T&M tags track work that is not part of the base contract and necessary for future change orders that potentially will be paid to the subcontractor. The T&M paper process is ubiquitously slow and defined by inefficiency, delays, and uncertainty. Choosing digital time & materials will help with positive change and improvements that will benefit all stakeholders in the T&M process.
If you are ready to migrate from a paper and PDF T&M, work with an expert that understands construction and your business needs. Your transition to digital is empowered by a greater awareness and adoption of API-enabled integrations, data standards, and integrated workflows, all driving a tighter approach for data management to identify, track, and resolve problems on projects.
Map out your current T&M workflows and evaluate the value, costs, and ROI the T&M tracking software you are considering can deliver.
Here’s an example from a recent Rhumbix Customer Time Study. You can see the quantifiable benefits in the ROI Case Study.
As you can see, the process is trodden with several approvals, transformations, data handoffs, and endpoints. All of which are workflow elements that are improved with well-designed automation, connected software. Today, it is possible to replace a troubled and high-risk manual T&M workflow.
Eliminating manual steps for each T&M Tag can reduce the process substantially for each ticket.
While every contractor has a unique set of needs, constraints, and resources, the overall digital journey from paper and PDF to structured, integrated data remains the same—start small to go big. Properly defining the workflows that you are looking to transform and the data you need will help to determine the best path and solution to move forward with:
In an age of digitized workflows, a T&M tracking solution will drive better revenue recovery on jobsites and improve the bottom line–this should be a focus for any construction company.
“By digitizing the T&M process, contractors can take steps to improve cash flow, margins, and the construction company’s financial health.”
Using mobile technology in the field to connect with the back office improves processes and saves time and money. This forward-thinking approach led construction firms to explore process improvements when they began recognizing the costs, headaches, and inefficiencies of paper-based T&M tracking on their jobsites. However, with so much invested in project management’s technological innovations, it becomes clear that the manual system of T&M tracking is not aligned with a core commitment to collaborative and transformative construction practices.
|Number of Tickets Submitted||Time Required to Fill Out and
|Month-Per Project||25||Month-Per Project||30|
|Avg Number of Projects Open – Companywide||50||Month-Companywide||37500|
|Est. Number Per Month – Companywide||1250||Year-Companywide||450,000|
|Est. Number Per Year – Companywide||15000|
Net: Time Spent Copying and Distributing paper-based T&M Tickets
Minutes Recovered Soft Dollar Savings
|Average Monthly Labor||50% vs Manual||Average $ Value of Labor||50% vs Manual|
|Per Minute/Per Ticket||15||Per Minute/Per Ticket||$19|
|Per Minute/Per Project||375||Per Minute/Per Project||$469|
|Per Minute/Company||18750||Per Minute/Company||$23,438|
While improved efficiency is important, the other advantages of a digital T&M tracking platform are what drives the value.
For a GENERAL CONTRACTOR, what is it worth to know outstanding T&M costs and put in forecasts for a Contractor?
|Average Cost/Value Per Ticket – Project||$5,000|
|Total Cost/Value for All Tickets in Month – Project||$125,000|
|Total Cost/Value for All Tickets in Month – Companywide||$6,250,000|
|Total Cost/Value for All Tickets in Year – Companywide||$75,000,000|
Companywide /Annual stats: Estimated tickets 1500 = 450,000 minutes required to fill out and distribute T&M tickets.
For a SUBCONTRACTOR, what is it worth to improve “time to payment,” reduce the number of T&M tickets in dispute, and improve GC/SUB relations? Does 50% savings sound worth it to transition to digital T&M Tracking software?
|Average $ Value of Labor Soft Dollar Savings (50% of Manual) – Per Minute/Per Ticket||$19|
|Average $ Value of Monthly Labor Soft Dollar Savings (50% of Manual) – Per Minute/Per Project||$469|
|Average $ Value of Monthly Labor Soft Dollar Savings (50% of Manual) – Per Minute/Company||$23,438|
|Average $ Value of Annual Labor Soft Dollar Savings (50% of Manual) – Per Minute/Company||$281,250|
|Value of Monthly Disputed Tickets Paid Faster (based on 50% of Disputes Paid Faster)||$781,250|
|Value of Annual Disputed Tickets Paid Faster (based on 50% of Disputes Paid Faster)||$9,375,000|
Companywide /Annual stats: Estimated tickets 15000; 450,000 minutes required to fill out and distribute tickets.
NOTE: The study also concluded a substantial reduction in the number of T&M Tags in dispute for the subcontractor. Evan, do we have a stat for this (slide 18 is confusing)?
The benefits of transitioning to digital time & materials software are overwhelming from a workflow automation and financial benefit perspective. By focusing on T&M tracking software that instantly connects the field to the office eliminates the heavy burden of flawed field reporting and overwhelming financial, administrative resources. There is no better way to drive better cash flow and the financial health of your construction firm on every project.