To E or not to E?
The blanket excuse that contractors are always behind the times when it comes to technology no longer applies. Contractors are buying supplies and material, researching products, purchasing permits, selling surplus equipment, managing projects, and e-mailing blueprints, pictures and purchase orders to all corners of cyberspace.
Surveys saySurvey results reveal that contractors on average spend one hour and 26 minutes each week on the Internet for business purposes, most often during regular work hours. The No. 1 reason contractors give for surfing the Web is to locate product information. Tools were mentioned by 67% of contractors as the products they most likely would purchase in the next year.
In addition to purchasing products, several other business opportunities for the construction industry are offered through Web sites such as HVAConline.com and PlumbingOnline.com. Buildpoint.com, a similar site providing a marketplace for contractors and suppliers to transact business online and identify business partners, claims it has realized a 200% increase in the number of companies registered on its site since May; the firms now total more than 15,000.
A survey of 400 construction trade professionals (CTPs) conducted by International Design and Construction Online, which operates E-IDC.com, reveals that 92 percent of them will increase their use of the Internet for business over the next two years. E-IDC.com is a B2B e-commerce Web site for architectural, design and construction products and services.
CTPs indicate that 17% of the equipment, services and supplies they need to conduct business is being sourced on the Internet. Architects source more (22%) than do interior designers (17%) or contractors (14%).
The broader the geographical reach of the construction company, the more frequently construction professionals go online to search for equipment and supplies. Results further indicate that 48% of companies doing global business perform online research vs. 33 percent of companies that do local or statewide business.
No doubt remains that the Internet plays a significant role in contractors' lives. Many maintain their own Web sites, some of which have existed for four or five years. This new survey reveals that 34% of contracting firms have Web sites and 68% of those sites promote customer service. Of those contractors not having a Web site, 31% indicate that they have plans to build one.
Another intriguing finding survey is that 38% of contractors have purchased business-related equipment online, and 41% state they are likely or very likely to purchase plumbing and heating supplies over the Internet during the next year. At least one of these contractors expects to purchasing close to 100% of its supplies through the Internet.
E-contractingMarlin Mechanical in Phoenix is purchasing material and supplies online from two wholesalers. When the technical infrastructure is established with a third wholesaler, Marlin expects to be purchasing about 75% to 85% of its contracting-related products using the Internet, says Mark Giebelhaus, president.
"We had no hesitation at all to begin buying on the Internet. We couldn't wait for our suppliers to get online," Giebelhaus explains. "We've been buying online for one year with the first wholesaler and six months with the second one. We can place orders online and get real-time inventory status as well as personalized pricing discounts."
Another contracting firm, A&A Mechanical in Louisville, Ky., also looks forward to purchasing products online from its wholesaler very soon. Job quotes, purchase orders and customized discounts will be available, and that will streamline A&A's purchasing process, says Robert Pierce, chief estimator.
Ferguson Enterprises, headquartered in Newport News, Va., started its Internet-based system of selling products online in July. However, it has been processing e-commerce transactions since much earlier than that. The Ferguson Automated Sales Transaction system was implemented 12 years ago. It began as an electronic link via dial-up modem between customers' and Ferguson's computers.
Contractors process orders in real time using their account information while logged on to Ferguson's computer system. The wholesaler logs about 7,000 FAST transactions each month. FAST was Web-enabled in July. Now customers who wish to conduct business over the Internet can use their Web browser to access the system.
"For customers, the change in technology from dial-up to Web-enabled is simple," explains Noel Hernandez, Ferguson's corporate communications manager. "By transitioning to the Web, we are looking for transaction savings for both our customers and Ferguson. Every dial-up connection or fax that customers make to place an order is a phone call, and the costs of those calls add up. Now through an Internet connection, customers can transact with us all they want. Their costs will be limited to whatever their Internet connection rate is."
Over FAST's life span at Ferguson, the number of customers using it has increased each year and the demand to use it constantly increases, Hernandez says. However, while online purchasing might be a large part of a contractor's business, e-transactions account for only a small portion of Ferguson's business.
The decision to Web-enable its FAST system was driven by customers wanting the service, Hernandez notes.
"If a contractor calls us and says he would like to be able to use the Internet for purchasing from us, we will be able to set him up for that," he says. "But we don't want to make contractors think that the only way they can do business with us is if they buy through our site on the Internet. We want to be able to work with the most leading-edge customer as well as the customer who is happy doing business using fax machines and phone calls."
Louisville, Ky.-based Masters Supply is also engaging in e-commerce with its customers, but not to the extent that Ferguson is. Masters' order-entry system truly can be categorized as e-commerce because it is paperless and needs electricity to function, but it is not integrated with its Web site.
"What we have implemented is a PC-based order-entry system that operates through the fax line," says Dave Wachtel, Masters' vice president. "We've installed special software on our customers' computers that replicates the system here in our office. Contractors can process their orders using a paperless system now. When we receive the order, it looks exactly the same as the orders we process in-house, which reduces mistakes and confusion."
The drive for this system did not come from Masters' contractors, explains Wachtel. "We knew it would make things easier for our customers and for us in-house, so we did it. The customers who are using the system love it because it is so user-friendly. I think it's easier to work with than some online sites I've seen."
The system has been in operation for six months. Masters does not have specific plans to process order entry through the Internet in the future, but is not ruling it out either. Masters is content to see how the current system works for a while and expand it later if needed.
The wholesaler's sales reps install the software on customer computers, and monthly updates of prices and product information are necessary. "Our sales reps have to make calls anyway and the update takes about a minute, so it's not too much of an extension of their time to do it themselves," Wachtel says.
Wholesalers' sites aren't the only places to shop online. Manufacturers also are selling product from their Web sites. A&A Mechanical was working on a recent job that required the use of a special hydrogen sensor, which the contractor did not own. A&A had no idea where to buy one so an employee jumped on the Internet and started searching.
"With two clicks of the mouse we had the manufacturer's contact information and were able to get pricing information that day," Pierce says. "We bought the sensor and were able to do the job properly."
Manufacturers' sites also can be a wealth of product information. Pierce says he can locate plumbing fixture specs as well as get rough-in sheets and color pictures from manufacturers' sites to help with designs and planning.
"Some boiler and water heater manufacturers even help you size their products right there on their sites," he says.
Having access to product specifications 24 hours a day also helps with preparing bids, Pierce adds.
Locating product specs is a popular online activity, a fact supported by Contractor's survey, which reveals that finding product information is the No. 1 reason contractors surf the Web. B-G Mechanical Contractors in Chicopee, Mass., is one of those contractors.
"If you're installing a small air conditioning unit and you want to know the dimensions to plan properly, getting that information from a manufacturer's site helps a lot," says Dan Jacques, project manager. "The information is up-to-date compared to getting it from a catalog that has been sitting on a shelf for five years."
E-mail maniaE-commerce can be conducted over the Internet in ways other than visiting Web sites. E-mail is a versatile tool that can be invaluable when seconds are ticking quickly and time is money.
Any construction-related document can be distributed in seconds using e-mail. When submitting a bid or meeting a project deadline, the speed of the Internet can make or break a deal.
"I was finishing a job recently and received a vital e-mail related to the closing, but a booklet I needed to complete the job was not included," says Kathy Thornburg-Jones, co-owner of mechanical contractor Morgan and Thornburg in Memphis, Tenn. "We needed it, so the person on the other side scanned it page by page and we printed it out on our side and had it in almost no time. That saved the job."
Faxing, while quicker than regular mail delivery, is facing competition from e-mail as the preferred method of document delivery. Morgan and Thornburg and its channel partners constantly e-mail quotes and purchase orders among one another, and that saves time compared to faxing and old-fashioned "snail" mail.
"Architects send us drawings, and we send drawings to them as well as other people all the time," Thornburg-Jones says. "We can receive a complete set of drawings using e-mail. If we have to make changes on certain parts, we don't have to work with the complete set. That saves paper and time."
Sending drawings back and forth between contractors, architects and owners is a common application of e-mail. General Mechanical Group in Latham, N.Y., is doing it and saving paper, time and money in the process, says Dennis Deeb, owner/CEO. CAD files take up only virtual space and can easily be attached to an e-mail and beamed through cyberspace with one click of a button. Even so, General Mechanical shrinks the files (a process known as zipping) to lessen the load on the e-mail system to speed up delivery.
"The days of using UPS or FedEx to ship drawings are going away," Deeb says. "With e-mail, instead of taking three days to get new drawings to whoever needs them, it's a matter of five minutes or an hour, depending on how often someone checks e-mail."
In a few years printers won't be printing drawings anymore, Deeb predicts. Construction management dot-com companies will post them on their Web sites and distribute passwords to contractors interested in bidding on the related project.
"I believe these sorts of developments will be good for the industry," Deeb says. "If young people entering the industry are fluent in this technology but can still use a pencil when they have to, this will be good.
"I remember a few years back when everyone was wondering if CAD would survive. Now everyone uses it."