Four strategies to streamline construction operations and finance teams
Live field data bridges the gap between the job site and the office
The struggle to efficiently align cross-departmental communication between operations and finance teams is all too common in the construction business. It can be a challenge for them to see eye to eye on the simplest of projects: finance is perceived to be a wet blanket, caring only about numbers, percentages and the margins, while operations is viewed as a loose cannon, making quick decisions and changing directions as the wind blows.
Construction leaders need to take responsibility for helping these two essential departments work better together – their alignment is key for companies to achieve growth that is predictable, sustainable and healthy. The good news? Live field data can bridge the gap between the two and allow them to sync up to the business' most important goals. Here are four strategies to streamline communications and get your operations and finance teams on the same page:
1. Help them speak the same language
A major hindrance to cross-departmental communication is the lack of understanding of what the other department is working on. Finance teams aren't privy to the day-to-day operations of the workforce, and operations teams may not understand the overall financial situation of the project or how that impacts the health of the entire business. To solve this problem, ops and finance need to start speaking the same language.
As with natural languages, the easiest way to learn is to be immersed in the culture. Finance should be involved in the planning and implementing stages of projects rather than playing catch up after the fact. When finance adds more data for the field operations team to collect, they need to make sure they explain why the additional data is needed and how it is going to positively impact the financial health of the company.
For example, the finance team may decide that they can reduce project and labour costs if they start collecting quantities completed or tracking non-productive time on a project when workers are just waiting around for another subcontractor to finish before they can start their work. That's a big shift for field operations teams to start tracking things they've never had to track before. This shifts the relationship away from finance telling ops what to do and allows them to be part of figuring out a solution together. This is where live field data comes into play.
Live field data, when collected and processed on a single platform, becomes like an interpreter or advanced translation software on the team's devices. It creates a single reference point that allows both groups to work together without misunderstanding one another or being left in the dark. What does this look like? Employee time tracking, mobile forms and asset tracking will share insights that will help them improve job costing, equipment maintenance and safety protocols.
Finance and ops teams need more of this type of historical data during the planning process, as well as regular updates of current data throughout the project's progress, to be compared against budgets, timelines and productivity goals. Fortunately, a live field data collection solution delivers the information both teams need on a single platform, allowing them to understand each other's needs and to speak to information from a single, up-to-date point of reference.
2. Recognize and communicate their core drivers
Operations and finance's success are entirely intertwined – the best performing construction companies understand precisely how their operational plans drive their financial results, and then consistently monitor those key performance indicators (KPIs). Financial results are the product of operational decisions and actions. For example, if the overall productivity of wood framing during a project were increased, and the amount of labour and/or materials used or wasted were decreased, the finance team would see an increase in the margins for the entire project.
With this in mind, construction leaders need to make the relationships between these departments clear. When leadership establishes a goal of increasing productivity by some amount, both teams must know what they have to do to achieve that goal and then put plans in action to make it happen.
Beyond that, contractors should monitor those projects' progress as detailed as they can to have a clear understanding of how their progress impacts the bottom line. This underscores the importance of collecting and monitoring live field data on things like labour productivity and progress, equipment usage and safety management. It helps to gather the best and most detailed picture possible.
3. Share historical data to bridge the gap between finance and ops
Operations managers know everything there is to know about their operations' specifics but don't necessarily understand the bottom line or their impact on it the way finance does. Finance best serves the rest of the team by bridging this gap. It requires that they know what is happening on the ground - and historical data can help them develop a well-rounded point of view. Once they have this access to data, they can build their expectations accordingly and connect the dots between operational goals and the impact on the financials. They can then work with the ops team to share this know-how and build a stronger business acumen moving forward.
Monitoring the progress and impact of such plans requires a robust mobile dashboard. This feature can display KPIs, the progress made toward goals and the status of initiatives. The more live field data is collected, the more "drillable" the data's dashboard becomes. Capturing specific goals and KPIs for each cost allows each layer of management to key in on their responsibilities and see where they fit in the overall picture.
4. Rally the teams behind the client experience
One motivator of improving the alignment between operations and finance is increasing the quality of the customer experience (CX). Their strong communication and partnership results in clients receiving more detailed and accurate budgets and plans. But the benefits don't stop there.
When operations and finance don't have to rely on multiple different tools as their primary mode of communication, and instead start using one platform, it will be like going from telegrams to instant messaging. Communication is more comfortable and quicker. There will be fewer misunderstandings and miscommunications. Links between the teams will grow tighter. And the universal data found on the platform will allow the entire company to align behind the clients' needs.
Just because finance and operations teams have struggled to align in the past doesn't mean it has to be like that in the future. With the right technology solution, these important teams can access vital live field data and work together from a shared source of truth. Using the data to ground cross-departmental meetings will bring the teams closer together. And by giving the teams access to live field data, contractors provide them with the ability to communicate and take their business to the next level like never before.
Mike Merrill is co-founder of WorkMax by AboutTime Technologies and host of The Mobile Workforce Podcast.