THE ULTIMATE GUIDE TO SELECTING

CONSTRUCTION SOFTWARE
SOFTWARE FOR CONSTRUCTION companies
has been around for over 25 years. The majority
of the construction industry is still cobbling
together different systems and software
packages to run their processes. As construction
companies grow, they tend to require integrated
software solutions to automate repetitive tasks,
eliminate duplicate data entry and enhance
collaboration across their business.

When most construction companies go to

market to search for software, they tend to
focus on functionality. While this is an important
piece of the decision, it’s certainly not the only
one. Too many times, construction companies
buy software, only to realize they invested in the
wrong software vendor, either because their
growth, product, technology, sales or support
strategy doesn’t mesh well. These factors become
critical in the decision making process because
it’s not about software, it’s about partnering “functionality
with the right solution provider. is an important piece
of decision making,
but it’s certainly
not the only one...”

This guide is broken down into five key categories:

PRODUCT STRATEGY
OWNERSHIP STRUCTURE
G ROWTH S TR ATEGY
SELLING AND SUPPORT
TECHNOLOGY
PRODUCT
WITHIN THE CONSTRUCTION
SOFTWARE INDUSTRY

STRATEGY
LANDSCAPE, THREE METHODS
OF PRODUCT STRATEGY
ARE MOST PREVALENT.

Building upon the existing product with the latest NO DISRUPTION TO

and greatest technology. This strategy consists of CUSTOMER OPERATIONS
improving current software functionalities with newer
NO RELEARNING COSTS
technologies to enhance the usability and
effectiveness of the overall system. This mitigates AVOIDS CUSTOMERS
disruption to the user, as they avoid the time it takes REBUYING EXISTING
to re-learn an entirely new software system FUNCTIONALITY

DISRUPTION TO CUSTOMER
Acquiring software companies to either piece-meal
OPERATIONS
the software and add-on third-party products
or replace existing software products. While the REQUIRES MODIFYING
products may look sleeker and appear to be enhanced, EXISTING BUSINESS
there is no true integration. If the intention is to replace PROCESSES
an existing product , this will force those customers to
spend on purchasing new software and re-learning REQUIRES RE-PURCHASE
their software systems. OF SOFTWARE

The rebuilding approach which software companies

MASSIVE DISRUPTION TO
use to replace aging product lines. With this strategy,
CUSTOMER OPERATIONS
software companies will choose to stop developing
on their existing product and rebuild their current REQUIRES REVISITING
functionality on a brand new product. If the customer BUSINESS PROCESSES
wants to do an update and get the new functionality
the customers will be forced to rebuy their software COMPANIES ARE
and spend on training to do what they already do today. CONSTANTLY REBUYING
FUNCTIONALITY THEY
ALREADY HAVE TODAY
OWNERSHIP THERE ARE THREE TYPES
OF OWNERSHIP STRUCTURE:

STRUCTURE
PUBLICLY OWNED,
PRIVATELY OWNED, AND
VENTURE CAPITAL OWNED.

HIGHLIGHTS
With publicly owned companies, all of their financial
information and performance details are available at any The company’s information
time. This is beneficial, as company performance and financial is visible and transparent
stability is visible for all to see. The stock price is directly
correlated to the number of customers, their development Companies goals are to ensure
and future growth potential and the overall impression customer, employee and
of the analysts following the company. shareholders are satisfied

There is more long-term

financial stability

Privately owned companies are not publicly traded, It’s unknown when the owners
and therefore, their financial information and company may choose to exit by selling
performance is unavailable to construction companies. to another vendor
With privately owned companies, the future of the business
is unknown, not only can they be acquired at any time, Development of new
but they can go out of business if there is not enough functionality hinges more
cash flow. This may leave their customers stranded on new sales
or working with new owners that don’t share the
same strategy or direction of the product. Financing of the business can

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be either through debt or cash,
which is unknown

Venture capital firms represent either one or a group The company typically
of investors looking to make a substantial short-term looks for profits to satisfy
profit from the company they are investing in. With this Venture Capitalist
type of ownership, there is typically a misalignment
between the venture capitalists, founders and Customers may become
customers. This can lead to a short-term sale of the less important over
company, which may be acquired by a product acquisition satisfying investors
company and their customers may be forced to find a new
software system to keep their business running. When and how the Venture
Capitals choose to exit impacts
$ $ $ $ $ $ $ $ $
the entire customer base
 GROWTH
STRATEGY
Growing organically is a proven method
to achieving consistent growth. Backed
by solid research and development,
investing in the product leads to a stable
software solution with the newest
technology and functionality that
meets the industry’s needs.
H I G H L I G H T S
EACH COMPANY CHOOSES THAT THE
PRODUCT IS RIGHT FOR THEM
LISTENING TO THE CUSTOMER BECOMES
MORE IMPORTANT FOR FUTURE GROWTH
VENDOR NEEDS TO CONSTANTLY ENSURE
CUSTOMERS ARE SATISFIED
WITHOUT A SOUND GROWTH
STRATEGY, COMPANIES CAN
PUT THEMSELVES AT RISK OF
DILUTING THE BRAND AND
DEVALUING THEIR PRODUCT.
Acquiring software companies and forcing
customers onto their software platform is
a type of growth. The vendor is buying customers
and not proving their products value to the
market. The acquired customers are required
to switch to the new software, which typically
requires customers to repurchase software,
spend on training, and revisit business
processes that already work.
EXISTING PRODUCTS MAY BE
DISCONTINUED AND CUSTOMERS
FORCED TO NEEDLESSLY SWITCH
VENDOR IS FOCUSED ON GROWING BY
ACQUISITIONS RATHER THAN BY GETTING
MORE CLIENTS ORGANICALLY
THE VENDORS FOCUS SHIFTS FROM
PRODUCING PRODUCTS TO GROW,
TO CONVERTING EXISTING CUSTOMERS
FROM THE ACQUISITION
 SELLING
&
WHEN IT COMES TO SALES
AND SUPPORT, BEING ABLE

SUPPORT
TO REACH AND TALK TO THE
ACTUAL VENDOR ITSELF IS
TYPICALLY THE MOST
PREFERRED OPTION.

Development is closer to the

H I G H L I G H T S
customer and can develop
In the direct model approach, sales, support, and better products
training are all performed internally by the software
vendor itself. Not only does this allow businesses Sales and development can work
to speak with representatives who have first-hand together to ensure a better fit
knowledge of the software, but also to industry for the customer
experts with years of experience. This also means
that sales, marketing, support and development act Professional Services can work
as a single operating unit – able to making it easy closely with development to further
for the customer develop products

The dealer model utilizes third-party vendors to sell, Charge customers for
train, and support new customers. The dealers may business consulting along
not be fully knowledgeable, may not reflect the with the software
vendors values when it comes to the software, and
may be unable to support the specific needs of the Vendor doesn’t always inform
construction industry. Also, the developers don’t have dealers of product updates,
a pulse from their sales and marketing teams, making roadmaps and strategy
it challenging for them to develop leading edge
construction specific products. Dealers can also close Dealer may sell multiple products
shop at any point and leave their customers stranded. and not be an expert in any

With outsourcing, 3rd party companies are contracted

to handle support and development duties. This is typically Lowers the Vendor’s overall
a cost reduction method that achieves its goal. There tends operating costs
to be a lack of understanding and engagement between
the customers and the outsourced personnel as the Creates misalignment between
outsourced personnel usually doesn’t possess the necessary support, development and the
knowledge about a specific topic. Outsourced personnel rest of the organization
are not as vested in the customers’ success. Also,
reaching someone for support within business hours Makes it harder for customers
may prove to be quite challenging as well. to be properly supported
TECH
NOL THERE ARE DIFFERENT WAYS TO DEPLOY SOFTWARE.

OGY
WITH THE INTRODUCTION OF SOFTWARE RENTAL
AGREEMENTS AND HOSTING SERVICE PROVIDERS,
CONSTRUCTION COMPANIES HAVE MORE OPTIONS
IN HOW THEY PURCHASE SOFTWARE.

Outright purchase, where the customer owns the HIGHER UPFRONT

software and the hardware, which is the traditional INVESTMENT
Client-Server approach. The customer has complete
control of the systems and hardware. This makes it COMPLETE CONTROL OVER
easier to configure the networks and systems for the THE SYSTEMS
specific customer instances. While this requires a higher
investment upfront from the customer, it means CONTROL THE COSTS OVER
that the customer can also choose how they deploy it. THE LIFE OF THE SYSTEMS

H I G H L I G H T S
Hosting means that customers own the software
INVEST ONLY IN THE
but rent the hardware from a hosting center that
SOFTWARE
manages the hardware infrastructure. This provides
customers with the control over the software, when
MONTHLY RENTAL FEE FOR
they upgrade and how they upgrade, without having to
THE HARDWARE
worry about upgrading costly hardware. The hosting
provider is responsible for ensuring that all the hardware
ALWAYS HAVE UP-TO-DATE
is to the recommended specification and up to date. This
HARDWARE
also reduces the need to spend on expensive hardware
upfront and hardware maintenance.

LOWEST INVESTMENT
Leasing or renting software is a newer concept know ENTRY FEE BUT MORE
as SaaS or Software-as-a-Service, which is sometimes EXPENSIVE OVER TIME
confused with the Cloud. Here, the customer doesn’t
own the hardware or software, but rents everything MONTHLY RENTAL FEE
from the software vendor. In this case, the customer FOR ENTIRE END-TO-END
always has access to the newest version of the software, SYSTEM
with no control on its upgrade path. The customer also
has no leverage with the vendor. VENDOR RESPONSIBLE FOR
END-TO-END OF THE
SYSTEM
 OTHER
COMPANIES

PRODUCT STRATEGY

Building upon what exists today Acquiring new technologies Rebuilding existing
with the best technology available. and integrating them to solutions on new
deliver enhanced software technologies to deliver
enhanced software

OWNERSHIP STRUCTURE

Publicly Owned Privately owned Venture Capital backed ·

Full visibility and transparency vendor only shares what potential misalignment
they choose to between customers and
financiers

GROWTH STRATEGY

Organically growing means that Acquiring growth tells a great story but not the whole story
the market agrees that the
software is the best available

SELLING & SUPPORT STRATEGY

Direct Model Dealers Outsourcing

Marketing, Selling, Deploying and selling but not developing to lower costs and meet
Developing under one roof what the market needs customer demand

TECHNOLOGY STRATEGY

Complete Purchase - Hosting Solution Subscription Based

Owning and controlling all the Owning the software, Renting the software and
hardware and the software for renting the hardware, and the hardware – keeping
their operations maintaining control costs down
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