Whether a project is fixed-bid or cost-plus, the pressure is always on energy services companies to master cost control.
How often does a project appear to be on track, only to incur unaccounted costs that take out most or all of your profit? I call these cost leaks and they occur in three broad areas. Here’s why.
Labor. You estimate how much labor you need for a project. Leaks occur when more of those hours are higher-priced overtime. Without project visibility, companies often pay more overtime than planned.
Equipment. You know what it costs to run your equipment. Massive cost leaks can occur, however, when you don’t know where your equipment is. A piece of equipment could be just down the road from your next jobsite, but if you think it’s in the shop or parked in your yard, you might rent what you already own. Furthermore, if you are looking for new ways to purchase your next piece of equipment, you might be interested in doing some research into equipment finance. For more information contact Equify to learn about equipment financing solutions to meet the needs of your business.
Supplies. When field crews don’t have the supplies they need – I’m talking about items like small tools – they’ll buy them nearby and pay full retail. Those are costs your project budget hadn’t anticipated. If you’re on fixed-bid, these cost leaks come out of your pocket. Under cost-plus, they ultimately make you less competitive.
VistaVu Solutions created an all-in-one, field service management software solution called FieldVu. Built on SAP Business One, it’s specifically for energy services companies. FieldVu goes far beyond what ticketing system software can do. It’s the answer for profit-killing cost leaks. Here’s how.
Labor. With FieldVu, you can access your past projects and learn from them. Your quote-building process will be more rigorous, your labor estimate more precise and overtime less likely.
Equipment. FieldVu ensures you always know where your equipment is. You’ll run a leaner fleet, while avoiding cost leaks from renting or buying equipment you already have.
Supplies. FieldVu knows, for example, how many torque wrenches and impact hammers you have and how many you need. Keep your crews supplied with lower-cost, wholesale-bought equipment so they bypass the hardware store.
In this industry, surprises tend to be expensive. FieldVu, our all-in-one field service management software, gives you true project visibility, keeps cost leaks from occurring and allows you to come in on budget. Your only surprise might be a pleasant one, when you see a promising project deliver all the profit you expect.
Read more about Challenge #3.