Collaborative Web Site Environments Can Improve Profits

By Jim Jordan

Jim Jordan is director of construction services for Dallas/Fort Worth-based Weaver and Tidwell LLP.

Offering a comprehensive reporting package can make financial partners more comfortable.

The author explains how CWE technology can expedite accounting functions and offer contracting firms other benefits that facilitate new levels of efficiency.

For a textbook example of high-level multi-tasking, look no further than the construction industry. During the course of any project, many people from different companies are required to perform disparate tasks at different times. And somehow it all must culminate in a seamless final product that reflects the owner's original intent.

It's little wonder that general contractors struggle to keep their accounting in step with a project's actual events -- and to produce accurate end-of-month financial reports. Moreover, the accounting process is becoming even more challenging as contractors face increasingly complex requirements related to innovative forms of project delivery and larger scale projects.

With greater complexities, however, come creative solutions that weren't available a few years ago. For those in charge of accounting functions, one of these is a collaborative Web-site environment, or CWE.

While variations of Web-based collaboration have been employed by larger architectural and engineering firms for quite a while, they mainly have been limited to the exchange of large design documents and images.

For contractors, a CWE offers more uses and benefits and the transition can be simple. A recent study by the Construction Financial Management Association shows that most construction companies have high-speed Internet access at their headquarters, and 80 percent of general contractors already have systems linked to remote worksites.

For contractors whose computer systems aren't already linked to remote sites, or aren't using Web sites to manage accounting at all, there is a lot of inexpensive software available to create a CWE. Some of the software programs address only certain aspects of the project management process, such as project closeout. Many are more encompassing, however, and allow for records management, long-term document archiving, quality assurance, suppliers management, materials management, regulatory compliance, engineering document control and other functions.

Software prices vary, but a contracting firm can expect to license several users to perform standard CWE transactions for about $2,000 per year. The majority of vendors provide free training.

The central benefit of a CWE to the accounting function is that transactions and events are recorded as they occur. Accounting becomes expensive when time is wasted on gathering and organizing finances. In addition, timely and accurate information leads to better decision-making, which in turn creates a positive impact on the bottom line. With a CWE, contractors can have an instant snapshot of project performance and know what to expect for the duration of the job. By automating business processes, time spent on non-value-added tasks is reduced and profitability increases accordingly.

The majority of successful contractors already are using Microsoft software to simplify and automate their business processes. These companies are already seeing numerous >> efficiencies, including those created by the automation of labor and material invoices. A CWE takes the process to the next level, one that all contractors will need to reach because owners, developers and public authorities increasingly are requiring ongoing evidence of cost savings and overall efficiencies.

As the name implies, a collaborative Web environment is Web-based, not client-server based. The means the data resides on the computers of a separate entity called an application service provider. Some contractors are hesitant to place proprietary information on a Web site. However, the decision about what information to display in a CWE lies with the owner and his construction partners, not the service provider. And all CWEs come with numerous security systems.

The beauty of a CWE is that owners, contractors, project managers and designers can access the system in real time with nothing more than a computer (or wireless hand-held device), an Internet connection and a password. Once a CWE has been established, all managers can post information, tasks and documents related to each of their departments. In addition, important business indicators and functions can be tailored to a specific role or department, which provides managers and employees with information to better manage their jobs.

Depending on how the platform is established, the CWE can also produce alerts on items that need action, which provides quicker response to problems that threaten profitability or schedules. With a CWE, the days of "I didn't receive the fax" are a thing of the past. All relevant project information and schedules are in one place and available 24 hours a day. Revenues and job costs can be tracked from initial budget through project closure, without waiting for accounting periods to close.

Before any future project, a contractor should discuss the need for a CWE with the project owner. Indeed a CWE should become a standard method of operation from now on. It's inexpensive to create, easy to operate and can improve profits.