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When Will My Marketing Produce Sales?

in Columns

By Tom Woodcock

The question many companies ask when they’ve spent significant money on their marketing is; “When will my marketing produce sales?” The fundamental premise of that question is flawed.

Having been responsible for sales numbers for the largest portion of my professional
career, I have marveled at the unrealistic expectations for marketing campaigns and marketing pieces. Marketing plays a critical role in business and must be done effectively, but sales are simply that, sales. People often don’t understand that sales performance is related to interaction with the customer base and not a read/buy proposition.

Because marketing is far more tangible than sales work, it tends to draw greater attention from management. It’s more immediately rewarding to create a new logo, refresh a website or dig into a social media campaign than do the hard
sales work necessary.

Hours are spent reviewing artwork, copy, and design to try and get the customer to bite. Even if they bite, who’s gonna reel them in? It’s extremely important to have a top notch brand and an active marketing strategy, but it is more important to strengthen your sales effort. What is the difference? The fact that the question is even asked makes my point.

Sales in the construction industry is often veiled by some old school mentalities. The mistaken belief that all work is awarded either via performance or low bid is still very prevalent. Such a belief removes the need to invest in an effective marketing campaign and drive a sales effort.

There’s no way to expect a sales effort to be effective when it isn’t worked diligently. Throwing out some marketing dollars and sitting back waiting for the deluge of business is amateurish. For marketing efforts to be successful they have to be tethered to an aggressive sales plan. Even if the overall construction market improves you won’t reach your desired results if those two areas are not on the same page.

The problem is that most creative marketers cannot help engage the sales team, so management or ownership pours more money into the marketing and waits for results. Usually they end up very disappointed.

Often a company is having success, but management cannot tie point A to point B in
regards to their sales and marketing efforts. Truth be told, both have probably been worked to some degree and the business is following. Wondering how can drive you crazy. I have clients that are having great success, but they fail to recognize that they’ve invested years in their sales and marketing work and are reaping the rewards.

Consistently seeing and entertaining customers, engaging closely with clients through the bidding process and keeping your company brand in front of the marketplace all contribute greatly to sales success, even to increasing numbers with existing customers.
After all, even your regulars can forget about you or the level of your capabilities if you don’t stay in front of them.

I’ve often said, if you want better sales as well as profitability, what are you going to do instead of investing in your sales and marketing efforts? I haven’t found the magic wand you need to wave to change your current situation. 

Applying dated, ineffective techniques to try and spark some interest can be a waste of
effort. The construction industry is not immune to marketing and traditional sales dynamics. Well, you have a customer, a product – the work you perform, a distribution network, and a price. Sounds like a traditional sales dynamic to me. The contractors that not only realize this, but embrace it, will prosper.

Acknowledging you have to invest in sales and marketing efforts will start the process of
improving. Effective marketing will increase your brand awareness and keep the company consistently in front of the customer base. Effective selling will engage the customer base and influence the decision-making process. It also will begin to affect the profitability of projects on the front end during the bidding process. These are undeniable truths.

Simply not believing in the need for these business basics is not a recipe for success.  Honestly, if I hear one more contractor say spending on sales and marketing is a waste of money I’ll, I’ll…okay, I’ll probably do nothing, but it still drives me crazy!

Hoping your marketing will sell for you is extremely shortsighted. Contractors often
are very good at what they do in the field, but weak in these business disciplines. There’s never been a project performed that was not sold first. To assume your company is exempt from marketing AND sales work is a simplistic perception that probably is hurting your company’s performance. Wondering when your marketing will produce business displays a lack of understanding of its role and the need for sales work. Getting a hold of both can light a fire under your financial performance.

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide. He can be reached at his website: or at 314-775-9217.

Strategy Deployment for World Class Performance and High Growth

in Columns

Would your employees say work is chaotic and hard for them to discern the priority tasks?  Do most associates seem disorganized and maybe even frazzled from day to day? Is focus and progress on the top initiatives lacking? Are company strategies unknown, disjointed, and becoming a low priority throughout the organization?

If you answered ‘yes’ to those four questions, you do not have the attributes you need to become the highest performing organization you can be. A vast majority of companies struggle every day and cannot get the results they truly want year after year. Organizations are so busy fighting fires and reacting to problems that they can’t seem to find their way out of daily crises to work proactively.  Neither can they consistently work strategically on business-critical tasks to get to the performance and growth level they desire.

The solution lies in a very simple and quick process of strategic planning and deployment.  My favorite response to companies struggling in the above way is: “let’s stop the insanity for one day and develop your strategic roadmap for faster results.”  That will add resource organization, clarity, and efficiency to your daily routine, and it also will drive performance excellence, delight your customers, grow the business, and produce the highest level of margins.

What is this strategic planning method?  It’s a planning method that has been used for over 60 years by Japanese companies.  It is called Hoshin Kanri, and its cornerstone tool is the X-matrix, shown below.  This is a one-page strategy tool that aligns your vision to your long-term objectives, short-term objectives, initiatives, metrics, and high-level resources. It will chart your course for aligning company resources to the critical projects, put key measures in place to ensure the objectives are met, and facilitate rapid achievement of your goals and vision.

Companies such as Toyota that have used this methodology for half a century have realized such significant performance that they are household names today. People recognize them for their quality, long-term planning, and huge growth. American companies that are starting to adopt this method are seeing the highest level of results in their history and are out-performing every competitor.  Danaher, for example, a science and technology leader that designs, manufactures, and markets innovative products and services to professional, medical, industrial, and commercial customers, has shown incredible gains. They doubled their growth in just four years.   Once a company starts using this strategy tool, they continue to use it every year because of these types of dramatic gains.

Companies today must get more strategic if they want to continue to be competitive, grow the business, and get the results they want. It is imperative to have this strategic roadmap in place to achieve business optimization with far fewer resources.  Without it, your company faces business as usual at best, lack-luster performance and most likely, loss of margins and declining sales.

What is your ten year plan?  Or, even five year plan?  If you’re like most American companies, you have a 1-2 year plan at the most.  Japanese companies are known to develop up to 100 year plans. In America, we are more very short-sided and not long-term thinkers or planners.  This can have a major effect on our success or lack of it. We have to start learning to think longer term and plan for greatness. Business success and productivity will not just happen without proper planning  and being more intentional about your strategic activity. The business case for developing your strategy is clear cut.

The process starts by developing a vision. Define where you want to be in five years. Next, build your strategy with the subsequent resources, projects, and accountability plans. This tells us why you are in business, where you want to go, what you need to achieve, how it will be measured, and who’s responsible for each project.

With this clear roadmap to your future, your company will have the focus to work the “right projects” at the “right time” with the “right metrics” and with the “right resources.” Once the plan is communicated company-wide, employees at all levels of the company will be on the same page, working on the priority initiatives, and getting results at a much more rapid pace.

 The following steps outline the process for this method: 

1)    Plan: Set mission, vision, and Strategy for the company.

2)    Develop high level process maps, identify and prioritize projects, and execute.

3)    Monitor performance.

4)    Adjust regularly to ensure success.

5)    Repeat.

Your company will thrive with:

• Higher levels of performance from top to bottom

• Self-governed employees focused on priority work

• Improved communications

• Accelerated growth.

Kim Rochetti is chief excellence and disruptive officer at Strategic Operating Systems. She can be reached at 314/838-4659 or

Stop Waiting for Google

in Columns/Technology

“Access to fiber is going to be key to future economic development,” said Owen Graham, business development manager, Arch Fiber Networks. “There are amazing things happening in Kansas City, because of the fiber availability to services businesses and homes,” he said.

Arch Fiber Networks, a subsidiary of Edwardsville businessman Tom Allen’s American
Fiber Comm, has installed a fiber optic loop around downtown St. Louis, the near south side and Old North St. Louis. Telecommunications cable made from fiber optics are made of glass fibers instead of copper wires, and have a much higher capacity for carrying data. 

While some people lament Google’s and AT&T’s decisions not to install fiber optic networks in St. Louis, Graham said, “We don’t need them. We love them, but we don’t need them.”

What St. Louis needs instead is more entrepreneurial spirit. “We already have the
infrastructure,” Graham said. “We just need demand and internet service providers.”

Arch Fiber Networks fully redundant dark fiber (dark means it is not being used)
  with a dual crossing under the Mississippi River 90-feet beneath the McKinley Bridge. It has direct connections to the telecom hotels at 900 Walnut, 210 N. Tucker, and 710 N. Tucker, and to the AT&T Toll Building at 2651 Olive Street. One network surrounds downtown between Carr Street on the north and Chestnut Street on the south. The southern loop runs from Chestnut and Market Streets in the north to Arsenal in the south and runs west to Grand Avenue, encompassing the neighborhoods of Lasalle Park, Soulard, Lafayette Square, McKinley Heights, Fox
Park, Compton Heights, and part of Tower Grove East. The northern loop runs up
Broadway along the Old North St. Louis neighborhood to the Hyde Park neighborhood, and returns downtown along N. 13
th Street.

“The system is there to serve carriers, enterprise customers, businesses, and homes
in the downtown ring,” Graham said. “We don’t care how much bandwidth you use.”

“Today our focus is providing fiber services along Washington Avenue,” he said. One
fiber cable runs up Washington Avenue to Beaumont and connects to AT&T. “We pulled laterals into the buildings so they are ready for customers,” he said.

“In our model, the infrastructure is there. We just need to pull fiber through the laterals and install in the buildings.

“From the standpoint of the end user, the difference is invisible. We will partner with internet service providers, who will put their equipment on the fiber distribution panel and go to a telecom hotel and purchase one or more gigs of internet to break up to buildings they serve,” Graham said.

Graham said fiber delivers faster, cheaper internet, that will enable office and apartment building owners in their rings to compete for Millennials and high tech tenants, he said. “At an apartment building, for example, instead of having the tenants all share 80 megs from Charter, they can share 500 megs,” he said.

Arch Fiber Networks donated a fiber connection to the T-Rex high-tech incubator on Washington Avenue.

“Start-ups are the ones that will need huge bandwidth, they need gigabit fiber,” he said.

Downtown, Old North St. Louis, and the near south side are now primed with fiber for
start-up IT companies and the Millennial generation. All they need now are developers with the entrepreneurial spirit to use and promote it, instead of waiting for someone bigger and powerful to do it as the characters do in Samuel Beckett’s play “Waiting for Godot.”

Market Like A Chorus Not A Karaoke Singer

in Columns/Marketing

By Scott Tripp

In today’s connected marketing environment, where the conversation never ends and every  message needs to be cross-platform, the static marketing model that has guided marketers for nearly 20 years is due for an upgrade.

It is no longer enough to come up with your elevator speech, or craft a positioning statement that doesn’t take into account your brands personality or the core reason for your existence. You can no longer just focus on digital (or postcards, or tradeshows).  What is needed is a more holistic brand focus.

So what does that look like and how does that work? We use the term “integrated” quite a bit around our agency. Lately however, I have been thinking about the term, and I feel it only  partially describes this all-inclusive approach needed. How can we start marketing in a different fashion when we still use the same terminology from 20 years ago?

What if we start using the term “harmonized”? Harmonization goes way beyond just integrating. Just because we integrate our various platforms, doesn’t mean they are singing the same song. Harmonization is collaborative. It doesn’t start with an ad or a website that gets homogenized and rolled out to be translated to other platforms (many times poorly).  It shouldn’t be like three different karaoke singers simultaneously performing three different Neil Diamond songs. Sure, they may have been written by the same guy, but they sure don’t sound great when sung together.

Done right, Harmonized Marketing sings. It has individual notes and each note strengthens and builds on the others — until they come together to create one multifaceted and complex song that communicates the brand as a whole.

If you think of a choir, all of the singers are broken into parts — tenors, baritones sopranos and so on. Each part has their own set of notes and each singer within the parts must contribute their individual talents in order for the entire choir to sound amazing.

One of our clients, a fast-growing mid-sized contractor, was looking to expand by acquiring other complimentary contractors in new markets. Our brand audit found its success was largely due to its high-touch, personal approach with its clients—something the clients felt they couldn’t get from a large contractor.

The challenge was to maintain its high-touch brand as it grew larger — in markets where they did not have recognition. To succeed, it had to align its business strategy with its newly defined brand strategy and synchronize communications to employees along with its other target audiences.

They adopted strategies and tactics that communicated the brand and its core beliefs to all managers so that they would understand the importance of the high-touch nature of the brand. They also implemented an all-encompassing plan to synchronize that brand behavior at every customer touch point, from Business Development to C-Level. By defining what a high touch experience for customers and prospects meant and then personalizing every touch point along the way, they were able to use the brand equity of the legacy company while quickly and harmoniously communicating what it meant to do business with them.

Over the next few columns, I’ll cover many of the platforms to consider when building your own harmonized marketing plan, along with ideas on how to get them to sing together and make beautiful marketing music.

Scott Tripp is the President and Creative Director of Trippco Creative, a marketing and branding firm headquartered in St. Louis, MO. With over 20 AEC clients on our roster, we work to align brand and marketing strategy with business goals—creating stories and experiences to engage,  influence, rally, inspire and build communities.

The Basics of Electrical Preventive Maintenance and Its Implications for Controlling Costs

in Perspective

By Emily Aschinger Martin

On December 2, 2014 the city of Detroit experienced a widespread shutdown of its electric power due to a failure of the grid. This power failure “forced evacuations, trapped people on elevators and darkened hospital rooms,” according to the Detroit News. The report continued with a statement from Randi Berris, DTE Energy spokeswoman. “Everybody is aware the system has not gotten the attention it needed over the past several decades because of the city’s ongoing financial problems.”

While your own building may not have the potential for the widespread, dramatic consequences of the Detroit power failure, deferring preventative maintenance on your electrical systems can be equally problematic. Building managers are recognizing the economic value in not kicking this expense down the road.

Power consumption is costly. Efficient use of power generated by maintained electrical systems reduces the expense associated with peak energy months. Still, the most obvious consideration for having an electrical preventive maintenance (EPM) program is employee safety, followed by damage to property and equipment due to heat build-up from fire. Any serious injury or resulting loss of life due to operating under unsafe conditions may open up a company to costly liability.

According to a report from Hartford Steam Boiler, the “failure rate of electrical equipment is three times higher for components that are not part of a scheduled preventive maintenance program than those that are.”

A full-service, qualified electrical company can provide a regular, preventative maintenance program which should significantly extend the life a company’s electrical systems. The ROI with this maintenance program is typically very high due to the significant costs of installing new systems versus the relatively low cost of the program.

This same electrical contractor can and should be able to provide a cost-benefit analysis to companies who are considering replacing their old systems with new ones. The ROI again is high in this case due to the significant potential savings in making a highly-informed, replace/no-replace decision when compared to the relative low cost of the cost–benefit analysis. We recommend finding a company qualified to do both.

Several factors may go into the scheduling decision for how often you need to perform maintenance. How often a business needs EPM is based on environment and the weather co nditions where the building is ocated. Or it may depend on the quality and type of the equipment. Even the part of the city in which your building is found can be significant in this decision. Stadiums, auditoriums, office buildings downtown or in inner ring suburbs in most cities are ripe for attention given that the age of these neighborhoods is usually older and typically built with greater density. In general, annual EPM by a licensed professional, with a full de-energized electrical maintenance service performed at least every three years, is a good practice.

Just like a maintenance contract for your home, the contractor you hire to service your business should: maintain a personalized checklist for your individual company and building; trouble shoot for the potential hazards and identify those that require immediate attention, while maintaining an accounting of the red-flag spots to look out for on a follow-up; and let you know at what point your money is better spent on replace rather than repair. Remember, there is little point in testing and inspections if you don’t plan on fixing the problems.

The recommended thorough inspection includes: switchgear, air circuit breakers, vacuum circuit breakers, air disconnect switches, oil circuit breakers, molded-case circuit breakers, battery stations and chargers, cables and bus, protective relays and uninterruptible power supply systems. Cleaning; dusting; identifying worn, loose or missing parts; checking for unwanted water; checking that batteries, lights, and casing are in working order; and ventilation should be part of the mix for all these areas.

Our clients schedule EPM during times that are convenient for them within their distinct scope of operations. For example, we work with 24/7 businesses such as hospitals that can shut down to skeleton operations during the weekend we are scheduled. Though not entirely disturbance free, interruption during pre-scheduled maintenance service is nowhere near the havoc caused by the disruption of unforeseen, ill-timed, electrical failure. 

In the electrical industry, making wise decisions about electric preventive maintenance has more importance for owners and managers than merely how and when to spend money. As in Detroit, it means taking responsibility for controlling those conditions with the potential to escalate into dangerous fire exposures to building employees and visitors; and in the least, averting the inconvenience of unplanned power outages and equipment break downs. 

Emily Aschinger Martin is president and CEO of Aschinger Electric, a St. Louis based, fourth-generation family business celebrating 75 years of service. One of the largest electrical contractors in the region, Aschinger Electric is ranked seventh by the St. Louis Business Journal (based on total revenue, 2013), which also named Martin one of St. Louis’ Most Influential Business Women in 2014. For more information about Aschinger Electric, please call (636) 343-1211 or visit

Sales Systems, Uhhhh…Really?

in Columns/Sales

By Tom Woodcock

So you’re telling me a sales system will take your business to the next level?

Your customers will adapt to your systematic approach to selling? Your people will work the system to a tee? Their personalities will freely flow in the confines of a step by step process? Plus you’re being promised a close rate of 80 percent if you incorporate this program?

All you have to do is spend 10, 15, 20, or 100,000 dollars to get the results you want? Plus, it works in any industry, just watch!

Then you go through the seminars, your people whining or fake telling you they love it all the way through, and “voila!” no results.

The only growth is in the sales system provider’s bank account.

I’ve gone through all of the biggies. There is a good point here or there, but in reality, you and your team are responsible for sales success.

I probably just ticked a bunch folks off that invested in one of these program formats. Believe me, that’s not my intention.

I’m just passionate about sales and hate when companies burn good money trying to make their sales dynamic a formula, especially in the construction industry, where you have a bidding pricing structure. Throw in the nature of the customer base and there isn’t a formula in the world that will create an a to z result if you follow all the steps there within.

I’m even seeing as young, inexperienced trainers implementing those programs. They’ve been trained on the teaching components and philosophy, but have little experience closing deals and finding opportunity. But they sure know how you should do it!

Okay, what’s the alternative? Get the Zig Ziglar type and rah, rah my employees to success? Well, I am one of those types at times, but I go a bit deeper.

Some people have an innate ability to connect with people. They own the room, make friends, and quickly gain trust. I couldn’t give you the percentage of people that fit in this category, but it may be larger than you think. These people are relatively receptive to sales and, with some training on sales basics and a decent CRM program, they’ll thrive.

For those that do not have quite the same skill set, selling can be a challenge, but successful nonetheless. Solid product knowledge, a good marketing plan and specific customer sales strategies can be worked effectively.

The greatest factor in driving a group to sales success is motivation. It is that simple.

Even a great rep is only going to have a 30-percent-to-40-percent close rate. That’s a lot of rejection. This can cause people to avoid sales work, make excuses, and reduce customer contact activity.

The more optimistic and genuine an individual is, the greater the results. Positive attitude and enthusiasm can overcome technical sales mistakes. They still require positive internal sales meetings and an industry specific, outside sales trainer to come in and reinforce company goals on occasion. But, that is much more cost effective and time conserving than buying into a “sales system.”

Much of what brings sales success is common sense. There is a certain amount of blocking and tackling, but in all honesty, it’s not very complicated.

Innovations do come into the sales process and those need to be evaluated and then implemented when effective. The problem is the more complex the sales formula, the less people will apply it.

Companies that try and force selling into a structured program negate the human aspect of sales. They insist that if you properly walk a customer down a certain path, you’ll get the desired result. That works in mathematics, but not in sales. Hard closing, cold calling, and making the customer uncomfortable make no sense when trying to get a customer to choose you.

Ask yourself this question; “Do I like being hard closed, cold called, or made uncomfortable?” Then why on earth would anyone think their customers would.

I’m fairly certain any sales organization reading this article is saying my name in vain. They’re probably trying to discredit me as an old fashioned sales guru who just doesn’t get it.

Zig! Hearing that up in heaven?

The thing is, I accomplished more in sales by being myself, supported by the companies I sold for and staying true to sales basics. Throw in a little creativity and BAM, sales success.

So, if you’re spending a ton of money on a formulaic sales system and you’re not satisfied, cut your losses. If you love it, awesome! My question to you would be two-fold. Are the promised results there? Are your people really embracing it? Obviously I’ve seen plenty of proof to wager the answer to both questions is “no.”

Maybe it’s time to go old school. Trust the talent you have or you’ve hired and work to support them internally as much as possible. The results may be pleasantly surprising.

Tom Woodcock, president, seal the deal, is a speaker and trainer to the construction industry nationwide. He can be reached at his website: or at 314-775-9217.

Three Contractors Denied Sales/Use Tax Exemptions

in Columns/Law

by James R. Keller

In three separate cases, the Missouri Supreme Court denied on January 13, 2015, the requests of two contractors and one subcontractor for exemptions from sales and use taxes for construction-related activities.

The cases are Ben Hur Steel Worx, LLC v. Director of Revenue, 2015 WL 161747, Fred Weber, Inc. v. Director of Revenue, 2015 WL 161751 and Alberici Constructors, Inc. v. Director of Revenue, 2015 WL 161935.  All three cases stem from hearings with Missouri’s Administrative Hearing Commission (AHC).

In the Ben Hur Steel Worx case, Ben Hur had applied for refunds of nearly $200,000 for 2008-2010.  Ben Hur contracts with commercial construction companies to provide labor, materials and equipment to furnish and install structural steel beams, plates, angles and other components for construction of large-scale commercial buildings and structures. Ben Hur buys steel beams and steel plates directly from steel mills.

Ben Hur modifies the steel beams according to project drawings and specifications to cut them to length, provide proper drilling holes and slots, bevel the edges, chamfer, curb, cope and cut the steel.

If the steel components that Ben Hur purchased were for a taxable construction project, Ben Hur paid tax on the components. If the project was for a tax-exempt entity, such as an educational institution or health care
organization, Ben Hur did not pay sales tax on the purchased materials. 

The dispute involved whether Ben Hur could seek tax reimbursement for materials purchased to fulfill construction contracts it had with non-exempt entities. 

Section 144.054.2 of the Missouri Statutes exempts the following from sales tax: electrical energy and gas, whether natural, artificial, or propane, water, coal, and energy sources, chemicals, machinery, equipment, and materials used or consumed in the manufacturing, processing, compounding, mining, or producing of any product, or used or consumed in the processing of recovered materials, or used in research and development related to manufacturing, processing, compounding, mining, or processing any product.

Both the AHC and the Missouri Supreme Court found that Ben Hur as a subcontractor was using steel beams, plates and angles to fulfill contractual obligations to construct steel frames for commercial buildings. These activities were part of construction contracts, an activity not exempt under the language of Section 144.054.2. The Missouri Supreme Court decided that if the Missouri Legislature had intended for “construction” activities to be included in this section, it would have used words that included construction activities and no such words are in this section.

In the Fred Weber case, Weber in 2008-09 sold various paving companies approximately $2.6 million worth of rock base and asphalt. Weber applied for a sales tax refund under Section 144.054.2 of $139,654.62 for those sales. The AHC agreed with Weber. 

The Missouri Supreme Court, however, found that this section was meant to apply to large-scale industrial activities. The paving companies were not engaged in such activities. Instead, they were engaged in construction. 

Since the word “construction” does not appear in Section 144.054, the high court concluded the Missouri Legislature did not intend that such activities should be exempt from sales and use taxes.

In the Alberici Constructors case, the dispute was whether Alberici was entitled to a refund of $18,593.11 for use taxes it paid for rentals of cranes and a welder to construct manufacturing equipment at a new cement plant in Missouri and a use tax for the delivery of one of the cranes to the manufacturing job site.

In this case, the applicable exemption is in Section 144.030.2(5), which reads as follows: Machinery and equipment, and parts and the materials and supplies solely required for the installation or construction of such machinery and equipment, purchased and used to establish new or to expand existing manufacturing, mining or fabricating plants in the state if such machinery and equipment is used directly in manufacturing, mining or fabricating a product which is intended to be sold ultimately for final use or consumption.

The Supreme Court decided that the only question was whether the cranes and welder were materials within the meaning of this section. The court concluded that even if a dictionary definition of material could include machinery, machines such as cranes and welders do not appear to be what the Legislature intended by materials.

Alberici also sought a tax exemption for the delivery charge of $15,000.00 paid to Bulldog Erectors to deliver one of the cranes to the job site. The Supreme Court supported the AHC finding that it was the intention of Alberici and Bulldog Erectors that the delivery service was to be part of the crane rental and therefore the delivery charge was subject to the use tax.

James R. Keller is a partner at Herzog Crebs LLP where he concentrates his practice on construction law, complex business disputes, real estate and ADR.  He also is an arbitrator and a mediator.

Utilizing Technology and Process Improvements to Gain a Competitive Edge

in Columns/Technology

By Frank Hogg & Ken Van Bree

More competitive bids…  Less backlog… Increasing costs of construction… Lower profit margins…


For every contractor in the construction industry, these terms have resonated since 2009. And with economic pundits continually pushing back the projected full economic recovery period for construction, the prospect of maintaining acceptable levels of profitability remains challenging for the foreseeable future.

Many companies have focused on cost-cutting measures, which include targeting overhead expenses or attempting to lower their costs of construction.

Contractors also should consider investing in technologies and process improvements that can assist them in being more competitive in the marketplace.

Companies focused on making tough, economical decisions before writing checks have a tendency to place priorities related to investing in technology and process improvements toward the bottom of management’s plans. That may not be the wisest choice.

Contractors should carefully evaluate the potential benefits that can be derived and whether these benefits exceed the costs involved. The “intangible” costs of lost productivity, lower customer satisfaction, and inability to properly execute project work should be an important part of the decision.

When considering an investment in technology, management typically has a few standard questions:

• Can we enhance the efficiencies of our operations?

• Can we improve the productivity of our employees?

• Can we improve the level of service to our customers?

• What will the technology cost and do the benefits outweigh the costs?

• What level of effort is required to implement the technology in terms of employees’ time and resources?

The most common concern is the upfront capital required (both in terms of time and money) in order to purchase these technologies. What many companies have found is significant capital outlays are not necessary for many construction technologies and process improvements.

Contractors should consider the following after evaluating each application’s costs and benefits:

Mobile Technologies

A majority of employee time is spent out of the office performing construction services at job sites and various other service calls for maintenance. Mobile technologies allow remote employees to communicate with the office.

Important information such as customer inquiries, work orders, change orders, service calls, etc. can be communicated in real time back and forth between the remote location and the office. This improved  communication allows everyone involved with a job to make quality decisions based on the most accurate and up-to-date information available.

Equipment Tracking Applications

Equipment is obviously a significant investment for most contractors. The efficient use of any purchased asset is critical. Certain equipment tracking applications track the location of assets through the use of GPS technology, providing for greater control of that equipment and helping to prevent theft or loss.

These applications can also track maintenance records as well as utilization data by job and employee. These applications can minimize downtime for equipment by proactively preventing significant future repairs. They also can help management determine where the equipment can best be utilized within the company.

Integrated Project Management Solutions

On a daily basis, project managers balance delivering a quality construction product, serving customers, meeting schedules and deadlines, and managing cost budgets. Integrating a project management system with a company’s accounting system is critical for any contractor that strives to manage costs of construction and drive efficiency higher.

Many project managers still do not have immediate access to accounting and project cost information while they are in the field. By giving project managers the tools they need to access real-time data and communicate with financial management personnel, decisions can be made that can improve overall project efficiency and profitability.

Business Intelligence Tools Driving Process Improvement

Do project managers ever mention that the reports they are given are difficult to understand, contain too much or too little data, or are not representative of their job’s status? Business intelligence tools aim to clarify the data accumulated within a company’s accounting system in order to improve management’s decision-making ability.

While applications such as Microsoft Excel represent the most basic business intelligence tools, many contractors have found significant added benefits in implementing more advanced business intelligence tools to their financial management systems. Such tools can be integrated with a company’s existing accounting system in order to:

• Query existing data and generate more meaningful reports for project management

• Generate alerts to users when certain triggering events occur (e.g. jobs going over their predetermined cost budgets)

• Conduct on-line analytical processing (OLAP) for large quantities of data

• Perform analysis to create graphical representations of underlying data or “dashboards”

Many providers of software and database solutions, such as SAP, Oracle, and IBM, have recognized the importance of such business intelligence tools and have created advanced applications that are designed to be integrated with a company’s current accounting system. They have done this in response to the growing demand for companies to better analyze and understand the information accumulated within their own accounting systems.  

In today’s challenging environment of excess capacity, it is critical that contractors remain competitive within the marketplace. In addition to cutting costs, companies should consider the potential benefits of certain technologies and process improvements. They have the potential to help a contractor gain an important competitive edge now while also building for future gains when the market fully recovers.

Frank Hogg, CPA, is partner-in-charge, and Ken Van Bree, CPA, is a partner & vice-chair of RubinBrown’s Construction Services Group. 

Contacts: 314.290.3413; 314.290.3429.


Is Technology Working For or Against Your Business?

in Perspective

By Joe Balsarotti

Technology relentlessly marches on. Just think back ten years, when Blackberry and Palm were the phones of choice, computers ran Windows XP and the iPod was everywhere. Now, connected thermostats, Dick Tracy watches, tablets on the job site, and constant attacks by hackers are the news of the day.

The lifeblood of small businesses is contained in their computers: customer lists, invoices, accounting, designs, tax returns, bank registers and more. To lose this data is usually the death knell of a business. Only six percent of all businesses were still around five years after a “major loss” of computer records, 43 percent of firms taken out almost immediately, according to a Gartner survey.

As startling as those statistics are, what is even more startling is that many small businesses turn to ‘the kid down the street that they’d never, never, never let their daughter date’ for IT help, giving them extensive access to financial, legal and personal information. As Grand Moff Tarkin said to Princess Leia, “You’re far too trusting my dear….”

With the advent of the smart phone and tablet, technology seems much easier and information so much closer, but it is also much easier to lose. ‘The Cloud’ brings lightning and rain if you seed it with easy-to-get goodies. It isn’t some mythical place where everything is secure. In reality, it encompasses data centers across the world where some of our rules (and laws) don’t apply.

Target, Home Depot, and Apple are ripe targets to be sure, with millions of users, but when those entities harden their defenses, where do you think the hackers will look next? Your business is the next front in the battle with techno-terrorists.

  • How vulnerable is your business? Ask yourself these questions to get an idea.
  • Does someone perform regular maintenance on your equipment? Computers, servers and the like require the equivalent of an ‘oil change’ just as much as any other machine in your business.
  • Is the person you trust with your most valuable asset, your data, a professional or a hobbyist? Professionals keep up with industry news, they have colleagues to confer with on more involved projects and they can articulate their value to you. Hobbyists, know a lot about the specialty they are interested in, but what good is a hardware guy, when your software doesn’t work right?
  • As with any other tool, you need the right one for the job. Are you buying Yugos when you need panel vans, or a backhoe? Could that computer advertised right next to toilet paper really be the right machine to run a business on for 3-5 years?
  • What disaster plan do you have? If your office burns to the ground, where is the second set of tax records, A/R, A/P and all those drawings, models and customer notes? How much time will not be spent ‘doing  business’ but instead trying to put the digital pieces together?
  • What security have you implemented to keep your financial, legal and customer data safe? Does every employee have to ‘log into’ their machine with a password? Does everyone, including the janitor know that password? Can you track their usage?
  • Are you using a ‘free’ antivirus, trusting that someone worked hundreds of thousands of hours to develop a piece of security software out of the kindness of their heart? Really???
  • Do you REALLY have a technology plan?

Computers and technology can be a boon to businesses, especially small businesses by allowing one to do the work that used to take many. They allow free exchange of ideas and allow designs to come to life in proposals before a single beam is lifted, increase cash flow by allowing instant information on invoicing and payments, and free staff up to deal with clients and prospects instead of pushing paper around, but computers can only work well, when they are treated and maintained as the invaluable tools they are.

In future installments of this column, we’ll look at these pitfalls in depth and explore the rise of new, exciting technologies which can benefit your business. Have a question you want answered in a future column? Send it to me.

Joe Balsarotti is President of Software To Go and is a 35 year veteran of the computer industry, reaching back to the days of the Apple II. He served three terms as Chairman of the National Federation of Independent Business (NFIB) Missouri Leadership Council; was Chairman of the Clayton, Missouri, Merchant Association; Chaired Region VII of the Federal Small Business Regulatory Fairness Board; and currently serves on the Dealer Advisory Panel of the ASCII Group, an organization of over 1000 independent computer and technology solution providers in North America. 

Don’t Be the Breach In Data Management

in Perspective

 By Lucie Huger

It’s easy to understand why the retail and banking industry are highly motivated to protect themselves from a data breach, less so for service providers, like the construction industry. That is until you realize that Target’s data breach – the largest ever – is reported to have originated from the breach of an HVAC contractor’s access to Target’s data network. In an industry that absolutely relies on cultivating and sustaining trusted relationships, secure data management is essential. The construction consumer demands it.

To date, the California-based Privacy Rights Clearinghouse reports 189 data breaches made public this year spanning healthcare, retail, financial, government, education, and miscellaneous businesses, including service providers. The breaches involve the three most common causes: negligence, criminal (hackers or the theft of a device), and corporate espionage/malfeasance.

In response to consumer demands, 46 states now have data breach laws. Multiple states may come into play in a single breach. Consider the rupture of trust that would occur if a contractor performing work for a university learns of a data breach in its business, which unleashes malware into the university network. If the university’s student data is compromised, the school can face scrutiny from every state in which its students reside.

On the federal level, a weak link in the chain of data protection could expose contractors to penalties from the Health Insurance Portability and Accountability Act (HIPAA) and Gramm-Leach-Bliley Act (GLBA). Last year, HIPAA announced the tightening of enforcement of protected health information. A contractor providing a value-added promotional service to its hospital client by helping with a ribbon cutting for a newly built cancer wing must ensure its public relations firm doesn’t expose the names of cancer victims, who will be helped by the new facility. HIPAA requires every link in the chain of information be secure.

To protect valued relationships, contractors should carefully consider data breach vulnerabilities in their own operations and demand equal scrutiny from their building partners or vendors who could come into contact with protected information. This would include:

  • Developing policies and educating employees on their role in data management. This includes establishing, publicizing, and encouraging internal reporting mechanisms of suspected breaches. 
  • Creating a data management team with clear responsibilities and a thorough understanding of the types of data collected, processed, and developed. The team should also understand legal responsibilities and regulatory requirements. 
  • Developing a risk assessment and mitigation plan. This includes reviewing vendor contracts to find weak links that could expose data. Even if a company shuns the exchange of data online, they can be held liable for data shared with vendors who do expose that data, however unintentionally, in a breach.  If a vendor doesn’t have an electronic security policy that addresses employee background screening and data management, then your company should write one for them.
  • Consider engaging a third party audit to review policies, compliance efforts, and technical infrastructure. This is often done after a breach. It’s best to find any holes before they are compromised.

Contractors may also consider “cyber” insurance policies, which can afford some protection against losses, but be aware that not all cyber policies cover the risks a company faces. Cyber policies should cover the costs associated with the data breach, including engaging legal counsel, hiring investigators, providing credit monitoring if needed, and enlisting public relations experts to facilitate communications with all parties served by the company.

If a data breach does occur, contractors obviously need to focus on discovering its source, mitigating the impact, and complying with appropriate state and federal regulations. But equally important is taking immediate action to be in a position to recover from the breach. That means engaging legal counsel to provide protection from potential civil litigation and the discovery process through the attorney-client privilege. This is especially important because third party reports from IT forensic, accounting, or crisis communications firms, as well as internal company communications, may be discoverable in civil litigation. If outside counsel is engaged, these communications may be protected under the attorney-client privilege. 

Technology is a wonderful business tool that enables contractors to conduct business much more efficiently. But it carries evolving risks of inadvertent exposure of sensitive information that can destroy a hard-earned reputation. Don’t waste the trusted relationship you’ve build through neglect. Show your customers that you are serious about data management.

Lucie Huger is a member of the data breach practice group and an officer in the health care practice group of Greensfelder, Hemker & Gale, P.C.


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