00:02From HWHQ, I am Zev Lowe sitting with Bob Swainhart. Bob, thank you for joining me.
00:07Thanks for having me.
00:08Yes, sir. So we are right down the road from the HomeBuilder Summit here at the HousingWire
00:12headquarters. And I was wondering if you could share with me what so far, what conversations
00:17have stood out to you in regards to technology, data, AI, and what those conversations are telling
00:24you about where builders need to focus next?
00:28It's a great question. Obviously, AI is the hot buzzword that the media grabbed onto not
00:37too long ago. And I think that specifically from the builders community, they're looking
00:44to technology providers to maybe give them some answers. They're all experimenting. They don't
00:51know necessarily what's going to work, what's not going to work. I think I saw a keynote speaker
00:57a couple weeks ago. 94% of AI initiatives fail or abandon. Everybody's trying everything.
01:08I think the easy stuff. People are figuring out. I want to ask questions about reports. I want to
01:16create PowerPoint slides. I want to do something that maybe makes me a little bit more effective
01:21in my role. Those are the easy things. I think builders are looking for that transformational
01:30AI initiative that really impacts their business. And that can be difficult. It can be a real challenge
01:38for them.
01:38I think this leads into my next question, which is that ERP systems, they sit at the center of many
01:44builders' operations. So from your perspective, how can builders get more value from, one, how can
01:51they get more information or value from the data that they already have? And then what needs to change
01:57to make that data, to make that information more actionable? Yeah. So again, you know, I think the
02:05builders are looking for like quick wins with AI. And fundamentally, if you're laying AI on top of bad
02:14data, you're getting bad answers and bad advice. And so I think now more than ever, this message that I've
02:24personally been preaching for 20 plus years, which is making sure that your users are good users of
02:29your system, because then the system provides data driven or system driven data for the executive team
02:39to make decisions. Now, if you've got good data, and now you lay AI on that, you don't have to
02:44get
02:45custom reports. I can have a natural conversation with Claude, for instance. And, and, you know, how many
02:52homes did I close in the last quarter? If I owned a mortgage company as part of my home building
02:58operation, of those 100 homes that were closed, how many had a mortgage on them? Oh, 75. Of those 75,
03:06how many were, were originated with a loan from our mortgage company? Oh, 25, right? Like, I can have
03:14those answers quickly from from an AI conversation. But if I don't have good data, then I'm not going
03:23anywhere, right? Like, I'm just going to make bad decisions based on stuff that is is false to begin
03:30with. So what that ultimately means for companies that have ERP platforms is it's more important now
03:38than ever to have your users using the system effectively, so that the leadership team can rely on
03:43the data that the system provides to make what I would say are real time or near real time decisions.
03:49And then, and then this environment, where markets maybe change on a weekly basis, you know, there's
03:57tariffs are here, tariffs are not here, whatever the particular variable is, like, those are changing
04:05rapidly. And the leadership team needs to be able to turn on a dime, which means that if you're going
04:11to
04:11make a decision, you want to make a good one. And so it's got to be based in reality.
04:16How do you see that relationship, or those relationships between the systems and the data
04:23and then overlaying AI on to that? How do you see those relationships changing in the next few years?
04:32And what do you think will be a key indicator for the for builders and for organizations that have
04:38really, you're talking about now this kind of like sense of urgency that have invested, and they've,
04:44they've cleaned up their, their, their, their data harvesting, and they're overlaying the right AI.
04:50Now, when do you think you'll start to see people pull away from the pack?
04:55Yeah, so we're, we already see it, um, a little bit with people who are really focused on good data,
05:03and they have mandatory use of the keyboard for their systems. And so they're, but they're, um,
05:10you know, they've got an army of people that are managing that data to make sure and creating reports,
05:16et cetera. With AI now being a reality, you're, you're talking about being able to, um, you know,
05:25ask questions, get answers much more quickly than you ever have in the past. I think the next step
05:32is your data is clean. You're, you're able to query, um, query your data, get the answers you need to
05:40make decisions. I think the next step in, in, uh, you know, kind of the life cycle of the, the
05:48AI
05:48reality is that you're going to see people start producing workflows, right? So we're already talking
05:55about in our system, like I'm a construction manager out in the field and I've got a mobile
06:01device and I want to create a variance purchase order because I've got, you know, a broken window
06:07in the kitchen. And so, um, I'm using my phone and I'm typing in a bunch of stuff to get
06:13a variance
06:14purchase order. How about I just talk into my phone and just say, Hey, I need a variance purchase order
06:19on lot eight, 15 wild dunes or whatever. And next thing you know, it automatically creates. So,
06:25so you'll start to see workflows that enable people to be more efficient, um, in their jobs that continue
06:33to feed the data. You know, I, I had a conversation with somebody recently and they were talking about,
06:39um, you know, creating this vibe coding, this AI, uh, solution for warranty. And, um, they did it over
06:50a weekend and it was really good and it was great. And all this data, you know, pictures and anything
06:55that they could capture was maintained in an Excel spreadsheet. And I'm like, yeah, but you don't
07:03even know what your actual margins are on that house because it's not in a system that you can
07:07report on. And if somebody says, Hey, let me see a picture of that. Like you got to go into
07:13some Excel
07:13spreadsheet to try and find the photograph or, Hey, how are my vendors performing? Which ones are
07:20actually costing me money. Oh, it's not in the system. I've got to go actually do some kind of
07:25manual creation of a report to give me vendor performance instead of it being driven by the
07:31system. And so, you know, one of the, one of the real risks for builders is taking on an AI
07:39initiative
07:40with the wrong partner, which makes a mess for the future, right? Like that's, that's a real risk
07:45that they face because everybody and their mother is out there today suggesting that they've got AI
07:51capabilities and they can vibe code, something specific for a builder. Um, 10 years from now,
08:0099% of those companies won't be around. And so, uh, you got to pick the right partner. You got
08:06to have
08:06a trusted partner who is very strategic and stable and, um, aligned with you from an innovation
08:13standpoint, always doing things that are good for the industry. Right. I got, I have one last question
08:18for you and, uh, it's really just to underscore something that you've touched on in every answer
08:25so far. So I know that you'll be repeating yourself here, but again, I want to restate this just for
08:30clarity. Uh, any organization that is, uh, serious about this, uh, you know, effective immediately,
08:36what should be their first step? Well, I think the first step is making sure that their system of
08:43record is being utilized correctly so that, um, they can, they can trust their data and then
08:52they can start making real strategic, uh, decisions about what they're going to do operationally to
08:59improve. Right. Prioritize clean data. Yeah. If you, if you don't start there, don't even bother.
09:05Right. Excellent. Thank you so much. Thank you. Thanks for having me.
