Boosting profits through smarter cost management

The Challenge

Marathon believed their profits could increase significantly through better management of their labor costs. With only 10 cost codes, it was difficult to gain enough insight into exactly where they were going over on labor costs. They needed to find a better way to track labor costs so they could course-correct before it was too late. This meant switching from manual labor cost tracking to tracking them digitally, in real-time with a technology solution purpose-built for construction.

The Solution

Knowing they needed a system that integrated with their ERP, Sage 300 CRE, Marathon decided Procore would be the perfect solution to consolidate their project management tools in order to gain full insight into labor and productivity. It took the company a year to fully transition all projects into Procore and integrate with Sage 300 CRE, but once that was done, they were able to see exactly where their hours and costs were in real-time. The result? Profitable projects with plenty of financial insight.

The Results

• Greatly improved their bottom line without a significant increase in resources
• Better management of labor costs to drive profitability across their projects
• By expanding from 10 to 100 cost codes, Marathon gained immediate, detailed insights into labor and production data as soon as timesheets were submitted

A Window into Productivity

When Brad Sandidge, CFO of Marathon Electrical Contractors, joined the team in 2018, the company was only leveraging 10 cost codes. In order to build out a more robust cost management strategy and better manage labor costs, the leadership team (including Sandidge) decided to implement Procore and build a new cost code structure with over 100 cost codes. By switching to a more robust cost code structure, the team could pinpoint exactly where their labor costs were going over, and switch course to protect margins.

"We leverage a productivity budget view to see the financial impact of labor cost and productivity the moment a timesheet is submitted. With cost codes, we're able to get granular information about where we're behind or ahead so we can make decisions about where to focus our attention," says Sandidge.

Previously, field teams were getting this information when it was too late to make a change that would positively impact the project budget. With Procore, they are getting this information in real time. No longer are teams waiting until after payroll is processed to know where they stand on their labor costs. With this real-time data, field teams are informed and empowered to hit production targets on a daily basis.

"The field production report can be a great tool for getting the guys in the field to understand what they have to do that day. ‘I have to get this many feet of conduit in today.’ It becomes bite-sized manageable pieces for them. We’re just scratching the surface on how powerful a tool that can be for us," says Sandidge.

Streamlining Change Management

With Procore, not only is the team at Marathon better at managing labor costs but they’re also better at tracking all change order requests and recouping the cost of extra work performed. With mobile tools built for the field, the project and accounting teams both have instant insight into extra work requests and the status of those requests.

"Everyone on the team knows exactly where we stand on a change order. What’s the status of it? What’s the issue? What are the questions? It’s all in one place and everyone sees the same thing and is on the same page," Sandidge says.

Utilizing the Power of Procore + Sage

Before Marathon started using Procore, Sandidge says projects weren’t as organized because there was a disconnect with all the different systems being used to manage a project. He says the information was disjointed because the project teams were using a combination of Sage 300 CRE, spreadsheets, and disconnected point solutions to manage their projects. Now, with the Procore and Sage integration, Marathon has a seamless project management process that empowers the project management team to get everything they need through Procore while allowing the accounting team to continue to use Sage for its day-to-day needs.

"When I saw Procore, I said, ‘That’s it! Now I don’t need to change my ERP.’ I have a small team and they’re the only ones that go into Sage. Everyone else can get the information they need from Procore," says Sandidge.

When asked about what made the integration so powerful, Sandidge says it’s all about visibility for their teams. He said that now, with Procore, his project managers never reach out to the accounting team for job cost reports because they get it all in Procore.

Switching to Procore

Having everything in one place to provide that level of visibility for the entire team was the main reason the team at Marathon made the switch from their previous systems. The team needed a complete project management solution that not only solved for document and drawing management but also cost management.

With disjointed systems, the office team was unable to have complete visibility into what was happening in the field, while the field team was unable to understand where they stood on their job costs. Neither had the visibility they needed to make data-driven decisions that improved outcomes.

"Now, Procore is the only technology tool we use for project management. If you feel that a more centralized, consolidated approach to project management is beneficial, then you need to seriously consider Procore," says Sandidge.

With a centralized platform that boosts visibility into the financial health of their projects and boosts collaboration across the entire team, it’s no wonder the team was able to significantly increase their bottom line.