (see video for more info)

Here’s a great list of job information to provide vendors:

1. Drawings and Bid Summary – as much detail as possible. (Copy of the Job Cost summary and Purchasing info from an estimate)
2. Cost Code List – Code, Description, Division, GL accounts, Expense Type.
3. Job Documents- Attachments to be included. (Drawings, Certificate of insurance, Billing template etc.)
4. Contracts/ Change order List /work orders – Contract #, Value, Division break down, sub section. (Budget if possible)
5. Job Budget Detail – Cost code, Qty, UOM, Unit Cost, budget Date, sub section.
6. Job Progress Billings – Schedule of values, Invoice copies.    
7. AR Deposits – Payments received for the Job.
8. Job Cost Detail - Cost code, Qty, UOM, Unit Cost, Transaction Date, sub section.
9. PO Detail List – PO #, Delivery date, items , Vendor, QTY, Unit cost and UOM.
10. Sub Contract Information – Sub contract value, Cost code QTY, UOM.
11. Sub Contract Billing – Billings attached to the Sub contracts.
12. Time Card sample/details – Payroll register for Job Employee Code, Hours, Cost codes, Rate, Sub Section, and other job cost payroll items.
13. Submittals – Details of Submittals and Attachments sent to GC.
14. RFI Listing – RFI detail listing with attachments.
15. AP Listing – (List of bills attached to Job) Vendor, Transaction date, Line detail, tax and Total.
16. Cost Projection Report/spreadsheet– Report displaying all the cost projection details. (Projection #, Cost code, UOM, Unit, UOM, Rate, Completion %)
17. Certified payroll rate sheet (If Applicable) and Certified payroll report. (If Applicable)
18. Work Tickets- Sample work ticket received from the work site.
19. Daily Report – Sample Daily report received from the job site.

1.b: Eliminate risk of cloud cuffing , which is when software vendors charge you subscription or license fees before they get you live. Recommendation: Ensure vendor is willing to make fees conditional on go-live. (see video for more info)

1.c: Eliminate risk of overages /handcuffing,  which is when vendors attract you with low prices, then charge 200% - 400%+ in overages when you feel it’s too late to quit. Recommendation: Ensure vendor will provide GMP (guaranteed max price) agreements for all services required for Go-Live.

1.d: Another good recommendation: Ensure annual fees align with value to ‘subcontractors’, as opposed to GC’s.

Section 2: Tips for due diligence

Tip #1:  2x now saves 4x later

Double due diligence:  Software adoption often results is overages that are 200% - 400%+ over the cost on contract so we recommend doubling the time you planned in making the decision. Subcontractors have little to no time for software selection but investing 2x time now will help expose risk and shortcomings so you can save 4 x later.

Tip #2: worthy references

Finding quality references: Look beyond the references provided and search for subcontractor specific associations for members who do the similar work to you AND who are customers of the prospective provider(s).

We also recommend speaking to 3-4 people in separate departments.

1. Speak to people outside accounting is they offer products outside accounting.
2. Ask about the variance between the original contract price and total cost of ownership.
3. Ask what promises were made vs. delivered.
4. Find out about changes in level of support over time.
5. Ask user about their level of knowledge of the trade.

Another good way to find worthy references is searching the provider on LinkedIn and find their key sales people. Then look to see which companies those sales people are connected with to get a list of their potential customers who they did NOT provide as references.

1.  This will help you avoid reference stacking, which is when software vendors stack the deck with references who only provide good reviews.
2. In addition to calling companies, search employees of the prospective provider(s) on LinkedIn and look for mutual contacts.
3. Your mutual contacts may be able to provide candid insight into the provider’s product, service and integrity.

Section 3: Services to ensure adoption and business continuance 

Most implementation services include general level data import, process recommendations and training, yet subcontractors need significant additional work for successful adoption.  As subcontractors have next to no time to complete the additional work, services providers need to step in.

To #buildTRUTH in cost and adoption, have service providers include all services below for a GMP (guaranteed max price) while defining go-live and what a successful implementation looks like.

Recommended Services to include:

Pre-Live Services

1.      Collect, import and validate vendor list, customer list and relational data

2.      Collect, import and validate employee list/safety/experience/HR data

3.      Build GL account listing

4.      Open jobs listing and cost code listing for replication in new ERP

5.      Scoping for custom integrations

6.      Prepare Payroll account defaults including Union, DB, CPR, fringe benefits where applicable

7.      Items database development for each branch/company/division of labor - items must include all properties related to bidding, field and purchasing manager’s perspectives such as:

• internal items codes and descriptions
• each supplier’s code and description for POs
• all related UOMs
• dimensions
• properties
• expense types

8.      Company logo and all external documents for replication in documentation

9.      Sample GL Transactions for replication

10.   Sample Check Stubs (Payroll, AP, Garnishment) for replication in documentation

11.   Sample Job Cost/Job Budget for replication

12.   Sample Reports (PO, AR Invoice, PM) for replication

13.   Sample WIP for replication in new WIP and potential customization

14.   Complete AR Aging (By Customer/Job) for tie off

15.   IF you are looking to integrate an estimating system, you need to:

• create mapping template for each estimator's database
• map item codes and descriptions, cost codes, expense types
• map locations/subsections, UOM, price per UOM, unit cost
• total cost, dimensions
• You also need to make sure the solution has the ability to map items that were added to any database that were not previously mapped on the fly without software vendor’s assistance.

16.   Outstanding retainage for entry (By Customer/Job)

17.   Trial Balance (Same date as AR)

18.   full historical AIA SOV's for manual entry to enable accurate retainage billing

19.   Invoice & Cash Receipt Register for replication

20.   AIA billing templates from all customer invoice template for replication in auto-progress billing template

21.   All vendor invoices for mapping so PO matching tools can work

22.   Complete change order log for replication

23.   All sales Tax Rates/Reporting for replication

24.   Monthly WIP Reports (Fiscal Year)

25.   Employee YTD and Payroll Information – Pay Stub/Time Sheet

26.   Payroll Register Reports for replication

27.   Sample Reports (CPR, Union, etc.) for replication

28.   Sample Direct Deposit File for replication

29.   Sample Positive Pay File for replication

30.   All open subcontracts for replication

31.   Complete benefit plans/enrollment (ACA) for set up in benefits tracking

32.   Remote introduction to customer, vendor and employee info

33.   Remote introduction to inventory/material management

34.   Remote introduction to vendor pricing, job special pricing and PO creation

35.   Remote intro to payroll info; pay rates (union/davis bacon, prevail wage, benefits, safety cert etc.)

36.   Open AR for replication and tie off

37.   Open AP / Discount Report for replication and tie off

38.   Confirm Trial Balance

39.   Employee YTD's (Quarterly) - 940 & 941 for replication

40.   Open Check Lists/Deposits for replication and tie off

41.   Open / Pending Change Orders for replication and tie off

42.   Bank Balance as of Trial Balance (All) for tie off

43.   Bank Reconciliation (All) for replication in documentation and tie off

44.   Job Cost to Date for replication and tie off

45.   Budget's for replication and tie off

46.   Pre-Live WIP Report for tie off

Go-live Services

47.   TRAINING for 3rd party estimating system import

48.   TRAINING for Payroll/HR

49.   TRAINING for Accounting/financial management

50.   TRAINING for pre-construction

51.   TRAINING for Job start up

52.   TRAINING for Purchasing & material management

53.   TRAINING for Job Costing

54.   TRAINING for Document Control

55.   TRAINING for Contracts & Subcontracts

56.   1st month end emergency data repair

(time sensitive data repair which is needed with new ERP implementations)

57.   TRAINING for project management

58.   TRAINING for estimators (if required)

59.   TRAINING for field (if mobile apps required)

Post-Live Services

60.   Continued core function training

61.   Post-live punch list creation and resolution

62.   1st quarterly emergency data repair

(time sensitive data repair which is needed with new ERP implementations)

63.   CPA checklist and sign off

64.   Post-live utilization assessment

65.   1st year end emergency data repair

(time sensitive data repair which is needed with new ERP implementations)

66.   Itemize all custom reports and/or custom work, imports/exports, mappings and APIs required so client can negotiate the cost of ensuring all custom work is made compliant with ALL future software updates as updates often break customization, imports/exports, mappings and APIs.