News Column

What Works

May 2004, HISPANIC BUSINESS Magazine

Jaime Adame

Armando Rodriguez, CEO of A&A Maintenance
Armando Rodriguez, CEO of A&A Maintenance

Ever since the Internet bubble burst, the hype surrounding new technology is increasingly viewed with a skeptical eye. Companies rarely invest in the latest trends these days because they've learned that "the latest" changes every few months. The businesses that make the best technology investments are those that begin with one question: What problem can it solve? Hispanic Business talked with three Hispanic-owned companies that are solving problems by making wise investments in proven technologies. WHEN TIME MATTERS Technology can carry people to the moon, but can it cut through bureaucracy? Maybe not completely, but Outsource Consultants is betting that technology can reduce some of the waiting for their clients, builders who turn to them for help with the dozens of permits they need to complete projects in New York City. The Manhattan-based company, founded in 1993, has developed an Internet-based application that allows clients to check on the status of their permits, as well as view and print copies of drawings and documents. The company has even automated some processes, e-mailing clients automatically to let them know when the city green-lights their requests. Previously, clients were at the mercy of an overworked phone system, which was not only inconvenient but also a significant drain on productivity. Caballero estimates that his company, which has annual revenues of $5 million and employs 25 people, has invested $500,000 in developing a proprietary technology that the company hopes will set it apart from competitors. However, the system began as a way to make their lives easier. "We deal with a lot of paperwork. There could be 500 projects in this office at any given time," Caballero says, noting that the company had some software to speed the data-entry process. But employees were still filling out the same information in duplicate. That was when the company decided to turn to technology as a way to become more efficient though they didn't know what to expect. "It was an exhaustive process to prepare a spec [for the software]," says Caballero. The company contracted the project to a software developer, who created flow charts to map all of the company's tasks. It took about three months to develop the specifications, deciding what features the company absolutely needed. The company began by focusing on its core business: preparing the forms and applications demanded by New York City before buildings can be renovated. By streamlining and automating that process, the company has cut the amount of time spent on administrative work by as much as 80 percent, Caballero says. The technology has paid for itself, he says, and has allowed the company to reduce its number of project managers from five to three, leaving more time for following up with clients. One key decision was to make the project Internet-based, knowing that the final stage would be to allow clients to access information about their projects. "It was not unlike renovating a house," Caballero says. And, as with any renovation, a determining factor was money.

Diego Caballero

"We had no idea what the cost was going to be," says Caballero. But, as the project began to come online, "we knew that we had created, in our opinion, something very special to our industry. It just allows you to see a very linear, complicated process," says Caballero. It's also an ongoing process that requires flexibility, as some things are beyond the control of the company. The New York City Department of Buildings threw a wrench into the project when the agency changed some of its forms and procedures; fortunately, it was early in the project so software developers could adapt without significant re-programming. Caballero says he has received extremely positive feedback from builders who have seen the system. "Everyone is absolutely floored by it," Caballero says. "We're in the service business. You basically have to convince someone that you're better. Now I can show you what makes me better." CLEANING UP Armando Rodriguez knows that when people think of the building-maintenance industry which includes janitorial services, as well as landscaping and systems upkeep they don't necessarily think of leading-edge technology. "People think it's unskilled labor, and for the most part it is. But to run a business, you can't be unskilled," says Rodriguez, president and CEO of A&A Maintenance. Rodriguez has used some of that skill to take a tiny, four-employee business founded by his father in 1973 and turn it into a 1,700-employee powerhouse with revenues of $24 million. A&A Maintenance now services about 23 million square feet of space, working in settings like office buildings, hospitals, and universities. The companies' clients are spread throughout New York, Chicago, and Florida. This accomplishment is all the more impressive considering that competition in the maintenance industry can be brutal. "My industry is a real cutthroat industry," Rodriguez says. Some contractors are so determined to underbid the competition, he says, that they'll actually lose money on a job in hopes of making up the loss on future business. "We're competitive with our bidding," says Rodriguez, but it is through service and client loyalty that Rodriguez says he has built his business, proudly noting that he has had some clients for as long as 20 years. Rodriguez now thinks wireless technology will help him take service to the next level but it took a serious miscommunication to convince him that such a project couldn't wait. In September, one of the company's quality-control field agents was doing a building inspection for a major client, running through a checklist to ensure things like smudged windows had all been cleaned properly. Normally, copies of such reports are handed to the property manager, but in this case the manager could not be found. The report was left with someone else. Days later, the property manager was furious because he'd never received the report and thought the work had never been completed. Rodriguez managed to smooth things over, but he vowed to make changes to ensure nothing similar would happen again. Now, as part of a pilot program started in April, the company's quality-control field agents carry wireless tablets as they make their rounds. Copies of their reports are sent instantaneously to clients via e-mail. Tablets were chosen instead of conventional handhelds to allow inspectors the flexibility of writing ad-hoc notes. They chose a stylus-based tablet PC from Fujitsu. To maximize the investment, Rodriguez says his company also developed customized software for the tablets at a cost of approximately $15,000. Because the tablets are wireless, the company now has greater flexibility in reacting to unexpected circumstances. "If we are to clean a waiting area [every six months] and it's carpeted, what happens three days after that task is performed if somebody spills coffee?" says Rodriguez. Before the company began using the tablet PCs, the stain would have had a week or two to soak into the carpet before a new proposal could be approved. "Now we are able to deliver the proposal right there on the spot within 15 minutes. It allows us to strike while the iron is hot," says Rodriguez. The investment in the hardware so far has been relatively small (about $2,500 per tablet), and Rodriguez thinks the program is innovative enough that it will attract enough new customers to allow him to recover his investment in a year. There are other benefits as well. Unlike some handhelds, the tablets are fully functional PCs, which means they can be used to store reams of information: Previously, inspectors had to sift through stacks of binders to find information about each building. "My QA people are excited because they have much more knowledge in a device that weighs three pounds instead of carrying big books," says Rodriguez. A NEW DRAWING BOARD The decision to adopt new technology sometimes means leaving certain clients behind. That was the concern of Kfoury Construction Group when the company made the move to use software that allows subcontractors to download drawings and specifications some of which are hundreds of pages long over the Internet. "Not every subcontractor has an Internet connection," explains Nicholas Timreck, president of the Reston, Virginia-based company. Many small- to mid-size contractors are more likely to put their money into a reliable truck to get their employees to the job site than they are to invest in Internet access. "In the long run, we have to run our business the most efficient way that we can possibly find. We can't be held hostage to groups that are not as technologically advanced," Timreck says of the company, which was founded by Jorge Kfoury in 1982 and has revenues of $60 million and employs about 50 people.

Kfoury Construction Group offices

Timreck says his company had become too involved in copying and distributing all of the necessary paperwork, sucking time away from the heart of his business project scheduling and cost analysis. And it wasn't just a question of boosting efficiency: There was always the risk that subcontractors might be given incomplete or inaccurate information that could drive up costs or force delays. Now, subcontractors can simply go online to make sure they have all the information they need. The company estimates it will save more than $100,000 a year in reproduction costs, and it has already reduced personnel costs. "In construction, the profit margins are very, very tight. It was a no-brainer as far as knowing that was the right direction," Timreck says. The company went with a commercial software product called PlanCenter, made by BuildPoint Corp., spending more than $15,000 a year ago to implement a solution that company officials say places the company on the leading edge of the contracting industry. The company estimates the technology has boosted efficiency by 200 percent, and shortened the time spent retrieving documents by 60 percent. Those gains offset the negative response from subcontractors who aren't able to use the Web. And, says Kathy McCormick, the company's director of marketing, "The ones that have e-mail love it."


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