With mortgage rates falling, making homebuying more affordable, homebuilders are increasingly struggling to meet growing market demand. However, as the market suggests, the challenge to meet demand may have less to do with buyers and more to do with concerns about the larger economy. Instead of trying to adapt to market changes outside of your control, which is virtually unchangeable by any one homebuilder, savvy builders focus on aspects of their business that they can control, such as making operations more efficient and profitable.
To offset current market challenges, some builders have turned to technology to increase productivity, allowing them to absorb higher material costs and maintain profit margins. Homebuilders feeling the pressure of market demand should find a solution that offers some or all of the following:
Homebuilders who seek greater understanding of the market and how their business fits should look for an industry-specific software solution that is focused on helping manage operations more effectively. Software isn’t a one-size-fits-all solution and finding a tailored platform can make a huge difference for homebuilders. Solution providers that have on-staff industry experts can also act as an extension of the business, allowing builders to better understand the tools to solve business problems and make more informed decisions, helping to reduce cycle times and minimize variances.
Business intelligence dashboards
Access to up-to-date data is critical to a homebuilders’ success, as they’re tasked with monitoring metrics like construction status, budgets and variances, sales goals, and more. A solution that specifically offers realtime business intelligence through an interactive dashboard can help homebuilders highlight important KPIs (key performance indicators) for their business—providing them with actionable insights that can help them make more accurate decisions for the improvement of sales, processes, margins, and more. Data analysis can be challenging for anyone, but a data visualization interface gives builders the ability to easily look at their data in realtime to make informed decisions regardless of the market conditions.
Flexible and scalable platforms
Technology solutions should be flexible enough to adapt to the changing needs of the residential construction industry. Cloud-based systems inherently offer greater flexibility and scalability, as the platform allows for faster and more frequent software updates. A reliable software provider should be able to meet business needs now and as the company continues to grow—making business owners confident that the investment will still pay dividends well into the future. As the residential construction market continues to fluctuate month-over-month due to wavering trade deals, mortgage rates, and other local dynamics, homebuilders will need an adaptable solution that can enable them to change with the tides.
Business management systems, like ERP (enterprise-resource planning), should act as the backbone of the company and therefore be completely integrated across all departments. Having software that manages activities across front and backoffice operations—from sales and marketing to accounting and purchasing to scheduling and customer service—provides users with easy access to the information necessary to perform their daily tasks. Additionally, complete integration streamlines every component of the workflow, eliminating the need to manually switch between disparate business systems, reducing redundancy and improving efficiency. Improved productivity is critical to tackling today’s market challenges, as builders will need to spend more time on the strategic tasks that support business development.
CRM (customer-relationship management) empowers homebuilders to more effectively nurture leads as they move their way through the sales funnel. Incorporating an industry-specific CRM solution can make it easier for sales and marketing teams to communicate with prospects in a timely, relevant manner using a consistent follow-up process. A software solution can also paint a big picture of what happens to sales leads—from first visit on the website to closing the deal. Being able to track what marketing is driving leads to the communities will give business owners a better understanding of the ROI on marketing activities. In addition, a CRM needs to give builders the necessary information into sales activities so they can adjust their processes accordingly. Having a detailed activity report makes it easier for managers to coach their sales teams and review pipelines for better visibility into forecasting.
Today’s unpredictable market can certainly hinder a homebuilder’s momentum—whether it be from rising material costs or volatile demand. Even the most talented, skilled homebuilders will struggle to compete if they can’t scale to keep up with the industry. To adapt to market changes and challenges while ensuring continued growth, homebuilders should look for solutions that will help make more informed decisions through industry-specific expertise, offer realtime business intelligence, and continue to adapt to the market.
Scott Duman serves as the president of the Residential Home Construction Group in the Building & Construction Division for ECI Software Solutions. Scott has more than 30 years of experience in applications systems design and development and is a Certified SCRUM Master (CSM 2016). He received a B.S. in Computer Science from Glassboro State College before earning his M.B.A. in Finance from Rowan University.