The Computer and the Contractor
Unless you’ve been living on Mars for the last five years, you’ve heard all this hype about the Internet. You’re probably convinced that it will “change the world,” but how can a computer network help you build walls? Behind all of the hype and madness of the computer revolution are some very simple principles that will change the way contractors do business.
Here are a few examples of what the Internet can offer the contractor:
•Aggregated volume-based pricing for supplies needed to
•Streamlined processes to create, distribute, evaluate and
respond to requests for proposals and service contractor
•Collaboration and document management tools to create
effective interaction between buyers and suppliers.
•Software tools for project management, scheduling, esti-
mating, accounting and other related business manage-
This is a short list of some more detailed tips to integrate the Internet into the contracting business.
Easing communication painCommunication can be a big chore, but it’s a necessary evil. Today, we live in a world full of paper, phones, faxes and overnights. Information flows from supplier to sub-contractor, from sub-contractor to general contractor and from general contractor to property owner. If you’re lucky, the paperwork arrives on time to each party, the information is complete and accurate, and nothing gets lost or hung up in somebody’s in-box for six weeks.
The Internet not only speeds the transmission of information between parties, it also removes the hassles of business. For example, a job comes along to upfit 25,000 square feet of office space. An e-mail arrives, notifying you of the RFP opportunity. Instead of toiling away for hours building a proposal to be hand delivered, you log on to your computer. There, you can survey the community of local suppliers and get the latest pricing on drywall. With a few keystrokes and mouse clicks, you can complete an online application to submit your bid. Point and click, and the bid can be automatically sent to the appropriate parties. No sweat!
Online exchange communities for the construction industry are available today and growing in popularity because, face it: No one really likes paperwork. These trading marketplaces bring together suppliers, contractors, and building owners and managers.
A way to buy and sellImagine a single Web site where you can see all local market jobs up for bid. The convenience of having the market on your desktop frees you to bid on more jobs or to be more selective about the jobs you take. Likewise, your allies, wallboard suppliers, can also see the total volume of business that awaits them. Now that puts the both of you in a position to do a little friendly negotiation!
There is one thing the Internet doesn’t change: It doesn’t take away the power of a personal relationship or the added value of a job that’s not just done, but done meticulously well. Therefore, you’ll always be in the business of selling service, quality and your reputation. To steal a line from a television commercial, “Think of it as you, only better.”
With sub-contractors managing business online, the Internet moves the supplier from the storefront to the desktop. As subcontractors begin to make more of their business decisions via their computers, purchasing products online will be as commonplace as sending communications to general contractors.
“I find this concept of an online exchange very intriguing,” says Lee Brennan, vice president of B & B Contracting Co. Inc., of Charlotte, N.C. “We are astute enough to realize that e-commerce is the way of the future and we don’t want to be left behind. Early adopters have influence over the movement and we want B & B to be a pioneer of the movement, or a charter member.”
Brennan sees e-procurement as an open-door opportunity for B & B Supply Co., a full-fledge distributor of gypsum products and accessories.
“B & B Supply Co. can access a greater realm of products online and then resell such products like tool accessories, pasting knives, screws and sanders to our residential customers,” said Brennan. “We see this as a great value proposition on the buying side.”
Volume sales opportunities provide suppliers and service providers greater visibility to market demand and incentive for cost cutting. For example, through an online exchange, ongoing market-wide events could be created for suppliers to auction off excess inventory. Property managers could participate in auctioning-like activity as well, creating specialized competitive bidding opportunities for large-scale jobs.
An Internet marketplace for buying and selling arms service providers, suppliers and property operators alike with the knowledge of what’s out there at any given time, and what is the going rate for those products and services. Then those in the know can quickly take the best course of action.
Each segment of the real estate operations industry has an opportunity to forge new business relationships. Property managers expand their purchasing power. Service providers can access bidding opportunities with ease and can leverage greater supplier resources. Suppliers sell to a host of new customers through a single, efficient pump channel.
The marketplace itself draws the attention of big players, and it will be interesting to see who takes advantage of this new sales channel on a local-market-by-local-market basis. We might see some “leveling of the playing field.” New relationships are an exciting possibility for growing companies, and the e-marketplace does make it easier to get a foot in the door. In addition, because the bid process is less painful, even if that door gets shut on that foot a time or two, it doesn’t hurt as much as if it had taken weeks getting the proposal together. So that brings me to the third principal, which relieves another common pain.
Run your business betterWhile some people think the hard work is the back-bending work of installing a ceiling, I’ve had other contractors tell me their greatest pain is on the business side—administering the books. The Internet can definitely make your life easier when it comes to crunching and keeping up with your business’ financials, because your purchasing can be directly tied into your back office systems. Eliminate the hassles and costs associated with tracking the flow of materials, income and payables by tapping into an e-procurement solution that integrates with your accounting software.
The change that the Internet presents for your business may sound a bit intimidating. However, it’s not quite time to run out and buy Palm Pilots so that your foreman can order supplies from the job site—at least, not yet. It won’t happen overnight, but the Internet is showing signs of approaching the construction industry, and e-marketplaces targeting real estate operations are a sign of times to come.
Hey, you already know the Internet’s not a fad! The good news is that it’ll actually make the business side of wall hanging and ceiling installation easier and potentially more lucrative by reducing your cost and time spent on other things.