Document control

Paperwork can add thousands of dollars to the cost of a project in overhead, missed deadlines and do-overs. You'll need to understand your current document strategy and how new construction project management software will support it. Here are some important questions to consider:

• How does your company manage documents? Can the software support the way you currently manage documents, or will you need to refine business processes to support better document management? The latter is not necessarily a bad thing, but it will require additional planning, and probably additional expenses in implementation and training.
• Are documents such as change orders, submittals and other vital paperwork kept in file drawers or electronically? Do you need the ability to scan in plans, photos and other images so they're stored with electronic documents? You'll want to choose project management tools that fit (or extend) your current document control strategy. During vendor demos, pay special attention to how the construction project management software handles documentation for change order management, a critical piece for most contractors.
• What are the storage requirements to use document control features in this software? Moving your paperwork from file drawers to hard drives may require significant upgrades in your file servers and storage systems. The ability to quickly scan in batches of documents can be an asset here.
• Is the document control system's database compatible with databases currently in use at your company? If other applications in your shop use Oracle database environments, for example, a document management system supported in Oracle can save time and money for your IT crew.
• Do you need to automate workflow? Often the appearance of new documents triggers an important event, such as sending a notification to the project manager, or rescheduling an important subcontractor. If that capability is important, how is it implemented in the systems you're considering?

Change order management

Change order management is a big headache for many companies. "At the most basic level, the software should let me track revenue and budget, keep a basic log and track the status of change orders," said Brown. "One level up from that, I can link electronic documents to the change order. A still more advanced system lets me attach images and design proposals directly to the change order, make comments and track the history."

Even more advanced systems will send change orders to appropriate subcontractors, trigger alerts or changes to budget forecasts and purchase orders, or send changes up the workflow chain for approval. At the highest level, the software will also trigger revised cost estimates, taking labor rates and markups into account, and reschedule key tasks on the critical path.

Ask vendors how they handle change order management, and don't settle for a simple "yes, we do." The more automated your change handling, the more efficient (and cost-effective) your project managers can become.

Project calendar management

Project calendar management may or may not be important to you. Brown said many project managers only need to include holidays and regularly scheduled meetings in a calendar, and tend to use one in an email program such as Microsoft Outlook. However, a good calendar tool can also automatically schedule all appointments and tasks -- and more importantly, reschedule them -- so the ability to integrate your calendar with Microsoft Outlook or user-defined schedules can be a useful addition to your checklist.

Budget management

Budgeting is closely linked to reporting and job costing, and you'll want to make sure that any budgeting capabilities in your project management software can be easily implemented into your existing job costing and reporting software tools. Although it's far more desirable to have all applications working from the same data set, at the very least document formats should permit you to import information without re-entering data.

You should also ask your vendor about the ability to lock in key budget items. Does the software allow you to prevent changes to the original estimate, at minimum? Even better, can you make changes to estimates, but track the changes so that management can see how the costs have changed as the project progresses?

Next, consider the construction project management software's ability to calculate earned revenue. This is probably the biggest pitfall for contractors, and therefore generally the most important feature of project management budgeting capabilities. All too often, Brown said, billing is equated with revenue, a dangerous mistake.

"Billing is not revenue, and if you continue to make that mistake you will go out of business," stated Brown. Accurately determining earned revenue is critical, and it's a function that Brown says many project management tools don't handle well. You'll want to ensure that this function performs to the satisfaction of your accounting department before making a choice.

Subcontractor/Vendor management

Subcontractor and vendor management is an extremely important aspect of construction project management software. Most general contractors will do the bulk of their project managing within subcontractor management tools, so this can be a critical factor in the success of the software. Similarly, subcontractors will rely heavily on the software's ability to manage suppliers or vendors. You'll want to investigate -- and test -- these functions extensively before making a decision, particularly in the following task areas:

• Can the software allow you to customize standard subcontract forms with project-specific conditions completely within the program? Most contracts will require some degree of customization.
• Can it set up a schedule of values? Some programs permit you to establish only a single unified cost/value for a type of work, for example, $20,000 for electrical. More powerful programs let you break down the total into specific line items comprising the total amount.
• Can it tie into your existing accounting system? Integration with accounting packages varies widely from product to product, but it's generally a crucial aspect of the software. Expect to spend a fair amount of time understanding acceptable levels of integration, and whether your vendors can meet them, before you make a decision.
• Does the system automatically trigger subcontractor change orders to meet yours? Does it offer workflow features that automatically adjust supplier orders or send notifications to architects, project managers, business owners and others? Can you establish thresholds for alerting subcontractors, owners and senior management of change order impacts?
• Does it offer good document management for change order tracking? Some programs won't allow certain payments to be made if the subcontractor is not in full compliance with regulations. The ability to link to relevant documents and history can also be extremely important.

Resource management

Resource management helps you ensure that critical project tasks are adequately resourced and scheduled. Most project management packages offer some degree of functionality in this area, but their claims may not always match reality. Some may claim to provide resource management, but only allow for the most basic information, while others have highly developed management capabilities. Use these questions as a starting point with your vendor:

• Is there a dispatch board function for shorter-term resourcing? This tool allows you to manage short-term planning for several hours or days ahead. It's most typically required by organizations that do a lot of service, maintenance or small project work, but is a necessary component for most firms.
• How does the system manage manpower and equipment over the entire project? Resource management tools should cover long-term planning for physical resources and labor, supporting any project at any time. Typically, these tools are used more for contractors with large numbers of resources to manage, but are necessary to manage any project with a sizable number of tasks and contributors.
• How does the software handle critical path management (CPM)? A critical path highlights the tasks within a project plan that have absolute dependencies, i.e., the task cannot be completed until the completion of another task, or the delivery of needed supplies. Failure to deliver on vital tasks will cause significant delays or even project failure. Resource management and construction scheduling tools must provide some kind of CPM display capabilities; generally this is what senior management asks for when determining whether a project is on track.
• Can the software track resources over multiple projects? Less expensive packages are often project-centric, but resources rarely are. If your company manages multiple projects simultaneously, you'll want the ability to obtain a total resourcing picture. Otherwise, you may encounter problems such as finding employees are scheduled for more hours than there are in a day.

Reporting and analysis

Reporting and analysis is one of the most critical aspects of any construction project management software. Whether the reporting is built into standalone project management software or part of a job-costing module in the accounting system there are some issues and capabilities to look for:

• Compatibility with Crystal Reports. Crystal is probably the most common reporting tool in the industry, and chances   are that you (or one of your partners) use it now or will later.
• Customizable reporting. Does the tool supply simple pre-formatted reports, or can you customize and create new   reports as needed?
• How does the software handle automatic reporting and exception triggers? In other words, can it send warnings   when items are over budget, or not in the budget?
• How is the data stored in the database? Can you retrieve it in the format you need?
• Can you link back to source documents? Can you view original documents such as signed time cards or proposals?
• Does the software support open database connectivity (ODBC) standards? Does it allow you to pull cost data from   Excel or other databases?
• Can you set triggers and notifications that support automatic or blanket approvals for some items? If so, what kind   of security is in place to prevent abuse?
• Can you bill directly from the system?

*** Go to the next article: Construction Project Management and Scheduling Software Buyer's Guide: Vendor Selection