Well those days are gone, my friend, probably forever.  This is your father’s home building market, and if we’re going to make it, we’ve got to face facts:

• Fact:  The pool of potential new home buyers is smaller than at any time in the last 5 years.
• Fact:  Despite the shrinking number of new home builders, the competition for new home buyers has never been greater.
• Fact:  Sales quality, as measured by the number of cancellations, is at an all time low in many areas of the country.

• Fact:  Sales cycle times remain near historically high levels in most markets.

So what’s the secret to capturing our share of this difficult, shrinking market?  In a word, engagement.

Like most industries, the current hot trend in prospect management is electronic communication through email and social networking.  Coordinated email and social media campaigns are now as much parts of the new home sales experience as lawn signs, and frankly they have similar return rates.  Take a look at your inbox, or your facebook news feed.  Are you reading every email and every post?  I’m not, you’re not, and neither are your customers.  Even targeted, personalized email campaigns return less than 2% of prospects.

The critical, often missing piece of this process is the experience your prospects get when they DO follow up.  This is particularly crucial for younger prospects, those 25 to 35 year old first time home buyers who have represented a large portion of new home sales this year.  Raised on the internet, these buyers expect an on-line experience that’s not just pictures and words; they expect engagement.  The most successful home builders give these buyers a way to interact that holds their attention and keeps them on the website.

You can easily measure the effectiveness of your website’s engagement by looking at two internet analytics: Bounce Rate  and Average Time on Site.  Bounce Rate is the percentage of single-page visits; that is, when a prospects looks at the first page they see and then moves on.   The lower the bounce rate, the more engaged your customers are, because they are viewing multiple pages during their visit.  This then relates to Average Time On Site, which is just what it says.

Obviously, your goal is to provide an online experience that keeps a buyer on your website long enough for your message to come across; that is, a low Bounce Rate and a high Time On Site.  And frankly, that fancy flash video with the beautiful music that you paid thousands of dollars for doesn’t do it.  Almost invariably, if the landing page for a prospect starts with a page that says “loading”, you’ve already lost them.  This is not to say that the video is without merit; you’ve just got to let the prospect watch it when she wants to watch it, by making it an interactive feature of the site.

While we’re on the subject, you don’t have to spend thousands of dollars to create an engaging video; in fact, just the opposite is true.  Spend some time on YouTube, and you’ll see what I mean.  Younger home buyers tend to react better to the veracity of hand held, “unstaged” videos.  The secret here is short and sweet – 15 to 30 seconds.  Talk to your superintendent, point out construction detail or unique features, talk to current (happy) home owners; basically give visitors a choice of engagement paths.

Of course, one of the best ways of engaging prospects is to let them “build” a house.   Selecting a model and elevation, then customizing it with options, both engages the prospect and gives them a substantial investment into the sale.

The key to successfully allowing prospects and buyers to make selections and build a wish list is accurate, timely, up-to-date information.  Accuracy is key here.  Once a buyer’s expectations are set, you never want to have to tell them “Sorry, that’s not available” or, even worse, “The price went up”.   One of the most effective ways of ensuring accurate selections is to link the selections process on your web site directly to the product information in your back-office software.

Although there are a number of dedicated portal products that allow you to upload product information to customer-facing website, at MARK SYSTEMS we took a very different approach.  By using a single database across every function and process, and by linking our web portal directly into that database, customers can view products, options, pictures, specifications and selection data in real time, using live information.  Selection lists made through MARK SYSTEMS’ IHMS Internet ToolKit are completely accurate, because the software that manages the information also manages the selection process.  Using MARK SYSTEMS integrated home builder software, customers can review options, pricing, availability by stage, images, drawings and plans, creating a personalized selection experience that translates into more sales dollars and higher margins.

“Compatibility with the full suite of Apple products was one of our goals during the development of IHMS³,” said Scott Duman, MARK SYSTEMS’ Vice President and CTO.  “The platform independence of Java means that our customers can choose the hardware and operating environment that works for them.  iPad integration for the IHMS Internet ToolKit gives home builder superintendents, customer service personnel, subcontractors and suppliers full graphical access to all pertinent IHMS information without the need for a laptop or desktop computer.”

Prior to the IPad release, field personnel had to contend with the limited graphical capabilities of mobile phones.  “Our Blackberry and smart phone integration is still available for those builders that require it,” according to Donald Scattergood, MARK SYSTEMS Vice President for Sales and Marketing.  “The great strength of the IPad, though, is it’s ability to deliver a full desktop experience regardless of location.  That means that superintendents in the field now have instant access to every schedule, job start, change order, purchase document, plan and drawing for every home in their communities”, Scattergood said.

The single-source, single-database nature of MARK SYSTEMS software lets home builders leverage the iPad feature set to deliver an incredibly robust experience to stake holders across the enterprise.  Using any of the available connectivity options, the iPad provides dynamic, real-time access to information that was previously only available via laptop or desktop.  For example, superintendents can now review job starts, work orders and plan markups as they walk each house, updating schedules and approving payments all in one step.

“We expect to see this new capability really helping to drive new home sales for our home builder customers,” Scattergood said.  “The coming generation of home buyers expects a superior online experience.  Using an iPad, home buyers can view available option selections dynamically, including full images and specifications, and can select options and configurations anytime, from anywhere.  Just as importantly, builders can be secure in the knowledge that MARK SYSTEMS residential construction software completely controls the selection process by model, elevation and stage of construction.”

About MARK SYSTEMS

MARK SYSTEMS’ Integrated Homebuilder Management System is the industry’s only single database enterprise software package developed exclusively for residential builders and developers.  With full support for back office and field operations, the software provides state-of-the art information processing tools for the homebuilder, including access via the Internet.  For more information, contact John Rogovich at 800-972-7444, email us at info@marksystemsusa.com, or visit us online at http://www.marksystemsUSA.com

“For the editorial team here at Constructech magazine, the Constructech 50 serves as guide for anyone looking for innovative, proven technology within the construction marketplace,” says Mike Carrozzo, chief editor, Constructech. “The members of the list for 2010 definitely embody those criteria, and will be essential solutions for companies looking to improve their business practices.”

“It’s very rewarding to have our products and performance recognized outside of our custom base,” said Mark Finelli, MARK SYSTEMS President.  “As one of the few independent ERP software providers for American home builders, this award confirms what our customers have always known – that MARK SYSTEMS’ ability to understand the market and deliver innovative technology tools is unmatched in the industry.”

Announced on July 7^th, 2010, the Constructech 50 is published in Constructech’s IT Playbook, a one-of-a-kind reference guide to the technology landscape in residential construction.  “We believe these 50 companies are bringing consistent and important solutions to those in the construction industry.  And for their accomplishments, they should be commended” says Peggy Smedley, editorial director, Constructech magazine.

Some of the criteria used in determining the list include having a strong product/service aimed at the construction industry, ongoing customer satisfaction and growth, as well as outreach and educational efforts for the construction industry, among other considerations.

About MARK SYSTEMS

MARK SYSTEMS’ Integrated Homebuilder Management System is the industry’s only single database enterprise software package developed exclusively for residential builders and developers.  With full support for back office and field operations, the software provides state-of-the art information processing tools for the homebuilder, including access via the Internet.  For more information, contact John Rogovich at 800-972-7444, email us at info@marksystemsusa.com, or visit us online at http://www.marksystemsUSA.com.

About Constructech Magazine

From the perspective of the construction professional, Constructech magazine uncovers the necessary tools to increase productivity and profitability and reveals the value of information technology tools and building control automation.

“We’re seeing indications that the residential construction industry is preparing to turn the corner”, said Mark Finelli, President of MARK SYSTEMS. “Savvy, professional builders are evaluating their current processes and taking steps now to make sure they’re positioned for maximum productivity as the market recovers” Finelli said. “These new clients represent a broad spectrum of the industry, from startups projecting 30 annual units to established regional builders with volumes above 400 units per year”

“Our 1st quarter sales clearly reflect an increase in expectations on the part of top tier builders across the country”, according to Donald Scattergood, MARK SYSTEMS Vice President for Sales and Marketing. “We signed new customers throughout the country, including many areas not traditionally considered active homebuilding markets. In the past three months we’ve partnered with multiple builders in Seattle WA, Albuquerque NM, Montana and Aspen CO along with Atlanta GA, Phoenix AZ and Huntsville, AL. We’re extremely pleased that the power of MARK SYSTEMS single-database ERP software has proven so successful with some of the top builders in the country”.

The single-source, single-database nature of MARK SYSTEMS software was a significant factor in the first quarter results, according to new MARK SYSTEMS home builder clients. During the last 90 days alone, MARK SYSTEMS replaced software provided by Builder 1440, Builder360, BuilderMT, BuildSoft, Master Builder, Punch List Manager, Quickbooks, Sales Closer and Timberline. “In our previous company, we used seven different products at a cost of over $8,000 per month, and continuously struggled with integration. MARK SYSTEMS’ Integrated Homebuilder Management System provides much more functionality and seamless, transparent integration at a fraction of the cost” said Mark Hammond, IT Director of KM Homes in Atlanta, GA.

One by-product of the economic impact over the last two years is an increased analysis by home builders during the software selection process. “During our record breaking 1st quarter, MARK SYSEMS IHMS was came out on top in comparisons with products from Kova, Constellation, Timberline, BuilderMT and BuildTopia . In each instance, MARK SYSTEMS’ combination of functionality, integration and value made the Integrated Homebuilder Management System the clear choice” said John Rogovich, Senior Account Manager. “Our conversion to a pure Java platform with enhanced reporting, implementation and access capabilities let’s builders of every size take advantage of the industry’s most powerful home builder software”, Rogovich said.

About MARK SYSTEMS
MARK SYSTEMS’ Integrated Homebuilder Management System is the industry’s only single database enterprise software package developed exclusively for residential builders and developers. With full support for back office and field operations, the software provides state-of-the art information processing tools for the homebuilder, including access via the Internet. For more information, contact John Rogovich at 800-972-7444, email us at info@marksystemsusa.com, or visit us online at http://www.marksystemsUSA.com.

1~ Make sure your traffic questions get answered

Take time to think about what you want to ask your potential home buyers.  This allows you to better help your prospects purchase a home from you.  Your sales staff is Sherlock Holmes and traffic answers are the clues you need to solve a potential buyer’s home shopping mystery.   This means you’ll need to enforce your sales people to ask the questions and make sure the prospects answer them too.  Easier said than done?  Not really.  Having prospects register on your website is a great place to fill out the traffic card because it’s a fast and easy way that also specifies the mandatory fields.  But make sure this information doesn’t just get emailed somewhere and forgotten about, never to be used again.  Make sure this information gets stored in your database where you can run a report to see a list of your highly qualified, potential buyers and act on them.  This is where IHMS comes in to play. 

IHMS has a feature that lets any prospect cruising your website enter their name and contact information.

It also allows them to answer your traffic questions from your Web site.  Best of all, it deposits the prospect’s information right in to the IHMS piggy bank to be cashed in on later.  Each prospective buyer’s name appears right on a contact report and is instantly available in the IHMS sales database and emailed to the community representative.   On the spot database collection of leads ensures that an email doesn’t get spam blocked, junk mailed, or discarded accidentally.  It also eliminates reentry while transferring from one data base to IHMS.  There couldn’t be a better way to funnel your leads in to your sales people’s waiting hands than making sure they go directly from your website to the IHMS database with no additional work.  Click here to download the ITK Prospect Registration Setup guide.  

2~ Continued follow up with EVERY lead

On my 30 minute drive to work I listen to 20 radio commercials, see 10 billboards, and see 20 cars and trucks with their companies’ name and phone number plastered all over them.   During lunch I see 20 adds in the newspaper and notice 50 advertisements on the way to checking my personal email.  I get home from work and get 10 pieces of junk mail.  After dinner I order tickets to a baseball game on the internet and am bombarded with at least 50 ads.  I watch my favorite TV shows before bed and channel surf during the barrage of commercials I’ve seen countless times.  The point is that every person must see over 1000 advertisements a day.  Easily.  99% of those ads don’t stick and that’s why advertising alone isn’t enough to get the job done. 

You have to attack any form of interest you get.  I registered with a national homebuilder (I won’t say which one) and expressed interest in one of their many communities by registering on their website.  I received one email from the community sales representative and after they found out this community wasn’t perfect for me, I haven’t heard back from this sales team at all.  Okay, maybe I’m not the perfect lead, but beggars can’t be choosers. They should be hounding me at least once a week via email with news about the attractiveness of their communities.  I am buying a house this year, and it’s going to be from the homebuilder that doesn’t give up on me. 

IHMS has the ability to define a set of follow up activities for every prospect (i.e. phone calls, emails, and brochures).  IHMS Follow Up Groups are dependent on traffic responses, and can be tailored to specific demographics.  The key thing is they determine the attention that each prospect will get from your sales people.  These scheduled phone calls and emails are displayed on an open contact report for each sales person so they can target their contacts towards interested onlookers.   This ensures that no prospect gets overlooked and continued contact with prospective buyers is demanded from your sales staff.

3~ Email Correspondence

This is very, very important.  Everyone needs to get emailed.   This includes your “A” prospects and your bottom of the barrel “C” prospects.  Your prospects that purchased from another builder and those that purchased one of your beautiful homes last year all need to be kept in the loop with newsletters, announcements, and especially advertising!  Don’t think you can’t advertise to someone who bought one of your homes and even someone who bought a home from one of your competitors, because every person has a friend or co-worker who’s looking for a home! 

Take the following example. I joined a gym nearby work, and I get an email once a week that explains the sales promotions currently taking place.  I asked the owner during conversation, why she sends me promotional emails when I’m already a member.  She said, “Because you’re one of my best salesmen.”  I came to realize that I usually forward those emails to my co-workers and talk about the deals my gym has going on during lunch.  Not even thinking about it, I was the catalyst that got three of my co-workers to join her gym.  

I want to stress that everyone you enter in your IHMS prospect database should get some type of regular, tactful email correspondence from your sales team.  I understand you are reluctant to do so in order to not be discourteous or an annoyance to your buyers.  But email marketing is something that is now expected from any professional company.  If your company is not leveraging email marketing you’ll actually look less professional. 

You should also try and target your specific marketing emails to the appropriate demographics.  For instance, send a lovely email about the great school district to current homeowners, and a different email to first time buyers explaining how they can take advantage of the First Time Home Buyer $8,000 Tax Credit.  Can this be easily accomplished?  Yes.  The IHMS Traffic Statistic Detail Report allows you to export the prospects from your database out to Excel with the name, address, and email address of your targeted demographic.  Best of all, it allows you to isolate prospects that answered ‘yes’ to the question of whether or not they had kids, or target prospects that answered ‘no’ to the traffic question of whether they currently own a home.  This allows you to send the “tax credit promo email” to first time home buyers, and the “what a fantastic school district letter” to the buyers with children.  Click Here to see a demo of how you can use the IHMS Traffic Statistic Report to key in on a specific buyer demographic and do an email blast.

 4~ Start a Facebook Group! 

Yes, it started as a college thing.  And yes, the average age might not be anywhere close to what’s necessary for your active adult communities, but this is a FREE marketing presence.  Moreover, the number of adults that are subscribing to this social networking forum is increasing profoundly. 

On the Centex Homes group it says:

This group is all about inter-company networking, right?  Wrong!  It’s another way to build a presence on the web and easily branch out to a lot of people very quickly.  The same thing goes for Twitter and LinkedIn – this is something that you can take advantage of easily.  Start a competition in your sales department to see who can get the most friends to join the group.  Plus, this is a great area to announce you’ve won an award, opened a new community, and link to your website!  What does this have to do with IHMS?  Not much.  But, all of us here at Mark Systems will gladly be your first friend on your Facebook group! 

5~ $8,000 First Time Homebuyer Tax Credit!

This tax rebate is quickly coming to an end, but it is still strong motivation for buyers to move in to your standing inventory up until November 30.  It should be plastered all over your website, sales offices, and marketing materials. The national builders, like Centex and Lennar, are doing a great job at putting big motivational banners on their website advertising the tax credit, and so should you!  $8,000 is available to every first time home buyer that will never have to be paid back!   This is a big deal considering 35-40% of the current market share consists of first time homebuyers and other buyers who haven’t owned a home in the last 3 years.  Right now this is one of the single biggest motivating factors to push my wife and me to purchase our first home.  It also will be a big help because we can use that money to pay a year’s worth of property taxes (around $8,000 in my area of NJ), or we could easily use this free cash to furnish our new home.  

 Get on the NAHB’s website and get the information you need.

 Here’s the bottom line:

• The tax credit is worth 10% of the home purchase price, and caps out at $8,000, which means almost any home purchase will qualify for full tax credit. 
• If you are buying a house alone, your Adjusted Gross Income (AGI) can be up to $75,000 a year and if you’re married you’re AGI can be up to $150,000 to qualify for the full tax credit. 
• The tax credit can be claimed when filing your 2008 tax return if you haven’t filed yet, or when filing your 2009 tax return.
• The tax credit is only available from January 1, 2009 to November 30, 2009 for buyers that “settle” in their home within this date range.  If you buy a home on November 10^th but don’t settle on the home until 2010 you don’t qualify for the $8,000.
• A “first-time home buyer” is someone who has not owned a principal residence during the three-year period prior to the purchase of their home.

Use the NAHB website as a resource.  Click here to get a printable color brochure provided by the NAHB that can be handed out at your sales offices and linked to on your website.

The Integrated Homebuilder Management System can help you accomplish all of these tasks (aside from starting a Facebook group) and is an essential tool to manage and follow up with leads.  Mark Systems conducts creative web classes on sales and marketing every month.  For more information, visit: http://www.marksystemsusa.com/home_builder_webclasses.php

-Richard Finelli is an IHMS Technical Consultant and Project Manager at MARK SYSTEMS

1. Communication is Key- maintain trade partner agreements prior to engaging in a construction partnership

Trade partner price agreements should be maintained by payment draw schedules agreed upon by both you and the trade partner.  Establish a contractual pricing agreement with payment terms and have your trade partners endorse it.  An endorsed price agreement will help to establish line item budgets for your job cost management and guide cash requirement obligations.  Well documented and established price and payment agreements also help trade partners manage cash flow positions and grow their companies.  Payment terms should be honored when a job is completed per scope.  Prompt payment based on payment terms should allow you to keep quality trade partners and maximize the best price agreements.  Remember, this is a partnership and both you and the trade partner have entered the partnership to make money.

2. Join and play an active role in your local homebuilder association

Playing an active role in your local builders association will provide you and your company many benefits including but not limited to the following:

• Networking
• Education
• Valuable legislation knowledge and a vice to steer it
• Industry updates
• Membership at the state and national level

Most homebuilder associations recommend that builders do business with associate members.  Being involved in the association will allow you to establish many relationships that will ultimately help your business.  Most associations provide member directories for both builders and associates.  You should take advantage of those directories when hiring local trade partners.  Trade partners that are involved in homebuilders associations will prove to be accountable business partners.

3. Disallow your trade partners to invoice you

This may be the hardest policy to implement.  Believe it or not, properly managing your business will take the place of trade partner invoicing and eliminate work for both parties.  Once you have established a good working relationship with a trade partner, you should treat that trade partner with the same respect as you would treat a valuable employee.  Provide them with the tools necessary to perform their job efficiently so they can make a profit.  Maintaining contractual agreements with trade partners allows you to use that information to pre-define work agreements for specific construction tasks.  Most enterprise management systems for homebuilders will allow you to do this.  Approval of the working agreements, usually defined as work orders and purchase orders should:

• Take the place of manually created vendor invoices
• Eliminate price agreement conflicts
• Maximize the book keeping processes for both your accounting department and the trade partners business
• Allow you to run a paperless operation

4. Implement an accurate construction schedule

Your trade partners must be kept informed of the status of a project and your expectation of their availability.  Trade partners rely on a projected workload when establishing their available resources.  Providing trade partners with a projected and accurate up to date schedule will help them manage the resources to complete tasks expected of them and provide you with a quality product.  When choosing a scheduling system, make sure it is integrated with the option selection and payment process.  Web based systems will help your trade partners access the information in real time rather than looking at an outdated printout.

Well documented and established price and payment agreements help trades manage cash flow positions and grow their company.  Payment terms should be honored when a job is completed per scope.  Prompt payment based on payment terms should allow you to keep quality trade partners and maximize the best price agreements.  Remember, this is a partnership and both you and the trade partner have entered the partnership to make money.

5. Educate your trade partners on your processes, procedures and technology

Good trade partners remain knowledgeable in regard to their specific line of work.  Good builders remain knowledgeable on the entire process of producing quality products.  Educating good trade partners on the operations of your business will create a team environment and encourage that trade partner to produce time and time again.  If you are using technology to run your business from the field, keep your trade partners informed of process changes/advancements.  Make sure they are properly trained on any tools offered.  Well trained trade partners will help you maximize the investment that you have made in the specific tool of choice. Check to see if the tool/product provided to the trade partner has established training programs.  If you are implementing a web based field management computer system, check with the software provider to see if they offer an established training/support program.  Knowledge is the most valuable gift that any business partner can provide to another.  Click here for an example of an established training program for valued trade partners:

http://tradepartners.marksystemsusa.com

6. Clearly define a detailed check list for every task required of the trade partner

If your policy is to hold payment from trade partners for a job not done per specification you should provide the trade partner with the specific details of the requirement.  Human beings are molded to follow direction from a very young age.  Some individuals are not very detail oriented.  That usually means that they will leave the details out of requested tasks.  Minimize this by providing the details for every trade partner.  Let trade partners know if you require a specific angle on a cut or a special type of material or a specific order of task completion during the initial phases of the relationship.  Make this part of the scope of work to the contract or provide an addendum referring to specific construction tasks.  The National Association of Homebuilders has established a special certification for trade partners to review industry specific standards (NHQ- Nation Housing Quality).  Hiring NHQ certified trade contractors will improve quality and help your project supers mange more trades.  Some scheduling software products have an NHQ checklist incorporated with them.  Check with your software provider for details.  You may also research the NHQ certification program for both builders and trade contractors at http://www.nahbrc.com/builder/quality/index.aspx

7. Promote and support technology

It is to your advantage to have your trade partners producing a quality product most efficiently.  You are in control of the overall process of building homes.  That includes getting each trade partner in and out of each house on time and safely.  There are many areas of technology that can assist in this task.  Depending on the specific trade, there has been much advancement in tools and services.  Local and national homebuilder associations and trade shows are great sources for technology advancements.   The best way to use technology to improve the entire process is to implement an enterprise software system that keeps the trade partners completely connected with the operation strategies of the back office.   Implementing a business management solution can be costly but those costs will offset with the efficiency and overall communication gains in your organization.  Some web based software solutions can be hosted by the software provider.  Be sure to consider your trade partner’s operation when selecting a system.  Most enterprise solutions come with a program to educate and support them.

8. Establish a trade partner counsel

Be open to well establish partnerships with trade partners working in a counsel format.  Your quality and craftsmanship in the industry is dependent on the work of your trade partners.  Some of the most successful and well recognized builders across the country have implemented this concept.  The NAHB has recently honored three national housing quality award winning homebuilders who each have established trade partner counsels.  See “6 Tips For a Successful Home Building Trade Partner Council” at http://www.housingzone.com/article/CA6626634.html to see how these builders implemented this program.

Click here to read about a fully integrated software product that can help make you and your trade partners more efficient today!  http://www.marksystemsUSA.com

• Both new and existing home sales saw their fourth consecutive monthly increases in July, rising 9.6% and 7.3% respectively
• The Pending Home Sales Index of the National Association of Realtors® rose 3.2% in July, it’s sixth straight monthly increase.
• New home inventories for July stood at 7.5 months, down from June’s 8.5 months due to higher sales volumes and continued  caution among builders
• Home prices are stabilizing, with 15 out of 20 cities returning higher home prices from May to June

If you’re still in business as a builder and are reading this now, you’ve probably done everything you could to position your company to be ready as the market improves.  You’ve cut back on staff, reduced land holdings, slashed inventory and eliminated costs across the board.   What could possibly hold you back?  Well, for too many builders, the weak link is software.  For home builders all across the country, the software systems they rely on to keep the processes moving efficiently are woefully inadequate to the task, and may be the difference between a successful turn around and years of additional struggle.

The myth of “Integrated Software”

The sad truth is that the idea of “integrated” software is, more often than not, just that: an idea.  The idea is a good one – take different software programs (tools, really), and make them somehow talk to each other so they can share information.  Generally, the idea is accomplished through a device called a process bridge, which is another program (or programs) whose job it is to try to identify those pieces of information that have changed between two different data bases, and to somehow put them back into synch.

Certainly a reasonable idea, if you’re trying to “integrate” two different products.  The real horror occurs as you add products and capabilities.  Each new product that needs to be “integrated” increases the complexity by an order of magnitude, until finally a builder can spend more time managing the information flow between his “integrated” software modules than building houses!

Think about it this way: how many places in your company does the customer’s name appear?  It’s in the sales system, the construction system, the purchasing system, the warranty system, the accounting system, the scheduling system, not to mention the hundreds of spreadsheets you’ll still have to use to try to keep everything together.  What are the odds that all of those different data bases have exactly the same name?  What happens when the name changes?  How much work do you have to do to get it all correct?

Real-world experience bears this out

At last year’s International Builder’s Show, the NAHB held a very informative educational session that really highlights this problem.  Entitled “Moving Toward Integrated Software: When is IT the Right Time”, this program featured a panel of builders who each discussed their experiences in implementing “integrated” solutions.  Each of the speakers seemed relatively satisfied with the outcome of their efforts, but when you delve deeper some glaring differences arise.  Of the 4 panelists, the software programs in use broke down like this:

• One builder, at 100 homes in 2008, used two packages with two databases and
  some degree of integration.
• Two builders said they used only one software product.  One of these was a small (12 to 20 units) custom builder.  Intriguingly, the other was a high-volume (570 units per year) semi-custom builder that had recently been acquired by national builder.
• The 20 unit custom builder, on the other hand, named 10 separate software products, almost one for every department in the company.

The differences here are obvious.  When one software product can meet the needs of every department, your ability to share information is incredible.  With one data base, each piece of information exists only once; there’s no need for “integration” in the traditional sense, because every process and program uses exactly the same data.  Now you’re eliminating duplicate data entry by eliminating duplicate information.  For the high volume builder, the ROI was obvious and immediate, increasing profits by $1,000 per house.  As the panelist said, “That’s big money.”

The bottom line is the Bottom Line

But that’s really just the start.  Using a single software product across the enterprise reduces costs and improves efficiency at every turn.  For example, “look and feel” are identical from one function to the next, significantly reducing training costs and improving cross-training capability.  Maintenance costs are dramatically reduced, as is maintenance effort when there’s only one package to update.  And troubleshooting problems between modules is eliminated; with one product, you always know exactly where the problem lies, and have one single help desk for support.

On the other hand, the more separate products with separate data bases you try to factor into the mix, the more work you and your staff have to do to keep it all in synch.  That’s work that you’re not doing to improve quality, or increase sales, or reduce cycle time.  It’s wasted work.  And in this economy, no builder can survive by wasting time.

What’s disappointing about this movement is the as-yet unrealized prospect of reduced costs and increased profits for the builder and developer.  Theoretically, sustainable design, construction and product selection should result in lower costs based on reduced energy consumption and arguably lower maintenance requirements.  In practice, many of the cost returns for green construction remain intangible and accrue to the long-term end-user of the product far more than to the builder or developer.

Green Management Offers Return On Investment Now and Later

However, there is one area of green business practice that returns substantial savings directly to the builder and developer immediately and continually.  That area is the application of green management practices within the building process.  By applying the same concepts of sustainability, efficiency and low carbon footprint to everyday management practices, builders across the country are realizing substantial reductions in operating costs and significant improvements in net profitability.

Address All Areas of Cost and Efficiency

We’re not just talking about recycled paper here (not that there’s anything wrong with that).  Sure, paper use is a big part of green management, but an effective program looks at the efficient use of every resource.  Quickly, what’s the most expensive resource a construction company uses?  Time’s up, but you already know the answer – it’s people.  Personnel costs traditionally make up by far the greatest percentage of overhead and G & A costs.  Fortunately, a properly applied information management system can reduce or eliminate both paper costs and personnel costs.

Consider that the construction of just one house typically results in the generation of over 400 separate pieces of paper, excuding plans.  While the cost (both financial and environmental) of the paper is a factor, a bigger factor is that each one of those pieces of paper is handled by multiple people at different times, often in different locations.  Perhaps even more importantly, the information on those pieces of paper is often crucial to the accurate construction of the home, yet is rarely available to the person who needs it in a timely fashion.  What is masquerading here as a paper management problem is really an information problem.  The challenge is this: how do we get the knowledge previously stored on 400 pieces of paper into the hands of the people who need it, when they need it, without the paper?

MARK SYSTEMS Offers Out-of-the-box Green Management

MARK SYSTEMS’ customers have been enjoying great success in doing just that.  By utilizing the power and transparent information delivery capabilities of MARK SYSTEMS’ Integrated Homebuilder Management System, companies like K. Hovnanian have improved construction efficiency while saving thousands of dollars.  According to Ken Gill, Implementation Manager for K. Hovnanian’s  Southeast Region, taking advantage of MARK SYSTEMS’ web-based work order distribution saved over $6,000 per month in postage in the Virginia communities alone!  Coupled with the elimination of 200,000 pieces of paper, and personnel savings of 1 full man day per week, that single change in just one state resulted in a real dollar gain of over $80,000 annnually!

MARK SYSTEMS’ IHMS addresses each of the main stumbling blocks to effective green construction management by:

• Capturing outside physical documents via Document Library Management and storing them as integral parts of the knowledge base
• Eliminating the generation of physical documents by giving team members real-time access to stored information
• Transparently distributing organization knowledge to every team member, regardless of location, via web and mobile web
• Eliminating the redundancy often found in home builder organizations by utilizing a single knowledge base with all processes integrated at the data element level
• Improving communications between team members by implementing process flow concepts directly into the knowledge base

Real-Life Results

Savvy builders are not just using MARK SYSTEMS’ software to reduce costs – they’re also using it to improve profits in a challenging market.  According to Ange Knox, Manager of Information Technology for Heartland Homes in Lawrence, Pa., implementing the Custom Option Estimator component within the IHMS Purchasing and Sales modules allowed Heartland to become the largest custom home builder in the Pittsburgh metropolitan area.  “To stay on top of the market, we had to transition from being a production oriented builder to being a very custom builder.  Using MARK SYSTEMS’ Sales Office / Design Center components, and particularly the Custom Option Estimator, helped us grow our market share from 8% to over 14% in just the last year.”  According to Ms. Knox, Heartland has used IHMS to quote and track over 6,500 unique custom options since its implementation, with over 60% of the estimated options being selected for purchase.  In fact, one home buyer included over 80 separate custom options in his final selections.

The bottom line is, of course, the bottom line.  Reducing costs while improving information flow, construction quality and profitability are real, achievable goals with the right tools in place.  Now more than ever, builders across the country are finding that MARK SYSTEMS’ Integrated Homebuilder Management System gives them the tools they need to compete, survive and prosper.

Take Action Now, When You Need It Most

For more information, visit http://www.marksystemsusa.com, email us at info@marksystemsusa.com

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