Your Tech Stack Needs to Start with Strategy

Dustin Stephens has spent 31 years in construction. He started on job sites in Utah, swinging a hammer and flashing rooftops. He moved into building materials sales, then into construction technology, then spent 13 years at Sage supporting the industry he came up in. Now he’s running Alliance Solutions Group, a 20-year-old firm that helps construction companies build and connect their entire technology stack.

When someone with that kind of trajectory tells you that AI adoption in construction is being approached backwards, it’s worth paying attention.

He joined Reece on Builders Budgets and Beers to talk about where the industry actually is on its technology journey, why most companies are asking the wrong first question about AI, and what the contractors getting it right have in common.

The cloud problem nobody talks about enough

Before you can talk about AI, you have to talk about the cloud. And before you can talk about the cloud, you have to acknowledge that a significant portion of construction companies are still running on software that was built before most of their employees were born.

Timberline — now Sage 300 Construction and Real Estate — was founded in Portland, Oregon in 1971. It’s still running the back offices of contractors doing tens of millions of dollars in annual revenue. Not because it’s bad software. Because it has 50 years of construction-specific functionality baked in, and the cloud alternatives are still catching up.

“There’s going to be a wave of customers moving into the cloud for construction,” Dustin said. “Because right now, most of what we’re seeing is pent-up demand.”

The contractors on QuickBooks at $70–80 million in revenue. The firms that know they’ve outgrown their current systems but haven’t found a cloud replacement that does everything their on-prem solution does. They’re waiting — not out of stubbornness, but out of a reasonable reluctance to disrupt an operation that’s running on software that, however dated, actually works.

What’s changing is the functionality gap is closing. Cloud ERP solutions built specifically for construction are getting closer to feature parity with their legacy counterparts. And when that happens, Dustin believes the migration will be fast.

The other catalyst: generational change. When a company’s founder retires and their kids take over, the kids want cloud software. When a new CFO comes in from the outside, they implement what they know. That transition is happening across the industry right now, and it’s accelerating.

The top five technology investments construction companies are making

When Dustin was at Sage, they co-sponsored an annual survey with the AGC that interviewed roughly 1,400 of the top construction firms across the country. One of the consistent questions was: where are you investing in technology?

The top five answers were always the same: AI, accounting, document management, estimating, and project management.

What’s notable about that list is the order. AI is at the top — not because most of these companies have deployed meaningful AI in their operations, but because they know it’s coming and they’re trying to figure out where it fits. Accounting is second, which reflects just how much pressure construction CFOs and controllers are feeling to modernize their back office operations.

The sequence most companies followed: project management into the cloud first, driven by platforms like Procore. Then estimating, which is still a space where legacy solutions dominate but where AI is starting to make real inroads — particularly in digital takeoff, where AI can compress days of manual measurement into minutes. Then the back office, which has historically been the last to modernize and is now where a lot of the most consequential technology investment is happening.

Why “add AI” is not a strategy

Dustin is candid about learning this lesson from the inside.

When he stepped into the CEO role at Alliance Solutions Group, he knew immediately that AI had to be a priority. He created a new role — strategic operations — specifically tasked with overhauling the company’s tech stack with an AI focus. The team came back with a roadmap. The roadmap had a price tag. The price tag was a million dollars.

“Obviously that’s not going to happen,” he said. “And we can’t do it all at once. We’ll cripple the company.”

The recalibration that followed is the same one every construction company needs to go through before they spend a dollar on AI tooling. The team had to step back and ask a more fundamental question: what is the business, how does it actually work, and where is the real friction?

They mapped the full customer journey — from first marketing contact through prospecting, close, implementation, post-go-live, and customer advocacy. They identified every department involved at every stage. They catalogued the tedious tasks, the manual steps, the points where time was being lost. Only then did they start asking where AI could help and what the ROI of helping would actually be.

“We started with: do we know exactly who we are as a business, where we want to go as a business, and how do we start making improvements?” Dustin said. “And if we’re doing AI, it’s got to elevate the human-to-human interaction, because we’re a people services business.”

That last point is worth sitting with. Alliance isn’t trying to automate away the relationship with the client. They’re trying to free up enough time from the administrative and operational work that their team can have more substantive conversations with the contractors they serve. The AI is infrastructure. The relationship is the product.

The back office opportunity: from history lesson to forward view

The most compelling conversation in the episode comes when Reece and Dustin get into what AI-powered construction accounting actually makes possible — not just as a cost reduction play, but as a strategic advantage.

Most construction P&Ls are a history lesson. By the time the numbers are accurate and reconciled, the decisions they could have informed have already been made. A job that ran over budget in week six gets discovered at month-end close in week fourteen. A missed change order gets found at job closeout, not in time to bill it. A lien waiver gap shows up after a payment has already gone out the door.

The promise of AI in construction finance isn’t just faster data entry or automated AP — though both matter. It’s compressing the feedback loop between what’s happening on the job and what the decision-makers can see. When costs hit the right job and cost code in real time, when draw packages build themselves from already-organized data, when WIP is current at the start of every week rather than three weeks after the end of every month — the financials stop being a rear-view mirror and start being a windshield.

“If we can speed up those processes,” Dustin said, “rather than looking at your P&L as a history lesson — how do you get to the point where it’s a future view? Here’s where you’re going, and here are the corrective actions you can take now, versus finding out after the fact.”

That shift — from reactive to proactive financial management — is what AI in construction accounting is ultimately making possible. Not just for enterprise firms with large technology budgets, but for mid-market contractors who previously didn’t have the staff or the systems to stay current across multiple active jobs simultaneously.

When does it make sense to hire for this?

One of the more practical threads in the conversation is about organizational structure — specifically, whether construction companies should have someone dedicated to technology strategy.

Dustin’s answer is nuanced. For larger firms, a Chief Information Officer or Director of Technology makes sense and is increasingly common. He’s seen clients gamify AI adoption — running internal contests to see who can identify the best use cases — as a way to get the technology into the hands of people who understand their own workflows.

For smaller firms, the principle is the same even if a dedicated hire isn’t realistic. The question isn’t whether you need a full-time technology strategist. It’s whether someone in the organization is thinking systematically about where the friction is, building a roadmap toward where the company wants to be, and evaluating new tools against that roadmap rather than buying whatever gets pitched to them at a conference.

“You have to understand how much time you’re spending on these things,” Dustin said. “What’s the real cost? And what are you going to save by putting in a potentially expensive solution? Is it making the company better? Is it improving the customer experience? Are your colleagues enjoying more of what they do because they’re not doing tedious work — and doing more impactful stuff instead?”

The labor math that makes AI adoption non-negotiable

The workforce pressure in construction is not hypothetical. Dustin cited the statistic that for every seven workers who retire out of the industry, only one is coming in to replace them. That ratio doesn’t sustain the volume of work the industry needs to complete — and it certainly doesn’t sustain the volume that the data center boom, power infrastructure expansion, and housing demand are about to generate.

The choice isn’t whether to adopt automation and AI in construction. It’s whether you get ahead of it or get caught by it. The companies that build their technology infrastructure now — that get into the cloud, connect their systems, and start automating the back-office work that doesn’t require human judgment — will have a structural advantage over the companies that wait.

“Innovation is going to just keep hitting us,” Dustin said. “And you know what? The printing press. People were like, the ruling people at the time, people are gonna be too smart. What’s that going to do? But look what happened and how technology skyrocketed after we educated more of our people. I would imagine AI is going to do the same.”

Start with the questions, not the tools

If there’s a single takeaway from this conversation, it’s that technology adoption in construction fails most often not because the tools are wrong, but because the strategy is missing.

Contractors get pitched on AI tools constantly. Some of those tools are genuinely transformative. But the ones that stick — the ones that actually change how a company operates and make it meaningfully more competitive — are the ones that were selected because they solve a specific, well-understood problem in the business, not because they had the best demo at a trade show.

The questions worth asking before the next technology conversation: What does our business actually look like end to end? Where are the people spending time they shouldn’t have to? Where are the decisions getting made too late because the data arrived too slowly? What would change if those problems were solved?

The answers to those questions are your strategy. The tools come after.

Dustin Stephens is the CEO of Alliance Solutions Group, a construction technology implementation firm based in Sarasota, Florida. He can be reached atdstevens@alliancesg.com. This episode of Builders Budgets and Beers is available wherever you listen to podcasts.