Full Episode Transcript:
Dustin: Construction has not seen the productivity gains that other industries have seen where they have seen three-fold increase over the last 50 years and construction hasn’t modeled that. That’s going to change, construction will see that type of increase. And it’s already starting to occur and that is because technology is now more relevant for construction. It’s more mobile, construction doesn’t have the benefit of being in a clean manufacturing facility and able to leverage it from that perspective. There are difficult job sites, strange environments, and often far away from Wifi and those types of things. No when you see even things like cellular signal is out there and what does 5G mean and all of those things. I think we are just at the precipice of change within construction.
Reid: Hey Everyone! Reid here and we have extended the early bird pricing for Build What matters Summit until the end of September. So now that the summer vacations are over and the kids are back in school, it’s time to start thinking about 2020 has in store for your business. Build What Matters will help you get there. With speakers straight from the show including keynote by today’s guest, Dustin. It will be a day packed full of learning and growing with topics on everything from strategic and workforce development to construction HR to block chain NAI. Visit Bangertinc.com/BWM for speakers, agenda and more and use code: BUILTCAST for an additional $25 off at checkout. I hope to see you there.
Builtcast Intro: Hey Everybody! It’s Reid and Kurt and you’re listening to Builtcast brought to you by Bangert Inc.
Reid: Our guest this week is Dustin Anderson, Vice President of Construction and Real Estate at Sage. We wanted to talk with Dustin because construction technology is a rapidly changing and developing world and we had to ask: What is the company behind the number one selling construction software doing to move that needle forward? What we found out is that it’s all about looking at where they’ve been and simply put, listening to their customers.
Kurt: Dustin, certainly happy to have you on Builtcast. Thanks for coming in.
Dustin: Thank you, Kurt. I really appreciate it.
Kurt: You bet. So, Dustin, tell us a little bit about what you do. Tell us about how you came to do it.
Dustin: Yeah, so I have the privilege of working for Sage, a global software company. I’m leading their construction and real estate business unit. Been a part of the construction industry for a little over 20 years and really passionate about that. And the opportunity to come to work for Sage and lead this group was one that I just– I simply couldn’t pass up on. And it’s kind of an interesting story Kurt. I grew up in the Seattle area and believe it or not, my father actually worked for Timberline. So prior to the Sage Construction and Real Estate acquisition of Timberline my father actually worked for them. So the apple didn’t fall far from the tree in this case. So getting a chance to come back and work for Sage kind of a legacy Timberline piece, was really rather exciting for me.
Kurt: Oh, that’s cool.
Reid: Yeah. You know I think it’s a kind of in line with a lot of the construction companies we work with, where we see families and generations move through businesses, and then that’s fun. So how did you get into technology? Tell us about it; how you came to be in the position you’re in.
Dustin: Yeah, so directly out of college, I had an opportunity to go to work with a startup out of the Bay Area. I was living in the Seattle area, but was focused on Cisco Voice- over IP Technology. So, moving from those old PBX phone systems, to voice-over IP- so kind of on the leading edge of technology there and really enjoyed that aspect; kind of talking to people about things that were on the horizon. We were just starting to implement some of that technology, and talking with them about how technology could actually help save them money; help move them to a kind of a next level of interaction with their employee base, et cetera. So that was kind of my foray into technology.
And then my father was actually at the time working for JD Edwards partner that was an applications service provider. So we called them an ASP at the time and they’re kind of on the leading edge or even on the forefront of what today is Software as a Service. So he actually asked me to come to work for them as an account executive and they were focused on the construction industry. So the founder of that company had come from Howard S Wright Construction in Seattle, and we really targeted the construction industry because of the vertical experience within the employee base. So that was kind of my leap into construction was with JD Edwards, both on the real estate side of things as well as construction. And from there, it’s been a wonderful ride of like I said, a little over 20 years focused on construction and technology.
Kurt: So what is it about like dealing with the construction industry from the software standpoint? What is it you like about it?
Dustin: Well, you know, it’s really interesting. I love the fact that the industry builds things. It sounds silly, it sounds simple, but as you drive through a city and you’re with your kids especially as they’re younger and you look at a building or bridge and you know the contractor that built it and you could say to them, “Hey, that’s one of my customers that built that.” I’ve always found that to be a joy. And you know construction is everywhere, so it’s something that is kind of prevalent in your everyday life.
Reid: You know Sage is the number one selling construction software on the market. And so in a lot of ways you can say, hey, we were probably a part of that project or we had something to do with that.
Dustin: Yeah, it’s a great point Reid. When you look at the market share that we’re fortunate to have most of those construction companies out there either are operating one of our accounting packages or they’re using our estimating tool. So our footprint into construction is really, really deep.
Reid: So as you got into construction tech, were there like specific challenges that you saw that you knew you could be a part of helping?
Dustin: You know initially Reid, it was really just the simple, how does technology help us better account for a project? – The simple nature of really more the accounting side of the house. I actually look at the way technology and construction has evolved and I think it kind of tells an interesting story. You know, first we had software that helped us with the accounting aspect, right? So we’re helping the accountants out; we’re looking at debits and credits, but it’s really construction specific. So we’re looking at job costs and how did this project actually do and payroll for people, et cetera. And at the same time, you had another software venture that was really focused on operations. So project management software, you had companies like Prologue with their Meridian software out there– Meridian with their Prologue software, excuse me. And you know as my career started, those were two separate entities, right? So you had construction software and you had operational software for project management.
Well, about four or five years into my career, the accounting vendors started saying, “Hey, let’s tackle the operational side of this.” Let’s give a single version of the truth, right? So let’s move and bring the operational pieces, the RFIDs, the meeting minutes, those types of pieces. Let’s bring those into our accounting software and give people a single package to tackle their needs. And so that was the first real need that I saw in construction, was how do we bring operations and accounting together? And I think it’s actually evolved to the point that today, I think it’s actually gone back to best of breed, right, to where we’re seeing accounting as a standalone vendor; with opportunities to really do best in class, financial reporting and accounting for construction. And the operational tools, the point solutions, are becoming so developed and so nuanced that we’re actually calling it power of choice – where the customer needs to choose the right solution for the problem that they face, rather than just buying everything from a single vendor.
Kurt: Yeah, I think not that long ago there was this effort to have an ERP vendor like Sage to say, hey, we have everything; it’s all under one roof. How has that changed and why do you think it’s changing?
Dustin: Yeah, absolutely, we participated in that; in terms of the one vendor that can do everything, and I think, Kurt, that it’s the speed at which technology is being developed today is phenomenal, right? And there’s also a tremendous amount of investment; so private equity investment, seed money, angel funding, et cetera, that’s being put into the construction sector. And so you look at startup companies and the investment they’re getting and they’re targeting one specific niche of construction. And when they’re that focused, they can do it better than anyone else, right? So you look at what the drone companies are doing or how lasers are affecting construction and the modeling, the 3D modeling, BIM – pieces of it, we don’t have all the answers. And I think that maybe we’re smart enough to say that – is that we don’t have the answers. So we’re actually listening, we’re observing, we’re probing the industry. We’re talking to customers to say, hey, what vendors out there are you seeing that are really making a difference for you? And it could be very nuanced and very focused, in terms of broad– from a solution landscape.
Reid: Pardon the interruption. But let’s take a blissful break into me telling you about Build What Matters our all new Annual Summit built for Contractors, Construction Companies and Specialties within the industry. This full day conference is packed with speakers straight from the show and you don’t want to miss it. For tickets, sponsorships and more visit BangertInc.com/bwm. Alright, now back to the show.
Kurt: So you know, back when the frame of mind was let’s build it all, let’s have it all under one roof. Probably the main impetus behind that was integration and we haven’t really lost the need for integration. Would you agree?
Dustin: Oh, agree. We haven’t lost the need for integration, but what has changed, what I probably missed in my previous statement there is, the advent of these modern API’s has made integration so much simpler, so we can take best in class solutions and actually share that data and integrate between those two systems, without the troubles that we faced when we tried to integrate 15, 20 years ago, right? – Where if you upgraded one of the two pieces of software that were integrated, the bridge would break. Well, that doesn’t happen today with modern APIs and so technology has enabled us to get to this point where best of breed is back.
Kurt: Yeah. So now it makes sense, you know, find the software and the applications that work for you and your company and then let us take the APIs and make them all work together. That’s the general thought.
Dustin: It is. And you know we still believe that we need to be the single source of truth for that financial information, the dollars and cents of it need to end up in the ERP system, the accounting tool. And so that’s kind of the one major tenant that we hold on to. So as we integrate with Procore or Red Team or any of these solutions from a project management standpoint, we definitely want the dollars to end up back in Sage. But there’s so much wonderful technology being developed out there that it’s silly for us to think that we could do it all.
Kurt: Oh, that’s great. What do you see in moving forward as far as helping these different software platforms, communicate and be a functional and really provide value to our customers?
Dustin: Yeah, so we’re a part of the Construction Progress Coalition. So we really believe in a kind of a common framework to help with integration, right? So how do we find a commonality in the language? And if you look at something like an RFI, what are the common data points that need to be exchanged? And it’s going to be vendor-agnostic. It doesn’t matter if it’s a ViewPoint or Sage or CMIC or Procore or any of the great vendors that are in this space. And we have some wonderful competitors out there. But you know how do we leverage kind of a common data set, common standards? So we participate in the CPC. And again, it’s kind of just back to listening and working. We work very closely with Procore and continue to try to find ways to improve the integration there. But we also have our own project management tool with Sage Construction Project Center that we continue to expand and look for additional ways to make the user interface better, the workflows better, et cetera.
Reid: So, you know, Dustin, as we’re going along, tons of exciting new tech as we’ve discussed. I mean, where is Sage going when it comes to new tech, what’s happening?
Dustin: Yeah. So, it’s interesting when we talk about new tech because, the first thing I’ll say is we’re looking at our old tech.
Dustin: So how do we look at what we would consider our legacy solutions that are still operated and sold a daily basis? You know we add three new customers a day on average. But how do we take those solutions that were — natively as they were built, they were more closed off, Kurt.
Dustin: So what do we do with those? Well, our answer is we’re opening them up, right? So when I talk about power of choice, and I know you’re probably tired of me saying that–
Kurt: That’s a great message. Sorry to interrupt you, but you know, I think, because the fact is those current products are quite valuable to so many thousands of our customers, right? And you know you have to have a good reason to actually change.
Dustin: No, I completely agree. We want to protect that investment that our customers have made. And that’s what they’ve told us. They said listen, we’ve made an investment in Sage 300 Construction or Real Estate or Sage 100 Contractor, and how do we continue to leverage that investment? And so our response is we’re going to open those tools up, right? So we’re adding modern APIs to these tools so you can extend them, you can add third party products with a much cleaner integration. So we’re really focused on the legacy technology and innovating on that front, Kurt. So that’s the first thing that we’re really looking at. And the second thing is, we’re really fortunate; Sage acquired a company called Intacct about two years ago, and Sage Intacct is a best in class cloud financial platform. It was built for the cloud – native cloud. It is a multi-tenant solution that is just considered really best in class. If you look at Gartner’s Magic Quadrant, they’re up there in terms of their vision and their ability to execute.
So what we’re able to do is we’re able to take this best in class tool and build out the construction functionality within it. So we didn’t have to go and build a tool from the ground up and hope that it was right and that it was architected in the proper way and that it can handle thousands and thousands of users and thousands of companies. Instead, we were able to leverage something that was already proven. And so, Kurt, what we’re in the process of doing right now is building out that construction functionality and that will be released in early 2020. We couldn’t be more excited about that.
But at the same right we have a message to our customers today and that’s that their investment in those accounting products that they’re running today – you know 100 Contractor or 300 Construction and Real Estate that those investments are safe. We’re not ending those tools, we’re not sun setting them; in fact, it’s the opposite. We’re continuing to invest in them and have roadmaps for the future. But what we’re doing is offering a pure native cloud option for the customer as well. Our focus would be new client acquisition initially, but certainly would be a home for existing customers when and if they’re ready. So we’ll work on that process to create a seamless transition for customers when they want to move to the cloud. And those that don’t, we’ll happily support that on-premise software for a long time.
Kurt: Oh, that’s very exciting, yeah. A lot of times I think when we look at smaller contractors they look at tech and just say, it’s not accessible to me. Either it’s too expensive or it’s too complex or whatever their reasoning may be. And I always ask about how do we bridge that divide that these solutions aren’t just for the big guys?
Dustin: And I think the key to that is kind of what we’re talking about. And they’re likely using Excel at this point to bid projects. So how do we take a user interface that they’re very comfortable with Kurt and help leverage what they’ve built to date? Many of them who had invested a lot of time and energy into building out their perfect kind of estimating tool within Excel. So how do we leverage that in the comfort that they have in that, and yet get them into a tool that can provide some of the enterprise level structure and safety of losing those formula errors and those things? So that’s a big focus for us is the simplicity of moving from Excel to our tool. And then some of it with the takeoff tool as well, where that can just automate the process. So what we’re doing with eTakeoff is also focused on some down market activities, where these contractors that might just be a husband and wife team or it could be 10, 12 employees. But how do we help them leverage tools that are best in class to run their operations better?
Reid: Hey, Dustin, we’re super excited that you’re going to join us for the Build What Matters Summit, here in Kansas City on October 24th. I don’t know if you’ve thought about it much, but why are you excited about the summit and why are you excited about coming to Kansas City?
Dustin: I love customers. I really do. As we mentioned at the beginning, I just– l love the industry. I love customers. I love their stories. And quite frankly even though I’ll get a chance to talk at them, I’d much rather hear from them. So I think the ability to carry on conversation with them and kind of hear some of the struggles that they face and some of the successes that they’ve had, to me Reid, that’s really such a fun part of what we get to do for a living.
Reid: Absolutely. Well, Dustin, thank you so much for joining us today.
Kurt: Appreciated the conversation and your insights.
Dustin: All right, thank you gentlemen.
Reid: That was Dustin Anderson. For more information on Dustin and to grab your tickets to see him live at Build What Matters, visit this episode’s page at Bangertinc.com/Dustin, that’s Bangertinc.com/d.u.s. t. i. n.
Thanks for joining us and if you liked this episode, don’t be shy, share it with your friends and connections on LinkedIn, Facebook, Twitter, and more. Builtcast is a production of North Pass Media and Bangert Inc. Our producer is Luke Englert. Your hosts are Reid and Kurt Bangert and our editor is Brandon Roten. For the uncut version of this episode and more, head over to Builtcast.com/uncut.