In the current business environment, technology is at the forefront of driving both value and change. Additionally, construction financial professionals (CFPs) are being asked to take on many new roles. The ever-changing and key area of technology was once a necessary evil of business but is now a required key strategy for companies that want to lead, not just survive.

Few construction companies and CFPs have a deep understanding of technology and how to think about it with a long-time horizon and global corporate viewpoint. However, these two factors are crucial to obtaining the most value from technology.

This article focuses on best practices and approaches that a company can leverage to maximize value by aligning technology with the company’s strategic vision. By gaining a holistic view of technology, approaching it in the same manner as strategic planning, and creating a technology roadmap, companies can create overall organizational visibility and drive meaningful change.

Gaining a Holistic View of Technology

If firefighters tried to put out a raging fire using one gallon of water at a time, they would never accomplish the goal — it takes focused planning, coordination, and a major effort to extinguish a fire.

Contractors often approach technology selection and implementation with a one-gallon bucket mentality. Unfortunately, rather than taking the time to deeply understand the needs and options across the organization, company leaders sometimes take one perspective for why a specific software is the best. Although different perspectives are great at providing additional insight, a company should take the information provided and do additional research to make sure the technology needs, options, and recommendations are solid.

Technology must be treated like building a house; if the order of construction is changed in any way, then the technology, like a house, will collapse or not work as intended. Consider how the systems and reporting of a company will fit together over time and what the end goal is. The following is an example of the thought process to use when a company is looking to approach technology holistically.

Is the General Ledger Structure & Dimensions of Looking at a Business Set Up Across All Company Systems?

An example of this is having the general ledger codes for revenue aligned with how the company measures the business. If a company is driven by geography and work type, then those metrics must be the key dimensions of looking at revenue. Companies shouldn’t try to build all of this into the general ledger (G/L) structure, but rather view data in multiple dimensions.

In thinking about data in layers, the company can better build codes that can be scaled and analyzed over time. For example, if G/L code 4000 represents revenue, then there is a dimension that looks at geography, which allows the company to slice the reporting of data (Exhibit 1). Each point on the table in Exhibit 1 represents a data point for each G/L and business unit, and this information provides a matrix that can be used for reporting over different timeframes. With additional dimensions, the data can go from a 2D to a 3D model. In the example in Exhibit 1, the two dimensional model is G/L and business unit; the three dimensional model can be layered on as data builds over time. Ensuring the company is capturing the right information is key to building sustainable systems.

Does the Data Structure Carry Across All Systems? Is the Data Structure Consistent?

If a company has multiple stand-alone companies with financials, does the G/L code 4000 revenue account mean the same thing for all of the companies? If the G/L code 4000 in one company represents construction revenue but represents real estate income in another, then that data does not scale and cannot easily be analyzed across companies. Rather, G/L code 4000 should represent construction income and G/L code 4100 should represent real estate income.