Due Diligence When Selecting Construction Software

By Sheldon Needle

You are a contractor who needs better job costing, inventory management, project management and subcontractor control to replace your Quickbooks system but how do you find the best solution quickly and efficiently?

Before you schedule sales calls, try the RFI approach
Just because you bounced onto a construction software vendor’s website based on a google search does not mean they should be on your list for consideration. The package may be too complex, too expensive, or simply not a fit for your operation. So before you commit your time to a lengthy sales call or webinar, try doing a brief RFI (Request for Information) to the vendor to see if you should go to the next stage of communication.

Here’s a sample of questions and issues for your RFI to help qualify the vendor:

• Percentage of customer base in your segment of the construction industry (e.g. heavy construction, specialty contractors with or without service departments, etc.)
• Typical sales price of software for the number of users you need
• List five of your most important functional requirements and ask exactly what steps are involved in accomplishing those items with their system
• Ask if they have an automated way to move over data from your current system to their system
• Find out what report writer or query functions are available and the underlying database of their program to see if they are up to date with technology

If the vendor fails to respond to you in a timely way, they either are not hungry for your business or lack the resources to be responsive to buying prospects. Either way, you probably won’t want to do business with them.

Once the vendor has cleared your RFI, think about the next step of qualification using the criteria below:

1. User documentation, the step child of lousy software. Check out user documentation for 5 or 6 system functions (e.g. handling retainage, lien waivers, multistate payrolls, change orders, fringe benefit allocations, etc.) and see if the explanations for each are complete and understandable. Can your accounting staff understand it? Does it provide graphic or workflow illustrations? Is it current with how the system works or out of date? This is a great way to get an idea of software quality.
2. Ask about major improvements made to the software in the past 3 years. That will tell you what you can likely expect in the next three years.
3. Get sensible references who have installed the system in the past 18 months. Long time users are not relevant references. Even the worst vendors can come up with a few references who will say only nice things (sometimes in return for financial incentives provided by the vendor).
4. Ask the vendor rep to do a couple of simple custom reports. See if you can do it even with the salesman's help. If he/she cannot do it how can you expect your staff to do it?
5. Look at the drilldowns from the general ledger back to subledgers and see how easy it is to follow the audit trail, track documents to transactions and “drill around” horizontally to other transactions and ledgers.
6. Ease of correcting transactions. Enter a transaction (or have the salesman enter it) and see what it takes to reverse an incorrect entry or to correct a single field of data once you get to the end of the screen. Do you have to start over or can you just click on that field and change it? Can you rerun a transaction entry batch report if necessary?
7. What standard reports come with the system and do they meet all, or almost all, of your information needs? If more reports are needed what will it cost you get them done?
8. Ask the salesperson what shortcomings exist in the system or where they could stand some improvement. All software has shortcomings. If they don’t have anything to say, you know they are not being completely honest with you. Would you then be comfortable dealing with them?
   

Summary
Webinars will only show you 3-4 % of the software’s functions. Many prospective buyers haven’t really thought through the specifics of what they need and, therefore, are not ready to evaluate what they are looking at. Instead of relying on webinars, try focusing on the key issues and questions cited above to weed out weak vendors and shorten your software selection timeframe.

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