Software Advice Reviews How Consumers Seek Construction Software
By: Forrest Burnson
Software Advice, an advisory that helps construction software buyers find vendors, recently released a report that analyzes the pain points and requirements of construction software buyers to better understand what factors are influencing their purchasing decisions in 2015. The goal of the report is to help guide prospective buyers who are looking to implement new construction software systems through the purchasing process.
Here are some of the key findings from the report:
1. Fifty-two percent of prospective buyers use pen and paper to conduct estimating, takeoff, bid management and other processes.
2. One-third of prospective buyers say that improving the accuracy of estimates
is their top reason for seeking new construction software.
3. On average, prospective buyers are willing to spend $7,766 for the purchase of new construction software.
The report found that the top reason construction software buyers seek new software is to improve the accuracy of estimates and their bid quality. That makes sense, due to the construction industry’s growth.
Top Reasons for Evaluating New Software
The construction industry’s growth, in turn, has resulted in companies receiving an increased number of bids. In order to keep up with the increased workload, it has now become a necessity for construction companies to use software that helps automate processes and increase productivity. As said by Software Advice’s construction researcher, Forrest Burnson:
“It’s not unsurprising that so many prospective buyers are still using antiquated methods such as pen and paper to execute various construction project processes. While many construction professionals can easily whip up an accurate estimate on pen and paper, for example, it inevitably becomes an issue of scale and maintaining organization as their business grows. Competition is fierce in the rebounding construction industry, so prospective buyers need every edge they can get to maximize the number of bids they’re sending out and ultimately winning.”
Despite the obvious need for software to help companies keep up with demand and grow to the heights they desire, their budgets have remained tight. As the report states, construction companies, on average, are only willing to spend $7,766 for new construction software. Although this may seem like a lot, it is actually only 0.01% to 0.64% of their annual revenue.
Prospective Buyers’ Software Budget by Annual Revenue
As stated in the 2014 Construction Technology Report by JBKnoweldge, Inc., among IT professionals in the construction industry with knowledge of their firms’ budgets, 71 percent say they allocate less than 1 percent of corporate revenue for IT (which includes expenses beyond software, such as salaries and other overhead costs). This stands in stark contract to other industries, where IT budgets typically average around 3 percent of revenue, according to Gartner. Burnson paints a bright side to this matter saying, “while prospective buyers in the construction space typically spend significantly less on software and IT compared to other industries, the good news is that there are more affordable construction software solutions than ever.” With so many opportunities to purchase new construction software across many platforms, Burnson thinks prospective construction software buyers should consider three things when evaluating new solutions:
Scalability. Buyers should consider how well a system will accommodate their company’s future growth in terms of the number of users that will need to be on the system and what kind of projects the company is taking on.
Project flexibility. Construction firms that handle different types of projects should ensure that the software can accommodate all of them. This is especially critical if the firm is forced to change the types of projects it works on due to market conditions.
Vendor viability. Larger software vendors routinely acquire smaller vendors. In some instances, support and updates for the smaller vendors’ software is discontinued.
According to Burnson, construction companies need to wake up to the changing times and leverage the software available, or face the possibility of folding up shop.
According to Burnson: “The most important thing that construction professionals need to realize is that the software they use is a tool; like any other tool, it’s better to invest in something that adequately suits the user’s needs and is well-made and reliable. I think a lot of construction firm owners experience a degree of sticker shock when they’re looking to deploy specialized construction software, and that’s understandable—if they’re graduating from using QuickBooks or Microsoft Office, then the cost can seem excessive at first. But once they see how that specialized software not only saves them time, but improves their bids and estimates and keeps them more organized, then it’s easier for them to justify the investment. To put it another way: Few construction firms who deploy specialized software solutions ever go back to doing things the old-fashioned way.”
Software Advice’s advisors regularly speak with buyers who contact them seeking new construction software. The data used to create this report was collected by their advisors during those interactions for business purposes rather than for market research. Software Advice randomly selected 200 interactions from the United States during 2014 to analyze for this report.
These findings exclusively represent those buyers who contacted Software Advice for guidance on software selection, and may not be indicative of the market as a whole. Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.
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