159. Estimating With AI With Darren Wallbank

Welcome everyone to another episode of Professional Builder Secrets. In this episode, I interview Darren Wallbank from Builder Price. Builder Price is a project management software, but they've recently partnered with a technology company called Utexa. Now Utex, work with large scale commercial builders and they have this really powerful AI technology for estimating and pricing projects. Builder Price are now bringing that to the smaller residential building market. It's technology that could really change the entire landscape and it's gaining traction super quickly. So keep listening to find out how this could impact your building company. Enjoy. This episode of Professional Builder Secrets is brought to you by Apparatus Contractor Services. Apparatus provides full scope, end to end QuickBooks, Precision Construction accounting and CFO services for residential builders. If you feel like you can't completely trust your weekly and monthly financial reports or you feel like you're flying blind, Apparatus Root will rebuild and operate your QuickBooks accounting system and give you precision construction accounting capability you can trust. Learn more@apparatusteam.com or on the APB Rewards Partner Directory.

We talk about taking your prospect off the market in the first hour, hour and a half because they're going to see that. They're going to, they're going to see what you're doing and feel comfortable with it.

Welcome to Professional Builder Secrets. This is the podcast for building company owners wanting to grow safely and securely. I'm your host, Will Blunt and today I'm joined by Darren Wallbank. Darren, welcome to the show.

Yeah, great, thanks Will. Great to be here and have the opportunity to share some wisdom, hopefully and knowledge.

Yeah, really excited to have you on. We've had many a conversation in person and over zoom before, but this is the first time we've had an official one on the podcast. So it's excited to share some of the great stuff you've been up to.

Great. Looking forward to it.

Before we dive into the details, can you just tell all the listeners out there who you are, what your company does?

Yeah, great. So, yes, I'm Darren, I'm chairman, one of the founders of Builder Price and Builder Price is a software company. But a little bit about my background. I'm 20 years with suppliers, major material suppliers. I'm accountant by background. I had my own accounting practice looking after builders and found out they weren't making enough money or knowing where they were making or losing money, so got into software to help solve that problem, which is where sort of Builder Prices come from. But Builder Price, we are targeted to bring clarity to the residential builders. Basically that's our sort of vision and what we want to do and that's through all aspects of building. So we do within our software we do Design, estimating, pricing, 3D imaging, project management, timesheets, invoice processing, financial reporting and even now have integrated health and safety in the software with the intention of trying to working towards getting end to end solution for all the core elements for a builder as opposed to having parts of a solution. Haven't got the nirvana yet but we're pushing as hard as we can to get there.

It all sounds good Darren, but the real reason you came on today is because you recently attended our professional Builders Summit as a sponsor and you've also recently partnered with another technology firm to bring an AI technology to the residential construction market. And it just hit the mark with all the builders at our event. So that's the real reason I wanted to chat to you today. Can you talk to me a little bit more about how that partnership came about and what it really means for this, for this space?

Yeah, yeah, absolutely. So that partnership is a bit of a funny story actually. But we were competitors in different parts. We have other businesses like Estimating and we were competitors in that space but for a common, common contact got introduced and actually figured out between us we have a great set of solutions and the partner we deal with is utexture. They have been handling the big end of town project group Builders but didn't have project management under that. So we're putting ours under that, under their brand. But we're bringing their solutions down to residential builders under our brand and with a tailored solution to suit the sort of market we, we service. So, so it was just, just a good partnership and they're, they're 10 minutes away from our office. Here is how, how, how good it is.

So yeah, I mean I want to dive into more about the product a bit later. We need to talk about the challenges that you're overcoming and that kind of stuff, but just at a very high level. What's the big difference with this technology that's making such a huge difference for, for builders?

I think it's the being on latest platform cloud based, using AI technology and using smarts. It's been between the two products have been eight years in the making and a number of those years were before AI but AI is now enhancing and just changing the speed and rapid pace of how things can move forward even to the point where I didn't even realize we were using AI and I thought I better go and talk to my guys about this. And they said oh we've Been using that for six months and the software, so if I don't catch up with it, they're going to move with it anyway.

From a functional perspective though, what specifically does it do? Just for anyone out there that hasn't seen the visual representation of it. Yeah.

So it's just doing a number of things. So it's basically with the design process, estimating part, it's creating what we call a digital twin up in the cloud, which is through Amazon. So as you're working on it, every time you save, it's shooting up into the cloud. AI is actually doing instant calculations and reformatting and you've got that available straight away. So you're not waiting for a timely process. It's using a lot of calculation and engineering technology. Calcium the back, that's AI driven, which is giving the ability to have instant answers coming through on this stuff. And 3D imaging tied in with that.

So that's like physically like from a builder's point of view or even the customer's point of view, they're seeing their estimations change in real time because of the technology behind it. Is that right?

Absolutely. And it is that instance. So that's what I think is attractive. And we'll talk a little bit about that and the impacts of that on the industries.

Yeah. Oh, perfect. All right, well, let's dive in. So beyond the solution that you're talking about just there, what are some other ways that AI is making builders lives easier?

At the moment, I'd say I was seeing some interesting trends. I mean you're seeing the physical stuff and you're seeing the robots, all that stuff and my less infant, but. But it's changing quickly and stuff. What I've learned with AI is it might be partly there now, but it's very quick to get to where it needs to get to. There's so much investment going on. So I think physical, I think the way I've always looked at it and the way I consider it, anything that has been a routine function, when I say routine, something that's standard, whether it's estimating, whether it's accounting, whether it's administration, AI is that's really low hanging fruit and that's happening pretty quickly in a number of areas. And we're doing that and we're seeing it elsewhere. And I think what AI is also doing is it's bringing a lot of data together, it's bringing a lot of information that is available to builders, but it's actually now getting to the point where it can be Writing the reports and doing, doing that work for stuff that that is standard. And so it's about, it's about changing, giving time back and speeding process up and really helping the decision making process through that. The implication of all that is some pretty good cost savings if you use it correctly.

Yeah, of course. So talk to me more about how it is essentially changing the roles of some of the people in that build process, estimators, designers and others that you just mentioned.

Right. It's interesting because I've done a lot of demos in the last couple of weeks and the estimated designer and the builders have been in those demos and and so this is not about taking roles out but it's about making them more efficient and giving them a faster turnaround comfort. So I quite often use that and I'd use it at the summit. The idea of the farrier versus the mechanic when motor cars come in, the guys working on horses, that profession changed pretty quickly. And I sense that's what's happening now will happen over the next two to three years. So what, what maybe has taken quite a while for an estimator to work through and calculations, all those calculations can be done driven off AI. So the estimator becomes more a quality check and checking the. Maybe some of the calculations behind that. But the grunt work's being done. The design process what we're doing is we're putting power back at the decision making design process. So they're not waiting two or three weeks to get information. They're getting enough information on, on concept, 3D design and price very quickly. So the decision making becomes a lot quicker. And one of the real benefits of that in that process is you're speeding up that and deciding who's a real prospect and who's not a real prospect. I think the other part we're doing quite a bit through is changing some of the admin processes pretty quickly by using AI. So that impact back into the back end process and admin is. AI is a big driver in that. To the fact I've got this vision of seeing paperless office. We've talked about it for 20 years but I feel like it's closer now with some of the AI the ability to eliminate routing processes.

Yeah, I mean that really is the future. Well, not the future. It should be a relatively soon thing, a paperless office, shouldn't it?

You have talked about it a while, but I, I sense it's a lot closer than it has been.

Yeah, I mean I don't take my wallet out anymore. I just use My phone for everything. So I guess that's, that's like a symbol of, of that progression.

Yeah, I think just around that. My test on that one is, is to look what you're printing out and because that drives back into a process and says why did I have to print it out? Because I should be able to change that process. That's my test. If you can get rid of your printers eventually that means you've, you've got hitting the right mark.

I like your comment around not replacing the staff, not replacing the estimators because we talk about that a lot when we're trying to encourage builders to implement AI in their companies a lot more to stay make sure they're at the forefront of the new technology. It's really important to empower your team without making them fear that they will be replaced. Right?

Yeah, absolutely. And I think one of the classic areas I've seen this S21, but is in admin functions is we put in project management, we put in the systems processes, we feed it all through to Xero. And your initial reaction from the admin manager or your accountant is this my job. But what we're doing is we're saying in that sort of situation is no, your time is suddenly more productive using the information, actually being proactive around it. It's just a changing role. No, different to estimator is you can probably focus on getting that extra 5% of margin out of that job because you're not worried about all the grunt work underneath. You're at the fine tune ending and you can also put more volume through so you're getting through those prospects a lot quicker.

And an extra 5% of margin can have a huge impact on a small building company, you know.

Absolutely, absolutely. Yeah. Given, given them, given the margins that some of them trade it.

Yeah, yeah, we won't get into that because that's another big issue to talk about. But other than the impact AI is having on the roles within the build process, talk to me about the customer experience as well.

Yeah, absolutely. So what I'll just talk through a little bit is how we would process that customer through the software solution we've got because that brings out the experiences. So traditionally someone will come in, they'll give you a concept plan or maybe architect's giving you the plans. You will sit down, get the estimating done, take maybe do some imaging around that, although I'm finding that's not common and it might take two or three weeks to get back to a customer around that. What we're now doing with the technology and AI is we can bring those plans in either scan and scale or we even outsource that. We'll do the service for a builder straight into the software. But within an hour, hour and a half, you can have your model done, your plan done. It's done the estimating initial calculations in the background using square meter calcs for subs and everything. And it's giving a price to the customer and there and then also giving them a 3D image of what actually has just happened with all the color choices, everything in there. And one of the feedbacks I've had from a few customers even in the last week was a number of the builders. Customers struggle to conceptualize what's actually just been put in front of them. So what we're doing here is saying actually this is what you're going to get. And in the next two quarters, those 3D 3D images we will be able to attach to an email to send to the customer and they'll be able to actually walk through the house and see what's actually just being priced in 3D. So that the beauty of that is you are really, we talk about taking your prospect off the market in the first hour, hour and a half because they're going to see that, they're going to, they're going to see what you're doing and feel comfortable with it. And we have real experiences of that. So that's one part, I think just another extension of that, which again we're looking at being out in the next two quarters the beta testing's done is traditionally to get a 3D realistic render on something. Could be a 9 to 12 day process. Using AI, we can load this up and within 3 minutes get a 3D real rendering situation again that can be sent to the customer. They could walk through that, they'll even be able to, when that version comes out, be able to click on the wall, change out colors and understand the implications of what they're walking through. Which for a design and selling process is massive because the customer is going to have a lot more comfort around that.

What about accuracy, like those 3D renders, how accurate is that to the final price and everything like that?

Yeah, if you set up, it's like any software, you do the homework, set it up, learn it properly, very accurate. And then because, because you've got all the calculations. So if I go and shift that wall, what it's doing is instantaneously re estimating, calculating quantities and then it's doing the 3D image based on that, if I get to the 3D image and something looks wrong, well, you know, you've got to come back and look at what you've just done. Because yeah, the software will do smart things like saying, well, you can't shift that wall outside the roof line. It'll do the basic things, but you still need to check it. But yeah, the calcs are there. It provides every time I change it, it's recalculating, redrawing the plans, doing all that and giving all the quantity breakdown. And that comes back to what we talked about with the estimator being the person that can quality check it at that point. But what we've done in that first hour and a half is we've, we've done a price based on square meter counts over the next few days or as you get tender prices, you can overwrite those and reposition it. But if you've done it right, you should be, you should be pretty close. You'll be close enough for a customer to say, yeah, you're in budget, I can afford it, or no, this is miles out, I can't get there.

So with the materials, are builders uploading, you know, a list of their supplies and things like that? Are you pulling that from a database? How does that work?

Yeah, again, this is an example of AI working. Having been in the supply end, one of the biggest problems in the past in the industry is if I have a stick of framing or lumber and it's got this supplier has this product code against it, that supplier has that product code. You've had to maintain multiple codes. Our new technology and the way we do this is we have a master code. The AI actually reads all the files from suppliers and matches, does that process and then we actually bring it up, bring up the supplier pricing, even to the point of supplier, individual builder pricing. And it's doing that all through AI, something that we couldn't have done before. It would have been a multiple week process to do that sort of mapping. Now it's done in multiple hours as opposed to multiple weeks. And so where it's a common supplier, we will centrally maintain that and do that. And we're doing that directly. For instance, say with Bunnings, where it's a direct integration work process through to if you've got a regional supplier, you can bring that up, you can map that yourself and then we can decide at our level, do we open that up to everybody as a supplier? It's being used by multiple. So really quite smart technology used through there. Something that we talked about in the industry, but now can actually happen again with AI impacting that.

Yeah, that's really cool. Maybe one for us to talk offline, but there's probably an opportunity there for you to be partnering with all those suppliers as well.

Oh yeah, we're gonna. You'll be surprised at what we've got coming.

Very cool. I imagine this would be beneficial too. If someone looking to build a home comes to a builder with, you know, a design from an architect or something like that, they can plug it in here and it's probably quite alarming sometimes what it's actually going to cost them.

Absolutely. And look, I had a classic case study I was talking to a builder about a couple of weeks ago and it was a $400,000 project budget, but to get to that, they'd had to spend $22,000 with professionals, architects to get it to a point of saying, yeah, whereas within the hour and a half you're going to know that you're within the ballpark and the builder's going to charge the client for that service. We can, you know, we can, they can do the modeling, we can turn around in a couple of days if they don't want to get technical on it. But what they can give the client back that fast just takes that stress out and I think really big money saving opportunities there.

Yeah, there's money saving. It's also, it also helps the sales process from what I'm hearing, because that immediacy is so important in that. Right. As you know, before they go and talk to another builder or, you know, price check elsewhere.

I think so. I think that's AI impacting. It's like you'll get people that pick it up, speed their processes up and move. We have a classic bell curve where you get your early uptakers, your standard users, late uptakers on technology. I think AI, you're seeing the early uptake now. They are the builders that get that right are going to have a real advantage. And as an industry, people will have to come along with that because traditional, I'll talk about this, but traditional software that is maybe not cloud based, not using that technology is not gonna be as fast and effective. It's actually gonna be costly. So you just gotta keep investing in this space.

Yeah, I just think about the physical experience. You got two builders and you've taken your plans to both of them or you've got them to both develop plans. If they're design build, one of them can show you things in real time or within a Few minutes changes, price changes, you know, estimates, all that kind of stuff. And the other one's taking days to make these small changes or weeks to produce anything. Naturally, if you're getting what you need over here so quickly, you're going to go with that builder.

That's, that's it. And that's why I talk about getting them off the market in the first hour and a half because. Yeah, because it's giving them enough to say, yeah, actually I'm in the ballpark now. The builder can spend a week or whatever time he wants fine tuning and he does that in the software. It's just going to fine tune any contractual issues around that. But you're two to three weeks ahead of your competitor. Yeah, I mean any, any sales cycle that can do that's got to be an advantage. All that immediately flows through to all our project management software. All through. So we're giving instant reporting everything around that and that's what I'm passionate about is actually let's give you the end to end reporting. So you've got the same structure coming through from pricing right through to your final profit and loss reports or job profitability reports.

Yeah, that's a great point actually. So you can help them through the whole journey. As soon as that estimate or that quotes approved, it moves straight into the project management side of things. Is that what you're saying?

Absolutely. And coming in, it's actually instantly put the information into the timesheet apps. You guys can be working on site and it's using all the consistent reporting. It's put it into the Gantt chart. Reporting as a structure, you still got to dictate timelines but it's doing a lot of those smart things. You don't have to manually and that's what do. And that's why I talk about trying to eliminate processes for builders. I mean one of our favorite lines and we started build a price around this is how do we give builders back their weekends? Because a lot of them are spending night times weekends trying to price and do admin. Actually this is about eliminating that.

I'm sure there's a lot of builders out there that would love their weekends back.

Absolutely. Yeah.

So actually that's, that's opens up a different conversation. I mean AI at the front end from a marketing and sales perspective is probably the most mature in terms of its use. And then you've got relatively new stuff happening in the estimating space. What about project management? How do you see AI impacting that part of the process?

Yeah, well, it's interesting. I think there's two areas. One is project management and one is what I would call administration, standard process, project management. I think what you're going to see is you're going to see more information available quickly and automatically provided between the different stakeholders. So whether that's a supplier, whether that's a customer subcontractor, that because, because the information's there. What AI can do is process that quickly and get it to the right parties. And we're working on stuff there now because I, I see. Because you've got the Gantt charts of schedules. Why can't the, the information feed straight through to a supplier to make them aware of what's coming up? Because one of the things that costs builders on site is when material doesn't turn up or the timing's out, let's use AI to write all those integrations and we've got all the components and we're working on some smart stuff in there now through to the other end of say, administration, where we're using AI to read and supplier invoices electronically, get them to the right place, match them to be purchase order, then feed straight through to zero. So we're eliminating that supply of paperwork. Coming back to that object of trying to get paper out. One of the biggest paper requirements for builders is supplier invoices. And we're taking out literally four to five hours a week in a number of builders now because they don't have to manually process those invoices.

Four to five hours a week. That's a lot.

Yeah. It could be their admin person or whatever, but it's. Yeah. I mean, I, I got to share this story. I, I showed a. Built. This would be about a year ago, I showed a builder this, this, that part of the solution and he rings me on Monday morning. He said, I just spent four hours of my Sunday morning doing supplier invoices. How do I get that part of the solution working? Because he was just not going to do that again. So.

Yeah, and I think that's all, like, to your point, coming back like paperless and builders having backed their weekends. Yeah, that sounds like a great mission to move towards. So where else. Where do you see AI going in this space, Darren? Like, what's going to happen next? There's obviously been such an evolving, evolving space over the last 12 to 18 months, but what's going to happen next?

I think one thing that will happen is it won't slow down and you're going to see it pop up in different areas and I think some examples is like physical components I talked about. You will see more of that happen. Yeah, it might be in the next year, but it's going to happen. What I sense will happen is a lot of the writing of reports and communications between builder project stakeholders will start to be driven by AI. So it's more an approval process because all that data is there, it's just grabbing it, putting it all into one place. I sense we'll start to see and some of the stuff we're working on will start to see deeper suppliers interactions occurring so that we, we can be providing things through from specs, everything, warranties, all that automatically changing between parties and storing in the one location through to as I said earlier, scheduling when material should be on site. I just think you're going to see a lot of smarter stuff happen there replacing traditional process. And one of the things I always have to do, I've got all my programmers I look after because I want to be close to the customer and the programmer changes but I will quite often walk into the room and I've got these 20 year old young guys compared to me and we'll talk about a process and they'll say well, why can't we do it this way? And I have to constantly look at it and say well we might have done it that way for 20 years but yeah, actually let's test the logic of what's going on here, whether it's accounting, whatever and let's maybe break the rules and figure out why can't we do it a different way. And I think as builders particularly that's, or any business owner you've got to be prepared to do that. I mean I, I, I've sort of been in the past, maybe I'll wait for something to get a bit more mature. I, I don't think you can do that here. You, things are moving so fast. Yeah, you will either be have an advantage or you won't have an advantage. Because you haven't jumped on doesn't mean you have to be the guinea pig. You don't have to be at the bleeding edge of it, but you should jump on to what's being established and happening around the place.

Yeah, that's a great point. You got to be willing and open to make a few mistakes and break a few things like you said there to be able to get the advantage. Obviously you don't want to blow everything up but if you're using a portion of your resources to test things out, that's when you can reap the benefits.

And just around that. I think one of the other things around here too, and you touched on it quite well earlier on, is if you're the leader, the owner, it can be quite a difficult process for your team because they're going through change, they're potentially threatened. It's about making sure you're selling the process and they're part of it. And it's about actually we're not replacing your job, we're actually going to give you better quality type activity to do. And I think that's a whole argument for AI because the roles of that we're talking about are still quite skilled roles.

Yeah. At the end of the day as well, the employees would need to understand that it's not going away, as you said, it's only going to get moved faster. So for them to be employable anywhere, they need to understand this. So if they're getting an opportunity to learn it from their current employer, then that's a huge advantage for them in their career as well.

Yeah, absolutely. Yeah, I think, yeah, it's guys. So my program is. They were doing it anyway, they'd already realized they needed that as part of their career development. But it's the same for any, any industry building industry is no different. And I think the differences for the younger generation coming through just not a hassle. It's just an automatic way they think and do things.

Yeah, you and I are talking about learning it, but they're, they're way ahead of that. So.

Yeah, yeah, they're already in it. You think, oh, we should go and talk to them and they're already doing it. It's like, okay, at least I ask the question.

Yeah, exactly. We can learn a lot from the next generation. I think to your point, being open to and receptive to ideas from different generations is really important too.

Yeah, no, I think so. Like, I think different ways that like a builder could get around getting up to speed on this. Obviously there's a lot of peer groups going on out there and sharing that is the best way to find out how things work. I think having the right partners, whether that's a software partner or financial partner or accounting partner, that's important to this mix because yeah, I think you're going to see an evolution pretty quickly in some of these areas. One of the things I sort of believe is happening and I've done a lot of strategic planning for some big companies, I sense particularly in the software game, you will see players like us that now start to get a more one end to end solution and as opposed to specialist solution that goes deep, you can use those but in the core processes you, you're probably going to use something that covers a lot of them. A classic example is I. We signed up a builder in Melbourne that could replace six different software solutions or what we gave them and he could do it for a price that was less than just one of those options. So it's, that's what I think is going to happen and therefore it becomes making sure you're on a software platform that where there maybe isn't something catered. It's got good integration, API standards, can use AI and stuff. It's just using modern platforms so that the stuff talks to each other effectively and that's the biggest thing we're focusing on. Okay, we might not be able to solve that issue, but who the heck do we partner with quickly to make it a seamless solving of that problem for a customer? And that's a little bit like the utext to build a price relationship. That's how we've done it. You know, we've both spent eight years. We're not going to go and duplicate each other's functions, but between them it's a really strong solution now.

Yeah, yeah. I'll give a bit of a plug for APB as well while we're there. We're leaning in heavily to this space and for example, every week on a Friday our head of op, head of operations posts an update about something which is happening in the AI space, whether it's just a new tactic or a new tool into our members group. So that's a great example of a community where you can access that type of information. We're partnering with people like builder Price who are at the forefront of this technology too. So to your point, you just got to lean in and learn about it and adopt things and test it out.

That's right. There's enough, say, podcast stuff going around. Just be prepared to listen. Some technologies, it's like, oh no, that's not affecting me. I don't need to worry about it. Listen to a bit and it's amazing what you'll pick up from that.

Yeah, awesome. Darren. Well, really enjoyed today's chat. Anything else you wanted to add or where should we send people next to find out more about what you're doing?

If you go to our websites builder price.com you'll. You'll find us. Just Google search that again. I, you know what I'll do with the link here? Anyone that comes in through a demo here, I'LL link to my site so you can get a demo for me and just you can book a demo on there and we can take you for about 40 minutes, show you how this technology is working and what we're doing.

Awesome. And for APB members, build a price is a rule on the rewards directory as well. So check them out if you want to get a cash rebate. Final question for you. I just wanted to clarify, you just serve Australia and New Zealand at the moment, is that right?

That's right. But we are now starting to look at the US as well so because the technology is going to work just as well there, but we really want to cement our Australian position and then move in. I've got inquiry coming out of the US and we will go there but probably within six to 12 months as opposed to right now. We've got a lot of growth happening in Australia so that's our focus. We're probably the dominant player in New Zealand so we just want to keep expanding country by country now.

Sounds good. Where our US listeners just have to hold your breath for a little longer.

Happy to demo and so you feel for it.

No worries. Well, thanks Darren. Really enjoyed having you on today.

Thanks. Well, great. Great to talk.

Yeah. Also a big thank you to our listeners wherever you are in the world. If you like the show today, please subscribe to Professional Builder Secrets on your platform of choice. Have a great day. This episode of Professional Builder Secrets is brought to you by Apparatus Contractor Services. Apparatus provides full scope, end to end QuickBooks, Precision Construction accounting and CFO services for residential builders. If you feel like you can't completely trust your weekly and monthly financial reports or you feel like you're flying blind, Apparatus Root will rebuild and operate your QuickBooks accounting system and give you precision construction accounting capability you can trust. Learn more@apparatusteam.com or on the APB Rewards Partner Directory.