Ty is a successful project manager by profession and volunteers as a youth community leader for most of his off-work hours. He decided to make a youth get-together once a week for his kids and their friends. The ultimate goal was to have the boys socialize among a group of kids of similar ages and challenges. Ty told the kids that they needed to brainstorm what to do every week to keep the get-together attractive and enjoyable for everyone. They agreed that they would have a weekly topic to be suggested, and its discussion to be moderated by one of them. The person that suggested a topic was to be prepared by reading and researching about the topic, which was then to be used to challenge the rest of the group. Another activity they agreed upon was to have a weekly lunch together in different places - some of which might even be out of town, in a park, or on a boat to break-up any kind of monotony. They decided also that the cost of every meeting should not exceed fifteen dollars per person.
I’ve always had mixed feelings about whether or not I believe in concepts such as “Luck” and “Destiny”. My dad always told me that there’s no such thing as luck and that you create your own destiny. He was very much a realist and firmly believed in taking responsibility for all the good and bad that happens to us in life. Regarding luck, he probably said it something like this, “Luck, ha, what a load of crap. Luck is nothing more than where preparation meets opportunity. You make your own luck. Now go clean your room.”
In our first blog in this series, we talked about the necessity of introducing innovation into your business - to improve efficiency, profitability - to stay competitive. Companies that don’t evaluate how they are doing business, and where they need to improve, are being left behind. Introducing innovation doesn’t have to be overwhelming or complex, and doesn’t have to result in spending a whole lot of money – in fact, the best ways to innovate are to look for ways to simplify and streamline your existing business processes.
In this second blog, we’re going to show you how one of our customers, Company A, started to do just that. Company A took a look at a key process – their project cost management - analyzed how they were managing their project costs, how they wanted to manage their project costs and what kind of information they wanted from their project cost management system...and what changes they could make to improve this process. And in future blogs, we’ll see how Company A uncovers inefficiencies in their process, and the result of improvements that they made.
Company A has been in business for a number of years, and has been running labor and materials projects that have been fairly similar in nature. They’ve been successful in that key respect that many small business owners benchmark success by – there was cash in the bank at the end of the month. So, all in all, their projects were running profitably – but the question is....how much more profitable could they be? How much more cash-flow could be generated from their projects? Were there trends developing that would signal areas to improve efficiency, shore up the bottom line?
As we talked about in our first blog, your evaluation has to start with the very first of the W5 – the “What” questions:
No matter the size of your business, innovation is essential. Looking for ways to bring innovation into your business can offer huge returns – cost savings due to greater efficiency, faster growth due to better decision making, improved retention of talented staff, and a number of other benefits. In a study performed by the Association of Canadian Community Colleges (“ACCC”) “Colleges and Institutes and Canada’s SMEs (Small to Medium-Sized Enterprises): A Partnership for Innovation”, we find the following statement, “The capacity and ability to innovate is a critical determinant for productivity and growth.” And critical it is. In these economic times, where every business has had to take another look at how it does business just to stay in business – incorporating innovation into your business is even more essential.
4castplus offers the capability for you to categorize your Labor, Equipment and Materials resources into what are called resource classes. This capability is an extremely powerful control and reporting mechanism that enables you to achieve two key objectives:
Establishing a starting-point and benchmark for costing out new projects is greatly simplified if you have good information to start with. When negotiating prices with subcontractors or suppliers, it helps to have good historical trend and benchmark data to support your negotiating position (at the very least to know what things have cost in the past, and how those costs have changed over time). Looking back on past projects and reporting on, for example, the average cost you’ve paid for a particular material over the past year or two; can be incredibly empowering during negotiations.
Excel is an amazing tool. It is truly the great multi-purpose software of our time. People can bend and twist spreadsheets to do pretty miraculous things - from planning a children’s party to full enterprise budgeting & forecasting. Like anything, of course, it has its limits. Excel works just fine in many cases, but when it comes to more complex jobs - like estimating, tracking, controlling and analyzing large construction projects – it simply breaks down. People certainly try to force Excel to work in this field, and there’s no question that with enough time, resources and effort, a person could achieve some - rather limited - results. But the truth is, it’s just not worth it. Especially when there are good tools available which are designed specifically for that task.