Digital: Technology, Data and Analytics – Move up the Continuum

Authored by: Ryan Merryman : Professionals : CLA (CliftonLarsonAllen) (claconnect.com)On the digital continuum some contractors are just getting started, some leverage sophisticated solutions across all aspects of their business and many sit somewhere in between. No matter your position today, even adopting small technological changes is a worthwhile step in the right direction, as the strategic use of technology, data and analytics can help you achieve your productivity and profitability goals. 

The question becomes: what changes can I begin to implement today to reach those goals?

A common reality is that contractors produce many types of data conducting day-to-day business and that each contractor’s set of data sources isdifferent.  Often financial data and production data is siloed and contained in systems that were not designed to communicate with each other creating challenges when trying to combine necessary information.  Without well-designed, system-level data integration, ad-hoc and manual procedures, often Excel-based, are commonly used to bring disparate information together in the hopes of generating business insights. These manual efforts are time consuming, can be prone to errors, are difficult to monitor from an internal-control perspective, generally arrive later than is ideal for decision making and, due to limitations of the process, may not provide accurate or most relevant insights.

If you are faced with some version of the above scenario, we recommend performing an overall assessment of your process(es). This can be done by stepping back and identifying the question or challenge the process was meant to address and from that question pinpointing the desired result. This then leads to clearer identification of the timeliness of the need and the relevant KPIs or metrics needed as indicators of progress. Armed with a clear understanding of the question, the target results and the metrics needed for evaluation, you can identify the necessary data elements and sources and begin to map where data is readily available and where challenges to accessing and combining data exists.

After assessment, automation and technology tools can be used to connect to the originating data sources, build repeatable, scalable queries to clean and transform the data, and store the data in organized data models. With the relevant data combined in one location, insights can be readily visualized, reported, and shared across the organization. The benefits of deploying a modern analytics, reporting and visualization tool, such as Microsoft Power BI (PBI), to address these types of business challenges includes improved quality and efficiency in the process, consistent, repeatable reporting, broader access to essential insights resulting in more timely decision making, customized role-based report views so users see only what is appropriate to them, and immediate and easy access via the web or mobile application.

Consider two contractors:

• Contractor 1 – Company management are provided separate financial and production reports in print form on a monthly schedule
• Contractor 2 –  Company management and field leaders get integrated financial and production reports with custom KPIs and analytics in daily-refreshed dashboard. The reports are accessible from the office or in the field on a mobile device

Given these scenarios, who has the competitive advantage?

Below is an example PBI dashboard like those we have developed for clients. The question this sought to answer was ‘how is profitability affected by various elements like job size, location, etc.’. The KPIs and metrics are all based on data generally available in financial and production systems. This example shows an analysis of closed jobs. Elements of billings, costs and profitability are compared across job size (cost bucket), project manager (name), customer (owner), division and location.

If your organization faces data challenges and you’re not able to gain the insights needed to gauge performance, CLA’s Digital team can assist.  Thanks to Ryan Merryman for authoring this post, please contact him if you would like a fresh look at your organization’s use of technology, data and analytics to help achieve your productivity and profitability goals