How to Measure the ROI of Construction Software

On a recent episode of Billing & Chilling, Dan Wies, President of Wies Drywall and Construction, told us that he gets maybe one chance every two years to roll out new software across his company. If he spends that chance on the wrong tool, it costs him far more than the subscription, because the next rollout becomes that much harder to sell to a team that’s already been burned.

It doesn’t help that picking the right tool gets harder as the options multiply. BuiltWorlds tracked $3.96 billion in built environment venture funding in the second quarter of 2025 alone, roughly 68% of which went to AI and machine learning companies, and 61% of firms in the AGC and Sage 2026 Construction Hiring and Business Outlook said they were using AI or planned to increase their investment in it, up from 44% the year before.

You’d expect that more options would make the right tool easier to find. But for most subcontractor finance teams, they’ve made the decision harder because every vendor promises time savings and very few explain how you’d verify them. Claire Wilson, Siteline’s co-founder and CEO—and the podcast’s host—asked Dan how he sorts real value from good marketing. She put the same question to brothers Andrew and James Baumgardner, the CEO and CFO of The Baumgardner Group, in a later episode. 

I’ve combined their answers with the vetting process in our software selection guide to give you a practical way to judge whether a tool will pay for itself.

1. Name the bottleneck before you take a demo.

Claire tells contractors to go into trade shows already knowing which bottlenecks they’re trying to solve, rather than gravitating toward whichever tool looks cheapest or easiest to implement. Without that focus, you can’t really measure ROI because a return only means something against a specific problem. You need to define that problem clearly enough that you could tell whether it went away.

In practice, that means auditing the workflow you want to fix before you book a single demo. For a billing team, the audit might cover:

• the hours spent building pay apps each month, 
• how often those pay apps get kicked back, 
• how many lien waivers you chase each cycle, or 
• how many days your receivables sit past 60. Whatever you measure becomes your baseline. 

You’ll test every vendor claim against that number, and you’ll come back to it once the tool is live.

2. Do the math in hours.

Dan evaluates software the way most contractors would: by the hour. When he considers a new payroll solution, he asks how many hours a week it would save the team running payroll, and then he compares those savings with the monthly cost. He also asks whether the tool would eliminate a duplicated process somewhere else in the business, because some of the biggest savings come from steps nobody realized they were doing twice.

The Baumgardners take the same approach, and it has kept them from buying tools that may sound impressive but ring hollow. For example, when they looked at an AI contract-review tool, they estimated it would save about 20 minutes on each of the roughly 100 contracts they handle in a year. That adds up to about 33 hours, which at any reasonable labor rate is worth nowhere near the tool’s $10,000 annual price. So, they stayed with what already worked: an experienced team that knows what to look for, plus Ctrl+F.

To put a number on it yourself, subtract a tool’s annual cost from the annual value it creates (hours saved multiplied by a loaded labor rate, plus any measurable gains in cash flow or accuracy), then divide by the annual cost. Make sure the cost side also includes implementation, training, and the internal hours your team will spend getting up to speed.

3. Put a price on change.

Time savings on paper don’t always show what it costs to get there. Every rollout draws on the same people, and a team that keeps absorbing new systems eventually wears out. “If something’s got a slight ROI on it, but people are getting fatigued by the amount of change we’re throwing out, we’re probably not going to do it,” the Baumgardners explained.

Dan treats rollouts as a scarce resource for the same reason. Because he gets so few of them, a tool that offers only a modest improvement uses up a chance he could spend on a bigger problem. He’s also candid that productivity usually drops before it rises. When he knows an implementation will be hard, he tells his team plainly that it’s going to be rough at first and much better once they’re through it. 

That expectation matters for ROI, because the numbers you collect in the first month will reflect the learning curve far more than they reflect the tool.

4. Count the value that won’t show up as a line item.

Claire raised a fair objection during her conversation with Dan. Hours saved for a salaried controller or billing specialist won’t turn into cash unless you plan to cut that role, so how do you count them? Dan’s answer was that there’s always more his team could be doing, and that reducing stress is a return in its own right, especially since replacing an experienced employee who leaves is expensive and slow. “If they go home and they are frustrated with it,” he said, “I’m not improving their life.”

So score the intangibles alongside the tangibles. Ask what your team would do with the recovered hours, whether someone could finally take a long overdue vacation, and whether the tool makes you less dependent on what one person keeps in their head. 

Billing software in particular should be held to a harder number, too—cash. If a tool helps you collect faster, compare the value of those days against your borrowing costs, the line of credit you lean on to make payroll, and the work you can afford to take on.

5. Vet the vendor as hard as the product.

Dan vets most software personally, and he asks questions most buyers wouldn’t. On the technical side, he wants to know:

• how often the vendor ships updates, 
• how many developers work on the product, and 
• how long the feature backlog is. 

On the business side, he asks about the last fundraising round, the burn rate, and when the company expects to be profitable. And our software selection guide adds two questions about proof: how existing customers measure ROI, and whether you can speak with customers who match your trade and size.

As he put it, “there’s a lot of folks that can make really great solutions, but unless their business model is really sustainable,” it’s hard to justify the switch. He admits you’ll never get every answer, but how a vendor responds tells you something, and he’ll try to reach the CEO directly when the decision is big enough. He also looks for founding teams with real construction experience, since vendors without it tend to miss the nuances and oversell.

Reliability matters as much as staying power. The Baumgardners take several sales calls and ask tough questions before anything reaches their team because a tool that works only some of the time loses people’s trust quickly. “The less people can rely on it, the more resistant to change they’re going to be,” they said. For the same reason, they’d rather have a great solution for one problem than a mediocre one for everything. 

6. Pilot it, then measure again.

Even the most thorough vetting can only predict how a tool will perform, and the real test happens when your team starts using it. That’s why Dan never rolls new software out to the whole company at once. He starts with a small group, such as a few foremen, a project manager, and a superintendent, who will give him honest feedback. Depending on the problem, he’ll either test the tool on the hardest jobs or hand it to the most tech-forward people for quick feedback. Either way, the pilot is where you measure against the baseline you set at the start.

Before the pilot begins, decide what success looks like and how long you’ll give the tool to get there. Dan doesn’t drop a tool just because people complained, but he does keep a threshold for when a rollout isn’t working, because it’s “not just an on and off switch.” The Baumgardners add that a good tool should show its value fairly quickly, and if your team still can’t see the benefit after months of onboarding, the problem is probably the tool rather than your team’s attitude.

Here’s where the ROI shows up in billing.

Billing is one of the easier places to measure software ROI, because the baseline is already in your numbers: hours spent per pay app cycle, rejection rates, waiver follow-ups, and days to payment. That makes the before-and-after easy for Siteline customers to recognize. Giroux Glass saves 32 hours a month on pay apps, Kovach Enclosure Systems cut its A/R aging by 20 days, and The Baumgardner Group kept growing without adding billing headcount.

If you’re weighing your next software investment, download The Subcontractor’s Guide to Selecting Construction Software for the full vetting process. If billing is the bottleneck, schedule a demo with us and bring your baseline numbers so we can run the math together.

Frequently Asked Questions

How do you calculate the ROI of construction software?

Subtract the software’s total annual cost from the annual value it creates, then divide by that cost. Value usually includes hours saved multiplied by a loaded labor rate, along with faster cash collection and fewer errors. Cost should include implementation, training, and the hours your team spends getting up to speed, as well as the subscription.

How long should a software pilot run before you judge ROI?

Run the pilot long enough to get past the initial learning curve, which is often at least one or two full billing cycles for finance tools. Measuring during the first rough weeks usually understates the return.

What questions should you ask a construction software vendor before buying?

Ask how often they release updates, how large their development team is, how existing customers measure ROI, and whether you can speak with customers in your trade and size range. For a major investment, it’s also fair to ask about funding and the company’s path to profitability. For the full list of questions, check out our software selection guide.