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In 1998 MASI was
referred to a drywall subcontractor in
northeastern Massachusetts by an
existing Master Builder client. MASI
used a consultative sales approach to
determine the prospect’s need for Master
Builder applications.
After two meetings it was clear that
Master Builder matched the prospect’s
many requirements. The company was a
union contractor with 110 employees
performing union and prevailing wage
work. Commercial project size was
between $150k and $1.5mil. The company’s
annual sales were approximately
$10million.
The Problem:
With the exception of writing checks
using Quickbooks Pro, all other
functions where being performed
manually. This included estimating, all
payroll functions, union reporting,
certified payroll functions, progress
billing, time and material billing,
prime and subcontract management (they
used MS Word for this), request for
change orders and approved change
orders.
The company was very firm in their
desire to computerize functions using
one system that integrated all functions
– accounting, job costing, project
management and estimating. Prior to our
meeting with the company, they had hired
a national consulting firm at an initial
cost of 50 thousand dollars to perform
that task.
By the second meeting it was clear that,
based upon our knowledge of the
construction industry and specifically
the union drywall subcontract vertical
industry, we had changed our role from
consultative seller of Master Builder to
business consultants.
During our second meeting we were asked
to review the agreement between the
national consulting firm and the
subcontractor. With a quick review of
the contract and the work completed to
date, it was clear that the consulting
firm would NOT be able to deliver the
desired contractual results without
developing a construction specific
integrated software solution from
scratch. It was also clear that the
contract would exceed the original
budget. The prospect had already spent
$35 thousand and had only received a few
processes and complex reports on MS
Excel spreadsheets. The Solution:
We found ourselves in an uncomfortable
situation as a consultant without an
agreement selling the Master Builder
Software. We identified the difficulty
with the client prospect and agreed to
make a proposal for consulting services
that included reviewing all aspects of
the business and developing an action
plan. Our proposal for services included
a fixed budget for consulting, training
and Master Builder Software.
This ultimately lead to the
restructuring of the business and the
sale and implementation of Master
Builder Software.
Our initial consulting direction
resulted in an overhaul of existing
banking, bonding, consulting, receivable
collections, tax preparation, general
line insurance brokerage and training.
Our consulting role grew as we added new
areas of focus that included business
planning, tax planning, insurance
consulting, legal contract addendum
preparation, limited employment
practices law, estimating processes,
computer software training, process
management, and later, business
transition services.
While this was a very complex project,
we were able to successfully complete it
because of the commitment by the client
and his team together with a very
talented group of professionals called
the MASI Network. In all the consulting
addressed, we were able to recommend a
business, tax, or legal professional
that had a background and specific
knowledge in the construction industry
and, in many cases, an understanding of
the Master Builder Software.
The Results:
The results which were
achieved over the next year included the
following:
- Contract with
national consulting firm cancelled.
- Negotiated out of
the original consulting contract
without legal intervention; Payments were refunded to the client.
- Implemented full
Master Builder Software suite.
- Totally
integrated client’s processes from
estimating through final accounting
for jobs.
- Client realized
tax savings using the
integrated information and tax
planning services from the
recommended CPA.
- By providing
previously unavailable information
to the state of Massachusetts, the
client qualified for an insurance
contractor discount program that
resulted in additional savings of
$200k over three years.
- Implemented
estimating database with detailed
part pricing and assemblies.
- The estimating win/loss ratios were
improved from winning 8 in 80 jobs
to winning 12 in 60 jobs.
- Bidding data now
available improved decision making
on which General Contractors and/or
awarding authorities to work with
(this became painfully clear in the
next phase of the consulting).
- Materials
purchasing from vendors improved
through the use of estimating and
purchase orders.
- Created written
business plan and action plans.
- Clarified company
direction, employee roles and
professional advisor roles.
- Used business
plan to influence increased lines of
credit and bonding limits.
- Software training
was provided to all users.
- Professional
staff is able to use and rely on
needed information
- Processes and
manual operating procedures formally
documented.
- Responsibilities
are clarified,, resulting in increased
accountability of mangers and
employees.
- New General Lines
Insurance Broker.
- Insurance costs
were reduced $300k in three years.
- New bank and new
line of credit.
- Line of credit
increased from $100k to $1mil.
- New
CPA/Accountant
- Significant tax
savings were realized retroactively
and in future years.
- New Bonding
Broker and increased bonding lines.
- Increased limits
from 500k by 1m line to 2m by 5m
program.
- Increased limits
on personnel responsibility to 250k.
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