Sage Transform 2024 - ACT Construction shows why industries are the future for cloud ERP

(ACT Construction at Sage Transform 2024)

By now, readers are familiar with my stump speech: the future of cloud ERP is vertical.

I sometimes poke fun at legacy industry software by calling it "green screens," but that's a bit unfair. These on-premise systems have had a good run.

However, at Sage Transform 2024, it was abundantly clear how Sage's real-time finance ambitions conflict with industry data silos.

But we always need proof points - for those, I go directly to customers, such as Sage Intacct customer ACT Construction.

'Think vertically, build horizontally' - Sage on industry cloud ERP

Before I met with ACT, I pressed the industry cloud question with Sage's Dan Miller, EVP Financials and ERP Division. Miller is the right person to ask - in the last couple years, Sage has managed to connect and/or build a range of industries into Sage Intacct, including Construction and Manufacturing. As Miller told me:

What we've been able to do in the last few years is to look at: how do we expand into some specific domain capabilities that are unique to an industry, and be able to step back, look at them and say, 'Well, where are the possibilities to leverage this across [our platform]?

At times, filling those gaps could mean acquisitions, such as the January 2024 acquisition of Bridgetown Software, which brings cloud-native bid analysis into the Sage Construction and Real Estate mix.  Miller made the case:

We can build that complete ecosystem and then work very collaboratively together to get there. And then we we will do those very unique specific things for the customer. And you're trying to reuse as much of it as possible. Yesterday, Julie Choi Adams was talking about what we're doing for Work in Progress (WIP). Work in Progress will first come out for construction, but then we have already figured out what we need to enable professional services organizations that have long-term projects to be able to be use WIP - just as an example.

So we look at: 'How do we adapt to 'think vertically, build horizontally' as much as possible, but make sure that we have an answer for that vertical.'

ACT Construction grows - and runs into a legacy software barrier

So how did that work out for ACT Construction? After all, a decades-old, family-owned construction company wasn't born on cloud financials. As ACT's Managing Partner Joe Murray told me, it was an adventurous and winding road indeed:

I had gotten some information and advice from another person I dealt with in the business world. I asked him some things, such as, 'What should I call my company?' And he said, 'You should make it start with an A,' because at that time we used phone books. So I said, 'Okay, I'm gonna maybe name it after my kids.' So I named it after my children, Amy, Christopher and Tanya.

ACT began with mainly residential remodeling, but pretty soon, the business projects rolled in. A fellow church member referred a project lead at Papa Johns pizza. During that work surge, the ACT team learned a vital lesson: don't subcontract; take on projects where you have control over the outcome. Murray explains:

We built Papa Johns or Jimmy John's stores all over the United States. That's what we got good at - in a niche where we would control the outcome of a job. It didn't matter if it was here in Vegas, or if it was in Dallas, Texas. And so as time went on, we moved across the country, picking up different accounts, and it evolved to where in today's world, we have about 100 employees. We did about $100 million last year in sales.

But somewhere along this growth trajectory, ACT Construction starting running into software limitations. Yep, that's the ol' 'green screen' crossroads. But Murray's cloud ambitions didn't mean the right software options were available. As he recalls:

The challenging part was in today's environment is having the information that a team needs in the field - and in the office. We originally started with Sage back in 2004. It was a product called Master Builder. It was an accounting package that was housed in our office, on our server. And then Sage came in and purchased them.

I don't remember what year it was, but they bought them out - and that was my introduction to Sage. It became Sage 100 Contractor, and I loved the software. I loved the support. And then ten years ago,  I really starting thinking about the cloud and the ability to have the data on-the-go, and do what you need to do in our environment to make it successful. We needed a cloud based-opportunity, and that's where everything was going.

Murray says when he originally thought about purchasing cloud-based construction software, he spoke with the Sage 100 team. After Sage acquired Intacct, however, things started to get real:

Probably three, four years ago. we found out that Sage had this product Intacct that was moving in the direction we wanted to, and they were going to open it up for construction. Intacct had been out there for a while, which I didn't even know (Sage acquired Intacct in 2017).

But would Sage Intacct's construction functionality work for ACT? Job cost accounting, for example, was a must-have feature:

In our accounting that we do, it's a different animal because it involved what I call job cost accounting. Everything revolves around the job. So I implemented in 2021, and we've been working with the Sage team ever since. And every quarter, they're working on getting more things added for the construction environment as a whole.

From mobile ERP to real-time finance

How has Murray's vision of a mobile ACT Construction workforce panned out?

It gave us the ability, obviously, to be on the move. We're able to take the data with us now instead of leaving it at your desktop. When you leave your office, you bring the whole thing with you, and that's been huge.

We have about fifty traveling superintendents, which means we have about fifty jobs going on all around the country at any one time. Our project managers oversee four to six jobs at a time. They're visiting the job sites, but they need to be able to check on everything in real-time, and know what's going on. I'm based out of Milwaukee; the main office is in Lewisville. I'm the CFO and able to access everything we need with Sage Intacct software.

But if you truly want to extract value from cloud ERP, you don't stop there.

1. How is the integrated finance and construction platform paying off?
2. Is Sage Intacct's view of real-time finance changing ACT Construction, and will AI factor in also?

Murray's quote in the Sage Transform Construction news release jumps out:

Sage Intacct Construction gives us the financial insights we need and can scale to support our growth. Now we’re excited to have this level of real-time insights extend beyond financials with Sage Construction Management. Using the two solutions together gives us an end-to-end cloud system that can help us be more efficient across the business, from initial lead through project completion. I’ve been looking for this for 20 years.

Earning user buy-in - "We call Sage Intacct the book of truth"

At ACT Construction, Chris Murray is driving the tech landscape as the defacto CTO. That includes serving up new Sage Intacct dashboards:

I would say every three to four months now with Intacct, we have a call with the project managers. And he says, 'Okay, I've developed a couple new dashboards let's go through ' - and now they're eager, and can't wait to drill down in there. Really there's the only limitation is what we can dream up as far as how we want to view these measurables.

But there's a catch. Now we have two change management criteria. One is the initial adoption of the transactional software by users (no small feat, no matter how modern the UI is). The second criteria? Getting teams to trust the numbers from an integrated system like Sage Intacct.

That's a user buy-in journey, but if you do this right, the light bulbs go off. Where does ACT Construction stand? Murray:

We call Sage Intacct 'the book of truth.' Everything that lies in there, that's the end deal. And so originating from that, it's fed information. What has to happen is the information you feed in there: the people are feeding it in. They need to see the end result, and they need to see what it looks like inside of Intacct with some form of a dashboard or drill down report. So yeah, that's invaluable to have it.

So, you have a quality data platform - maybe you're now ready for AI? Murray liked what he heard during Sage Transform demos:

He was in there talking about AI. And he was talking about putting invoices into the system and his invoices go into the system. The it recognizes that invoice from that vendor and then it says it gets another invoice out to that vendor. And it builds upon all that information that it gets and it becomes more efficient.

He brought up Sage's ambitious Copilot product news:

This morning in the keynote was great, on the things that are going to be coming out there. That's pretty wild.

Was there anything in particular that jumped out during the Copilot demos?

I asked them afterwards, 'Is that something that's going to be able to be applied to some of the other pieces that tie into Intacct? We use a Procore product, and we're going to use a Sage Construction Management tool. And they said 'Yes, it will work.' You have that kind of leverage, and you can ask [the Copilot] literally a question, and it comes back with responses - and ways of doing things, or the automation that it had for the AR and the AP.

My take

Act Construction's management team has made important discoveries by drilling into Intacct dashboards. Joe Murray explained:

Big jobs don't [necessarily] make big profits. We have a sweet spot where our jobs that run probably 14 to 20 weeks are the best performing jobs when it comes to money. Bottom line: a big 8 million dollar job doesn't always perform in the bottom line. It's a nice job to have on your resume; you did this really nice, big restaurant. But it's doesn't always equate to the dollars that way.

Chris Murray told me about how he handles Procore integration updates into Intacct on a near-daily basis. Could that be automated at some point? Absolutely, but you don't have to roll out of the gate with 100 percent real-time integration to get a result. Speaking of which, Joe Murray told me that they are also considering moving from Procore to Sage Intacct for more of the core construction functionality. This is the "one industry platform" transition I carry on about. Once you get a flavor for it, you want more.