Most contractors listen closely to their peers when it concerns business management software, as they are eager to learn which packages work best and which ones they should avoid. That’s because all contractors want to use software that will streamline operations while keeping data safe, organized, and easy to manage — and they don’t want to pay an arm and a leg for it.

Finding that dream software package can be a challenge, though, because every contracting firm has different needs, so it takes a lot of time and effort to figure out which one will work best for a particular company. It’s a difficult — but necessary — task for contractors wanting to continue growing their businesses.

No Package Is Perfect

The first thing contractors need to keep in mind when shopping for software is that no package is perfect, said Rick Tullis, P.E., president, Capstone Mechanical, Waco, Texas. “Show me one contractor who is completely happy with his software, and he’s either lying or he hasn’t actually implemented it yet. Every package has its problems.”

While it is usually possible for companies to work around some software limitations, there may come a point when the software starts limiting the growth of the company, and then it’s time to start shopping around. Tullis, who founded his commercial contracting firm in 2005 with partner, Stefan LeRow, discovered his company had outgrown its software after hitting annual sales of about $10 million.

“We found out we had become the largest user of this particular software suite, which is a scary place to be. The larger we got, the more difficult it became to extract the data we needed from the system,” said Tullis.

Knowing that the company was going to continue to grow, Tullis and LeRow recognized that they did not have the time — or the expertise — to handle the financial side of the business. In 2008 Scott Stanger, a professional accountant who had previously led a large HVAC contracting firm, joined the Capstone team as vice president of business operations. “My expertise is in engineering and marketing, not accounting,” said Tullis. “We feel really blessed to have Scott here, as he has the right experience and was able to choose a software package that we are confident will help our company continue to grow.” The new software is scheduled to go live on Jan. 1.

In addition, Capstone hired two recent college graduates with Business Information Systems degrees in order to help implement the new software, install the associated hardware, and provide general technology support. “Right now is a good time to hire recent college graduates because they’re looking for jobs, and although they probably never envisioned working for a contractor, they are just happy to have work,” noted Tullis.

Knowing their limitations is something that most contractors should consider carefully, said Tullis. “A lot of contractors struggle with implementing software, usually because they just have a bookkeeper or an office manager. They don’t have an in-house professional accountant who knows and understands contracting enough to meld those two worlds together. My advice to contractors is to evaluate themselves first, to see if they have the time and the expertise to take on the project of finding the right software. Or, do they have the right people in-house who can take it on? If not, subcontract that out to a professional.”

Regardless of whether contractors decide to find the right software themselves or sub it out, Tullis encourages them to approach the process as they would any other contracting job. “We wrote out a scope of work and only paid for what was delivered. Don’t pay someone the full amount and then have them drop off a box of software and leave. Create a contract just like you would for any other project and hold them to it. And don’t pay them until they accomplish the milestones that were set in front of them.”

Checking References

Robert Champe, president, Shearer Heating, A/C, and Refrigeration, Washington, Pa., is also in the process of shopping around for new software, after outgrowing the package that he originally purchased for his full service residential and commercial company in 1995. Champe has been happy with his existing software package, which he said is functional and user friendly; however, he would like to add mobile technology, and in order to do so with his current vendor he would have to completely change out his existing software. Instead, he decided to look around and see what other vendors are offering.

“We would like to add tablets in the field because we chase a lot of paperwork,” said Champe. “Our commercial refrigeration division does a lot of traveling, so there are times we don’t see them for a few days, and we are left waiting for paperwork, billing, and time tickets. We’re looking for software that allows our guys to input the information on a tablet and send it right back to our office, without dealing with all the paperwork.”

Cost is a big consideration to Champe, as it will be expensive to purchase and implement an entirely new software system. Training is also an issue, and Champe likes the idea of having the software vendor fairly close to his office in case any problems arise.

“I’d like the vendor to stop in and spend some time with us to see how we do business and whether the software is going to do what we want it to do. The software company we are looking at has programmers and developers, so they can tweak the standard package a little bit. While we don’t expect them to reinvent the wheel for us, we do need to make sure the software can handle the data for residential service and installation, commercial service, and refrigeration.”

For contractors looking to purchase a new software package, Champe strongly encourages them to make sure the vendor has an adequate number of programmers and developers on staff to keep up with the newest technologies, as well as make the necessary changes for customers. While researching packages, Champe intends to visit other contractors who are currently using the software, as well as check out demo versions to make sure he is comfortable with the user interface.

Tullis also highly recommends visiting other contractors who are using the software. As he noted, “You don’t want to go to an office and hear, ‘Don’t buy this software because it’s the worst ever. Run away.’ Contractors should also look for software vendors that are going to be around and have good technology — the more open the technology, the better because that’s going to provide more options going forward.”

This is especially true where mobile technology is concerned. In Tullis’s case, their new software provider recommended having a third party write the application for the tablet PCs that will be used by the service technicians in the field. The application will allow technicians to receive their work orders, do all their invoicing, and transmit that information real-time to the database in the office. The process is seamless because the new software package uses an open protocol, which makes it easier to add functions that the vendor does not provide. A similar third-party application will be written for Capstone’s human resources functions, including employee benefits and payroll.

“We wanted to go further than what the new package offered, and our vendor was able to provide the accounting package and bring in third parties to create the other applications we needed,” said Tullis. “At the end of the day, we have one contract with one dollar amount that goes out to all those people through our reseller. It’s a collaborative effort. We’re not on our own doing it without our vendor’s help, and at the same time, the vendor is not doing this without our involvement.”

And Tullis has one more piece of advice to offer: “Remember that software vendors want to sell software. They’re going to tell you it’s easy, it’s a no-brainer. That’s fool’s gold. Either do the research yourself, or hire the right people to figure out what is going to work best for your company.”

Sidebar: Still Happy After All These Years

Rich Kusleika, president and owner, Standard Heating and Air Conditioning, Omaha, Neb., may be the exception to the rule when it comes to software: he has used the same package for 10 years and is still happy with it. The software provides everything he needs to run his 160-employee company, which specializes in commercial and residential new construction, retrofit, service, and commercial controls.

“This software has allowed us to grow our business without adding any accounting staff,” he noted. “It gives us great timely reporting, and we do not need to outsource any accounting functions. Our vendor offers all the modules necessary to run our business, including payables, receivables, inventory, payroll, and service contracts, and we can use Excel, Access, and Crystal Reports for custom reporting.”

Kusleika noted that finding the correct software takes a lot of time, especially if “the person writing the check is not involved in accounting.” He chose his current software for several reasons, including that the vendor seemed to be very forward-thinking; the job cost module works very well; and the software is designed specifically for general and subcontractors, as opposed to being inventory based. “We are happy with our software, and it works well for us,” he added.

That being said, Kusleika stated that no software is perfect unless it is custom written, which is why contractors need to “see it in action, and talk to the people who are using it. Just listening to the salesperson is only the very beginning.”

Publication date: 12/26/2011