By Tom Gebes
Hands down, home building is the most idiosyncratic and unpredictable business in the economy. It’s where SQL technology and BIM models meet delays caused by a clump of mud in the house framer’s compressor. But our industry has seen dramatic IT advances over the last five years, as forward-looking software and Cloud providers have invested during the downturn, preparing for the very markets we are seeing today. In fact, for today’s home builders, unpredictability is increasingly mastered by IT solutions…yes, even ones that can adjust a multi-faceted schedule due to a muddy air compressor. Let’s take a closer look.
The Cloud and advanced software … have leveled the playing field. Now, mid-market builders are eating big builders’ lunches by merging the best of customization with the best of production building.
What we see as the four hottest builder concerns can all be addressed by hardware and software solutions: 1) Overall cost avoidance, especially of IT infrastructure and IT talent, 2) Predictability of margins, 3) zero/near-zero variances from the projected workflow, and 4) the ability to scale-up without staffing up.
In fact, because with today’s Cloud solution and software advances like those found in BuilderMT, builders of any size can take advances of IT solutions that used to be available to only the largest and wealthiest builder.
Yes indeed, the Cloud and advanced software truly have leveled the playing field. Now, mid-market builders are eating big builders’ lunches by merging the best of customization with the best of production building. And this new breed of builders, Production Custom Builders, is possible only through the power of advanced IT.
Now, let’s dive deeper on those four topics:
- Overall cost avoidance: It used to be that a builder had to install servers and hire IT staff to run them. That was the only way to get advanced software capability to manage the vast amount of data created by options, estimating, and purchasing. No longer. Cloud solutions have dramatically lowered these costs, and builders can use proven advanced software like BuilderMT to identify and eliminate operational costs. We’ve got two dozen case studies to prove this.
- Predictable margins: In any one housing start, hundreds of things can chew up profit. We know what they are in our guts, but it’s only through knock-out software that we’ve been able to track and control them. Ordering 1 extra truss for each house by mistake? Used to be that this truss got tossed. Until the builder realized that this added up to a “free roof” on his every 30th home! Now he can track overages, adjust his orders, and pay for just what he needed. No guesswork. Just good software.
- Zero /near-zero variances: Software and Cloud computing power are the keys to identifying and correcting workflow variances (the ones that cost you so much money), like an extra dumpster you should be charging back to the framing sub, or a foundation kick-out the home buyer should be paying for, due his purchase of a fireplace option. Are you tracking charges for your variances or just eating them? Stop the guesswork.
- Scale up without staffing up: This quote from Verity homes says it all: “With BuilderMT we were able to add 25 starts…without adding any more staff. That’s a 20% volume scale up. Given that we are achieving average margins of 6% on $220,000 average sale, we were able to pickup well over $300,000 net just with that capability, to say nothing of how our operations are so well managed with BuilderMT and its allied partners.”
Want to learn more about what BuilderMT and its increasingly wide range of Cloud solutions can do for you? Visit www.BuilderMT.com.
Tom Gebes is the president of BuilderMT, the #1 market share leader in North American homebuilding for workflow management software.