Rishi Srivastava (00:01.08)
Today, our guest is Emanuel Falaguerra. Emanuel, welcome.

Emanuel Falaguerra (00:06.974)
Thank you, Rishi. Great to be here.

Rishi Srivastava (00:09.912)
First section is on your background and perspective. You've been in construction tech for 20 plus years. What's one thing about the industry that hasn't changed despite all the new software?

Emanuel Falaguerra (00:22.494)
Yeah, software has definitely gotten to be plentiful and there's still an amount of interpretation that has to be done that software doesn't quite always handle. you still need to know how much of the job is left, what are the costs, where are we in the process and things like that. And that doesn't necessarily come from a product. That's really the interpretation of your team that's coming up with that.

Rishi Srivastava (00:49.934)
Yeah, I was talking to an owner and she was telling that anytime there is a law, the agencies, they write the interpretation and she has to do interpretation of interpretation.

Emanuel Falaguerra (01:06.078)
And that's tough enough.

Rishi Srivastava (01:07.694)
You've seen the evolution from early systems to modern SAAS Has construction actually gotten more efficient or just more complex?

Emanuel Falaguerra (01:21.064)
There's been pockets where they've gained some efficiencies, but for the most part, the construction industry has kind of lagged behind.

in adopting technology and getting it to really work for them. Yeah, the work has gotten complex, that's for sure. But there's a lot of tools out there now in this arc, you know, since then to kind of meet that demand. But it's about preparation before you get to the product. know, before you pick a system, probably good to go and look at what your process is and how is that going to work with the system you have or how will that system support you.

in that.

Rishi Srivastava (02:01.319)
There is only one industry that is behind in adopting technology compared to construction, is agriculture.

Emanuel Falaguerra (02:08.828)
I'm sorry, what was that?

Rishi Srivastava (02:10.613)
Agriculture is the only industry that is behind in tech adoption compared to construction.

Emanuel Falaguerra (02:15.93)
It is. Yeah. Yeah, it's pretty far. It's far behind. There's a gap between construction when you get into other finance industry and manufacturing. They've really done a lot with technology. But yeah, construction seems to struggle with that a little bit.

Rishi Srivastava (02:36.737)
Yeah.

You choose to stay in construction instead of moving into more quote unquote modern tech sectors. What keeps you here?

Emanuel Falaguerra (02:48.562)
You know, I saw the need, you know, in the early days, the gaps from the systems that were there and the lack of preparation. know, construction was kind of trying to figure out what to do with technology, how did it fit. You know, in those early days, there was a lot of opportunity to build interfaces. That's a lot of the work that I had. There's still that, you know, there's still some of that because not every system or systems are going to fix everything. So there's always going to be gaps somewhere. The important part is to identify

those, you know, and then try and find a way to make them in the process more solid.

Rishi Srivastava (03:25.965)
Yeah, even someone like me, I was an engineer at Bank of America until 2022. And I was like, which industry should I go to where this technology needs to be implemented? And I was like, yeah, construction sounds like the right fit.

Emanuel Falaguerra (03:40.776)
Yeah, right. And I think, you know, not for them not trying, they really haven't had the opportunity to benefit from what technology can do. That's the big opportunity that exists for construction, in my opinion.

Rishi Srivastava (03:56.536)
Yeah. the market is very fragmented too. bunch of private equity led software companies are leading the charge. And one complaint I have against private equity led companies is that they don't like to innovate. They just like to keep making their consistent revenues.

Emanuel Falaguerra (04:16.082)
Yeah, right. They're not concerned about whether the product is the right fit or whether or not they've done their due diligence to make sure that the company is using it right and properly. They just want to get their money and run, basically.

Rishi Srivastava (04:32.971)
Yeah, and milk the cow for as long as you can. Don't try to invent anything. There's so many companies that are sitting on software packages from 1990s.

Emanuel Falaguerra (04:45.288)
Yeah.

Rishi Srivastava (04:46.869)
That's insane.

Emanuel Falaguerra (04:48.218)
It is, yeah. Well, you know, guess there is a lot of that in the industry, in the construction, you know. But they're starting to make that change, you know, going from those client server products, you know, some of the older ones that have been out there like Sage and whatnot. That's a big…

lift for them, know, to take all that they built all of those years and now bring that into, you know, SAAS or, you know, cloud service. That's quite a bit of work. So, but they're, you know, they're getting there. Sage's got intaact and whatnot. the technology is definitely advancing very well. That's, that's short.

Rishi Srivastava (05:24.449)
Yeah, even though they have the newer product, like how do we move these companies, these construction companies from this old product like Sage 100 to newer stuff, let's say Acumatica. It's like that transition itself is a nightmare for these companies.

Emanuel Falaguerra (05:34.76)
Right.

Emanuel Falaguerra (05:39.282)
Yeah, one of the problems too, if they were able to first step back…

take a look at the process, what's going on with the current system, right? Where doesn't it work for us? Where are the gaps? Where are the holes? Who owns this? Who's taking care of that? But they go and they read the feature list or they're presented a feature list of a product and like, yeah, we needed to do this, that, and that, but then they don't come to the table with this is our process. How does that actually work in reality in the real world?

Rishi Srivastava (05:49.047)
Mm-hmm.

Rishi Srivastava (06:09.1)
Mm-hmm.

Emanuel Falaguerra (06:13.502)
That's where I've seen people get kind of tripped up, you know, and then you're scrambling to go back and, you know, fix that gap or, you know, optimize the software to make it a little bit better.

Rishi Srivastava (06:24.456)
Yeah, Also, the sales driven nature of this industry, it's like sales people that are out there just to sell something quick and walk out of the door. And when it comes to implementation, it's like, do we really sold that? Did we really sell that?

Emanuel Falaguerra (06:41.427)
Yeah.

They don't want to pick up the phone and take the call and be like, this isn't doing what you said it would do or whatever. They're just going to move on to the next. That's it.

Rishi Srivastava (06:53.036)
Exactly. So I think that the differentiation, like the split between sales and delivery is kind of a big problem as well.

Emanuel Falaguerra (06:59.87)
Yeah, I agree. They're not helping. Let's put it that way. They aren't really helping the situation. I think there's an opportunity for a sales organization to build a strong relationship with a company if they help that company do their due diligence to really get the most out of the system. There's expectations. I think that some companies, in my experience when I've done implementations in the earlier times,

Rishi Srivastava (07:19.008)
Mm-hmm.

Emanuel Falaguerra (07:28.67)
they really just were expecting that the software is going to fix the problem. And all we need to do is implement it.

Rishi Srivastava (07:34.23)
Mm-hmm.

Emanuel Falaguerra (07:36.595)
You know, and then there's a bunch of reality that comes into play like, I got to, I got to have all these meetings and give all this process up about how it's going to work. then you're chasing those people to get their time when they don't already have the time. They're so busy, right? They're, everybody's got so much to do. So that's one thing I encountered a lot is the focus of the companies when they're implementing these systems, they're really just tell me what to do instead of here's what I needed to do.

Rishi Srivastava (07:52.577)
Yeah.

Emanuel Falaguerra (08:06.768)
Here's how it needed to function and then get that validation from the vendor You know that okay, we can definitely handle it or here's how we handle it Is that okay if it doesn't work that way then either another product or this is a sidebar that we're gonna

We're going to fix that gap with some other solution. Not everything is a software solution. Sometimes there's a process, a manual process, and it happens. As long as everybody knows what it is and whoever owns it does it. They all play a very important role. It isn't just the software. The software by itself really doesn't do anything. It's about how you design it and then how you use it and how you fit it into your organization.

Rishi Srivastava (08:32.193)
Yeah.

Rishi Srivastava (08:54.156)
very well said. The next section is the core problem, chaos and implementation. You described the industry as quote unquote chaotic with too many tools. What does that chaos actually look like inside a typical contractor?

Emanuel Falaguerra (09:12.242)
Yeah, you know, chaos to me was that I would see…

Working with a client, I'm there to solve one problem, then hear about, we got this, an example would be a PM initiating on their own, getting like a toolbox talk app or some kind of field app that they're going to use. there's no discussion about how that fits in the process, what that person is doing with the information. So it's the beginning of a silo. It's a fragment. And nowadays, like you're saying about how the

vendors are very eager to sell their new tools and products, then the grab is, look what this can do. And right away they're going and they're going to purchase that and now the CFO is looking at the subscription, you know, dollars every month. It's like what are all these software tools we're dealing with? know, that it's a kind of chaos but it really is an indicator that you have another problem.

Rishi Srivastava (10:05.078)
Mm-hmm.

Emanuel Falaguerra (10:14.308)
And that means your communication and your process hasn't been well defined. And you don't really know yet how to integrate that with the tools that will make you do better. It isn't just buy whatever and then see how to make it work. It's what do we need it to do? What is the best product to make that happen?

Rishi Srivastava (10:34.208)
Yeah, You know, construction, you look at the field, it's like complete chaos. But the software world or office world doesn't have to be as chaotic.

Emanuel Falaguerra (10:47.14)
I I agree. It could definitely run more smoothly. I see that over and over again with the clients I work with.

It's an innocent kind of way that it evolves into that. People come in, they inherit what's already there for a process. No one's really questioning it. So they just proceed that way. And then just things get to a point where they're like, OK, what's the mess we have now? maybe we need new software to fix these problems. And then they take that problem and they move it into a whole new system and then carry it forward.

Rishi Srivastava (11:23.484)
Yeah. Why do so many construction companies buy software but fail to fully implement it?

Emanuel Falaguerra (11:31.581)
Yeah, that goes back to the idea that they think that it's about the features first before their process. That's kind of where the failure happens. It's not even in the implementation. It happens before they even start because they haven't defined their process. really, that's time and again, and the numbers still bear this out in the 30 years that I've been doing software.

time frame, you're still looking at a 55 to 75 percent unsuccessful or failure rate in meeting the objectives of the system. And that's stunning to me in all these years and that hasn't changed. it's so funny the simple little fix to that or one of them is to really get a good solid process baked before you start implementing software tools.

Rishi Srivastava (12:10.687)
Mm-hmm.

Rishi Srivastava (12:15.84)
Yeah.

Rishi Srivastava (12:29.319)
Yesterday, I had a first customer meeting with Prospect and I was trying to understand their process and their systems. And I spent like 45 minutes and at the end of the discussion, the owner tells me, I thought you were going to give me a demo at minute one. I was like, man, I'm trying to understand your process and show you what makes sense.

Emanuel Falaguerra (12:54.12)
That's so right. That same thing. They look at me like, I thought you were going to give us a demo. like, no, I've to know what you need first. That's spot on. You see a lot of that.

Rishi Srivastava (13:04.426)
Yeah.

Rishi Srivastava (13:09.131)
expectation is kind of backwards, right? I mean, your system, your processes, you've been doing it for 10 years and you want this new software to kind of give you a demo that's kind of going to be changing everything in your process or organization. Even though I, as the person who's going to demo this product, I don't even know your process.

Emanuel Falaguerra (13:25.937)
Mm-hmm.

Emanuel Falaguerra (13:31.986)
Yeah, right. I'm going to show you. that's it. That is that whole feature thing. That's the, well, show me the features. What does it do? And then that is where it all goes and falls apart right from there.

Rishi Srivastava (13:44.425)
Yeah.

Rishi Srivastava (13:47.943)
What do most companies get wrong when evaluating new technology?

Emanuel Falaguerra (13:53.417)
think you know kind of hit on that that they're they're they're leading with features and not their process you know and in fact going back to what I said too is sometimes they get to a point with the system or their processes that are so dysfunctional or disjointed that they think it's another system that's going to fix the problem a lot of times if you go back to your

figure out your process and lay that design that piece look at the systems you currently have how can they be optimized to work that way you may not have to go through a whole disruption of getting a new system you you might just what you have might be good enough because even if you've upgraded to something new right if you're talking about the older systems it's better to probably move into something more current but

If you are in a more current system and you're still having problems, really more important, in my opinion, before you start shopping around for something else, is take a good hard look at your process and then find ways. Talk to the vendor. They have plenty of consultants. They can probably help you optimize what you're currently doing and get better results.

Rishi Srivastava (15:04.287)
Yeah. In the same call where I was talking about their process, at the end of it, it came out that they needed a stronger integration between their PM and accounting system. I I ended up recommending a bunch of things that our product doesn't even do. Hey, you got to figure out which field you are connecting this Procore with in your accounting system. It's not the unapproved, the transaction entry field that you need to connect.

Emanuel Falaguerra (15:31.678)
Yeah, and the consistency of that information flowing. I've seen that trip up companies too. There's no communication about when the order should get into Procore. When is that interface going to hit? What information is going to come over to the system so that you can know and relate back to those orders, if you will, or the change orders.

Rishi Srivastava (15:46.805)
Yeah.

Rishi Srivastava (15:53.664)
Yeah. You know, the source of truth, you think about it in construction companies, the PMs have a different truth versus accountants. You know, it's kind of so strange.

Emanuel Falaguerra (16:02.492)
Yes.

Yeah, right. that is part of the problem, right? The PMs, they're a little bit, I don't want to use that, alienated might be strong, sometimes they're the ones grappling with the tools to try and get the information they need and the requirements so they can get their WIP report or whatever reporting they have to do. And they become…

Rishi Srivastava (16:25.131)
Okay.

Emanuel Falaguerra (16:28.862)
the ones that end up doing the workarounds and start building those silos because the accounting system just isn't giving them what they want so they're going to track everything over here. I feel for them in ways that sometimes their job is a little bit harder than it needs to be, I think.

Rishi Srivastava (16:45.333)
Yeah, the systems are complex too. And there's so many vendors and so many of these systems don't talk to each other.

Emanuel Falaguerra (16:51.535)
yeah, right, that's truth, yeah.

Rishi Srivastava (16:55.359)
What's the real cost of a failed implementation that CFOs don't fully appreciate?

Emanuel Falaguerra (17:01.746)
Yeah, you know, there's a drag on the system. There's an organizational drag when the system isn't implemented right. And that cost is revealed in ways of productivity issues, poor judgment and decisions based on wrong information, delayed decisions based on missing information. it isn't so much the cost of the system, although some of those can be kind of crazy too, but

Are you optimizing? Are you using it to its fullest potential? So that, I think, is an area companies can definitely work with.

Rishi Srivastava (17:35.723)
Yeah, actually, one thing I have actually observed in the last three, four years, some of these consulting companies in construction, they're also very far behind in their processes. They show up with these inefficient processes and the stuff that needs to be taking ten hours it takes 100 hours to do.

Emanuel Falaguerra (17:44.03)
Hmm.

Emanuel Falaguerra (17:52.614)
Yeah, and no one questions that enough or some do, but then the response sometimes internally is like, well, we've always been doing it this way. So this is our process. So yeah, change is hard. It takes time.

Rishi Srivastava (18:01.865)
Yeah.

Rishi Srivastava (18:06.056)
Yeah. And, and you and I both know the software world has changed a lot. And a lot of these companies, I'm not necessarily talking about construction companies. I'm talking about construction software consultancy from companies. They have not changed their processes. You know?

Emanuel Falaguerra (18:23.175)
You think that their software is not as aligned with those processes too? that?

Rishi Srivastava (18:28.906)
So I'm thinking about companies who are migrating, let's say, these construction companies from one ERP to another ERP. I mean, their processes are pretty bad too. Like things take like six months to do. I mean, these migrations are so painful. And there's one reason the construction companies are stuck in 90s is because these migrations are painful. And the consultancy companies have not evolved. And they're like just as far behind as construction companies themselves.

Emanuel Falaguerra (18:36.317)
Very good.

Emanuel Falaguerra (18:41.755)
Yeah.

Emanuel Falaguerra (18:59.453)
You're right, that's a good point. The migrations, I've worked a few of those, they're brutal. They do take time and they can slip six months or longer and sometimes you're still doing cleanup after the fact when you're done.

Rishi Srivastava (19:15.786)
The next section is WIP and financial truth. This is your strongest section. You've spent the last decade focused on WIP. Why is it still such a persistent problem?

Emanuel Falaguerra (19:33.822)
know, WIP is the kind of process that sits between, you know, all of the data, the system, and the process. And that one revealed when the WIP is hard, that means you have problems in other places. So it's not really a math problem. It's an alignment problem.

You don't have your process aligned to produce the WIP easily. I think that's what I've seen to be the biggest struggle.

Rishi Srivastava (20:06.312)
There's a lot of judgment calls in there too in WIP. It's not necessarily like a past report. It's also looking at the future.

Emanuel Falaguerra (20:13.435)
That's right. And that note too, what's important is the quality of the information that that WIP is going to produce because that is kind of related to the quality of the decision you're going to be able to make. And I don't know if enough credence is given to the importance of that, you know, what it takes to get that WIP report together. So the information isn't

What you're scrambling, like, we finally got the whip done, now we can move on to our next task, because the exercise is about understanding where everything is, where are the projects, what is the health of all of this together, what's our cash flow look like, what's our backlog like. So there's a lot of pieces that come together and there's a lot of important pieces that matter when it comes to the WIP you know, in that whole process.

Rishi Srivastava (21:05.876)
had a speaker previously on the podcast and she said WIP is one of the three main reports and she called WIP as one report to rule them all.

Emanuel Falaguerra (21:19.965)
I think I would agree with that. That's true.

Rishi Srivastava (21:23.05)
Where does WIP usually break? Data quality, process, or ownership?

Emanuel Falaguerra (21:31.582)
I think there it you can start with ownership on that because that kind of trickles down from there going back to you know who owns what information and is there consistency in that information being collected disseminated reported on so I think I've seen a lot of that I've run into people who's supposed to enter in these change orders or you know

Where is that purchase order that I had given? Did anybody enter that and things like that. So there's a big scramble come if you're doing it on a monthly basis. I see I've been involved in those situations and there's just a lot of people trying to figure out what's going on in that moment.

Rishi Srivastava (22:19.197)
Yeah, know, ownership is kind of very important. Who owns the project?

Emanuel Falaguerra (22:24.381)
Right, you I think, you know, that is a, you should work that out internally who's going to own that process, you know, and this should be very clear that where that trail is, what is the chain of command, if you will, for getting to that ultimate, you know, production of the WIP

Rishi Srivastava (22:38.354)
Yeah.

Rishi Srivastava (22:49.277)
Yeah, and even the project management system, you think about it like they're recording the history, you know, they're not like real time systems. According systems, let's say they're like reporting, you know, know, archives, but like even project management systems, are not real time systems.

Emanuel Falaguerra (23:06.705)
Yeah, they are information systems, You're storing information and the idea, the goal of that too, is you want to produce actionable information and reports. The systems are there to support all of the efforts and work that you're doing in the hope that now that you've collected all that data, you're going to be able to make some good decisions based on that.

Rishi Srivastava (23:36.081)
Yeah. How do multiple quote unquote source of truth, let's say ERP versus PM tools distort financial decision making?

Emanuel Falaguerra (23:48.016)
I they distort through the multiple processes.

It's an alignment issue, again, going back to do we have our process right? And you can have multiple sources of information, those multiple sources of truth that somebody has an Excel spreadsheet here or something there, but that just really is a symptom of the problem that they don't have a consistent process in place and they don't have that communication going and ownership in place to make all that happen.

Rishi Srivastava (24:26.641)
Alignment is such a big deal. Even in AI, know, this Anthropic CEO, Dario Amodei, he keeps calling about alignment of AI with what the real world needs.

Emanuel Falaguerra (24:36.497)
Mm.

Yeah, and on that too, it's the alignment, because AI is going to sit on top of all those systems, you know, and if they're not aligned, AI is going to not really be able to fix that, you know. It's not the judgment piece, you know, that's the thing, that the judgment and interpretation comes from the individuals. AI is there to help you amplify that, for good or for bad, really.

Rishi Srivastava (25:07.869)
Yeah. What does a high functioning WIP process actually look like in practice?

Emanuel Falaguerra (25:15.869)
I'd have to say, know, you would want to, I think, the ones that I have seen and the meetings I have sat in, everyone knows that the meeting is going to happen on a particular date, for instance. So there's clear communication of when accounting is going to close and what the expectation is.

Everyone has a role in terms of the reports that everybody's going to review, who's going to be in that meeting all of the time. That's a consistent piece too. And, you know, with that, you're going to get the result of that meeting when it's consistent, well,

well designed as far as having information available and someone is owning and running that meeting so that it stays on track with the goal being again like I said before to make sure that you know the health of the jobs that you're working on. That's kind of the key thing. Where do you stand in this month? What looks like is going to be a problem? Those are the important conversations that we'll be to have at that moment.

Rishi Srivastava (26:31.497)
If a CFO feels like their WIP is unreliable, what's the first thing they should fix?

Emanuel Falaguerra (26:41.213)
Yeah, they have to look at that ownership and process and go and start to build in that consistency and those guardrails, if you will, collecting the data. You don't need a perfect data set for it. You really just need a good, well-communicated process that repeats the pattern of consistency. And this way you'll get a much better result with that, too.

Rishi Srivastava (27:10.569)
It's really hard to know the absolute truth about the health of the project. So even if you can get to like, let's say 80 % or 90%, I don't know what that number is, but it's good enough. But like if you're like a 10%, then that's a problem.

Emanuel Falaguerra (27:25.284)
Hmm. Yeah, you know, the two metrics, yeah, I mean, it's going to take a little while. I think the curve is like after 20 % in, you know, you're kind of at that point, I think also looking at labor for the most part, you know, once you buy out all your materials and things like that, then you're really monitoring the project between that 20 and maybe 80, 85 % before you get into closeout. But

That's where you're going to be able to affect things. If you're able to watch that process every month, then you're going to see things coming because your information is well presented to you, and then you can make adjustments going along.

hopefully, at least ward off any problems that might come up. communication is really important. I've seen that work very well in these meetings with people. When they start talking about what's happening on the job site, it starts to give more context to what's happening. And it could be like, well, we had to delay shipment. the prior subcontractor, their stuff was delivered soon. It was in our way. We had to…

Now move that and now we lost half a day's work or something to that effect. in terms of that communication, all across is very important.

Rishi Srivastava (28:52.488)
By the way, you're also working on a software product for WIP You want to say something about that?

Emanuel Falaguerra (28:56.369)
Yeah. Yeah. It's I've been investing the time in really digging into this process. And this is some of the revelations I'm having and seeing. Well even just the repeat pattern of ownership and data process and processing and whatnot. So.

I decided that I've worked with a couple of controllers over the years, the past 10 years, and I decided to take a shot at it. And I'm getting close now. I'll probably be ready next month to start releasing it. But the goal here, I really wanted to solve the problems of that gap of WIP to really be able to kind of…

force, if you will, a process that will guide them and help them get it done in more reactive instead of proactive way. yeah, that design work has taken a little while, just a lot of the research. I've been playing with scenarios and the like. So I'm excited about it. I'm getting kind of pumped up.

Rishi Srivastava (30:14.856)
The next section is on software, ROI, and industry reality. You've questioned the ROI of some construction software. How should companies actually evaluate whether a tool is worth it?

Emanuel Falaguerra (30:31.761)
Yeah, the products today, they're delivered with the idea that if you fully utilize the system, you're going to get an ROI on it. will pay you

And then if you go back though, what's happened is because they didn't come with the right process and they struggled in their implementation, now they're looking at the software and it's not performing well for them. So the ROI isn't necessarily the product, it's about your process. Making that process tight and with accountability, then…

really everything just kind of flows from there. It's upstream where all the work has to happen in order to get the products and everything else to flow.

Rishi Srivastava (31:21.256)
Actually, I keep going back to construction tech companies and you know, when a company is led by purely salespeople, know, the kind of product usually comes out that's not very good. You know, the product doesn't have a soul. You know, if the company is led by a product person, it's a different product.

Emanuel Falaguerra (31:42.599)
Yeah, that's true. Yeah, I agree. Yeah, I can't think of examples right now, but yes, I have seen some products that really just, promise a whole lot more than they deliver.

Rishi Srivastava (31:56.605)
Yeah. Why is there such a gap between what software vendors promise and what companies experience?

Emanuel Falaguerra (32:04.335)
I think we touched on that a little bit too. I think it's a combination. There is a responsibility for the customer to know their process well and then be able to evaluate systems that are out there. But I also feel that, like I said earlier, that I think the vendor can play a strong role and

lead these people into defining the process instead of pulling them into an implementation and then pushing them out on the other end and say enjoy the product. I think there's more value if there's a little time spent working with that. That's the role a vendor could play that I think would be tremendous value right now for construction. They could really use it to be honest.

Rishi Srivastava (32:55.516)
Yeah, and a lot of people who are evaluating the software, they don't do a good job of evaluating it too, like the construction, finance, or ops people.

Emanuel Falaguerra (33:04.381)
Yeah, yeah, but sometimes, you know, they just getting things into the system to get them in there and, you know, no one's really checking on the work to see if it's being done right or optimally.

Rishi Srivastava (33:19.91)
The last section here is future plus practical advice. Also, this is the last question, Emmanuel. Looking ahead three to five years with AI integrations and data, what actually changes in construction finance and what stays the same?

Emanuel Falaguerra (33:41.805)
know, AI in three to five years is still going to need that process underneath it.

So instead of creating clarity, if you add AI now before you've done your process, you're just going to get more confusion in that. I think in three to five years, unless something changes with the way that construction companies and the vendors get these people up and running on the systems, AI is definitely going to just amplify the issues that you have.

If you're company that has a good process and a well implemented system, AI is going to really help your business a great deal. You'll be able to take the information you have and then really amplify it to the point that you can make great decisions. I think we don't need more, there isn't more tools that are necessary, there's really just more focus on process and getting that down.

and then go ahead and jump into AI after that.

Rishi Srivastava (34:56.275)
Yeah, at least in our world is changing things a lot more than, you know, and construction, finance, or software is kind of the easiest thing to automate. it has automated so much of software.

Emanuel Falaguerra (35:08.349)
It's true. It's very true. And that's the myth. The construction companies need to really… I don't know how I can… I've tried to find a way to put this, but in the years that I've worked with construction companies, they've almost not… They don't know what to do with the software.

They're told they need to have software and technology and they try to implement it, but I think they missed the bigger picture of how it is a tool that works for you. How you can design it, if you will, to really boost your business.

I hear lot of complaints about software and the cost and it doesn't work right, etc. But that isn't necessarily the software in every case. It's just got to do with the process in the background.

Rishi Srivastava (36:09.521)
Yeah, also the people who are operating it sometimes they're not knowledgeable enough. You I was listening to this anthropics engineer and he was saying like all these agents, you will not know how to operate them unless you start thinking like agents. So it's kind of weird.

Emanuel Falaguerra (36:24.509)
Yeah.

Yeah, that is. Yeah.

Rishi Srivastava (36:32.423)
you

Emanuel Falaguerra (36:33.849)
You know, the one thing, just thinking on that too, but there's a certain kind of governance or maintenance that should happen with software after the fact too, right? So once you have it, it's not, okay, it's configured, we're using it every day. There needs to be people that are subject matter experts internally, right? That they can keep the system going, make sure it stays true. You know, I think that

That's another area where construction, and I think other companies as well, I think it's probably broader, they don't make that investment internally. They purchase these systems, but they're not set in and forget it. They really need to have some kind of stewardship that says, this system is working for us, something changes in the process, who's responsible for…

you know, making sure that the system is utilized optimally for that because that's how, you know, that's how the garbage in starts to happen, you know. It's that something else comes up and then somebody makes their own judgment call and then now you're distorting your data.

Rishi Srivastava (37:48.273)
Yeah, so well said. One thing I've noticed is like these systems tend to have like thousands of knobs. You can turn this off, can have this, that. Suddenly like all these knobs, you really don't know which knob to turn on and which knob to turn off, you know?

Emanuel Falaguerra (37:55.133)
Yeah.

Emanuel Falaguerra (38:02.237)
Yes, I know. I'm laughing because that, you know, I sometimes wonder about that too. I'm like, you know, somebody should have said stop a while ago. There's just too many options here.

Rishi Srivastava (38:15.303)
Yeah, it's very configurable, but it's a nightmare to configure.

Emanuel Falaguerra (38:22.173)
Exactly. so you have to… and that is really kind of a thing that's gone on in the whole evolution of software because they were very rigid in the beginning. They were very task-oriented. It was accounting. You you enter in your invoices and do your checks and now, you know, it's so much more complex. You know, there's so much more going on. So, I don't know.

What train slaughter?

Rishi Srivastava (38:53.691)
Yeah, So three to five years from now, how would construction work look?

Emanuel Falaguerra (38:57.437)
Yeah, three to five years. I think.

Emanuel Falaguerra (39:05.467)
Yeah, think they will start to benefit from AI. Again, I still think they need to do more work in being prepared for AI, you know, and making that effort to say, let's take a hard look at our process and let's, you know, stress test it and figure out where the problems are. And because as soon as you put in AI on top of

any kind of mess you have, going to amplify it. trying to roll that back and then try to fix everything and go forward, it gets to be a daunting task. Easily overwhelmed, you know?

Rishi Srivastava (39:49.479)
good points there, Emmanuel. It was a pleasure talking to you, Emmanuel. Thank you for coming on to the show.

Emanuel Falaguerra (39:55.261)
Thank you