TECH TALK 15: A SMALLER WORLD VIA PROCESS
INTEGRATION
By Bill Allen
This is the 15th article in the Tech Talk
series.
For some time now, consultants and IT vendors
have sung the praises of integrated,
automated back-office processes and systems.
Not long ago, this meant that estimates could
produce purchase orders; purchase orders
could update accounts payable functions; and
loan draws, customer deposits, and accounts
payable systems could update the general
ledger.
The benefits are obvious; the payment
approval process, in particular, becomes much
more efficient. For example:
The superintendent inspects work done in the
field and approves it.
This triggers automatic approval of the
electronic purchase order, which is set up to
be invoiced and paid.
At the same time, the task is recorded as
complete in the construction schedule, and
all dependent tasks are then scheduled.
Exceptional costs are managed through
variances, as are schedule changes and
customer additions to contracts.
The next natural move is to integrate
automated front-office processes and systems.
In this scenario, production schedule
milestones automatically update the payment
approval process, while sales office systems
automatically update the sales and closing
backlog and the customer care process.
Handheld computers replace whiteboards, and a
computerized database replaces file cards
containing information about prospects and
buyers.
Builders have struggled mightily to get to
the point above. Integrated systems and
software require everyone in the company to
adopt a common set of procedures. Tasks must
be standardized so that data used by a
variety of systems is perpetually updated-not
duplicated or corrupted, as is often the case
with manual systems.
To a small-volume builder, just the process
of synchronizing a Blackberry® to Microsoft
Outlook® is a big job, but has obvious
benefits. Integrating every process of a home
building operation is a daunting
responsibility even for a mid-size builder,
but consider how many redundant steps the
payment approval process described above
saves.
Process and systems integration does not stop
there. The next dimension is to go outside
the office and allow your automated systems
to communicate with trade contractors,
vendors, and customers. Many builders are now
opening up their Web sites to these "outside
parties" with password-protected portals. The
Web site is no longer an electronic
billboard. It has become part or an
extension of the virtual private network.
This is not simply Bill Gates dictating what
the future will be. The whole point of
process integration is accomplishing more in
fewer steps, with less paper and redundancy
than ever before. It's also about service to
the customer. If you don't embrace this
evolution, your vendors and customers will
demand it.
Here are some pointers on making process and
systems integration work for your home
building company:
* Examine your current processes. Determine
how external users (e.g., trade contractors,
suppliers, homeowners, etc.) could benefit
from integrated processes. Just because you
save time and redundancy doesn't mean youve
made life easier for your external
customer.
* Determine which action steps in your
processes affect which internal users (or
employees, in this case). Figure out the
point of control (the point at which a human
decision or intervention is needed; e.g.,
approving a purchase order, checking a bid
list to make sure it's complete, etc.) in
each action step.
* Explain to your staff how automated
processes work and the benefits of automating
yours. Get your employees' buy-in (and be
sure to listen to their concerns) before
converting manual processes to automated
ones.
* Similarly, explain to your external users
how you plan to automate the manual processes
they participate in. Ask them if they agree
that integrated processes will get the job
done better. Give them training and guidance
to use automated processes properly and
effectively.
* Evaluate whether or not you still need
paper. Could your integrated process work
just as well-or possibly even better-if you
used electronic documents, databases, and
records?,br>
* If you incorporate a feature into your
company Web site (such as allowing trades to
submit bids online via password-protected
portals), figure out how the information
collected will automatically mesh with your
integrated back-office system. If you have to
re-enter the bids into your estimating
system, you've put the cart ahead of the
horse.
* There's only so much business you can
transact via Web sites, e-mail, and other
electronic communications. Identify those
aspects of your processes to be automated
that require "high touch" (that is,
interpersonal) communications to ensure that
the end product meets the customer's
expectations. Examples include vendor
purchasing negotiations and customer
selections. Make sure automated processes
include prompts as well as a way for users to
get in touch with you (or vice versa) for
those all-important face-to-face
conversations.
* How will you handle an exception to the
planned cycle (e.g., an emergency customer
service call, a schedule delay, or a
purchasing variance?). How will such an
exception affect other integrated processes
and systems?
* Test your automated, integrated systems
in-house before you make them available to
your external users. Don't blow the cover
until you are ready and able to. This applies
to any new system initiative, but especially
to something you are asking an external user
to interact with.
* Don't be afraid to abort a process that is
not delivering expected results. Have a
backup plan in place, and know what procedure
to return to. My deceased father was a
pioneer airline pilot. Another pilot once
told him the greatest maneuver in flying was
the 180-degree turn.
The exciting part of integrating systems and
processes between the field, front- and
back-office functions, and end users is that
smaller builders can compete with larger
builders using the same arsenal of speed and
services on a level playing field. So keep up
the grass drills, wind sprints, and be agile.
It's a new world out there!
Bill Allen is a longtime contributor to
NAHB's Business Management & Information
Technology Committee and is president of W.A.
Allen Consulting
(http://waallenconsulting.com). The Redmond,
Wash., company provides information
technology consulting services and process
management assistance to the home building
industry. Contact Bill at 425-885-4489 or via
e-mail at skagit@foxinternet.net.
For more information about this item, please
contact Natalie Holmes at 800-368-5242 x8461
or via e-mail at nholmes@nahb.com.
