So close and yet so far. That’s the perception of many small and midsize contractors in the construction space when it comes to technology investments. Tech like machine control, laser scanners and field solutions hold the promise to drive efficiency and productivity, often accompanied by a hefty cost.
While the benefits may be clear, the time and cost to deploy these advanced solutions is a barrier many don’t believe they can breach. That’s where subscriptions for construction technology software and hardware can help. They are now available for a range of products, from on-machine grade control systems to off-machine base stations, data collectors, rovers and total stations.
Subscriptions are fast becoming a preferred way to implement technology with confidence and affordability. This article covers four key advantages to today’s construction-focused subscription programs.
1. Lower Upfront Capital Investment & Faster Approvals
According to Stutsman, the team is always current with new sensors, harnesses and cables along with software upgrades on desktops, rovers and tablets—it’s all done automatically.Trimble Construction
Subscriptions can also enable faster approval cycles since the monthly costs are lower than large upfront investments. These lower costs are more amenable to decision makers in an organization's hierarchy.
For example, someone may be able to approve $1,200 per month but not a $65,000 purchase. These lower approval thresholds with subscriptions mean new technologies and purchases can receive a greenlight to move forward more quickly within an organization.
The lower upfront capital investment is an advantage that Redman Construction Inc., a family-owned contractor based in Brockport, N.Y., is fully realizing. To this company, a subscription is a way to build toward a digital ecosystem while keeping the company’s long-term debt ratios down.
JP McKinley, vice president for Redman, said, “For any contractor, it’s a continuous effort to keep bankers, accountants and bonding agents happy because they all want different things. Whether it’s low tax liabilities for the accountants, cash for bonding agents or loans with bankers, the goal is to keep our long-term debt ratios at a minimum.
“With a small company like ours, that can be a challenge. Subscriptions offer a brilliant solution for all three groups because we’re minimizing our upfront costs. We’re leveraged less, which improves our overall credit.”
Because of a more predictable and stable cash flow facilitated by the subscription program, Redman was able to purchase a second rover and has its eye on more machine control systems down the road.
2. Flexibility to Scale & Test
A subscription program can provide flexibility to scale a technology suite up and down depending on the workload without taking on the full risk of ownership. It allows businesses to start with a basic offering and gradually adopt new technologies as they see fit.
The subscription model provides more flexibility to experiment with different solutions without large upfront commitments. Need a new technology for a specific project? It’s available. Over time, they can build their capabilities through incremental upgrades rather than infrequent major purchases.
This nimble approach also allows organizations to more easily test and try new technologies rather than waiting until their next major purchase cycle. They have the flexibility to see what works best for their needs.
For instance, ready access to new technology is one way contractors are driving productivity and safety. National design build contractor Power Design, headquartered in St. Petersburg, Fla., operates in 23 states across the U.S. on more than 300 active projects. Through a subscription program, the group looked to pair building information modeling with robotic total station technology to support field installations using point layout technology—a 3D-modeling, virtual solution. With the accuracy and speed of point layout technology, superintendents have reported a 300% to 500% increase in layout speed.
3. Always Current Solutions
Stutsman-Gerbaz invested in a subscription for its total station and rover and machine control solutions on dozers and excavators.Trimble Construction
Stutsman-Gerbaz invested in a subscription for its total station and rover and machine control solutions on dozers and excavators. President of Stutsman-Gerbaz, Shay Stutsman, said, “We are always current with new sensors, harnesses and cables along with software upgrades on desktops, rovers and tablets—it’s all done automatically. Any time there’s an upgrade or we need a new piece of equipment, our distributor brings it out and installs it. It was a no-brainer for us to go with the subscription. We’re able to do more work in less time with greater accuracy, while keeping our indirect expenses the same or even lower.”
McKinley added, “With a subscription, budgeting equipment costs in bids is easier, so we’re more competitive. I don’t have to worry about outdated software or communication between systems, or that the technology we just spent thousands of dollars on is now obsolete.”
4. Full Technical Support
With a subscription-based model, software updates are typically loaded automatically and configured while hardware is inspected and, if needed, repaired/replaced at no additional cost.
Founder and owner of Whitefish, Montana-based Eagle River Construction & Excavation LLC, a specialty contractor for commercial earthworks and utilities, Corey Hale said, “This [subscription] has made it super easy to invest in GNSS across my fleet ...”
Subscriptions also encourage vendors to continually deliver value and meet customer needs, since customers have the option to easily switch to a competitor if not happy.Trimble Construction
Subscriptions also encourage vendors to continually deliver value and meet customer needs, since customers have the option to easily switch to a competitor if not happy. This raises the bar for vendors to stay on top of their service delivery, providing the customer with the best possible experience.
Stutsman-Gerbaz added that one of the intangible benefits of having the latest and greatest technology on every machine is consistency for operators. Stutsman explained, “Every operator is running on the same platform. If one of our newer operators is not familiar with the system on a dozer, an excavator operator can share their expertise. They have the same screen, even on a different machine.”
Advice Moving Forward
An increasing number of subscription programs are available for construction professionals. If your organization is considering this model, look beyond the lower upfront cost.
A subscription can do much more than simply make it easier to invest in technology, including:
- Providing more flexibility
- Giving faster access to new technologies
- Encouraging vendors to continuously improve their offerings
These models can be ideal for maintaining the latest hardware and software and ensuring a full factory warranty and repair or replacement of accidentally damaged hardware.
When evaluating subscription versus more conventional purchasing options, make sure to consider the total cost of ownership of a piece of technology across projects large and small. Also, think about the storage, logistics and upgrades when new advances become available and maintenance needs when weighing alternatives.
No two subscriptions are created equal. This is an evolving model, so make sure you understand what equipment and technologies are included and available through the program as well as if associated maintenance and upgrades are included. Ask questions about what happens at the end of a subscription term and if there are options to purchase or extend.
Finally, know what level of support and training is included in the subscription plan. When it comes to sophisticated solutions such as robotic total stations, machine control, field solutions, and even base stations and rovers, day-to-day support and training is essential to ensure that the technology is used in the most advantageous way.
Subscriptions are here to stay and will continue to evolve to best meet industry needs. When done right through a strong manufacturer and dealer partnership, they’re a terrific way for contractors of all sizes to invest in technology with less risk and more return-on-investment.
