At HalfSerious, my job is to listen to entrepreneurs about the unique challenges they face in their industries and brainstorm ways custom software can help them.
Recently, I’ve been having a lot of conversations with leaders in the construction sector, and the one challenge that seems to be stumping them is the manual estimation process.
Specifically, how difficult it is to produce an accurate estimate these days with the fluctuating price of materials.
Here are some other insights these entrepreneurs have shared with me.
- Customers are shopping around more, which means construction companies are producing more estimates for price shoppers
- Because guarantees are only good for three days, estimators need to constantly update estimates to match pricelists
In other words, estimators are up to their necks in estimations, and it’s affecting construction companies’ bottom line.
As one entrepreneur told me, “we are estimating ourselves into bankruptcy.”
So, how can custom software help?
Streamlining this otherwise time-guzzling process is why construction companies are turning to custom software to win more jobs.
In fact, construction companies that leverage estimation software in their business report that digital takeoffs are 80% faster than traditional pen and paper.
Research by the McKinsey Global Institute also shows that digital transformation in the construction industry can result in productivity gains of 14-16% and cost reductions of 4-6%.
So what do all of these stats mean?
Custom software + construction companies = more estimations + more business
But isn’t custom software risky? Isn’t it safer to go with something that already exists?
There’s no shortage of off-the-shelf tools that can assist you with estimation (PlanSwift, Autodesk Build, etc), but most construction companies will find that they’re over-engineered for their needs.
In my experience, businesses are inherently drawn to off-the-shelf software because it feels safe.
“It’s already there; we might as well make it work.”
But there is a risk when you commit to off-the-shelf construction software: it wasn’t designed for your business.
Not to mention, off-the-shelf solutions aren’t guaranteed to support your internal processes or integrate with your existing systems.
Custom software, on other hand, fits like a glove.
Digital business vs tech business–why the difference matters
Something that I think entrepreneurs get wrong about custom software is that it’s this big digital endeavour.
“We need to uproot all of our existing processes, digitize them, and transform the way we do business.”
That’s what we call tech business: a company that spins off a custom software solution and sells it to other businesses in their industry.
Digital business, on the other hand, is much more accessible and far less daunting than spinning off a second business, because it’s optimizing your existing process with an internal construction software tool.
Back to the entrepreneur I spoke to a few months ago–their big challenge was that their 3 estimators could not keep up with all of the bids coming across their desks.
If only there was an internal tool that could make an initial estimate based on its inputted formulas and supplier’s price lists, they could bid on 10x the projects.
They weren’t looking to replace their skilled (and human) estimators. Instead, they wanted technology to put together an initial estimation based on their formulas and for their estimators to validate the work before sending it back to the client.
In other words, they wanted the software to help their small team scale.
Is there anything else I should know about custom software?
People love to talk about how the construction industry is plagued by a negative technology bias. I disagree.
I think for a long time the way things have always been done in construction worked well enough that there had to be very little technological intervention. But in this post-pandemic economy, entrepreneurs are realizing that this way of doing business is no longer sustainable, especially with the industry’s labour shortage.
The good news is that the entrepreneurs in this sector are some of the most curious and driven people that I’ve had the pleasure of meeting. They’re eager to learn and looking for tangible ways to innovate.
If this sounds like you and you’d like to talk to someone who’s in the business of solving complex problems with simple solutions, then you can book a call with me here.