In Part I of Tracking Success, I talked briefly about the history of USGN. Obviously, USGN didn't just materialize one day out of nowhere. A lot of important things happened leading up to it.
For example, the predecessor to OPM was a software tool that I designed for my architectural firm prior to founding USGN. It came from the idea that there had to be a better way to manage projects so they would be more profitable. Even though our profits were already in line with other firms, I wanted to do better and we needed a tool to make it happen and to give us an edge.
The tool we developed was Profit Tracking. Using it allowed us to meet our profit targets; in fact we were doubling and in some cases tripling our original profit on jobs! This isn't hyperbole; it really happened, and we were amazed. This is what enabled us to start USGN without an outside investor. It wasn't just accurate tracking against a plan that got us there. It was uncovering the hidden profit robbers that happen along the course of pretty much any project and acting on them as they happened.
One big way architects lose money on jobs is "scope creep”, where the project scope changes little by little and results in a lot more work than you ever planned or budgeted. Profit Tracking allowed us to clearly identify and manage what had previously gone unnoticed because we were tracking real-time.
One of USGN's first clients was Southern Company, one of the largest utility companies in the country, headquartered in Birmingham, Alabama. Their biggest pain-point was something called construction claims, which are common in very large projects. Basically, if the GC’s profit is less than anticipated, the GC’s accountants come up with reasons why and then charge back those missed billing opportunities at the end of the job to bolster profits.
Here is a good example: The GC remembers that the owner had equipment delivered where the crane was to be located. This delayed the job 10 days and cost $100,000 in extra labor. The GC wants to be compensated. The owner disagrees. The GC hires an attorney and expert witnesses and initiates a law suit. That is a construction claim. Historically, Southern Company said they might be sued $10M on a large project and would end up settling for half of that!
Their goal was
zero
construction claims. To reach this, they would need to know immediately when something they had control over was creating a cost impact for the contractor. USGN suggested that the daily logs contain a required field that asked: "Did anything happen today that will cause an increase in the project cost or schedule that would be identified at a later date?” Answer “Yes” or “No” only, and if it is “Yes,” explain in detail. If the GC said "Yes", the owner would have an opportunity to resolve it now. If the GC said "No", when the project was completed, the GC could not use anything that happened that day in a claim against the owner!
As with scope creep for architects, this is a good example of invisible costs that were causing grief for Southern Company. Now, using USGN, there was a way to fight back.
We always urge you to explore ways for USGN to solve pain points. We can work with you to develop processes and create applications that bring structure and order to out-of-control costs. The results could be well beyond your expectations, like doubling or tripling the profitability of a project! The results you dream of are within reach!
Doug Sperr, CEO and Founder
USGN, Inc.
