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Ecmweb 3343 208ecm24pic1
Ecmweb 3343 208ecm24pic1
Ecmweb 3343 208ecm24pic1
Ecmweb 3343 208ecm24pic1

Buried in Paper?

Aug. 1, 2002
Finding themselves in a paperwork nightmare, many contractors are turning to document management software to digitize traditional paper-based forms and streamline business practices. There's no doubt about it. Despite analysts' predictions of a paperless society by the turn of the century, we still love paper. According to The Freedonia Group, Inc., an international database business research company

Finding themselves in a paperwork nightmare, many contractors are turning to document management software to digitize traditional paper-based forms and streamline business practices.

There's no doubt about it. Despite analysts' predictions of a paperless society by the turn of the century, we still love paper. According to The Freedonia Group, Inc., an international database business research company based in Cleveland, U.S. shipments of office papers and related products are projected to increase nearly 4% per year through 2003, surpassing $24 billion. Consumption of paper is expected to rise approximately 2% annually to 11.6 million tons with printing papers exhibiting the best gains (29%) among office product segments through 2003, supported by the proliferation of printers, copiers, and faxes.

Electrical contractors are just as inundated by paper as everyone else. Why? It's probably not exactly a love affair with paper that's driving them to fill up warehouse after warehouse with hard copy archives, but rather the need to organize and keep valuable project data together and accessible. Ask any contractor, and you'll typically get the same answer. The paperwork part of their job — filing invoices, processing time cards, billing customers, and managing contracts, packing slips, purchase orders, productivity logs, meeting minutes, requests for information, change-orders, design reviews, and submittals — is a necessary evil. Although the importance of effective document management in the construction industry hasn't changed for decades, the method by which contractors track information has.

To address this proliferation of paper, more electrical contractors are moving toward a digital workflow, harnessing the power of automated document management software to manage their paper nightmare. But there's no single solution. Contractors are implementing these systems in many different ways. Some use a standalone workstation with a single administrator to track project information. Others have multiple users, accessing their data on the company's LAN, WAN, or the Internet via a desktop computer, laptop, or PDA. Still others are tapping into an ASP environment, which is a true Web application hosted off-site for online construction project collaboration. Some want accounting built-in; others want to integrate with their existing accounting system. The possibilities are almost endless.

The electronic push.

What's driving the demand for digital document management solutions these days? According to Greg Dohrman, director of professional services at Avatech Solutions, a software integrator headquartered in Owings Mills, Md., the field has really taken off in the last two years in mainstream business. Prior to that, it was something exclusively reserved for high-end manufacturing and government. “I think simplicity is driving the demand,” Dohrman says. “Document management used to be kind of ominous, almost like Oracle. You had to spend a lot of time programming it and trying to make it do what you wanted. In the electrical industry, I think it's just getting to the price point where that small- to mid-range contractor can afford to buy in.”

Although the technology's improved over the years, this isn't a new concept, explains Joel Koppelman, CEO of Primavera Systems, Bala Cynwyd, Pa., which introduced Expedition project management software about 19 years ago. Offering LAN-based products and an ASP option, Koppelman's business has been growing for years, but it has taken a while for the construction market to embrace the technology. “People in the construction business tend to want to be told by an owner ‘You need to do this. Otherwise, I'm not going to pay you,’” he says. “Left to their own devices, they tend not to do it.”

Koppelman believes the Internet has ultimately driven acceptance of a digital workflow. Making the software Web-based and giving people access to their data through a simple interface, which is what a browser does, opens up the marketplace. “It enables hundreds of thousands of people to gain access in a simple way,” he says. “Before Web-based capacities really got into the marketplace, I think the learning curve was a little too steep, and they didn't want to bother with it. With Web-based systems, that excuse doesn't exist anymore.”

Brad Mathews, vice president of sales and marketing, Dexter & Chaney, Seattle, agrees that acceptance has been gradual. With a large portion of electrical customers, 2,200 of whom incorporate the firm's document imaging module, Dexter & Chaney released its flagship product (Forefront) in the early '80s but added document imaging and Web capabilities within the last five years. “Has it caught on with everybody yet?” Mathews asks. “Definitely not. But is it catching on? Absolutely. I think we're at the point now where it's sort of gaining momentum. This is an emotional thing that's taken people time to get used to the concept of not filing invoices. Two or three years ago contractors were saying things like, ‘I don't know if that could work in our company.’ Now they're saying ‘We've got it, we're budgeting for it, or it's on our agenda.’”

Taking the digital plunge.

Before investing in document management software a little over a year ago, Brian Scott, controller at Morse Electric, a heavy industrial electrical contractor headquartered in Freeport, Ill., used an old DOS-based program to organize workflow. Before that, everything was done on hard copies. Chuckling as he reminisces about making the trip to the rental storage unit to dig through palettes to find a document, Scott remembers when he realized automated document management was inevitable. “We knew we needed something bigger and better,” Scott says. “We knew we wanted to scan documents. We knew we wanted to electronically start storing things. We knew we wanted every module tied together. We couldn't add on buildings and buildings to store documents, and we needed an easy way to retrieve the information.”

He also credits his firm's president for pushing his staff to be on the cutting edge electronically. “When you're trying to deal with high-tech customers, you've got to be competitive or you can't sell your services,” he says.

Morse Electric originally started scanning AP invoices only, running a year's worth of records simultaneously and keeping a hard copy just to ensure repeatability of the system. Now they've dropped paper almost altogether. They've got six months of running electronic cash receipts under their belts and are starting to scan general ledger entries to try and get rid of binder backups. Electronic changeorders are in the works, and contracts are next on the list.

A new user of digital document management technology, Harry McClane, service department manager, Hughes Electrical, Portland, Ore., has been in the construction business for 25 years. He admits he was basically strong-armed into using the system about six months ago — his firm's decision to digitize business processes stemmed from a push to solidify relationships with its general contractors. “You either move with them or you get behind, and I think it's better to stay with them,” he says.

Although somewhat reluctant to make the change at first, he looks back on his old paper-intensive spreadsheet method as obsolete. “It's like anything else — you don't need that Palm Pilot, but once you start using it you think ‘How did I get along without that?’” McClane says. “If you had told me six months ago I would be using this program, I would have said you're crazy. If you'd told me a year ago I'd be using a laptop, I would have said you were nuts. The same goes for a PDA. They just seem like toys, but then you start using one and realize you can get twice as much done.”

Since implementing the system, McClane estimates his firm has saved roughly $100,000 by putting people back into the field who were previously spending much of their time pushing paper. “One of the things we like about it is the fact that you don't have anything to hide anymore,” he says. “If there's a mistake made, it jumps right out at you. So at the end of the job, you've either made money or lost money.”

It's this kind of visibility that's driving business, says Ian Howell, vice president of business development at Citadon, a San Francisco-based ASP. In an ASP environment, the general contractor or owner would typically host the project and pay for the service. So it's like a free ride for subs, explains Howell, because they're invited as project participants to collaborate and share documents at no charge. But there are other benefits to this technology as well.

“People don't like to talk about it, but ‘litigation’ is the dirty word of the industry,” Howell says. “Online project management keeps everyone on their best behavior because the visibility is there with a project database and event logs being maintained every second of every minute of every hour of every day in terms of who got what, who sent what, and when.”

To make an unlikely comparison, a typical black four-drawer file cabinet stuffed full of paper documents is equivalent to about a gigabyte in electronic storage space, says Mathews, who actually figured that statistic out. “When you think about what a gigabyte costs these days, they're cheaper than a file cabinet,” Mathews says. “You could probably get 40 or 50 file cabinets on the hard disk space for the price of one file cabinet, not to mention the floor space to put it on and the person filing it.”

As wireless technologies improve, more customers are accessing their document management systems remotely via laptops — some are even asking for PDA accessibility. Although many vendors have unveiled PDA options to supplement their software, Howell says Citadon's been there, done that, and stopped.

“We perceived the need — the idea of having a punchlist in the palm of your hand, walking around the jobsite — and it turned out that the devices were the problem,” he says. “You couldn't read the screen in daylight. Drop it once, and it's broken.”

Certainly the dream is that wireless connectivity makes that better, he says, along with things like color screens. But the fact is it's not practical to view project documents like AutoCAD drawings on a small handheld screen.

But there's still hope for electronically savvy, gadget-hungry contractors. Howell says there's a new concept emerging. “The latest thing they're touting is the idea of these electronic tablets, which are like giant-sized PDAs,” he says. “These tablets are like taking a normal, letter-size page and turning it sideways. They also have a much stronger plastic or rubber frame. But we're going to wait this time and see if they actually get used and not be on the bleeding edge.”

Sorting through the clutter.

Despite the obvious capabilities of all the flavors of document management technologies on the market, it's difficult to narrow the playing field when you're ready to consider an appropriate solution. Even after the dot.com bomb, there are still more software options out there than one can comprehend.

Kevin Rowe, one of the owners of US Reprographic, a subsidiary of Western Blueprint (one of the largest digital blueprint companies in the country) based in Kansas City, says not all contractors are welcoming a digital workflow with open arms. He's seen tremendous resistance among contractors who feel like they're being forced into electronic project management by owners and general contractors.

That's why Ron Butterman, director of marketing at Océ, a nationwide supplier of digital document management and delivery technology, says the majority of contractors are relying on reprographic houses to output electronic construction drawings, mainly because they don't have the sophisticated printing equipment necessary to print the files. Despite advances in digital document delivery, Butterman says most contractors still prefer paper prints.

But the market is changing. Rowe says five years ago he handled 100% of transferring, distributing, and outputting engineering and architectural drawings for contractors in his market. Today, as some invest in the hardware, software, and personnel necessary to bring these functions in-house, he estimates that number has dropped to 70%. Although his company has offered full digital distribution services for the past two years, he says his business is still predominantly paper-based due to the physical size of these drawings. He says many contractors are bucking what owners are telling them as far as electronic mandates go, and in some cases turning down bids.

“There's always been kind of a historic animosity between all three disciplines: the architect, engineer, and construction company,” Rowe says. “You put them all in the same sandbox, and they've got to build a sandcastle. Nobody is really happy in the end except the owner. I think that until we get to the very architectural root of where the documents start and make them more contractor-friendly, they won't use these systems.”

When deciding if a document management solution is right for you, Dohrman finds it's best to start with a list of objectives. “Do they want Internet collaboration, or is it electronic workflow, document control, or security?” Dohrman says. “Our suggestion is don't even look at products until you have your functional requirements. Then you can take it to the next level and say what are our key applications that are critical to our business.”

Even if subs aren't investing in document management, Dohrman says it's important for them to keep up with technology. “I think if they're aware of what the technology is and are willing to accept documents through a data management solution — whether it's theirs, the general contractor's, or the customer's — I think it gives them a lot better shot of winning a project.”

Regardless of the benefits of a digital workflow, there's still something about paper. Butterman says one construction manager he knows summed it up best. “He said, ‘Ron, all of this computer stuff is great, but in the end there is nothing better than a big sheet of paper on the hood of my truck.’” The counter argument being “but is that sheet of paper the most current drawing?” asks Howell.

About the Author

Ellen Parson | Editor-in-Chief - EC&M

Ellen Parson is the Editor-in-Chief for EC&M. She has a journalism degree from the University of Missouri-Columbia. She's been a business-to-business writer and editor for more than 25 years, most of which have been covering the construction and electrical industries. Contact her at [email protected].

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