Home Builder Crafts Consistency

Written by Evan Schuman
April 19th, 2006

As one of the newest members of the Fortune 500, Standard Pacific Homes has seen more than its share of growth and, accordingly, small companies that it acquired to fuel its growth.

When Rob Kelle, the CIO of the $5 billion home builder, began his CIO tenure about 18 months ago, he says he knew the company had a California culture and that acquired companies needed to be left alone as much as possible.

Acquired businesses were certainly forced to use Standard Pacific’s chosen applications, but were given the freedom to choose how they did it.

“We actually replaced their systems with ours, but we set them up to support their processes in the way that they were already running it,” Kelle said.

“At the heart of it, we told them, ‘We’re standard, but how you get to it is different. In an industry going through consolidation, it’s attractive to the seller to know that ‘I get to stay with the company, and I’m not going to be told how to do things.'”

Today, Kelle says he regrets that position. “We should have developed a standard methodology and rolled it out,” he said.

That has given Kelle a major headache in terms of process standardization, data consistency and problems with delivering practical business intelligence analysis.

Various Standard Pacific units “look at data differently, which is a maintenance nightmare. We have to pull data from 26 different systems. If the definition of that data is different, you’re not really getting apples to apples comparisons,” he said.

“This is why all of the business intelligence vendors are banging their heads against the wall wondering why we won’t buy anything.”

One example is that sales data is not consistent.

“It’s not tied into our ERP system. Well, ultimately it is, but it’s done through manual reconciliation,” he said.

The ERP system itself is also hampered by the varying data procedures and processes.

“Everyone has ERP access, but they are using it to varying degrees. Some divisions do it all manually in Excel or some little database they’ve created but they don’t use the ERP system to its full extent,” Kelle said.

“Culturally, we won’t do anything that is a top-down push. We don’t want to get too deep into how they run their business.”

The CIO has been trying to work with employee groups to customize the applications to deliver more of the information they want, in an attempt to persuade them to use the systems more consistently and more frequently.

Kelle said that much of this is the way people tend to react to any new technology.

“If the new technology doesn’t work quickly, they default to the old,” such as using Microsoft Word or Excel, said the executive who worked as an Ernst & Young consultant before taking over the CIO job at Standard Pacific.

Kelle’s IT budget is small (about $20 million with 90 employees) given the $5 billion 2,700-employee company’s size, but it’s triple the size of the company’s IT budget when Kelle started about 18 months ago.

Another critical change that Kelle is championing is updating enterprise systems.

The current network is heavily Cisco networking equipment (including voice over IP) with Microsoft running on HP servers and an EMC SAN. They’re using an Exchange Server with an SQL backend and lots of .Net development work.

The ERP currently sits on an AS/400, but Kelle is moving it onto SQL on Wintel servers.

The AS/400 change is being done for several reasons, including reducing development languages and making recruitment easier.

“Most of our engineering staff is comfortable with the Windows platform,” Kelle said, adding that potential job hires are sometimes scared off by the AS/400.

“You get a kid out of college who’s never seen a green screen and he comes into our environment and looks at you cross-eyed and asks why [programmers] have to hit function 3 to do something. They’re used to using a mouse.”

But the easiest reason for the AS/400 replacement is that the company has maxed out the storage capacity and they would need to replace the systems anyway.

Kelle has also been trying to modernize operations in the field, but he’s doing so gradually.

They have deployed an ASP hosted extranet application from AutoDesk that is called BuzzSaw and gives field people access to a wide range of construction documents, including specifications, budgets and schedules.

The advantage of a server-based system is that all changes are theoretically integrated and updated, so that if one engineer needs to move a pillar two feet to the right, everyone else knows how the change may impact their part of the construction.

But Kelle focuses less on the system’s blueprint capabilities than he does on core business functions.

“Our system will send business managers alerts when a change occurs to a cost item or a particular budget item or it impacts schedule. Critical slippages,” said Amar Hanspal, an Autodesk VP.

Kelle has started sending wireless Palm devices?mostly BlackBerry devices?into the field, but it’s not for blueprints as much as fast communication.

“It gets them used to using an electronic device for communication. It kind of gets their feet wet,” he said.

“The PDA screen is too small for a blueprint. It’s too small to do sophisticated scheduling.”

Kelle is looking more toward tablet PCs and other devices larger than a palmtop and smaller than a desktop.

“The PDA is OK for a small amount of information or for a quick response. Maybe approval routing,” he said.

“But for a lot of detailed work, you’re really going to need that bigger screen. Think about who is using this. Burly construction workers, these guys don’t have small fingers, to put it bluntly.”


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