I’ve spent the past 25+ years working with new home builders on operational issues, including how they use (or more accurately, haven’t used) cloud technology. Old habits die hard in our neck of the woods. In 2019, many builders, even those successfully producing 100s of homes per year, were doing so with a bare minimum of technology. Last Christmas if you’d told me that by 2021 practically all of the builders we work with would suddenly be training their superintendents remotely, telecommuting their Sr. management teams, encouraging their buyers to make selections via the web, or were finally (after 20 years of my cajoling) centralizing their project purchasing and scheduling in the cloud, I would have thought you were delusional.
True enough, smartphones and basic file/photo sharing services have become part of many homebuilders’ digital toolkit for some time, but that’s a far cry from the cloud-based BIM (building information modeling), project collaboration and management systems that widely in use by other segments of the construction industry. It’s not for a lack of options – software developers (many of whom are forward-thinking homebuilders themselves) have been bringing innovative cloud software/services to market since day one of the Internet: There just haven’t been that many takers. Unlike commercial construction, whose project owners and financiers demanded early adoption of Cloud solutions so they could better-monitor their projects, new home buyers haven’t forced builders do the same, and the attitude in our piece of the industry has been “if it ain’t broke….” But then along came COVID-19, and with it a sea change practically overnight.
HOW CAN WE STAY OPEN?
Demand for new homes has stayed very strong throughout the pandemic. Many of our clientele had record sales years in 2020. I’m not surprised… when you’re forced do everything from home, you want a better one, right? To survive and prosper, builders had to quickly figure out a way to keep selling, building, and closing houses despite model homes and office buildings being shuttered, and entire staffs being indefinitely forced apart.
Permanently “Out-of-Office”: Builders have LOTS of meetings, and pre-COVID 99.9% of them were held in-person. Management teams, production teams, designers, sales teams, trade councils, building departments, customer meetings… all required to fight traffic and congregate in conference rooms, showrooms, or model homes. COVID lockdowns ended that abruptly. Just like in every other industry remote meeting services such as Zoom™ and GoToMeeting™ are now a daily ritual with homebuilders. But that’s just the beginning of what I think is a larger and more permanent trend. High demand for new housing also creates demand for homebuilding management talent. In the past that meant national head-hunts and costly and time-consuming re-location of suitable candidates. COVID-19 has brought many builders to the realization that if a management team can function productively a few miles apart, why not a few states apart? Or a few time zones? Builders are now hiring management talent located other places but not requiring the move. This is probably old news for Enterprise Technology Magazine readers, but for those of us working in the “old” housing industry, it’s a huge shift in thinking. Builders still have their physical offices (for now, anyway), but since COVID-19 you won’t find nearly as many people working there, and my guess is they’re not coming back.
Virtual Sales and Selections: COVID-19 has changed the trajectory of new home sales. Model homes and physical design centers aren’t going away (completely), but COVID has made them the final stop in the home-buying process instead of the first…e.g., the place where buyers go to confirm the choices they’ve already made online. Digital marketing had already taken the place of conventional media marketing in recent years pre-COVID, so it’s no surprise that tech-savvy millennial buyers want to avoid the hassle of in-person sales and selections meetings in favor of using mobile technology.
The sales automation systems aren’t necessarily new, but the adoption and deployment post-COVID by mid-market and smaller volume builders is. Today’s best cloud-based tools allow a buyer to virtually tour the builder’s product, pre-qualify for financing, pick a floorplan, elevations and structural options, select a building lot in their community of choice, configure their options and product selections, see the selling price of the new home they configured, and finally make a down payment to secure their construction slot. What’s around the corner is even more exciting: Systems are in late-beta that promise to automatically generate accurate working drawings and complete purchase orders in response to the buyer’s selections, potentially saving weeks of cycle time and significantly lowering production support costs.
I will admit these kinds of tools have been tried for years but never really gained acceptance for one reason or another. I’ve been involved in a few myself, but this time is much different. Broadband and hosting are now ubiquitous, bandwidth and storage are dirt cheap (compared to 15 years ago), software developers have much better tools, and most importantly buyers are demanding the change. Underwriting buyer financing, and closing loans are still a paper-and-pen throwback in many places, but that’s rapidly changing too.
Live Remote Training Programs: Pre-COVID, the homebuilders we worked with either flew trainers and software implementers to their offices, or they flew their staff to the trainer’s. It got the job done but was inflexible, expensive, and worst of all employers often had no way to know if their people were really benefitting from the training investment. COVID-19 has radically changed the homebuilder training landscape too. Again, on very short notice, we training providers were forced to re-structure our workshops and curriculum so they could be delivered remotely using off-the-shelf cloud-based learning management systems (LMS). Instead of in-person “one and done”, now sessions are recorded for playback on-demand and attendees’ progress can be easily tracked via online pre-assessment and regular testing. When building codes or materials/methods change, those training updates can be easily pushed down to attendees.