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	P= roject=20 Management: Bringing Builders Back to Basics
	T= echnology=20 Moves into the Neighborhood
	L= ighting=20 Systems: Illuminating New Options for Builders
	S= oftware:=20 A Builder's Best Tool
	B= uilding=20 on an Integrated Foundation

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Project=20 Management: Bringing Builders Back to Basics =
September 2004=20

Mike Carrozzo
Senior Associate Editor

Project management software isn't = as=20 complicated to use as you may think and it just might be the = right=20 tool on the road to efficiency.

It's no secret that commercial construction and = residential=20 construction are two distinctly different breeds of = building. What=20 is viewed as an essential part of completing a project for = one group=20 might not necessarily be the case for the other group.

A prime example comes in the form of technology used by = both=20 residential and commercial builders. Those in the commercial = field--whether it's building a skyscraper, public school, or = shopping mall--have found a great deal of benefits in using = project=20 management software for the purpose of controlling the cost = of=20 materials and labor, managing the schedule and change = orders, and=20 many other facets of the project.

On the flip side, those on the residential side report = they have=20 found very little value in using project management. = Homebuilders,=20 particularly those on the larger production side, find that = material=20 costs, labor costs, and schedules don't change much once the = project=20 begins. Therefore, implementing a bulky system designed to = control=20 change orders and scheduling conflicts add very little to = the=20 project.

Yet experts will challenge this thinking insisting that = project=20 management software can help control the little aspects on a = project=20 much better than homebuilders even realize. With some in the = market=20 speculating that housing demand, which has continued to = remain=20 strong, may be reaching a peak, now might be an ideal time = to=20 receive a bit of assistance in managing the little things on = a=20 project.

"What we have had with this market is a lot of companies = going=20 good because of lower interest rates and many builders have = been=20 successful despite themselves," says Tom Gebes, president,=20 BuilderMT, http://www.buildermt.com/,=20 Lakewood, Colo. "That has no guarantee to continue and what = many=20 consultants and industry experts are touting as the key to = future=20 success are things like process management and process = control."

Gebes indicates that many builders are stuck in an = environment of=20 pieces and parts. Islands of automation surround many of = these=20 builders--the ones that are indeed investing in = technology--with=20 purchasing in one area, accounting in another, and so on. =

"It becomes an environment where builders are not just = looking to=20 see if they have made or lost money on a specific job, they = want to=20 know specifically which areas they made or lost the money," = says=20 Gebes. "That becomes just too difficult with these islands = of=20 automation and as a result many builders are starting to = realize=20 that they need some sort of an integrated solution."

Joel Koppleman, CEO, Primavera, http://www.primavera.com/, Bala=20 Cynwyd, Pa, agrees, adding that those that are using = "project=20 management" are doing so in a manner that is much different = from one=20 company to the next.

"I think there is a lot of room for enhancing what these = builders=20 are doing," says Koppleman. "Many are using the scheduling = component=20 to address the coordination and timing of the work. Project=20 management should go beyond that and some are just beginning = to pay=20 attention to the resources required to carry out the = process."

Eric Rose, president of E.M. Rose Building Co., http://www.emrose.net/, = Branford,=20 Conn., which builds high-end homes in Fairfield County of=20 Connecticut, believes project management is vastly = underutilized in=20 the home building market.

Rose brings a high attention to detail on each home = built.=20 Working with the architect step-by-step, the company works = on no=20 more than four projects at a time, ensuring the best effort = is on=20 every project.

Accompanying that effort is the use of high-end software. = Project=20 management is a prime example, used for a range of functions = across=20 each project. Rose believes it brings an assortment of = benefits to=20 each step along the building process.

"I think the biggest value of project management is = documenting=20 what was agreed to (by our company) and what (is actually = built),"=20 says Rose. "It has been a tremendous help in managing = projects,=20 risks, and disputes. It also helps in giving us electronic = access=20 and transmission of project documentation."

Experts agree that project management can indeed add a = great deal=20 of value to the homebuilding market. Providing better = control on=20 costs, managing the schedule, and helping to streamline = financials=20 are all basic functions that are provided via this software, = which=20 is the message many agree needs to be related to builders. =

"Companies need to sit down and figure out their core = processes=20 and how the different departments all work together first = and=20 foremost," says Gebes. "They need to realize that it's all a = matter=20 of getting back to basics, which is what project management = is all=20 about."

On the small side
Many argue that if there is a need = at all in=20 the homebuilding industry for project management, it is on = the=20 custom builder side.

Large production builders are churning out what some = would refer=20 to as "cookie cutter" homes, and are left with very little = surprises=20 in terms of changes on a job. On the flipside, custom = builders are=20 constantly in a process of getting change-order requests = from the=20 homebuyer and are dealing with a wider range of = subcontractors, so=20 the need for a system to help coordinate it all makes more = sense.=20

"If the smaller (builders) are doing one project at a = time they=20 can keep all the critical information in their head or on a = piece of=20 paper," says Robert Intersimone, senior industry advisor, = Intuit=20 Master Builder, http://masterbuilder.intuit.com= /,=20 Santa Rosa, Calif. "However, once they start getting into = doing=20 multiple projects at once it becomes hard to keep track of=20 specifics."

Intersimone believes smaller builders are beginning to = find value=20 in pieces of project management, if not the entire package.=20 Scheduling is the one area that he sees a lot of companies = using=20 within the software.

"What (builders) are starting to realize is that once = they have a=20 system in place they can have others participate on = schedules, they=20 can delegate authority to others, and they can accurately = document=20 what is going on and measure against metrics to make = improvements,"=20 says Intersimone.

He believes the most critical aspect that a project = management=20 system can provide is enhancing communication on the job. = Setting up=20 the system to automatically send an email or fax to the=20 subcontractors each day can cut down on costs and the = possibility of=20 miscommunication. He relates it to having the right tool for = the=20 right job, typical of any other part of the construction=20 project.

"Similar to any aspect of construction, if you plan = efficiently=20 and make the proper moves you will do it right the first = time," says=20 Intersimone. "Things such as disputes, miscommunications, = and=20 hassles eat up so much time and effort that if you had just=20 coordinated it properly the first time you would save so = much in the=20 end."

Some believe the fact that custom building varies from = each and=20 every project is a reason in itself to use project = management. As=20 opposed to production building where specs are laid out = step-by-step=20 on each unit, custom building can change as quickly as the=20 weather.

"Customized building is much more complicated with more = subs,=20 owner inspections, changes on a job, just to name a few," = says Jim=20 Coen, business development manager, Geac, http://www.geac.com/, = Markham, Ont.=20 "Sometimes you can keep your fingers on those issues when = you are=20 doing one home, but as you do multiple projects and the=20 sophistication goes up it gets harder to keep track."

Jerry's Homes, http://www.jerryshomes.com/,=20 Urbandale, Iowa, which builds track homes in the Des Moines = and=20 Cedar Rapids areas of Iowa is making a transition to build = more=20 "semi-custom" homes. Yet, the bulk of its 700 homes built = annually=20 are of the track nature.

Still, project management has become a vital part of both = sides=20 of the business. The builder recently implemented scheduling = software from BuilderMT, which ties directly into job = costing from=20 Timberline, http://www.timberline.com/,=20 Beaverton, Ore., which it has been using for nearly four = years. This=20 has helped Jerry's Homes stay on track with multiple = projects=20 simultaneously.

"This helps us stay on track so we don't fall behind = schedule,"=20 says Bob Lundstrom, general manager, Jerry's Homes. "We have = about=20 eight superintendents using it and they get one report that = shows=20 where they need to be for the next two weeks rather than = have to=20 call (constantly) for updates."

He believes the biggest appeal of project management-type = software for homebuilders lies in the ability to make = decisions on=20 multiple projects with little difficulty and communicate = changes=20 with great ease.

"We like the scheduling portion because it keeps us from=20 over-allocating resources across our multiple projects," = adds=20 Lundstrom. "Overall, it has taken a learning curve for our = guys to=20 get accustomed to the software but I would say that it has = showed=20 good results for us thus far."

On the large side
While most experts agree that the = smaller=20 homebuilder would get the most out of a project management = systems,=20 the fact remains that those actually using project = management to its=20 fullest are those in the larger production home space.

However, these builders are using it for different = actions. As=20 opposed to custom builders, which value the management of = change=20 orders and the improved communications aspect, production = builders=20 are using project management to reduce paperwork and = streamline=20 financials.

"I think the larger builders are looking at the system to = provide=20 more office automation," says Coen. "They want to be able to = cut a=20 purchase order and have the production supervisor approve it = electronically and then turn that into an invoice for = accounts=20 payable to pay out in a manner in which they never have to = generate=20 any type of paperwork."

Beazer Homes, http://www.beazer.com/, = Atlanta,=20 Ga., which builds in excess of 15,000 homes annually, values = project=20 management and actually uses two different types of project=20 management software, each covering different aspects of the=20 business.

It uses BuildPro from Hyphen Solutions, http://www.hyphensolutions.com/<= /A>,=20 Addison, Texas, which encompasses production scheduling for = each=20 home and is tied to purchasing and accounts payable = applications. In=20 addition, its suppliers use an adjoining product to Hyphen, = which=20 gives them better visibility into job schedules as well as=20 information on purchase orders and payments status.

In managing IT efforts and the management of complex land = developments, Beazer turns to Microsoft Project, from = Microsoft, http://www.microsoft.com/,=20 Redmond, Wash. Overall, project management has become very = valuable=20 to the company.

"As our business is inherently project focused, project=20 management is key to managing the construction cycle, = automating=20 process connected to the production schedule that would = otherwise be=20 manual," says Jonathan Smoke, chief information officer, = Beazer.=20

Smoke believes while the nature of a smaller homebuilder = may not=20 necessitate project management, the nature in which Beazer = produces=20 homes--thousands of homes year--calls for automation to step = in to=20 help the process.

"The value of technology is just as important as managing = the=20 delivery of a multi-year commercial project with the primary = differences being the size and complexity of the individual = project=20 versus the quantity and frequency of the projects being = delivered,"=20 adds Smoke.

Uncovering costs and managing the large base of = subcontractors=20 via technology is quite appealing to these builders as well. = Many=20 have found value in linking their accounting, financials, = and=20 enterprise resource planning systems (ERP) in order to find = out=20 costs, materials, and labor. Project management in essence = becomes=20 part of the overall business process.

"Companies use as much or as little project management as = it=20 relates to their business," says Koppleman. "It's all about = how much=20 you want to track and control processes. Some have taken the = time=20 and effort to make the connection to their cost systems and = they=20 have been rewarded on that part."

Making these connections becomes much easier as = integration=20 improves. Many vendors have made the critical connections = between=20 the systems in order to provide the seamless link from cost = to=20 planning to construction.

A simple breakdown of how this all connects goes as = follows: a=20 company completes an activity in the field and then = communicates it=20 into the scheduling system via a handheld or laptop. As the = schedule=20 is updated, cash-flow projections are automatically updated = in the=20 accounting system. Next, it generates an automatic approval = for a=20 purchase order for payment to be sent back into the = accounting=20 system.

In turn, orders are processed, schedules are updated, = financials=20 are adjusted, and workers are paid and updated on project = changes=20 all automatically and without the need to generate = paperwork. This=20 can be a time and cost saving wonder for companies working = on=20 multiple projects and with hundreds of subcontractors=20 simultaneously.

Homebuilder Management from BuilderMT is an example of = this. As=20 part of the production management suite from Best Software, = http://www.bestsoftware.com/,=20 Scottsdale, Ariz., it optimizes a builder's business = processes and=20 coordinates integration with accounting and estimating = solutions=20 from Timberline, which is part of Best Software.

"Builders can sit down and establish a coding structure = within=20 their job costs and look at what product they want to build, = where=20 it can be built, how they want it accounted for, how to make = comparisons, and what type of management reports are needed = and then=20 they can move backwards to see how to appropriately set up = the=20 system," says BuilderMT's Gebes.

Speed of communication, increased collaboration, and = integration=20 aside, project management is all about improving business = processes.=20 Homebuilders can no longer look at it as a cost constraint = or a=20 piece of software only applicable to large commercial-type = projects.=20 Rather, it needs to be looked at as an automated version of = the=20 basics of their business.

"The timeframe to build a home continues to shorten = tremendously=20 and complications are increasing," says Coen. "Controlling = multiple=20 projects without some sort of technology becomes nearly = impossible."=20