Information Technology – earning you money! By Kevin Dick
Information Technology is either earning or costing you money. • The true cost of Information Technology is not inherent in the direct costs of the software, But….. it is the result of information not obtained. • Information is the heart of control, and control is the basis of profitability in your business!
Information is at the heart of control • Accurate, timely, up to date and relevant information is paramount to sound decision making. • Information needs to be readily accessible. • Live real-time information minimises the risk of losses. • Timely information allows early identification of possible problem areas.
Trying to control your construction costs can be like trying to package fog. • Building, Civil & Development projects are notorious for running over budget. • Labour, Plant & Materials make up the bulk of costs in the contracting industry and are difficult to control. • Margins are can be tight! excessive costs can decimate margins. • Often the basis of information is supplier invoicing or other source documentation obtained and reconciled long after the fact. • Remote and or multiple sites are difficult to manage and control.
Practical challenges in collecting information • Different pieces of information are generated at dispersed points and sourced from many different documents. • Fast track developments need constant information flow. • Communication and process breakdowns • Separate software for wages, accounting, costing etc. causes the need for multiple processing and re-punching of data. • Reports need to be compiled from different sources.
Extracting Information • Most organizations have all the correct, information somewhere, in some form but not available in the format required. • Standard accounting data is not sufficient for effective control in the building industry as the critically needed activity based information is not generally available. • Double or even treble capturing is required to even come close.
The lack of timely information results in the following; • The organisation is not sure where they stand at any given moment. • The information cannot be trusted. (Data Integrity - out of date, incomplete etc.) • Decision makers are forced to make decisions on history, not the present. • Cost-overruns are not detected until after the fact • Losses can’t be managed or prevented.
Give the information strategy sufficient attention! • Accounting and audit requirements usually drive IT purchases. • The strategic approach should be the need for accurate and timely information. • What information is needed • Where is the information needed • By whom is the information needed • When is the information needed • In what format is the information needed • And finally why is the information needed • What decisions need to be taken based on this information
The Dream Live – Real - time integrated information
Benefits of “real time” “fully integrated” information • Enhanced Control • Enhanced ability to manage project costs • Better margins • Competitive edge • Information is accurate, timely and controlled. (Data integrity intact) • Instant accurate decision making • Cost-overruns can be managed. • Losses can be prevented.
Basic Elements of Operations • Software • Estimating • Planning • Valuations • Procurement • Accounting software • Costing software • Wages/Salaries • Plant/Workshop/Job Cards • Subcontractors • Yard Stock • Stock • Reporting • Connectivity • Internet (ADSL) • Hardwire • Wireless (GPRS) • Output Information need • In the correct format • Accurate • Relevant • Up to date (current) • Continually available
Information Flow Let me show you
Cost of technology • Technology used to be expensive. • Especially out of reach of the medium to small building enterprise What is the cost of not having the information?
Other industries have benefited from “Live – Real Time” Information!
Other Beneficiaries Civil, Building, Marine, Mining, Sub-Contracting, Plant, General Contractors
Above all things Know oneselfSun Tzu (Art of War) Correct use of cutting edge technology will enable you to; • Gain a Competitive Edge, • Increase accurate pricing, • Enhance control by being able to match Actual Costs with Allowable Costs on a continual basis. As someone once said “If all you have is a good budget, you will at least know why you have gone bankrupt.”
With the technology available today, there is no excuse! You can know exactly where you stand!! Using information technology correctly - will earn you money!!
Thank You for your kind attention!