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What Are Contractor Management Systems in Construction? Navigating the Digital Transformation

Micke Paqvalén
12 December, 2023

Many modern businesses find that freelancers and contractors are vital contributors to their success. Nowhere is this truer than in construction, with many projects both large and small requiring independent contractors for specialist work.

However, managing multiple subcontractors can be a nightmare without the right systems in place. This is where contractor management systems come in.

Contractor management systems are designed to help you view and manage all of your contractors, boosting your efficiency and reducing the risk of errors in communication, payments, estimates, and documentation.

 

 

What Are Contractor Management Systems in Construction?

Contractor Management Systems, sometimes referred to as CMS, are software platforms designed to help organizations manage and oversee their contractor workforce. 

These systems provide a centralized and structured approach to handling a variety of contractor-related tasks, including onboarding, compliance management, payment processing, and performance evaluation. 

By bringing together all the steps involved with working with contractors, these digital contractor management solutions ensure that contractors are effectively integrated into an organization's operations. This makes communication easier, project progression more transparent, and ensures that each contractor adheres to the company's policies and standards.

The construction industry has long been associated with its unique challenges and complexities. Managing a vast network of contractors, subcontractors, and suppliers, while ensuring compliance with safety regulations and project timelines, can be daunting tasks to juggle. Ensuring precise execution of tasks in the right order and timeframe can be equally challenging.

However, the digital age has ushered in innovative solutions to these challenges, and for completing a construction project, a Contractor Management System (CMS) has become an indispensable tool for the entire construction industry.

 

What Are Contractor Management Systems Used For?

Each specific contractor management program offers unique tools and solutions, however, there are some key functions that all good contractor management systems will offer:

  • Onboarding and Compliance: Contractor management systems automate contractor onboarding by collecting vital documents like licenses and certifications. By employing stringent verification processes to confirm the authenticity of submitted documents, most contractor management systems can maintain ongoing compliance by monitoring expiration dates and regulatory changes. 

    This takes the burden off project managers and contractors, as the software automatically sends timely alerts to ensure everyone remains up-to-date. 
    • With the right contractor management systems, this process can also cover creating more streamlined construction bidding and contract creation processes.

  • Assignment and Scheduling: Perfect for streamlining field management in construction, contractor management systems enable precise task assignments based on qualifications, optimizing your workforce allocation. It provides real-time workforce availability data for informed resource allocation and often integrates with project management software to ensure projects stay on track.

  • Performance Tracking: Contractor Management System enables organizations to track and evaluate the performance of contractors. This includes assessing the quality and timeliness of their work, helping project managers prioritize workloads and assess project success in real-time.

  • Payment and Invoicing: Contractor management systems can facilitate payment processing, ensuring that contractors are compensated promptly, accurately, and in compliance with tax regulations.

  • Risk Mitigation: They also help in identifying and mitigating potential risks associated with contractors and the wider project. By notifying you of issues such as compliance violations, safety issues, or contractual disputes, the use of software can help aid in your risk mitigation process.

  • Data Management: For businesses looking to grow and improve, having the right data on hand is key. Contractor management systems centralize data related to contractors, providing a holistic view of the contractor workforce and simplifying reporting and analysis.

How Contractor Management Solutions Helps Businesses Adapt to the Digital Age

As businesses transition into the digital age, Contractor Management Solutions play a pivotal role in helping them keep up with the changing dynamics of the workforce. Here's how these solutions contribute to this adaptation:

  • Enhanced Efficiency: Contractor Management Systems can automate many contractor-related tasks with tools such as contractor management checklists, reducing administrative overhead and increasing operational efficiency.
  • Improved Compliance: In a digital age with evolving regulations, Contractor Management Systems help businesses maintain compliance with changing laws and standards.
  • Data-Driven Decision-Making: By consolidating data and analytics, it enables data-driven decision-making, enhancing business strategies and contractor management.
  • Scalability: Contractor management systems can easily scale with a growing contractor workforce, accommodating the needs of expanding businesses.

 

Advantages of Using Contractor Management Systems in Construction

The construction industry is constantly evolving, and contractor management systems are another step towards streamlining processes and improving the industry. Here are five key advantages of using contractor management systems:

  1. Cost Savings: Streamlined processes reduce administrative costs and improve resource allocation.
  2. Risk Mitigation: By ensuring compliance and tracking contractor performance, Contractor Management Systems help mitigate legal and operational risks.
  3. Enhanced Productivity: Contractors are better integrated into the workforce, resulting in increased productivity and project success.
  4. Centralized Data: A single source of truth for contractor information simplifies record-keeping and reporting. This is something particularly useful for construction project managers on complex projects, allowing multiple contractors and areas of construction to be managed in one place.
  5. Improved Communication: By using building management systems, contractors and project managers can ensure clear, efficient, and transparent communication throughout the project.

Streamlining Project Management in Construction

In the construction industry, contractor management systems play a pivotal role in optimizing project management, from the initial stages of contract negotiations right through the core construction months, especially when integrated with facility management software. 

Construction projects often involve numerous contractors, each with specific tasks and deadlines. These Contractor Management Systems help with task allocation, scheduling, and performance tracking, ensuring that projects are completed on time and within budget without the need for days of admin work. 

This is crucial in the construction industry, where delays and budget overruns can have significant financial implications

In few other industries is saving time and increasing efficiency as important as in construction, which is why contractor management systems have become a vital tool for most project managers, both for small and complex projects.

 

Choosing the Right Contractor Management System

When selecting a Contractor Management System, it's essential to consider the following features:

  • Compliance Management: Make sure that the system helps maintain contractor compliance with legal and industry standards - this can be a huge admin burden for project managers, and ticking this off with a trusted app will save you a lot of time.

  • Scalability: Ensure the system can grow with your organization's needs. If you are looking to expand greatly into larger, more complex projects, selecting a smaller-scale app for your current smaller projects may not be worth it in the long term.

  • Reporting and Analytics: Robust reporting capabilities can provide valuable insights for decision-making. You should be on the lookout for contractor management systems that can most efficiently gather and present you with the data that’s important - displaying analytics in an easily readable way is just as important as data collection.

  • Communication Tools: Features that enable easy communication between contractors, clients and project managers are essential, as good communication is the foundation of any successful construction project.

 

What Is the Best Contractor Management Software to Use?

There are a lot of different options available to help you boost the productivity of construction projects, but not every contractor management app is equal. Here are some of the best contractor management systems you can currently get:

Buildbite:

Buildbite is a comprehensive app for efficient construction task management, including contractor management. It provides streamlined operations, real-time communication and collaboration, efficient task management, and simplified documentation. All while enabling true mobility by empowering teams to efficiently manage tasks, communicate, and make informed decisions from anywhere.


This enhances operational efficiency, project coordination, and cost-effective project delivery. You can try out Buildbite for free to see its benefits first-hand.

 

SAP Fieldglass:

SAP Fieldglass is another leading CMS that provides a comprehensive solution for managing external workforces across many different sectors. Its core features include onboarding, compliance management, time and expense tracking, and analytics. It can also integrate with other SAP solutions.


Procore:

Procore is another Contractor Management System that is specifically tailored for the construction industry. It offers tools for project management, financial management, and field productivity.

 

 

Managing Independent Contractors in Construction Projects

Independent contractors are a vital part of many businesses and construction projects, providing flexibility, specialized expertise, and adaptability. Managing them effectively involves:

  • Clear communication with everyone involved in the project
  • Defining expectations with clear transparency
  • Setting clear performance goals and objectives
  • Ensuring compliance with contractual agreements

Contractor management software simplifies these tasks, allowing businesses to maximize the benefits of an independent contractor workforce. This method helps make businesses more agile and adaptable, being able to navigate the difficult world of construction with more flexibility.

In a rapidly evolving digital age, businesses are finding it increasingly necessary to adapt to the changing dynamics of the workforce. Contractor Management Systems (CMS) offer a solution to effectively manage contractors and improve operational efficiency.

They help in onboarding, assignment, performance & time tracking, reporting, risk mitigation, and data management. 

With Buildbite you can more easily communicate and collaborate in real-time, manage your contractors, allocate tasks, and visualize progress, all within one single app.

Using cutting-edge software, Buildbite constantly collects, collates, and presents you with the data you need to better understand the inner workings of your projects. 

Whether it’s through more accurate and streamlined documentation, contractor management, task management, or time management, Buildbite has everything you need to increase efficiency and boost profits.

Download the app to try it out, or schedule a demo if you’d like to learn more.