Leveraging Technology Solutions For Your Heavy Highway/Civil Business Needs

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1 AGC'S Contractor to Contractor Webinar Series: Leveraging Technology Solutions For Your Heavy Highway/Civil Business Needs Ron Campbell Director of IT Richard Forrestel, Jr., CPA Treasurer John Clancy Director of IT Goodfellow Bros. Cold Spring Construction Company

2 Discussion Points Industry trends, business and IT strategies Fact-based decision-making on equipment based on historical usage data, associated expenses, and projected cash flow Processing different billing types: quantity-based, dollar-based, equipment utilization based and more Convenient access to equipment information and dissemination of such information across the organization Material billings and management (produced and purchased) Human resources management and payroll processing, including handling prevailing wage scenarios Incorporating, selecting and managing technologies, systems and IT infrastructure

3 Ron Campbell Ron is the director of Information Technology for Goodfellow Bros. where he has been since Ron is responsible for the company s IT infrastructure and related technologies. Ron championed the engineering and implementation of a central processing area for technology which drove costs down while increasing availability for Goodfellow Bros. Ron s forward-thinking IT strategy has enabled Goodfellow Bros. to remain a leader in their market. Prior to Goodfellow Bros., Ron has more than 25 years of experience in a variety of technical positions including both management and front-line IT. His expertise include in-depth knowledge with enterprise systems and networks, large infrastructures, network optimization and solution implementation.

4 Goodfellow Bros. Goodfellow Bros. is a fourth generation, family-owned business with nearly a century of experience in building key infrastructures (airport, bridges, roads, landfills), transportation systems, housing facilities, recreation sites and more. The heavy highway contractor with approximately 450 employees and $300M in revenues self-performs most of its work and is known as a leader in innovation leveraging state-of-the-art, satellite-guided equipment, GPS modeling and surveying capabilities as well as equipment monitoring and management technologies.

5 Richard has served as treasurer for Cold Spring Construction Company since in Cold Spring was founded by Richard s grandfather, Eugene P. Forrestel, in 1911 and is primarily a highway contractor in western New York state. Richard spent eight summers in the field for Cold Spring from 1975 to During that time, he earned a BA from Princeton University and an MBA from the University of Michigan. Richard worked for Peat, Marwick, Mitchell & Co. in Philadelphia from and was awarded a CPA from the Commonwealth of Pennsylvania in Richard is a member of the AGC Tax and Fiscal Affairs Committee as well as the Small Business Advisory Committee to the FASB. Richard Forrestel, Jr.

6 John Clancy John is the IT director for Cold Spring Construction Company since John's responsibilities include the management of the IT infrastructure and associated technologies He has been working with Computer Guidance since 1997 implementing various applications of ecms with emphasis on equipment accounting, maintenance and productivity. Recently over the past three years he has been beta testing GPS Tracking & Maintenance software with Caterpillar & Trimble, going live with 640 assets in January of John's main objective is to get the most out of the equipment for the least amount expenditures. Using the latest technology he has been able to extend maintenance schedules and track the life cycle of detailed components.

7 Cold Spring Construction Company Cold Spring is a family-owned, heavy highway/civil contractor located Akron, New York. Cold Spring self-performs most of its federal and state work with employees. The heavy highway/civil contractor engages in site preparation and construction of roads, bridges, airports and landfills in the states of Pennsylvania and New York.

8 Industry Trends & Considerations For Heavy Highway/Civil Contractors

9 Business Strategy Get work Build up backlog Lean work Partnerships M&As Customer Service

10 Start with a solid core system Integrate best-of-breed applications with the core ERP system Collaborate with the field Simplify field operations Add intelligent asset management Leverage business intelligence Focus on business objectives, not on IT projects and systems Don t forget about business continuity IT Strategy Reduced expenses Less overhead More flexibility Smarter business processes Fact-based decisions

11 Corporate Financial and Tax Management

12 Corporate Finance & Tax Tax vs. Book Depreciation Methods Segmented Analysis Analytical Flexibility of the System Cash and Asset Analysis Quick Visibility into the Future

13 Cash Flow Improve timeliness of billings Decrease DSO Automate T&M billings Extend life of the asset Preventive maintenance Reduce cash outlay

14 Billings Quantity-based Billings Dollar-based Billings Equipment Utilization Based Billings D.O.T. Jobs Time & Material Billings

15 Technology Solutions For Corporate Financial Management ERP Integrated Applications Single Data Source Scalability Flexibility Reliability Accessibility

16 Equipment

17 Utilization Planning Maintenance Performance Shared Resource Equipment Accounting Risk Safety

18 Planned utilization Utilization management Measuring idle time vs. productive time Best practices to minimize equipment time Use of preventive maintenance Extending the life of your asset Utilization

19 Challenges Equipment Operators Face Wrong equipment Poorly maintained equipment Wrong location Inadequate training Transportation logistics The company was moving the overhead runway beam within a warehouse when it collapsed onto an office. The slings used to lift the beam failed. Investigators found that the operation had not been properly planned by the contractor, which led to the wrong equipment being used. Article by PP Construction Safety H&S Assistance and Consultancy service

20 Planning Coordination of activities Owned equipment vs. rented equipment Knowing where equipment needs to be Knowing what resources are needed How much does it cost to build a road one mile? Hundreds of thousand dollars to over twelve million not including design, engineering and land acquisition. Amazon research study from various DOT case studies

21 Maintenance Minimize downtime Improve scheduling Maintain asset value While rentals account for only 1% to 3% of total project costs, experts say, a non-functioning machine can bring a jobsite to a standstill. An idle crew waiting for a replacement machine or repairs can add unexpected costs that skew project profitability. Maintenance is a big part of the decision. Engineering News-Record

22 Idle time Fuel usage Meter reading Performance correlation with equipment condition Performance Measuring fleet performance per equipment, job and operator

23 Equipment Accounting Charging for equipment cost more efficiently Impact of equipment cost on the overall job Evaluating low and high margin jobs Correlation between equipment utilization and equipment cost per job

24 Equipment Accounting Cost recovery based on historical data Rate structure based on corporate standards Rate structure based on customer contract Ownership and leasing The U.S. rental business grew an estimated 18.6% in 2011, according to the Associated Equipment Manufacturers, a Milwaukeebased industry trade group. Engineering News-Record

25 Risk Management Operations Location Tracking Utilization abuse PM upkeep Theft Carbon footprint Equipment efficiency Buying decisions based on carbon footprint EPA compliancy Contract compliance Safety Safety certifications Operator certifications OSHA Liability management Insert visionlink slides Equipment history ecms

26 Operations Risk Management

27 Technology For Equipment Management Core Business Management System (ERP) Equipment Accounting Equipment Maintenance Service Management T&M Billing Payroll/HR Job Cost/Core Financials Intelligent Asset Management Trimble VisionLink Zonar Many Others Business Intelligence & Analytics Mobile/Self Service Applications

28 Intelligent Asset Management Engine Data Max fuel Idle fuel Idle time Starts total number of engine starts Fuel Data Consumption Level value - % of fuel remaining Meter Data Service meter value total lifetime by location Number of hours machine is on Odometer reading Latitude and longitude

29 Human Resources

30 Resources Do I have the resources I need? Do I have the right resources? What skill sets do I need? What skill sets do I have? Do I self-perform? Do I sub it out? Both? Union or non-union? Do I have training certifications in place? Do I have all safety items administered? Prevailing Wage Union and non Union Labor

31 Materials

32 Materials Self-produced Materials Buying Materials Scale Ticketing Plant Sales Transportation Schedule of Values

33 Technology, Infrastructure, and Systems

34 Considerations Does my IT Strategy support my Business Strategy? Is my IT System, Technology and Infrastructure flexible to accommodate my changing business? Do I outsource IT? Do I perform it and manage it in-house? Where do I spend my time and money? IT Infrastructure Overhead/Expertise Outsourced Services What is the most important to automate? Communications Asset Management (human resources and equipment) Financials/Accounting Project Management All of the above

35 Business Needs Multi-company Multi-division Shared Services International presence/work Growth through M&As, JVs, partners Government jobs Union and non-union Audits and compliancy Contracted or self-performed work Office and field employees Considerations

36 Considerations System Stability Performance Scalability Accessibility Integration Capability Business Continuity/HADR Communication Collaboration Mobility Cloud Solution Provider Corporate Stability Proven Business History Experience, Expertise, Skills Support Model Corporate Strategy

37 ecms Construction ERP Software for General, Heavy Highway/Civil, Specialty Contractors Computer Guidance Customers include numerous Engineering News Record Top 50, 400 and 600 contractors. ecms ranked as the No. 1 Job Costing/Accounting/Payroll Software for commercial contractors with annual revenues of $250 million and higher* in 2010, 2009, 2008, 2007 *Construction Financial Management Association s (CFMA) Annual Information Technology Survey for the Construction Industry Proud Supporter and Affinity Partner of the Associated General Contractors of America

38 Q&A Thank You to our Sponsor

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