What is your process?

It’s a simple question, with complicated implications. Almost every company I work with has a “process” for how they get work done, and how their business runs. What I am finding is that although these processes are unique to every situation and company type, there are certain themes that are shared across the board. The main one I want to discuss today if the age, or maturity, or the process.

I find that many companies have a process for getting work done that is based on traditional tactics and workflows. Example; take a look at the picture below and ask yourself; does my office look like this?

I bet the answer is yes; there is at least one corner or cube with a similar layout somewhere in the building.

So the next question I have for you? When do you think this picture was taken? Would it surprise you to know that it was 1986! That’s correct; 20+ years later, and I’d wager that this office still looks the same today. The reason: process.

The process for design, for creating plan sets, documentation, and specifications is the same today as it was twenty years ago, dare I say 40 years ago. The only changes over the decades are the tools used to create them. We’ve gone digital, yes – word processing for the specs; computer aided drafting for the plans; excel spreadsheets for the estimating. The challenge I believe we are mired in today is that the process, the workflows, the way we do the design, the way make ideas a reality in the built world, has not changed. And because it has not changed, neither has our efficiency or profitability. I’d also be willing to bet that it’s gone in the opposite direction.

Here we see a study done that compares the productivity of the construction industry to all other non-farm based industries (Aerospace, Mechanical design, Electrical engineering, etc.). Note the problem; the construction productivity index, represented as the orange line in the chart, has fallen roughly 20% in the last 40 years!

I have several theories for this fall; AEC industry is one of the most heavily regulated, and we’ve seen a dramatic increase over the past 40 years in laws, codes, and regulations for construction. Consequently, this industry has a large amount of litigation ties to it as well; any owner that just paid their insurance premiums can agree with that. But I propose that a large amount of this productivity loss is due to our process – the fact that we haven’t changed that process in over 40 years.

So I challenge you to think about this; what part of my process could I change to be more productive? What new workflows, new techniques, and what new technologies can you take advantage of to increase your productivity, to make me more efficient, and ultimately, make me more money?

More to come on this, but in the meantime, I’ll give you a little hint: http://www.cenews.com/article.asp?id=2528

Tax laws that can save money?

It may be hard to believe, but the government actually created some tax laws that can save you money instead of taking it out of your pocket. Some of you who are tax and economy savvy may have noticed that the government passed the Economic Stimulus Act of 2008, which contained several tactics for trying to stimulate the downturn in the economy we’ve suffered across the US this year. One of those tactics was Section 179. Now I am the first to admit that I am NOT an accountant, and I need to be clear that you need to do your own research and find the specifics of how this tax break can be applied to your business.

To paraphrase all the legal and accountant jargon, essentially Section 179 allows a business to depreciate an additional 50% of the cost of an asset acquired and placed into service in 2008 in that year with the remaining basis depreciated in accordance with the statutorily prescribed recovery period.

To make it simple, if you buy $10,000 of software this year, and install it before the end of 2008, you can depreciate $5,000 this year, instead of having to amortize that cost over a longer time period as most tax laws dictate (usually 3-5 years). Additionally the provision states that the business equipment (software) can be purchased or financed, which is important too, because you can get it purchased today pay for it over time, but get the maximum tax advatage today.

This is huge for companies that that need extra room in their tax profile as we reach the end of the fiscal year. So if you are considering acquiring some new technology, and preferably some Autodesk software is in the mix, you’ll want to take a close look at section 179, and see how it can save you money, and aid in your end of year budgeting.

For more information, please go to www.section179.org/section_179_deduction.html

Rising from the ashes, again…

Ok, so I had a bit of a false start with my “new” blog, and as you can see by the archives, it’s been a long time since I’ve posted. Let’s just say that I’ve been re-energized and will be posting more and sharing my views and thoughts on the business world. For those that are still tracking me, I thank you for the patience; for all others who stumble into my small part of the blogosphere, I say welcome!