Software Hardware

Hi Leticia,

I post this advice often when subcontractors are seeking software as CFMA members have reported that it has helped them in their software selection AND adoption.
The first critical step to this process is getting a technology team together that includes key representatives from each department so you have all perspectives accounted for in this decision.

Once you have the team in place, the following should help;

As your biggest risk is adoption, regardless of the software you choose, you can significantly lower risk with these 2 initiatives.

• Initiative #1: Build a fair contract
• Initiative #2: Secure detailed plan for successful adoption.

 

Suggestions for Initiative #1 (Build a fair contract)

1.a.  SAFEGUARD AGAINST RISK of UNFAIR SUBSCRIPTIONS: 

Unfair subscriptions have an imbalance of rights and obligations and can include lack of transparency of total cost to onboard, misrepresentation of products and service and failing to provide options for cancellation without penalty.

Include the following into your agreement;

• Client may cancel agreement at any time (any payments made are non-refundable)
• Software vendor shall provide detailed plan, including a complete list of tasks, commitments, milestones and skills and hours required for successful onboarding.

1.b.  SAFEGUARDS AGAINST RISK of CLOUD CUFFING: 

Cloud-cuffing is when software vendors charge license or subscription fees BEFORE the client is LIVE while also keeping client data hostage in order to extort additional payments from client in future, should client decide to change providers.                           

Include the following into your agreement;

• Software vendor shall defer subscription fees and/or licensing fees until client is LIVE on related software. LIVE is defined as when the following critical milestones are achieved:
  • AP payments are paid through software
  • Payroll runs (and/or) Payroll service export is completed through software
  • Client is posting to the GL
  • Entry of historical AIA/progress billings details to enable accurate retention billing                                                                                                                                
• Software vendor shall ensure that lifetime user licenses is granted in the agreement are grandfathered into ANY future agreements or end user license agreements that and updates that accepted by client.                

1.c.  SAFEGUARD AGAINST SMOKE STACKING:  

Smoke-stacking is when software vendors oversell the level of integration of products in a tech stack.  This can also result in additional fees to improve integrations as well as fees to maintain the integrations when they break with updates.             

Include the following into your agreement;

• Software Vendor shall ensure integrations between estimating, mobile apps, project management and accounting functions are integrated to the level represented in sales demonstrations with no additional set up or support fees outside of contract, as well as no additional fees for keeping integrations compatible with updates to any product.

1.d.  SAFEGUARDS AGAINST R&D REDIRECTION: 

R&D redirection is when software vendors collect similar fees from all customers in all industries while functions and workflows mostly benefit a core group of customers (common when subcontractors use software primarily made for general contractors)                                                                                                      

Include the following into your agreement;

• Software vendor shall ensure annual support fees are aligned with the demonstrated value delivered to client's trade(s) over the previous 3 years of the product's release notes, as it compares to value delivered to other industries.                                                                

1.e.  SAFEGUARD AGAINST OVERAGES AND OVERRUNS: 

Software vendors can undersell the complexity and cost of deployment which can result in overages of 200% to 400% of the cost on contract as well as multiple schedule overruns.

Include the following into your agreement;

• Software vendor shall provide a complete deployment plan with GMP (guaranteed maximum price) for all commitments required for a successful GO-LIVE.

 

Suggestions for Initiative #2 (Secure detailed plan for successful 'adoption')  

Specialty contractors need to complete the following tasks in order to achieve successful adoption on ANY ERP CONVERSION.

We recommend having software providers indicate which tasks they will complete for you, and at what maximum cost so you don't get charged overages, and which tasks you are required to complete:

1. Import and verification of vendor list, customer list and related data
2. Inclusion of company logo into all external documents
3. Completion of employee list/safety/experience/HR data
4. Completion of GL account listing, open jobs listing and cost code listing
5. Scoping for custom integrations
6. Payroll defaults, union, DB, CPR, fringe
7. Sample GL Transactions for replication
8. Sample check stubs (Payroll, AP, Garnishment) for replication
9. Sample job cost/job budget for replication                                                
10. Complete items database development for each branch/company/division to customer spec to enable effective item selection for POs (Specialty Contractors require item codes by vendor and descriptions, UOMs, dimensions, properties, expense types to be included in database development)
11. Sample reports (PO, AR invoice, PM reports) for replication
12. Sample WIP to align with WIP in go-live
13. Complete AR aging (By Customer/Job)
14. Outstanding retainage (By Customer/Job)
15. Trial balance (Same date as AR)
16. Historical SOV's to be manually entry to enable accurate retainage billing
17. Invoice & cash receipt register
18. Creation of billing templates to customer/GC invoice templates
19. Creation of vendor PDF invoice template mappings for PO matching
20. Complete change order log for replication
21. All sales tax rates/reporting for replication
22. Monthly WIP reports (Fiscal Year) for validation
23. Employee YTD &payroll info – pay stub/time sheet for replication
24. Payroll register reports for replication
25. Sample reports (CPR, Union, etc.) for replication
26. Sample direct deposit and positive pay files for replication
27. All open subcontracts for replication
28. Complete benefit plans/enrollment for replication (RE: ACA)
29. Preliminary training/introduction or training materials review and Q&A for customer, vendor and employee info
30. Preliminary training/introduction or training materials review and Q&A for inventory/material management
31. Preliminary training/introduction or training materials review and Q&A for vendor pricing, job special pricing and POs
32. Preliminary training/introduction or training materials review and Q&A for payroll info; pay rates (Union/Davis Bacon, prevail wage, benefits, safety cert etc.)
33. Open AR for replication and tie off before go-live
34. Open AP / Discount Report for replication and tie off before go-live
35. Trial balance for go-live
36. Employee YTD's (Quarterly) - 940 & 941 for replication
37. Open check lists/deposits for replication and tie off before go-live
38. Open/pending change orders for replication and tie off before go-live
39. Bank balance as of trial balance (All) for tie off before go-live
40. Bank reconciliation (All) for replication in documentation and tie off before go-live
41. Job cost to date for replication and tie off before go-live
42. Budget's for replication and tie off before go-live
43. WIP Report review and customization if needed
44. Training for payroll/HR
45. Training for accounting/financial mgt
46. Training for pre-construction
47. Training for job start up
48. Training for purchasing
49. Training for job costing
50. Training for document control
51. Training for contracts & subcontracts
52. emergency data repair of 1st month end to ensure future month ends are sound
53. Training for executives
54. Training for remote tools
55. Punch list creation for outstanding gaps and functions for optimization
56. emergency data repair for 1st quarterly to ensure future QRTLYS are sound
57. CPA review to ensure integrity of financial reporting
58. Year-end emergency data repair of 1st year to ensure future year ends are sound

 

------------------------------
Chad Pearson - Plexxis Patriot (dealer of truth in build)
Director of Business Development
Plexxis
Brampton ON
(416) 574-1677
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Original Message:
Sent: 02-01-2021 13:05
From: Leticia Parises
Subject: [EXTERNAL] Software Hardware : Viewpoint - Spectrum: Need new program recommendations PLEASE

Thanks!

 

Leticia Parises Controller COLLINS ELECTRICAL COMPANY, INC. | CA License No.  115427 3412 Metro Drive | Stockton, CA 95215 T: (209) 466-3691 | F: (209) 466-3146 lparises@collinselectric.com | www.collinselectric.com
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