Finding A Niche In Verticals

BUILDING AN IT BUSINESS
Another niche vertical that benefits from the use of IT is the residential construction industry. Currently, the industry is in the midst of a significant downturn; in January the U.S. Department of Commerce reported that new home starts hit a 16-year low. Yet the nature of the industry—a distributed workforce, multiple suppliers, and subcontractors— presents an environment custommade for IT.

For the industry to work successfully, “it is critical that the IT systems of all participants be able to talk electronically, and in an automated fashion, to the systems of all of the other players,” says Michael Cocanower, president of itSynergy, a technology consulting firm in Phoenix that offers custom application development and network infrastructure services to the residential construction industry. Such IT-enabled collaboration “presents a huge opportunity for the information technology systems to really have a significant impact on the business,” he says.

Technology can also be used throughout the industry to capture information directly in the field. “A great example is equipping the field labor force or field superintendents with tools like smartphones, Pocket PCs, ruggedized tablets, and laptops,” Cocanower says. “These devices allow residential construction companies to extend their technology infrastructure right out to the front lines of the business.” Ultimately, by facilitating the real-time flow of accurate information, such tools can help managers make better decisions, he adds.

In addition to facilitating collaboration within
the industry, Cocanower sees an opportunity for integrating disparate applications within a company. “There are a lot of applications on the market for this industry, many of which address one particular area of the business,” he says.

In its 2008 information technology survey, the Construction Financial Management Association (CFMA) highlights the top software applications and products in the industry. They are: CAD/drafting applications (AutoCAD, AutoCAD LT); estimating applications (Sage Timberline Office); job costing/accounting/payroll applications (Sage Timberline Office, Viewpoint Construction Software); project management applications (Sage Timberline Office, Primavera Project Planner, Microsoft Office Project); project collaboration applications (Microsoft Office Project, Prolog Manager); and project scheduling applications (Microsoft Office Project, Primavera Contractor).

In Cocanower’s experience, many builders select best-of-breed applications for each functional area of their business rather than running a single system. “There is a lot of opportunity in working with these customers—and often the developers of all of the component systems—to integrate each of the pieces and create connection points among them,” he says. Since founding itSynergy in 1997, Cocanower has focused on residential construction because he feels it gives his company an immediate advantage. Construction companies “don’t have to spend time teaching us their business,” he says. “We know the business and the language when we walk in the door.”