Computerizing is a lot more time-consuming and costly than most contractors imagine. Transferring data takes a lot of time, often months, and inevitably involves transcription errors. Managing a fail-safe transition is costly. It always takes longer to install, transcribe, and debug a system than anyone projects. Conversion often costs as much as two or three times early estimates. It's risky to depend on a new computer system too soon. You need a formal contingency plan in case data or the system is lost. Professional advice and even insurance is available to cover the contingency. Remember to store duplicate data off the premises to further protect yourself.
Few industries place as much product in the hands of buyers as far in advance of payment as the construction industry. Late payment is the accepted norm for construction contractors. What's surprising is the blase attitude contractors take toward the payment system. This attitude, along with the system itself, compounds the payment problem for contractors. In the language of most contracts and in the role of most designers, there's an assumption that contractors don't do the work without a gun held to their heads. This creates mistrust. Contractors often feel they have little power to get paid and that entitlement to their money is clouded. They send in their payment requisition, and if the architect disagrees, it's returned with red-lined changes. Then the contractor retypes it, signs it, and sends it to the architect again. This puts the contractor in the passive role of taking what they can get, rather than invoicing customers for services rendered. Changing your payment requisition is saying that you were wrong in the first place.
Construction is fast-paced and involves remote sites. A lot of money that belongs to others passes through a company's books. Capturing this information with a good accounting system and accurately interpreting it is essential.
The only real difference between the continuing successful construction companies and the early failures is management skill. It's staggering how many contractors have enjoyed years of success only to fail because they let their companies get larger than they could effectively manage. Management skill is more than supervisory skills. It includes a certain amount of vision so that planning for the future can take place.
Key people in a construction business are easy to point out. There's only one or two in a small- or medium-sized company. And in a large company, there aren't more than three of them. A company cannot function without them.
