The team at Software Advice, a construction management software advisory firm, has sent along the results of their 2014 survey of potential buyers of construction software who contacted them for advice during the year. While not a scientific survey, the anecdotal results are revealing.
According to Forrest Burnson at Software Advice, "The most important thing that construction professionals need to realize is that the software they use is a tool; like any other tool, it's better to invest in something that adequately suits the user's needs and is well-made and reliable. I think a lot of construction firm owners experience a degree of sticker shock when they're looking to deploy specialized construction software, and that's understandable—if they're graduating from using QuickBooks or Microsoft Office, then the cost can seem excessive at first. But once they see how that specialized software not only saves them time, but also improves their bids and estimates and keeps them more organized, then it's easier for them to justify the investment. To put it another way: Few construction firms who deploy specialized software solutions ever go back to doing things the old-fashioned way."
Seems that the construction industry members who contacted Software Advice, especially smaller firms and subcontractors, continue to rely on pencil, paper and an adding machine to do their estimates, takeoffs, and bids. The survey showed that 53% of the inquiries for software advice came from firms still using pencil and paper for their estimating and takeoff work. For projects of any complexity at all, that basic approach can lead to bad takeoffs, lousy estimates and bids that either get thrown out, as they are way out of the ball park, or accepted much to the chagrin of the bidder who later finds out that their bid was only low because they missed something major.
Software isn't the perfect solution, but as Forrest says, “It is a tool” that goes a long way towards providing the metrics and benchmarking that will lead to higher productivity, more accurate takeoffs, precise bids leading to higher profit margins and repeat business.
It is interesting that the Software Advice Survey found that most construction firms who contacted them spend less than 1% of their gross revenue on production advancing software when compared to the cross index of firms in other industries who spend an average of 3.3%. The amount that the average construction firm spends for IT is $7,766 per year for the purchase of new software.
The demographics reveal the following information.
- 74% of the buyers had less that 20 employees
- 88% of the firms had less than 5 users
- Two thirds of the potential buyers had annual revenues of less that $5 million.
After looking over the 2014 results, it is apparent that the industry still has plenty of room for growth in the use of software tools. It is also apparent that many in the industry are way behind the curve in being able to use that software productively.
You can read the entire survey at Software Advice.