For the last 40 years, I have been working with homebuilders to improve profitability through the use of integrated and accurate management and information systems. The use of integrated systems eliminates duplication and protects the integrity of the information generated throughout the process. Anyone involved in building a home or in any of the processes along the way knows the value of consistent and accurate information. However, communication has always been a challenge as multiple documents and channels are used causing confusion and creating errors and misunderstandings. Thus the final step of the integrated system has been to identify the document to be the recipient of the information which in turn could be disseminated to all required users in a standard and reliable format. It was not difficult to arrive at the conclusion the working drawings could provide such format; thus the effort to create the perfect working drawings.
It requires integration and information sharing across the entire organization. Every department needs to have access to the same data base; from sales to estimating and purchasing, to the superintendent, trades and warranty teams who build and support the home. Inaccuracies and inconsistencies create avoidable mistakes which end up causing deterioration of profitability and infringing on the ability of the builder to realize superior profits. Even prior to computers, the road to superior profits has always been through the creation and disciplined implementation of integrated management systems, including the preservation and communication of reliable information throughout each department across the entire organization. How can a builder streamline processes or increase profitability if each department is working from what could be unreliable data?
We know there are scores of inefficiencies in homebuilding, providing builders with the opportunity to improve profits 2% to 10% if they streamline their management systems. In doing so, the builder also increases control over its operations, and gets into a position to grow with only minor adjustments to the management systems.
Back when I started working towards seamless integration of management systems, getting to the end goal was much more of a challenge than it is today. At the time we did not have technology available, nor did we have standard classifications in accounting inside each company much less across organizations in the industry. It was difficult at best to track construction cost to each house under standard cost classifications and furthermore identify variances accurately to the right cost codes. A similar situation was prevalent with the classification of expenses. Analysis of the financial information with the objective of improving financial performance was very difficult at best. And the capability of measuring the industry performance was non-existent. Today, we see real time access to critical management information as a powerful value-added component in achieving competitive advantage and facilitating better, faster, and more strategic decision making.
We have come a long way since those early days and there have been many changes in the industry as well as with the advent of technology to bring us closer to the desired goal of integrated management systems. What years ago was a great feat has now become much easier to accomplish through developments in technology.
However, we still face resistance from the builders to standardize and allow full integration of the systems utilizing technology tools. Now more than ever, it is crucial for builders to address this challenge head on. We are facing a dramatic change in the market place we have not seen since the baby boomers entered the market. 83.4 million Millennium buyers are now poised to enter the housing market setting up to drive the future for homebuilders. The builders’ product and processes must be ready for these customers who have grown up in the age of technology. Although our vision has not changed since the early days, as technology has evolved, we continue to work with software companies to create systems that would further support our goal of integrated systems and information sharing. Today successful management information software solutions should provide the configuration for homebuilders and developers to proactively identify, document, and analyze problems or opportunities for improvement. Take the time now to investigate the opportunities new technological advances have to offer to improve your daily operations and the communication with buyers, home owners, trades, suppliers, and your own staff.
To view the entire white paper, go to http://ow.ly/227G0.
Copyright © 2005-2010 Builder Partnerships
