In today's fast-paced construction market, contractors need more than just electrical expertise to stay competitive. This means automating project management and accounting.
For more than 12 years, Mustang Engineering (with more than 1000 employees) has specialized in providing the energy industry with some of the world's most advanced production facilities and plants. Internally, however, Mustang was still handling many of its project management and accounting functions the same way it had since the company began. The decision to move from basic spreadsheets and a manual "paper and pencil process" to a more advanced Microsoft SQL Server platform and industry-specific electronic timesheets led management to select a system tailored to their needs. Note: "SQL" stands for "Structured Query Language" (pronounced "see-quell").
Mustang's search for the right software started with how to tackle the job of electronic timesheets for the 350 jobs the company has open at any given time. Randy Hewett, manager of project controls, says Mustang's first task was to improve the way it manages and controls the time and labor charged on each project. The staff also wanted a better way to manage projects and handle the huge amounts of data generated on each project.
"We process between 275 and 300 invoices every month on average," says Hewett. "Our processes include dozens of ways to pay people and lots of ways to invoice our clients. Compared to the old way of processing payroll, we use fewer people and save many hours."
Since Mustang kept most accounting information on spreadsheets, this resulted in labor-intensive procedures under the old system.
"Processing project data and time sheets back into the accounting system could require seven to 10 days," says Hewett.
The company's old system used several programs that did not integrate or link with each other. Thus, Mustang had to pay for a high amount of manual data input. This cost time, not just labor dollars. The input occurred at different levels, and information was slow in flowing to the people who needed it to manage projects.
"Mistakes were common in the old system," says Hewett, "and verifying the accuracy of reports tied up a lot of manpower."
Mustang learned some important lessons (see sidebar, below) in this software project. Fortunately, the vendor was able to help the staff learn through shared expertise rather than bitter experience.
The long search. Because of the impact a modern accounting system would have on its operations, Mustang approached the selection process with the same diligence required to do the accounting. Just as any project needs the right staff for each step of the process, business process software must be able to handle each step of your business process. Mustang identified what those steps were and put them together into a plan.
Mustang wanted an integrated system that could handle both its accounting and project management needs, in a way that would allow a complete tie-in of the two functions. So, it analyzed products from 30 software companies before narrowing the list to three. This intense analysis took three months and involved site visits and detailed analysis of each software package. In the end, Mustang chose a system that offered the accounting features it needed with the flexibility of the SQL database.
Mustang managers saved implementation time by using the services of Maverick Software to perform the custom programming work. The result was a totally integrated process, successfully eliminating hundreds of manual hours and steps. Implementing the new software enabled Mustang to:
• Reduce errors;
• Reduce data inconsistencies;
• Reduce cost of business processes;
• Improve turnaround time and throughput;
• Improve confidence in results of queries and information searches;
• Improve security, backup capability, and data integrity;
• Improve ease of use through standardization of interface and procedures;
• Improve audit process through automation and access to information; and
• Allow Mustang to run on a cost basis.
Software should work the way you work. The software Mustang chose has a characteristic we refer to as "extensibility." This means it can expand to meet future needs. The degree of extensibility varies among products, so it's important to project your future needs. In Mustang's case, extensibility was a prime consideration. You also must look at how flexible the software is and how it can adapt to your way of doing business. This was also essential for Mustang.
"Our business must be flexible to meet the demands of our customers' projects," says Hewett. "We selected this particular software because it exhibited the greatest flexibility, and it allowed Mustang to implement a new system without major changes to the way we do business. Our chosen supplier was the only company that offered this ability. The payoff has been substantial and obvious to company management."
In this case, Mustang analyzed its business processes first and then looked for software that would simplify those processes. This is a good approach to follow. Don't fall into the trap of buying a generic program that forces you to change the way you do business. What typically happens is you go back to your old processes; you had them for a reason—and the software simply doesn't fit.
Increased quality and control. Since implementing this software, life for project managers and accountants at Mustang has changed dramatically. Duplicate data entry is a thing of the past.
"You can enter accounting data into an integrated management system in much greater detail," says Hewett. "We also avoid the re-keying. Our accuracy has improved, and information is available from one electronic database instead of multiple spreadsheets or hardcopies from filing cabinets."
The software put control of the information back into the hands of the people who use it. This information is real time, and it is readily accessible electronically. The staff that had to re-key or verify data now works on much more productive responsibilities.
The software's automation delivers information on demand. "Major energy firms like Exxon and BP Amoco perform audits on their contractors to ensure their invoices reflect accurate and appropriate charges. The last thing they want to see is an unauthorized charge or an inappropriate employee on their account," explains Hewett. "A recent audit byExxon required much less time for approval, once we demonstrated the solid documentation available from our new system."
Managing time is managing money. "It fits with our core philosophy of always getting better," adds Paul Redmon, a partner in Mustang Engineering. "Benchmarking performance is easier. What we can measure, we can improve. This program allows us to run Mustang on a cost basis. We know exactly what our margins are on labor and nonlabor in real time."
Finding one system that solved many problems and made operation more efficient has made all the difference. Not only does using the latest technology benefit Mustang, but its clients profit as well. With this new software, Mustang improved its operational efficiency and supported its philosophy of delivering high value to customers.
Cook is with Geac AEC Business Systems, Irving, Texas.
Sidebar: Lessons Learned
Here's a list of the top 10 things Mustang learned about software selection:
1. Identify your business processes before looking at software.
2. Narrow your search to software that fits your business processes.
3. Choose software that will expand as your company grows.
4. Speak with experts in the industry for software recommendations.
5. Select integrated software to help complete projects on time and on budget.
6. Improve communications between accounting and project managers.
7. Avoid re-keying data to improve accuracy and efficiency.
8. Move to a single software solution to make data available immediately.
9. Put control back into the hands of the people that use the information by making accurate data available on demand.
10. Choose an open database, so the data are available for custom reporting.