Canadian firm merges FAST, Newstar and Computers for Tracts in quick succession.

In astronomy, a constellation is a group of stars. Constellation HomeBuilder Systems hopes it has assembled its own group of "stars" in the form of its recent purchases of FAST, newstar and Computers for Tracts (CFT)... all three already among the leading service providers for homebuilders.

But Constellation HomeBuilder Systems, which was formed in March 2004, does not appear to be an ephemeral shooting star. The parent company, Constellation Software Inc. (CSI), is a privately held holding company with more than 900 employees in North America and Europe with revenues of more than $120 million. CSI already offers software solutions for public transit, public housing, utility billing, district attorneys, private clubs, and door, windows and cabinet manufacturers.

Now that large builders have finally forgotten the sting of the BuildNet debacle, Constellation's aggressive market approach with its Enterprise Resource Planning (ERP) integrated software system is aimed at builders that produce 80 to 5,000 homes annually. Computers for Tracts targets builders that construct 100 homes and up.

Are homebuilders ready to be considering an all-in-one solution? The increasing competitiveness of the homebuilding industry is forcing all homebuilders to find new ways to operate more efficiently. Software answers that need by giving them accurate, current information to cut waste and reduce errors, make decisions more quickly, and be more responsive to customer demands. In addition, builders can reap savings through reduced labor costs, because there is less need for clerical staff and IT staff no longer needs to move data from one system to another. Equally important, a fully-integrated solution can grow with the company.

Wilf Hinderle, senior vice president business development of Constellation, agrees, saying, "The No. 1 benefit [to builders from integrated software] is improved decision making by management. Everything happens in a more timely fashion because there is no need to request a secondary to run a current report. Customers benefit, as well, because the homebuilder can be much more responsive and is able to identify and correct issues before they become a major trend. Financial staff benefits because accounting and audit control no longer involve moving data from one system to another, a time-consuming practice that inevitably leads to errors and makes it extremely difficult to track discrepancies."

So what if you are a builder that was already using newstar or FAST, which have overlapping services? Are you going to be forced to switch? No, says the company, which is already working on a new software product that will operate on both platforms.

"We respect that the customers of each product line are comfortable with their existing solution. We also understand that while our product lines have common elements that are tightly integrated, there are important differences. For example, the FAST product line meets the needs of customers that want a disciplined package or group of software focused on a strict purchase-order, cost-control build program methodology. The newstar product line, in contrast, provides similar functionality but more flexibility. Buildpro is the choice for customers who need a Web-based product and want the added advantage of using Hyphen Solution's Supplypro," adds Hinderle.

Meanwhile, Constellation is working to develop a land development software system for large builders as part of CFT.

Individually, the systems get accolades from builders like Kathy Mortensen, IT Director of Dunmore Homes in Roseville, Calif., which has seen a productivity increase of about 15 percent [using newstar]. "Management now works with data that is about one-hour old. With the old multivendor system, most data was one-week old," says Mortensen.

Tim Wellings, director of corporate operations at Obra Homes in McAllen, Texas, credits a banner year in 2004 to using FAST. Not only did the company go from 60 starts to 1,200, but also had a back-office labor savings of 50 percent, along with a 25 percent to 35 percent savings in the production department.

What now? Hinderle is not ruling out more buyouts. "There are no plans for more acquisitions, but Constellation HomeBuilder Systems is always interested in acquisitions that will bring more value to our existing customer base, attract new customers and meet investment requirements," he says.

Hinderle stings at any comparisons to BuildNet. "It's already clear that there are no similarities. In its first year of operations, Constellation HomeBuilder Systems was profitable. BuildNet was never profitable, mainly because it was driven by an IPO and acquired 12 companies in one year at valuations our parent company (CSI) would never consider. CSI is a far more prudent and experienced investor that knows how to operate and nurture vertical market software companies."