There are 10Lakhs in India alone. Everyone has work to do, but most are stuck. There seem to be a clear learning curve in delivering projects. Once a company cracks the code, they do not drop the ball much after that point. The reality is, demand across the spectrum of construction projects is largely scattered. The question I keep asking myself is why it is so difficult to scale a construction company at a consistent pace.

I am Amit Bansal, co-founder and CEO of 91Squarefeet and Rdash. I am sharing my journey of building a design+build company focused on commercial fitouts. We scaled to to 100Cr revenue in 4 years. I will specifically cover the role of technology in this journey for viewers to have some perspective around digitising processes in their company. If you are running a construction business, or responsible for delivering projects for your organisation, and you feel like you are stuck in an endless loop of making ad-hoc decisions in every moment, this video is for you.

Let's start with some dig at the problem. Running a construction company feels like walking on a rope. You are always balancing the tricky equation between margins and cashflows. But it infact is the customer who is holding the rope, and pays you basis his experience which depends on rather delicate matters like planning, coordination, and reporting of the project. A small misstep can domino into a financial loss. and most leaders that I know who are running a construction business are so used to playing it close to the chest that they aren’t even sure about the benefit of deploying technology and processes in the first place.

Let me share how it panned out for us. when we started with 91Squarefeet, we were an outsider to the industry. We wanted to build the best construction company ever and dreamed about all great things like robots doing the labour jobs, fully digitised material and production supply chain, fully automated project management and what not. And this lofty dream was the direction of technology we built in the initial days. We started with building a master catalogue of project elements thinking we would digitise the procurement behind it. We automated Site survey workflows to reduce quantification errors, and built BIM like system to manage design files. Things of similar nature. We were venture capital backed, so we had to run fast. Within an year of the launch, we were managing 30+ projects in parallel and the team size swelled to 150 people. Only there were a couple of practical challenges. We were bleeding margins on projects, our working capital swelled to 90 days, and our customers were suffering. For all the tech differentiation we were trying to bring in the business, we weren’t setting the right benchmarks.

We were so bent on bringing the differentiation in business, that we didn’t fix the basics of the business. If I were to share a secret, We were even struggling to know what is the real margin we are making on a project for good 12-15 months. Vendor PO process was all over the place without any controls. The vendor invoices would come even after 3-6 months of closing the project. The payments to the suppliers was happening on gut feelings that wasn’t working out neither for us nor our vendors. We would even delay on raising the client invoices due to our own oversight. Such a mess it was. Lucky for us that we were fortunate to have the support to pursue it deeper.

When nothing was working out, We crystallised our focus on two things: Customer Experience and Cashflows. All technology effort and leadership bandwidth must be spent on fixing these two areas directly. Also this time around when we thought about technology, we weren’t thinking about a new features, we were obsessed about business workflows. We would pick one critical workflow at a time, and build the tech for it while testing it live on day to day operations. The messy state of ours probably expanded our range of experimentations.Net impact of our efforts reflected in our business performance as well. In the FY23, the gross margins for that year stood at 9.6%. Also, we had a working capital cycle of 90 days. However, a year after in FY24, gross margins improved to 20% and working capital came down to 30 days.

let me shed some light on the key workflows we fixed around customer experience and cashflow control. The key workflows we fixed around cashflow control were Raising Vendor Order, making modification in the order, Accepting the vendor invoices, Requesting Payment, imprest of site folks, and management of scope changes for claiming non-tendered items. All of these workflows touches many department within the company and sometimes add in other workflows. For an example let break down the flow of accepting final invoice from the vendor. We made it mandatory for project managers to cross verify the vendor invoice document with the order elements punched on Rdash. The project manager then triggers an invoice acceptance request which goes through approval hierarchy. We understood that we were adding extra steps, so in order to make things faster, we brought the approval flow on mobile via what’sapp so that people can approve on the go. Finance person became the final approver on every order, invoice, or payment request. This workflow improved about 2% of margin and helped us stagger vendor payouts.

Many changes were being made in the order throughout the process of invoice acceptance, so we flagged them on the software and linked it to the BOQ. It strengthened our scope change management workflow. We realised that we can unlock a better coordinated effort amongst our team by connecting the information bridges. E.g. We were using an ERP system to log, approve, and settle the expense request from our site team. My finance person had to map these requests to a project which was a time taking work for him and this would result in slow turn-around of imprest requests because of which the site folks would hesitate in making even small payments for labour and material during the last few days of the project. By bringing the imprest payment workflows close to project management on a single software made this whole process faster and resulted in better support from ground team in project handover.

The another equally important piece in the equation was the customer experience. Key workflows we worked on for this side were daily progress reporting, measuring Installed work progress, Managing activity schedule, Material Handling, Design Coordination, and Snag Management. Customer experience is way more delicate than the cashflow management. Let’s take Daily progress reporting workflow for an example. We were struggling to understand the real day-to-day progress of our sites. Our site supervisors were a little optimistic in reporting site progress and the photos they would send were not sufficient to understand the project in entirety. I had to dedicate different set of people (I called them CSMs) to take supervisor's update and give it a professional touch before sending it to the customer. But the whole process was noisy, laden with regular escalations and multiple versions of truths. We thought what if we provide a nice mobile app template to our supervisors to click site photographs from consistent angles, update manpower, and record blockers along with action plans for tomorrow; and send this to our customers as PDF on whatsapp, this will reduce a lot of reporting workload off our shoulders. My Sales Team advised me against it: They said the site supervisors do not understand the nuance of the relationship and they may write things which could do more damage than good. There must be a check point. I pushed through it anyway. My thought process was we can always train our people. To reduce the damage, we will keep the "Send to Customer" setting off for the first month. In this duration, the sales team will review and provide feedback on the DPRs submitted by our site supervisors. Once they are trained, then we will open it for customers, that too on a project to project basis. This turned out to be our best discovery. Our customers really appreciated the transparency of it as they know they are seeing the same thing as the contractor's management. If there is mis-reporting, they would call it out and it helped us improve our culture as well. Sometimes the practical way of doing things get in the way of making things simpler, it is then for the organisation to decide.

We then doubled down on making this workflow more mature. Now the DPR workflow has become a 360-degree project reporting process where the system automatically fetches Schedule Update, Material Movement, Installed Progress, Site View Point photos and almost everything important on a project and push it out as a PDF to everyone on whats'app as soon as the project manager clicks on the submit button.

Before we conclude things, I want to express my empathy for construction leaders. It is very difficult to keep a level head while operating a construction business. One day, you would be very positive on bringing a systematic change one day, and the other day I would be totally drenched on ad-hoc problems that bringing the systematic change feels like a pointless battle. I believe there must be some common set of problems that everyone face and some of our industry veterans have figured out a solution for most of them. Whats missing is awareness. To address this, we are planning on doing a series of content around the central theme of scaling a construction business. We are putting out podcasts with industry leaders, white papers, case studies and stories of change management within companies of different shape and size.