We sat down with Matt Mussell, group finance director at the Joseph Gallagher Group and Carol Massay, Head of Construction at the Access Group, to discuss how EasyBuild’s ERP technology supports the construction sector
Tell us a bit about your background and your role at Joseph Gallagher
My names Matt Mussell, I’m the group finance director for the Joseph Gallagher Group and have worked in construction for over 25 years. I’ve been with the business for just over three years, through quite a challenging period of that little thing called Covid.
The Group is made up of four subsidiary companies, all complementing our core services of tunnelling and civil engineering. Joseph Gallagher Limited (JGL) is pretty much where the lion’s share of the action is, the turnover there is just over £100m a year, and we employ around 800 people. The nature of the Joseph Gallagher business is evenly weighted between reinforced concrete structures and tunnelling/civils specialists.
The company has grown largely in turnover in the last few years, and we now have live projects across the UK and the Middle East. Part of my function here is to set out systems and controls that can deal with the fast-growing nature of the business.
This year has been difficult for many, what are the key challenges you’ve faced?
Working with the people here was a privilege when Covid hit – we’ve been organised and joined up, so it kept us ahead of the game.
One thing we worked out early on was the easiest way to get through Covid was to keep working. The operatives and engineers were all continuing work, so it only seemed right and proper that we led by example and came into the office too.
Our biggest advantage was that it was quite easy to block out what was going on in the outside world, it was business as normal – that held us in good stead.
However, we did of course find it difficult at times. If I was going to bundle it up into one statement, I would probably say ‘inefficient gross margins’. This is a whole barrage of things; it’s having your operatives be able to get to the worksite, as social distancing measures cut down how many operatives could work on one bit at time. All of these things meant projects cost us more money and slowed us down which led to delays on projects.
It was hard all the way through, but we always knew there would be light at the end of the tunnel. I think as a business Covid taught us how to adapt and become more efficient. We’d like to think we’ve come out of the other end of Covid a better business.
If you could change one thing about the industry, what would it be?
I’d get paid on time!
The vital signs for this company are very simple – profitability, cash management and forward workload. I spend most of my time managing working capital in one way or another. If there was one thing in this industry, it ties up a lot of working capital.
We have to go through so many hoops in order to get paid.
Sometimes it can take up to 3 months to receive the money for a project we completed 3 months ago. In the 25 years that I’ve been in this sector, chasing money is the aspect that takes the most time.
Why did Joseph Gallagher choose EasyBuild’s ERP technology?
I inherited EasyBuild when I joined Joseph Gallagher. The main thing that attracted the board of directors here was probably its ease of use, it’s got a nice look about it. I come from a background where I’ve used all sorts of ERP systems and the general look of most is like looking at a spreadsheet. However, EasyBuild doesn’t look like you are just filling out boxes in a spreadsheet.
EasyBuild was built solely for the construction industry and that understanding is clear, especially when working in the accounting elements of the software. This added a lot of weight to our decision. We have quite strict internal governance around invoice clearance and all of those capabilities are integrated into EasyBuild’s software.
Working together with EasyBuild over the years we’ve been able to highlight industry best practices into the product which has given us additional functionality.
Carol: It has been an incredible journey, we have dealt with the highs and the lows, which is natural when a construction business introduces new systems and processes. The executive board at Joseph Gallagher said to us we’ve got the system in place, and we want to make sure we get the best from the changes we are introducing to drive efficiency across our business. EasyBuild, at the time were the “newbies on the block”, so for a multimillion-pound construction company to see the benefits which we could bring as part of a Request for Price (RFP) process says a lot.
What are the benefits/notable results you’ve seen from the ERP technology?
I’ve always tried to get away from a million different spreadsheets that don’t add up. In construction many will be familiar with a CVR (cost and value reconciliation), this is a cumulative re-assessment of any project that you are working on at any given month end. One of my objectives was to try to get away with 50 different CVR sheets and have all of that information embedded within EasyBuild. We got to the point where we could enter our accrued income and our cost accruals all through the CVR entry screening in EasyBuild but that’s as far as we got (before Covid hit).
We generally work on fixed-price contracts, so whilst we’re quite interested in where we are accumulatively on a project, we also want to know where we are going to be at the end, in terms of our value and cost. So, if we sign up to a contract that is worth £2m and it lasts for 9 months, and we do the job for £1.2m there’s going to be a lot of happy people sitting around the table. However, if our cost to complete highlights that it’s going to cost £3m there will be a lot of grumpy people sitting around the table.
One of the things that we explored with EasyBuild was to define on our CVR that we can see what our accumulative position is each month.
What has got me particularly excited since EasyBuild has been acquired is that within the Access Group you have other strands of products that EasyBuild didn’t have before. Predominantly around estimating software etc. All of those offerings are something that can now help us with our forecasting process.
With these additional offerings, I feel in the future we can adapt the way we work to give us more added value.
Most accounting systems, whether construction-related or not, are pretty good at dealing with your profit and loss account.
EasyBuild has allowed us to line-up next to our Profit & Loss performance the debt that was outstanding against each of those projects. What’s really good to see is how much money you’re owed on a project in real-time, whether it be unbilled sales in the form of accrued income or billed sales.
You can look at your cash tie-up in conjunction with your turnover and profitability. So, what I try and get our board members to do is read the report from right to left – a paid pound of profit is an earned pound of profit. We are able to effectively press a button, it drops down and it all works very smoothly.
The forecasting element is a huge fit that really takes our use of EasyBuild to the next level.
Also, when you’re looking at your turnover to complete on different projects, you can then start to attribute that to where you are with your order bank/work pipeline – you can forecast even further into the future based on your ongoing projects. These are all tools that move us away from unreliable spreadsheets. All our information is in one place and all our directors have access to EasyBuild.
What does the future hold for this relationship?
I think the biggest opportunity is around what we want to do with forecasting and that is inexplicably linked to the way we bid and tender work.
Now that EasyBuild is part of a wider group with additional offerings, we can work together to get various other products embedded in our systems and rolled out on our projects.
Carol added: The exciting thing is getting the foundation right and moving away from paper-based spreadsheets. Ultimately construction margins are tight, so you can streamline all of those processes. Not only has Joseph Gallagher expanded in the UK, but it has also branched out further afield.
It’s forward-thinking businesses like this that are exciting to work with, as they embrace technology to allow them to confidently branch out. Access Construction is on an amazing journey and having valuable, forward-thinking customers like Joseph Gallagher will help us to move forward with the technology that is key for construction.
