We first caught up with Atlanta-based ProNovos in 2020 when we were trying to better understand how startups were navigating the complexities of pandemic-related shutdowns.
As a construction-focused tech startup, ProNovos has had to navigate its fair share of uncertainties over the last few years. While real estate prices ballooned, commercial construction has been riddled with supply chain lags and a general lack of technology adoption.
Despite these challenges, ProNovos is turning into Q4 2022 with new funding and a new strategic partnership to help subcontractors navigate the vast amount of data they have.
The team recently announced a new partnership with and investment from Smith + Howard, and Atlanta-based tax, accounting and advisory firm. Now ProNovos can help CPA firms’ construction practice groups introduce clients to data-driven approaches.
As the team continues to build out of its Atlanta Tech Village home, we asked them a few questions about what’s next for the startup. Here is a bit of what we learned:
QUESTION: Between supply chain problems, inflation, and COVID, the construction industry has had a rough few years. How has ProNovos navigated these changes and worked with its customers?
The Covid-19 pandemic and the employment, materials and supply-chain challenges certainly have made life more difficult for contractors. However, interest in analytics has kept on growing. Really, it may have accelerated just because today’s contractors are even more laser-focused on being efficient.
Many contractors are realizing that the industry is too competitive to allow for inefficient approaches to labor, equipment, costs and other fundamentals. They can’t let those incremental slips go unchallenged. The next generation of construction professionals are also more interested in technology and data. They see how the industry is collecting a lot more data and are aware that they can do more with it, with the right tools.
We’re offering them a way to take data from their accounting systems, project-management software and other applications and integrate it into a cloud-based platform–it’s like having a single app for your whole business instead of six or seven apps that your personnel need to master.
Over the past couple of months, we’ve been in the middle of a flurry of conversations with different CPA firms that advise construction contractors on how to run their businesses more efficiently. We’ve now formed strategic relationships, not only with Smith and Howard, but also Somerset CPAs and Advisors, REDW, GBQ, HoganTaylor and AAFCPAs. Two more strategic partnerships will be announced soon. These companies serve contractors all over the country.
Our analytics consists of reports, dashboards and machine learning, designed to make it easy for construction contractors to track, manage and analyze things like:
- Project financials
- Accounts receivable and payable
- Job costs
- Labor hours
- Monthly billings
- Change orders
- Projected final project costs (also known as cost-to-complete)
- Cash Flow
Our executive and work-in-process dashboards give even higher-level and more detailed analysis of company and project performance. Typically, this information provides lagging indicators, but we’ve designed this so nicely that it includes leading indicators.
QUESTION: Can you talk more about what the investment piece means and why the partnership is important for Smith + Howard and ProNovos?
Smith and Howard wants to help its construction contractors be the best they can be, especially in today’s environment. They’re investing in us because they believe in the power of construction data to achieve that. They also share our mission of serving the construction industry.
The investment is meaningful for us on a financial level, but having our mission and products validated by a firm of Smith + Howard’s caliber is meaningful to us on an emotional level as well.
We have felt similarly heartened each time we’ve talked to veteran construction advisors at these different CPA firms and heard them describe the analytics needs of their contractor clients. Those needs — for things like automated work-in-process reporting, better management of change orders or more efficient ways to handle AP and AR — are precisely what we’re offering.
QUESTION: How would you describe the state of Construction Tech today? What are the biggest problem areas / challenges / opportunities you see for the space?
Contractors all over the country are pretty advanced when it comes to project-management software. Just look at how ubiquitous Procore has become.
However, profit margins on projects are razor-thin, and so understanding and managing costs on projects can be a challenge for the project team, especially if they are working in multiple spreadsheets and systems. We’ve seen an opportunity to standardize and modernize project forecasting to accurately predict profit margin fade or gain in a timely manner. Also, we’re focused on delivering timely insight into billings on a project to ensure the project maintains a healthy cash flow.
It’s why we really see analytics as the next logical step for contractors all over the country.
In many cases, their accounting software, which may be specifically designed for the construction space, doesn’t give them analytical tools at all, or provides tools that are lacking in various ways. (We hear this from contractors all the time.)
As we see it, the industry is in the rollout phase of analytics but will be getting into more advanced approaches as time passes. For example, AI-driven predictive analytics can allow contractors to have a more accurate sense of where their projects and companies are headed. These tools, while not in widespread use in construction as yet, will make forward-looking suggestions based on trends and other data points. It’s very exciting.