No doubt about it… large complicated projects that stretch out over many months will strain a custom integrator’s operations. Any inefficient process — from improper ordering of equipment to poor scheduling and tracking of technician productivity — is likely to be revealed on a big project. The end result can be broken timelines and lower profit.
Joel Hernandez, sales and marketing manager at First Priority Audio in Pompano Beach, Fla., knows this first-hand. Recently, the 16-year-old company undertook one of its largest projects, which required accurate ordering and efficient labor utilization. But if the company had not adopted iPoint software in 2016, it would have been difficult to figure out its labor efficiency on a large project like that.
With iPoint, Hernandez says First Priority is able to quantify the amount of labor it is using for every project, not just large jobs.
“Everyone thinks they have a grasp on labor,” he says wryly, but using iPoint, First Priority can say it does with confidence. ‘We do all of our time tracking through iPoint. Our guys check in and out using iPoint. So, we know every minute of the day what guys are working on,” he explains. “This allows us to pinpoint how efficient our guys are, and the dollar amounts attached to their work.”
Labor Utilization to 75%
Using the timeclock features in iPoint to clock in and out, and to log into and out of work orders, First Priority Audio can now accurately track technicians, and the company has seen its labor efficiency increase by 25% for installation technicians, according to Hernandez.
Technicians on new projects now are billed at a whopping 75% utilization rate. Overall, if you include the company’s service team, the labor utilization rate is about 65%, says Hernandez.
“When we started tracking our team [labor] number it was about 50% average for all of our techs. Our standard install technicians now operate in the mid-70% range for our labor efficiency. Overall, service techs are not as efficient because they have more drive time. Those numbers vary week to week, and technician to technician, but we are around the mid-60% and that is great,” he says.
Hernandez is quick to point out that labor utilization indicates the percentage of time the technicians are at the jobsite, but does not necessarily indicate how productive they are once they arrive at the project.
“75% of the time they are at a job working, but it does not mean they are working the entire time… that’s a different number, which you can also track in iPoint. We are looking at that and it is going to be an accurate number too.,” he says.
Hernandez calls that percentage “true hours” and using iPoint he can conduct an assessment at various phases of the project, such as when the project hits 50% of hours used versus hours sold, and 75% of hours used versus sold. With that information, First Priority can adjust or make necessary changes to boost profitability.
“If we know that number we can adjust, but the goal is not to miss by a lot. No one can estimate a job with complete accuracy. The same is also true of smaller jobs too. On smaller jobs you have a tight number of labor hours and if you don’t manage them properly that two-day, quick-and-profitable job turns into a four-day job. Our techs see it too in iPoint and it gets updated. They know how many hours are left and how they need to push through a job.”
He continues, “If you are off on that labor analysis calculation by 25 or 50 hours … if you are putting in 25 to 30 hours that you didn’t bill for, you just dragged down your gross margin drastically. That gross revenue is going out the door, and you’ve just dragged that profit number down to 30% to 40% on your gross labor,” Hernandez emphasizes.
Tying Together All Functions
First Priority also likes how iPoint ties together multiple back-office functions.
“It’s one place to look up information as opposed to three or four if you are using product management, proposal software, accountability and more,” he says. “I am no longer managing three or four pieces of software,” notes Hernandez.
“The iPoint mobile app is also good. Other software companies say they have a mobile app, but those apps are stripped down or limited. Whereas the iPoint mobile product is full-fledged.”