4castplus Blog

Does Efficiency Lead to Profitability?

Does Efficiency Lead to Profitability?

 

A lot of software solutions talk about how software can make your business more efficient. In fact, here at 4castplus, we’ll tell you exactly that: that implementing our software platform will make your teams far more efficient. This is a very common claim in the technology world, and in many cases, it can actually be true. However ...

 

being-more-efficient

 

The thing about efficiency is: does being more efficient actually make your more profitable? Does it increase your revenue?  

The short answer is – and I apologize for this – but, it really depends. You can’t make a categorical statement that taking less time to do something will translate into lower costs, therefore increased profits. It’s not quite that black and white. To examine this question a bit further, I’ve laid out 5 key questions to ask when you’re considering advancing your bottom line by implementing software to make you more efficient.

1. Are You Just Doing the Wrong Things Faster?

It’s a common mistake to think that efficiency actually makes you better.  Unless the software provides your project controls and construction management teams with better tools to make informed decisions, you’ll end up no further ahead. In other words, efficiency, all on its own, is not a key business goal - it needs to be combined with a wider initiative of business improvements.

2. Are You Actually Cutting Out Wasteful Activities?

Are your project managers and project controls professionals spending their time analyzing trends, entering forecasts and making critical decisions on budget allocations; or are they buried under a mountain of spreadsheets, fighting with formula errors, re-keying data and formatting reports?

How much of your team’s time is spent truly doing the high-value work they’re trained to do – the critical functions that are key to your project’s success? I bet if you did a poll of your team’s overall effort in terms of where their time is actually spent, you’d be shocked at the results – that is, if the tools they’re using to manage and control projects are a combination of spreadsheets. Construction projects are notorious for being mired in wasteful activities; so adopting software to actually eliminate those wasteful activities does much more than just achieving greater efficiency.

3. Are You Efficiently Introducing More Errors?

Being more efficient must be coupled with also being more accurate, complete and timely in order for efficiency to have any meaningful impact.  If what you’re doing is making errors at a faster pace – or introducing data gaps & delays – you are in fact taking a step backwards.

For example, providing your jobsite crews with slick tools to capture jobsite costs and hours super efficiently is a huge bonus for your field personnel, but if the new tools don’t provide advanced data integrity features to ensure accuracy, you’re effectively opening yourself to rapid entry of bad data. 

4. Are You Aligning New Efficient Processes to Take Advantage of your New Efficient Software?

It’s not an uncommon mistake to believe that software can fix business problems. Remember, software is just a tool. While it can bring about efficiencies through advanced algorithms and AI to help make critical decisions, the fact remains that there is effort that needs to be dedicated to redesigning processes to take advantage of what the software can do. Especially with enterprise-level software where multiple disciplines are working collaboratively together on a centralized platform, companies need to rethink their end-to-end processes to make the most of the new system.

We frequently come across companies that have adopted a new software system that ends up just being another thing stacked on top of everything else they have to do.  You used to do 5 things, and now you have 6 things because you have this new efficient software. It’s not that people aren’t aware of this; the challenge is in underestimating how much work goes into the Business Transformation of a software implementation.  It’s only when processes are redesigned that the cost savings that technology will bring can truly be achieved; and those 5 things you used to do are reduced down to 2 things.

5. Is Your Efficient Software Making You Better at What You Do?

There’s no question that the right software system can transform your business.  It can be a true game-changer on so many levels. It can offload the heavy-lifting from your project controls, construction and procurement staff so that they can focus on the high-value work they’re educated to perform; and it can truly improve the value and quality of your entire project delivery infrastructure, while making them more efficient at the same time. But it can only do this if you:

  1. Choose the right software platform that fits your business
  2. Commit the effort to improve your processes so that you can achieve the cost savings
  3. Leverage the decision-making power in the software, so that you can make significant improvements in your business

In other words, efficiency for efficiency’s sake can often be a wasted effort.  In certain industries – such as manufacturing – efficiency is critical since so much of what happens is repetitive and streamlined.  But for those organizations whose main revenue stream is in the execution of projects, improvements in efficiency is only worth it when coupled with improvements in quality, accuracy, visibility, reporting, productivity, etc.

 

 

 

By Michael Wilson | July 23, 2020 | Categories: project cost controls software, project cost management software, project controls best practices | 0 Comments

Recent Posts

New Call-to-action