Creating Paperless Project Management
June 2009By Sue Watkins
It’s no surprise that project-based organizations, like Neal Electric, are pushing for cost savings and streamlined business processes—particularly as capital building and construction programs grow in size and complexity. Disruptive market dynamics like green building and BIM, combined with the need for increased construction project and document control, make it clear why all capital projects must have some formal project management (PM) system in place.
Neal Electric Corporation is one of the largest commercial and industrial electrical contracting firms in the San Diego area. The company based in Poway, California, is recognized for its expertise in design-build and design-assist projects, installation of data and telecommunications systems, and the ability to fast-track projects ahead of schedule and budget expectations. Neal Electric provides the highest quality construction and maintenance services—along with a 24-hour emergency service department—to clients in the commercial, industrial, bio-tech, education, gaming, hospitality, medical, and military market segments.
In 1984, Tom Neal and Cas Wesolowski joined forces at Neal Electric, combining their knowledge and management capabilities to take the company to the next level. Today, Neal Electric has approximately 500 employees, $80 million in annual revenue (with a solid growth rate of 2 to 5 percent each year), and a branch operation in Los Angeles.
According to Jeremy Roos, Neal Electric’s San Diego project operations manager, the company’s continued growth made it more and more challenging to manage increasingly complex projects using its current system of disconnected programs. With more than 100 projects to manage each year, says Roos, “We were pretty much winging it as far as day-to-day project management goes. Billings, budgets, correspondence, purchase orders, and change orders were all tracked in an in-house system using a variety of software programs.”
Roos recognized the need for a sophisticated PM solution. “We had so much redundancy,” he says, “and everything was updated manually. A change order, for example, was entered in the change order log, re-entered on the budget sheet, and re-entered on a project review page for monthly work-in-progress reporting. As we grew, this process became a huge task. In addition, making multiple entries created the possibility of error, which posed a significant risk to the company.” Over time, Roos convinced senior management to investigate options.
SELECTING A PM SOLUTION
While several solution criteria can drive the software selection process, when asked which criteria were most important in choosing a PM system, PM software customers most frequently responded with 1) flexibility, 2) ease of use, and 3) functionality. Neal Electric was no different and sited these same reasons. In fact, according to a recent research study by FMI, the nation’s largest provider of management consulting and investment banking to the worldwide construction industry, a company’s success is clearly influenced by the using of a formal project management software solution.
In the study, Utilizing Construction Project Management Technology to Create Best in Class Organizations, FMI surveyed construction firms and building owners and concluded that companies with PM systems in place experienced overall improvement in project controls due to better communication. In fact, organizations experienced tangible ROI metrics and business value, reporting average annual savings of $230,000; some organizations reported annual savings in excess of $1 million.
When Neal Electric began the search for a software solution, they originally chose a system with strengths in accounting. They quickly learned that the flexibility of the solution was less than what they needed. In order to use some modules, they were required to use others that they simply did not need. In the end, they learned that going with a solution specifically designed for PM that could integrate with the accounting system eventually through Web services, was their best bet. So Neal Electric chose Prolog® software from Meridian Systems.
EASING THE TRANSITION
Adjusting to a robust project management system after using basic applications was a challenge for Neal Electric, so they contacted Kelar Pacific, an authorized Meridian reseller for assistance with implementation and training. “Kelar spent a lot of time understanding our business processes and tailoring Prolog to our needs,” says Roos. To ease the transition to the new PM software, Kelar created custom reports for things like budgets and purchase orders so they were presented in a familiar format. Kelar also modified screens to remove un-used options to make the interface more user-friendly for project managers.
To maximize the implementation, Neal Electric invested heavily in training. Kelar helped the company develop several short training sessions that addressed the system’s modules one at a time. Follow-up sessions reinforced the initial training using methods adapted to different learning styles. Throughout each step in the training process, notes Roos, “Kelar was really helpful.”
INCREASING EFFICIENCY WITH PAPERLESS PROCESSES
Almost immediately, Neal Electric realized significant efficiency improvements by standardizing project management, including Cost Control, Document Management for correspondence like requests-for-information (RFI’s) and submittals, Field Administration, and customized reporting. The company estimates that the company’s top management, along with 20 project managers and engineers, currently utilize about 80 percent of the system’s functionality.
The process efficiencies gained from using a formal PM system have translated to measurable time savings for Neal Electric—and better management of costs. “Even though we’re only in the infancy stage of its use, the efficiencies gained from using Prolog have already saved us about 15 percent of our time, which allows us to be more proactive with project management from a cost side. We don’t have to go three or four places just to write an RFI. We now have time to look at the financials and address issues early. That’s huge for us,” he says.
A ONE-STOP PROJECT MANAGEMENT SHOP
Although Neal Electric reports improved project profitability to-date as a result of using a PM system, they expect a substantial climb in profit and time savings as they further streamline their paperless operations and create even more transparency around dollars and cents. ■
About The Author:
Susan K. Watkins is director of marketing at Meridian Systems, the market share leader for construction project management software, where she oversees all corporate marketing initiatives. She can be reached at swatkins@meridiansystems.com.
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