Running an entire business from smartphones

Stephanie Lloyd's demolition firm works on mobile software.

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(FORTUNE Small Business) -- Lloyd's Construction in Eagan, Minn., might not seem as if it needs flashy phone software. The $9-million-a-year demolition and carting company has been run by the same family for the past 24 years. Lloyd's takes down commercial and residential buildings, then hauls them away. What could be more simple?

That is, if wrangling 100 employees, 30 trucks, and more than 400 dumpsters can be called simple. Coordinating those moving parts is crucial to growing the business - and to saving the sanity of Stephanie Lloyd, 41, who has run the company for the past four years.

Until recently, Lloyd's used a hodgepodge of spreadsheets, paper ledgers, and accounting software on company PCs to keep track of its workers and equipment. It seemed a little absurd to the company's de facto CTO - Stephanie's 17-year-old daughter, Allie.

"Everything had to be written by hand in the logs and then transposed to our spreadsheets," Allie says. The same information was then entered into forms employees carry in the field. "I was like, 'What, Ma, three times for each entry?'"

To make matters worse, the company used radios to coordinate with its workers on the job - and the more cellphone towers that came online in Minnesota, the worse Lloyd's radio reception got. It was time, the Lloyds decided, to drag their company into the 21st-century world of smartphones.

Mobile-productivity software, once the exclusive realm of giants such as FedEx (FDX, Fortune 500) and UPS (UPS, Fortune 500), is now within the range of companies such as Lloyd's. The Apple (AAPL, Fortune 500) iPhone and Verizon (VZ, Fortune 500)'s LG Voyager, among others, offer fast processors, plenty of storage, and positioning technology to track a user's location by triangulating his proximity to cellphone towers. Load them with software such as Verizon's Field Force Manager, and you've got a phone that handles document portability, business automation, record capturing, and invoicing.

Service providers sense they are on the cusp of a new market.

"We definitely see ourselves getting into more managed services for our business clients," says Mike Willsey, director of enterprise segmentation for Verizon Wireless. "It's not about just plain connectivity anymore."

Lloyd's considered a half-dozen mobile-productivity software suites before settling on eTrace, which happened to come from a company called GearWorks based just across town.

Not only was GearWorks local, but its software worked on Sprint Nextel (S, Fortune 500)'s i560 and i850 phones, which are aimed at the construction industry. Lloyd's had already started buying these push-to-talk phones to wean workers from their dying radios. Allie, who also runs the company website, supervised the eTrace installation.

Immediately, there were troubles with technophobic staff. Employees had to be guided up a steep learning curve in order to master even basic features on their new phones. For 18 months two systems ran side by side: eTrace as it was phased in, and the old paper-and-pencil system as it was phased out. Accounting inconsistencies quickly crept in.

"It got pretty confusing," says Allie.

And eTrace gave rise to a delicate labor problem. The software featured integrated mapping and travel data that showed the real-time locations of all company assets. To their chagrin, the Lloyds discovered that those assets were spending too much time parked outside the same lunch spots - ones that were not on prescribed routes. Stephanie was sympathetic to workers' needs for breaks - "we've all worked demolition here," she says - but quickly clamped down on unauthorized ones.

GearWorks' CEO says the challenges Lloyd's faced are to be expected.

"All these products operate under the ominous pendulum of challenge and opportunity," says Todd Krautkremer, 47. "But our software does a good job of letting the customer control that rate of change in the business."

Once the deployment dust had settled, the savings became clear.

The company employs 12 drivers, 22 foremen, and seven office workers who use 41 phones running eTrace. The company buys an unlimited data package for each phone, which totals about $4,000 a month. Add other networking charges, and Lloyd's spends about $50,000 a year for a complete business, accounting, and communications solution. Before eTrace, the company paid an accountant 40 hours a week to do the books. Now that person comes in one day a week for six hours, saving roughly $1,000 a week.

Data entry and job logging by the dispatcher and foremen, Stephanie says, is roughly 1½ times faster than paper and radio. More efficient routing has cut fuel costs by about 30%. And employees have stopped making unauthorized stops. Stephanie estimates a net improvement in performance of 10% to 12%, or roughly $1 million for 2007 - not a bad return on $50,000.

"It really does work," says Stephanie.

"If you have the patience to get it to work," adds her 17-year-old CTO.