{"id":19992,"date":"2022-11-07T21:53:37","date_gmt":"2022-11-08T02:53:37","guid":{"rendered":"https:\/\/www.foundationsoft.com\/?p=19992"},"modified":"2025-05-21T13:21:35","modified_gmt":"2025-05-21T17:21:35","slug":"analytics-as-an-educational-tool-for-pms","status":"publish","type":"post","link":"https:\/\/www.foundationsoft.com\/learn\/analytics-as-an-educational-tool-for-pms\/","title":{"rendered":"Analytics as an Educational Tool for PMs"},"content":{"rendered":"

By Bruce Orr, ProNovos<\/strong><\/p>\n

Teaching construction financial management<\/a> is an unofficial part of the job for C-suite executives at contracting firms \u2014 after all, they can\u2019t achieve maximum profitability until their PMs know fundamentals like profit fade and over- and under-billing inside and out.<\/p>\n

A PlanGrid and FMI<\/a> report found that poor project data and miscommunication cost the construction industry $177.5 billion annually.<\/p>\n

What\u2019s at stake in getting this right? Just ask Casey Dillon, President and CEO of West Lafayette, Indiana-based Atlas Construction. After finding a better way to educate field personnel about project billing, the 32-year construction veteran improved his company\u2019s cash position by about $1 million.<\/p>\n\"UG<\/a>\n

<\/span>\u2018Data Overload\u2019<\/strong><\/span><\/h2>\n

Dillon\u2019s family-owned excavating firm started using FOUNDATION\u00ae construction accounting software<\/a> back in the 1980s when it was still coded in DOS. Over the decades, Atlas added HCSS HeavyBid, Procore and other construction apps. \u201cWe eventually were creating such an abundance of data that we struggled to interpret it all,\u201d Dillon explained. \u201cWe probably had 1,000 spreadsheets that we maintained. We were trying to present that data to young managers and field personnel in a way that would be easy for them to digest.\u201d<\/p>\n

But some busy field personnel never seem to get any \u201caha!\u201d moments after staring at rows and columns in Google Sheets or Microsoft Excel.<\/p>\n

Dillon also points to shortcomings in the traditional approach to WIP reporting<\/a>, in which project data is pulled out of the accounting system on a particular day, then combined into the WIP report and finally discussed with PMs days or weeks later. \u201cThe WIP is 100% accurate the day it is produced,\u201d the CEO said. \u201cA week or two later, it is not a great indicator.\u201d<\/p>\n

<\/span>\u2018The Money Graph\u2019<\/strong><\/span><\/h2>\n

For Atlas Excavating, two related concepts \u2014 data warehousing and data visualization \u2014 made the difference on PM education.<\/p>\n

Earlier this year, the company rolled out a cloud-based analytics platform by a FOUNDATION partner that pulls in accounting and other data from multiple sources and systems (i.e., data warehousing).<\/p>\n

Meanwhile, the platform\u2019s data visualization capabilities provide real-time views into areas such as labor hours, sales, billings, change orders, projected final cost and AP\/AR.<\/p>\n

In the project cash flow analysis dashboard, a simple graph with blue, green and black lines shows the relative positions of cash, costs and billing. Dillon lightheartedly calls this \u201cthe money graph\u201d because of the impact it had on his PMs\u2019 understanding.<\/p>\n

Like construction CEOs everywhere, he emphasizes being aggressive on billing. However, the actual big-picture effects of particular parts of the equation \u2014 like payment lags by specific owners \u2014 can be hard for PMs to gauge. Even on a project that seems comfortably over-billed on the 30th of the month, cash could still run behind if the owner takes 60 days to pay.<\/p>\n

With the money graph, Dillon\u2019s managers can see at a glance how much they need to bill as well as average lead times for customers. \u201cIt\u2019s powerful,\u201d the CEO said. \u201cIt really showed our guys why some of these jobs were still negative cash. We reduced our cash position by about $1 million in 45 days.\u201d<\/p>\n

<\/span>Change Order Deep Dive <\/strong><\/span><\/h2>\n

Charts and graphs of real-time data can also help PMs better understand how fundamentals like profit margin and change orders affect financials.<\/p>\n

When Atlas first ran analytics on its change orders earlier this year, the company identified 500 examples or about $5 million in extra work. \u201cWe hadn\u2019t taken too many jobs \u2014 we just underestimated how much change-order work we were doing, along with how much effort that takes,\u201d Dillon said.<\/p>\n

The new dashboard shows Atlas execs and PMs change orders by year, active jobs, active close, approval status and more, with filters for individual project managers. \u201cIt allows us to see, right away, if we\u2019re doing change orders to lose money or make money,\u201d Dillon said. \u201cOur PMs are learning where they need to focus.\u201d<\/p>\n\"Watch<\/a>\n

<\/span>Moving the Ball<\/strong><\/span><\/h2>\n

Dillon was a linebacker in high school and attended college on a football scholarship. Pulling from this experience, he likens trend-analysis to coaches reviewing footage with players right after the game. \u201cYou want to shorten the timetable from the actual event to when you learn the lesson, because that makes you less likely to repeat mistakes,\u201d he said.<\/p>\n

Good coaches are also direct in ways that help everyone up their performance. \u201cAs an organization, we get better if we\u2019re honest with ourselves about where we goofed up and how we can improve,\u201d Dillon said, \u201cand that\u2019s exactly what analytics helps us accomplish.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

By Bruce Orr, ProNovos Teaching construction financial management is an unofficial part of the job for C-suite executives at contracting firms \u2014 after all, they can\u2019t achieve maximum profitability until their PMs know fundamentals like profit fade and over- and under-billing inside and out. A PlanGrid and FMI report found that poor project data and miscommunication cost the construction industry … <\/p>\n

Read More<\/a><\/div>\n","protected":false},"author":21,"featured_media":21155,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_searchwp_excluded":"","inline_featured_image":false,"footnotes":""},"categories":[9],"tags":[],"class_list":["post-19992","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"acf":[],"yoast_head":"\nAnalytics as an Educational Tool for PMs - Foundation Software<\/title>\n<meta name=\"description\" content=\"Companies can\u2019t achieve maximum profitability until their PMs know fundamental construction financial management skills.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.foundationsoft.com\/learn\/analytics-as-an-educational-tool-for-pms\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Analytics as an Educational Tool for PMs - 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