Companies urged to use the current "quiet time"

Friday, 3 July 2009

Use the current ‘quiet time’ as an opportunity to rationalize your business and prepare for the upturn, argues Union Square Software's Will Yandell

Implementing a business wide information management system that centralises and leverages corporate information, connects employees regardless of their location and streamlines processes is still a pipe dream for many organisations, and a decision it seems that can be put off again and again. And it’s no surprise; undertaking an implementation of this kind can be daunting at the best of times. However, argues Will Yandell, now is the best time to investigate strategies and undertake complex software implementations that will lay the foundations for the future. As many construction companies are realising.

Positioned for recovery

The tendency during an economic downturn is to batten down the hatches, cut costs where you can and carry on as before. The problem with this is that the reluctance to consider business improvement is unlikely to lift once the work starts coming in again. As people get busier the impetus to improve working practices and increase efficiency will be even less and businesses will carry on as before with no real business improvements made. The new competitive landscape means that the most efficient and successful companies are now competing with each other and are forced to differentiate themselves on a higher level. Simply still being in business won’t cut it in the post recession environment.

Once the recession is over the pressure on companies to use modern working methods will become even more intense. Those that have cut back overhead and more often than not this means administrative staff and non fee or revenue generators will, without more effective systems have to start ramping up their overhreads once more. The industry needs to sharpen up and move on and now is the time to get your house in order. This isn’t necessarily the time for a reinvention of the wheel; it’s about doing what we do but doing it better and more efficiently.

Many companies are finding that the spare capacity they currently have available makes it an ideal time to implement change and for many that can mean better processes and therefore new and improved business applications. For those that don’t necessarily want to jump to making redundancies, having an internal project to sort out your information management systems or research new technologies is the ideal solution. When things fully start to pick up they will have a good platform from which to work and can use their resource wholly for delivering projects and adding value where it matters.

Michael O’Donnell, Financial Director at SCC design and build contractors, who have recently bought a project and document management platform sees this as the ideal time: “It can take up to 6 months to complete a full internal information management review and product implementation, and that’s after you have selected a product. By doing this now we can dedicate a few people full-time to the implementation and by the time it has finished we will be far better placed to compete for projects.”

Teetering on the edge

But what if confidence in your company’s progression is not what it might be? What if redundancies are happening daily and getting the enthusiasm to think about something new is difficult; even if you have the luxury of knowing you will still be around this time next year. Recessions can be an ideal opportunity for individuals to advance their careers. Those people that are willing to take a chance, to do something different and drive change when everything else is crumbling are future leaders. Business wide technology applications in particular tend to be driven by those that are on the up and will be the leaders of the most successful companies of tomorrow. With the employment market as competitive as it is, any way that individuals can demonstrate they are prepared to step out from the crowd will be at an advantage.

Even companies that are on the brink of administration and refinancing such as Taylor Wimpy are realising that a lack of effective information management is holding back proceedings. As recently reported in Building Magazine on the lengthy refinancing discussions, “[…]a key factor behind the delay was Taylor Wimpey’s less than ideal MIS. These are the detailed financial models you need to run a business or, in this case, base a refinancing around. They lacked fine detail, which is okay in a rising market but not during a complicated debt restructuring […] Unless they had transparency with the numbers [the banks] assumed there was bad news in there. As a result, analysing the MIS went on ad nauseam.”

So not having quick and simple access to numbers that you are confident are correct could result in drawn out discussions and a less than fair assessment of your companies value. Those companies that can at least demonstrate they are making steps to control their data are putting themselves in a much stronger position to negotiate.

Making the step

Assuming you have the impetus for change, there is still the small issue of presenting a business case or finding the money to do it in the first place. These solutions could be cheaper than you think. If you can’t afford the up front costs to buy a solution most vendors offer a lease or rental option.

Stephen George and Partners have chosen to lease a new practice management solution which is working out at less than £1 per person per day, Mick Barker, Financial Partner at Stephen George comments: “The lease works out as a very cost effective option for us, allowing us to control payments so it isn’t affecting our immediate cash flow. When viewed like this we can see exactly what our investment levels are over an extended period and can easily justify the returns based on this.”

Presenting a solid business case and ROI for this type of project is difficult. However, a few have attempted it. Geoff Dennis, Financial Director at Contractor Lakesmere attributed a cost to all of the unnecessary manual and paper processes they were running in the business, he worked out that an integrated Enterprise application would save them £500,000 over three years. Following the implementation they are confident they have achieved this as well as saving additional costs in freeing up people’s time.

For those who are not as ambitious in their calculations the only thing you can really do is speak to companies who have been there and done it. Most, assuming they have selected the right product see no way back, Stephen Oakden, Technical Director at RPS Group comments: “Implementing an Enterprise Portal application has undoubtedly made a difference to our bottom line profitability by making us more efficient. With margins as tight as they are companies simply cannot miss any opportunity to streamline their operations. We couldn’t operate this efficiently without it.”

Union Square Software

Union Square have developed Workspace to provide members of the construction supply chain; architects, engineers, main contractors and sub-contractors with…

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