Before I joined Moore Colson, I was a consultant for a software company and was responsible for client software conversions. I had many successes and a few failures. Now, as part of the Moore Colson Accounting Software Consulting team, I hear about all our construction clients’ good and bad conversions.
So, what goes wrong in the bad conversions? Here are the top pitfalls of software conversions for construction companies.
No True Software Selection Process
Construction clients will sometimes choose software based on something they heard, what a salesperson recommends or because someone on the team previously used it. However, the best approach is to create a software selection process that defines your requirements, evaluates several potential software systems and compares their features. This thorough process will help you find the best fit for your needs. Equally important to choosing the right software system is selecting the right software vendor. You should evaluate several vendors, obtain references, and create a formal RFP process from the start to save you a lot of headaches during the implementation and migration phases.
Construction companies also have specific software requirements, including job schedules, work in process and retainage management. Generic software cannot accommodate these requirements.
Failure to Define Scope, Timeline and Budget
When first meeting with construction clients for an implementation (scoping session), I always tell them there are three types of implementations:
- Good implementations
- Fast implementations
- Cheap implementations
Unfortunately, you can only have two out of three. If you want a fast and cheap implementation, it won’t be good. If you want a fast and good implementation, it won’t be cheap, and if you want a good and cheap implementation, it won’t be fast.
I recommend taking steps to control your project’s timeline and budget effectively. Some common mistakes that construction companies make during this process include:
- Making budget and timeline promises before all the facts are in hand
- Not putting enough detail in the RFP, resulting in an inaccurate price quote
- Not identifying business process changes before implementation
- Inadequately defining the scope of integrations upfront
- Not creating a detailed project plan
- Not devoting enough client resources to the project.
- Approving unnecessary customizations due to not performing a comprehensive cost-benefit analysis
- Increasing the scope of the project during testing and training
- Inadequately defining data conversion specifications
Attempting Business Process Transformations
On the surface, it makes sense to make significant improvements to workflows while replacing software, rather than converting the software, then changing the new system. However, this presents significant challenges, including:
- Legacy system conversions already carry a substantial amount of risk. Including significant improvements to the workflows adds yet another issue.
- The development team likely doesn’t understand all the emergent workflows in the current system, which will break with process re-engineering.
- Most end users are resistant to changing systems. Adding process re-engineering increases aversion to the rollout.
Construction companies should make business process transformation a core part of their strategy, continuously improving business processes before the system conversion, during conversion in a test environment or after conversion as part of a phase II implementation.
You should also establish clear change goals and outline why they are important. Assemble and empower a team to help lead the change process by implementing education plans and workshops. Address objections from users by listening and communicating with them throughout the process. Overall, you can sustain change management with detailed planning, specific measurement and developing an atmosphere of trust and cooperation.
Poor Risk Management
Most construction software conversions fail because companies do not identify and address risks before they become a crisis.
Lack of Executive Buy-in
Staff cannot implement the project successfully without full commitment from upper management. Obtaining buy-in from all end users also plays an essential role in ensuring a smooth transition to the new system. Construction companies often select software because the project manager has used a specific vendor previously. Or, companies leave critical software conversion decisions to top-level decision-makers who may not work to get the consensus of the end-users impacted by the conversion. This decision-making can open the organization to risks of project sabotage by users excluded from the process, causing productivity and efficiency issues that lead to business interruptions.
The executive sponsor must not only set the project’s direction but also ensure that the project team has the resources and tools necessary to carry it out. Do not underestimate the time commitment needed from staff to make the project successful. Also, do not assume the software vendor will manage all aspects of the project or that management will view the project as an “IT-owned” initiative. These assumptions could lead to a lack of staff engagement and can sometimes result in you missing out on critical knowledge needed for a complete and successful conversion.
Issues can also arise due to project scope creep, which may include:
- Problems with the software and integration that are not uncovered until after it is live.
- Unrealistic expectations about the internal effort required to develop custom screens and workflows with the vendor’s software development toolkit.
- Over-customizations that make upgrades extremely costly and lock you into limited programming resources and technical support.
- An inadequate data conversion plan that imports bad or unnecessary data. Focus on cleaning up the database before transferring data, and ensure that you are converting all critical data, including historical transactions.
Lack of Training
Some construction companies may have staff resistant to the change and, therefore, do not train or test the software properly. Team members may also receive training that is too short (watching videos), too sporadic (no follow-up), or too early in the process (staff forgets what they learned by the time implementation is complete).
Other Risk Factors
Construction companies can run into issues during software conversions for various other reasons. Some of these additional risk factors include, but are not limited to:
- Waiting to begin the process until your legacy software stops working or is no longer supported. Some construction software vendors are soon sunsetting their products, so be proactive. If you convert too late, you will be using obsolete legacy software.
- Lack of parallel processing and testing of new processes
- Rushing implementation by trying to force the project to fit a set deadline. Companies should plan ahead to allow adequate time for a successful implementation.
- Trying to do the implementation in-house to save money. You get what you pay for.
Construction software conversions are complex and require planning, commitment and oversight. Your business will have to work with the new software for several years, so making the investment worthwhile is essential, ensuring it allows for better management decision-making and makes the staff’s jobs more efficient.
If you need assistance with a software conversion, the Moore Colson Corporate Accounting team can help. Our Software Consulting professionals can assist with selecting a software solution to meet the current and anticipated needs of your construction business. Don’t hesitate to contact us for more information.