30 Apr Help! We’re growing too fast!
According to the latest construction sector outlook report published by New Zealand’s Ministry of Business, Innovation and Employment, after a period of historic lows, the number of new dwellings being consented is growing at a rapid rate. And nobody knows this better than the building companies involved in the rebuild of Canterbury or those helping resolve the housing crisis in Auckland.
Businesses that were working on 3 – 10 builds a year are now working on 50 or more. While this is very positive from a growth perspective, the systems that have supported the businesses so far are starting to constrain and jeopardise growth. Accounting systems, QS systems, planning systems… they all do a stellar job performing their own specialised functions, but with increasing complexity in the business and multiple simultaneous builds across different sites senior management often have no clear picture of the pulse of the business.
In a hyperactive market staff turnover tends to be higher, and when new employees join the business there are often few, or no formal processes used in on-boarding them. When people leave they take their ideas, contacts and knowledge of the business with them. Even when they make an effort to hand over all information, in many cases it is held in an array of different programs or storage locations, leaving room for things to fall through the cracks.
While rapid growth puts pressure on the existing systems and processes in a building business, it is worse still when there is nothing in place. With no coherent view of the business there is little clarity of the current financial position of the company. Companies can find themselves wanting to hire more staff to grow the business, but may not be sure that they have the cash flow to back up their ambitions. Access to borrowing through financial institutions is also threatened when there is a lack of clarity around finances. Banks that may have lent funds in the past, or would like to in the future, need to understand the financial health of the business in order to make decisions about lending.
A certain level of integration needs to exist between current systems in order to provide clarity across the many different business functions. When the systems are integrated, it is easier to access the consolidated, consistent data, necessary to provide a clear, accurate view of the state of play within the business.
To find out more about the issues facing a rapidly growing building company and the ways in which they can achieve information clarity, download our free white paper “The foundation for business growth”.