Enterprise Resource Planning And The Construction Industry
medium to large-sized construction companies have moved over to using
ERP systems to efficiently manage all their company’s resources, such as
labour, finance, equipment, material, data and many more. In a
competitive market like the construction industry, even the smaller
concerns are looking to integrated systems to maximise project success
ERP for construction companies has two main functionalities – data management and workflow management.
Both functionalities are work hand in hand to assist stakeholders to
monitor multiple processes and manage data across the company in
real-time to ensure the success and profitability of completed projects.
What Challenges Typically Face the Construction Industry?
Problem 1: Improper planning processes can lead to project failure
old saying goes “If you fail to plan, you plan to fail”. Nowhere more
so than in this industry where the ineffective coordination among
clients, suppliers, subcontractors, architects can cause substandard
completion of the project.
Problem 2: Inaccurate estimations can cost a company the bid
lot of firms provide their services on a contractual basis. Before
bidding for a tender, these firms need to provide as accurate an
estimated cost of the project as possible. Failure to estimate
accurately can lead to either not getting the tender as the estimate is
way too high or the company having to carry the financial losses as
their estimate was too low and they now have to fulfil their contractual
Problem 3: Workflow management
management processes like sub-contracting, assigning tasks and
monitoring work progress across multiple departments are always
complicated and challenging. Managers have to be able to have real-time
data at hand to track these processes and, if necessary, make
adjustments and use this information to then bill customers
appropriately and timeously.
Problem 4: Tedious data sharing is inefficient and vulnerable
large amounts of information within departments can be time-consuming.
Where there is not a central repository of information issues such as
outdated information, time-lags, inappropriate access (internal and
external) and version-control arise.
Problem 5: Time-consuming processes slow down the expected streams of return on investment (ROI).
all businesses, the construction industry is always looking for new
ways to add to the bottom line. Time-consuming, tedious, and manual
processes hinder development.
ERP solutions help construction firms
monitor expenditures for materials and human resources, cut costs for
technology, eliminate manual processes, and avoid downtime. All these
factors affect the success of business and project implementation as
Problem 6: Lack of overall perspective can cause problems in accountability and coordination of projects
when projects run concurrently, it’s important for the business to have
a comprehensive view of the allocation of company resources at any
given time. Without the use of an ERP system, they cannot get this view
in one centralized place.
Core Features of ERP for the Construction Industry
good ERP system for the construction industry should consist of
features that ensure streamlined business operations. These usually
include the following processes:
Tender and bids
bid management modules allow the writing of tender documentation, making
accurate estimations, and bidding. It is also useful for tracking any
revisions to documentation. This feature can ensure that the actual
expenses won’t deviate much from the allocated pricing. It also
provides a useful repository of information to refer back to when
tendering for similar projects.
Project planning & scheduling
the estimate has been accepted, project planning is the first stage of
any construction project management process. It can be of three types
which are strategic planning, operational planning, and scheduling. The
first type determines the project objectives. The second one develops a
detailed plan including the steps to meet the set objectives. And the
third type of planning sets schedules of concrete actions to meet the
objectives. Any ERP for construction company provides its users with the
capability to organize effective project management and track the
Inventory & materials
construction materials and inventory is always a time-consuming and
complex process which requires special knowledge and skills. ERP systems
allow easy sourcing, purchasing, planning, storing and monitoring raw
materials. Besides this, construction ERP module ensures secure control
of stores and materials, timely disposal, tracking and tracing of
Managing data about
subcontractors and work orders is one of the core features required of a
good ERP system. Thus, modern solutions for builders and construction
firms allow them to assess subcontractors and based on the pricing data
or other selected criteria, to hire a particular subcontractor. For
example, one subcontractor may have a lower estimate for their section
of the job but may only have the capacity to carry out the work weeks
outside the desired timeframe which then has a negative impact on the
workflow of the whole project.
helps recruiters and managers hire the right candidates and do lots of
other useful things like managing payrolls, complying with HR
regulations, training employees. Due to the fluctuating nature of the
construction industry, it is very useful to have a skills repository
which can be easily accessed to match employee skills to the work
Reports and dashboards
With robust analytics,
visual boards, reporting tools in place, data can be managed in real
time. Accurate reports and progress charts assist to keep a company on
track and profitable during the running of a project. They are also
very useful too in the post-analysis phase of a project to determine
or cashflow crunches occurred which can then be assessed and plans put
in place so that operations flow more smoothly with the next similar
Supplier Relationship Management
companies need lots of materials, machines, equipment, and other things
to provide their engineering, architectural, building services. A SRM
module for ERP system is crucial. It ensures effective management of
enquiries, quotations, orders, reports, lead times and quotation
Construction sphere is very mobile
and accounting module must provide the capabilities to track different
types of expenses like packing tools and materials, travel expenses,
cost of equipment, and clearing expenses when the project is completed.
An ERP system with a strong accounting module will allow the company to
accurately ascertain the profitability of a project.
Customer Relationship Management (CRM)
module allows managers to easily track, process, edit, and share
customers’ information within the company. This module facilitates the
enhanced level of communication between the company and its clients.
Omni ERP Accounting software incorporates many of the above requirements. Its Job Costing
module is ideally suited to the construction industry allowing the
allocating and tracking of stock, labour costs, services and expenses of
a project from start to finish.
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