If you could know what the future held for you, would you want to know? In our personal lives, this question usually requires a great deal of thought as surprises provide plenty of spice for life. In business, the answer is simple: Most leaders want to know everything they conceivably can about the future so they can anticipate and protect against construction risk that is on the horizon.
In today’s era of data-driven enterprise operations, construction firms can get more insights and projects than they could in the past. Enterprise resource planning systems provide visibility into operations that would have been unrealistic to obtain in the past, giving you a personal crystal ball that lets you engage in meaningful construction risk mitigation.
Using data to handle risk
A Construction Executive report explained that the amount of data generated within building projects is increasing quickly. As a result, organizations often run into significant overhead in trying to manage and communicate that data over different parts of the business. However, the companies that do get data to the right people at the right time are able to reduce risks by gaining greater visibility into operations.
When your data silos disappear, your various leaders can get a clear picture of what is happening in your business and minimize the risk associated with any decision that may be made.
This sounds great, but the benefits don’t just exist on a project-by-project basis. They also extend to big-picture business issues.
Getting ahead of risk
A successful project begins well before you break ground. You need to begin managing construction risk before you even commit to a build.
Picture this: You have a sales team developing a bid. They have access to annual reports on revenues, an accountant in place to provide insights into current fiscal capabilities and a project manager who knows your construction team there to ensure you have the skills to handle the demands of the project. However, the data this team is using to make a bid is spread over a bunch of spreadsheets, paper files and other sources of organizational knowledge.
As the team is preparing its bid, it becomes clear that you are dealing with a highly variable opportunity cost. On one hand, the revenue potential is significant because you know the customer will have more properties to build once they find a builder they can trust. However, you have a few projects scheduled for a similar time frame as the initiative you’re bidding on and aren’t sure you’ll have the available capital or human resources to handle the demands.
What do you do?
- If you decide that you lack the resources to make a competitive bid on the project, you risk missing out on significant future opportunities.
- If you bid even though resources will be tight, you’re left with little margin for error and risk having the project go poorly, tarnishing your reputation with the developer and costing you heavily as problems emerge on the project.
Solution: Getting better at using historic data alongside existing project information and near-future projections can empower organizations to quickly evaluate the opportunity costs of sales decisions.
Furthermore, this type of visibility remains valuable throughout a project as stakeholders work to respond to problems as they arise and make the best decision possible based on available data.
Taking full advantage of forecasting
Within this conversation on anticipating future resource availability to mitigate risk, it is important to keep the full scope of projects in mind. It isn’t enough to have a deep understanding of raw material availability, for example, while underestimating the staffing requirements of a project. You need to bring together data from across every part of your business if you want to forecast effectively, and enterprise resource planning solutions are especially important in these situations.
An ERP system will bring together data from the entire organization, letting you blend project-specific information with big-picture company data to help you identify potential risk in advance to prepare contingencies and avoid potential pitfalls.
Ultimately, effective project and financial planning begins with understanding and mitigating risk, and an ERP system gives you the combination of data visibility and accessibility needed to make better decisions across every phase of a project, from opportunity management out to constructing your bid, gathering resources and actual building.
Many construction companies are stuck in an endless pattern of responding to emergencies and scrambling to keep projects profitable. It’s time to end the cycle.
If you want to escape the repetition of facing an unexpected project event, enacting a construction resource management plan in response and hoping you can keep a project profitable, you aren’t alone. The rise of digital technologies in business has left many companies realizing they can use data to shift from reactive operational models. The construction industry may be behind some other sectors, but it isn’t too late to adapt.
Shifting from a responsive project resource management practice into proactive resource planning can empower firms to maximize their assets and get more value from projects. To start, you need to cement the distinction between the two into your mind:
Resource management vs. resource planning
We could go through a bunch of analogies and metaphors to tell you why management is different than planning, but let’s keep it simple. Here’s a hypothetical scenario similar to what builders face all the time, and how the situation varies in each setup.
Here’s the scenario: You have a team working on a multi-unit dwelling project that begins with demolition of an old building. From there, the plan is to analyze the site post-demolition, create the foundation for the new structure and construct the property. Demolition goes smoothly. With the previous home out of the way, you are able do a deeper site survey and find that the foundation will need stronger reinforcement than you initially anticipated. You find out you can tweak the plans to use a reinforced material in strategic locations to make the change with minimal disruption, but you have limited supply of that material on hand.
How to respond with resource management:
In a traditional operational model, a construction firm would respond to this problem by analyzing what’s available relative to what is needed. There may be assets available at another site, after all. Your site manager notifies the project lead, who then contacts other sites to see if they have excess supply available to borrow from.
From there, you’re looking at multiple projects from the top down, trying to identify which timelines can be tweaked and which supplies can be repurposed to solve this problem. You now have to scramble to project adjusted timelines, see how long it will take vendors to ship replacement inventory, recalculate project costs and adjust revenue expectations. All of this is further complicated if you don’t have the budget space to deal with the cost overage.
Sure, you could just order new supply and put your multi-unit residential development on hold, but if you do that while you have available supply unused at another site, you’re wasting time. A good resource management strategy can optimize what’s available at a given time, but it comes with a great deal of overhead and relies heavily on coordination across teams. The potential pitfalls are plentiful.
How to get ahead with resource forecasting:
In this same scenario, an organization engaging in forecasting will have analyzed past projects and anticipated potential supply or financial shortfalls in advance. Your team may know that a project involving demolition and rebuild can introduce complications, but until you dig into historic data trends, you can’t really project the precise cost and material bills that can come with those complications. Furthermore, the business will have visibility into company-wide resource availability at the project’s outset.
An organization that is proactive about resource forecasting won’t necessarily anticipate every contingency, but they will have created flexibility in the budget, project schedule and materials strategy to accommodate for reasonable unexpected issues. In this scenario, this could play out in having extra reinforced beams in place from the start, knowing that unused materials can be passed on to a future project anyway, for example. If the capital isn’t immediately available, creative scheduling and project management could help to sidestep the issue.
Embracing a proactive approach
Resource planning is often overly complicated for construction firms because organizations can’t easily see what they have available at a given time and report on historic data trends. Modern enterprise resource planning solutions are changing this by combining user-friendly visualizations with intuitive dashboards so site, project and business leaders can easily get the information they need to make decisions based on the entire organization’s resource plan.
When these organizational resource planning tools are combined with collaborative project management systems that extend to the field, all stakeholders are left with the ability to generate and access the information they need to get ahead of resource challenges. Shifting from managing emergencies to getting ahead of problems before they arise.
Picture this scenario: You look ahead at a planned project, consider the customer and think, “OK, we’re going to get delayed here. We’ll need to manage expectations and overtime throughout the effort.”
Sounds too familiar, doesn’t it?
In actuality, the lack of concrete data about those concerns means that you’re just on the lookout for problems, and not controlling the project with precision or establishing stronger schedule and budget forecasts.
With construction companies now having access to groundbreaking tools to help gather and analyze data, you can get the information you need to pinpoint potential project problems and enact controls proactively. Here are four tips to help you do so effectively:
1. Don’t just collect data. Build it into operations.
Establishing a construction plan and working to execute it has long been extremely challenging for the simple reason that organizations have lacked tools to get managers relevant information in a timely fashion. Now, users have mobile devices and apps that let them collect and create information with ease, but businesses lack the backend systems needed to organize that data and deliver it to proper stakeholders.
If a site manager is dealing with a staff shortage that is causing a delay, it isn’t enough to simply log that delay in an isolated system. Instead, you want your project manager to be automatically notified about the delay so as to adjust schedules, orders and other timelines right away, and get ahead of any future problems. This is only possible when data is naturally organized within workflows, so users not only can track information, but also use it in organic ways.
2. Take advantage of modern reporting
Creating a formal report on operational performance used to be a nightmare in construction—and it still is for many builders. You need to gather invoices, paper-based files, digital spreadsheets and similar sources of data, and compile them into cohesive reports with visualizations that make data more actionable.
The process was so clunky that you could really only do it for major reports at predetermined intervals. If a project manager was discussing a construction plan and thought, “You know what, this customer is asking us to go through a lot of approvals before building. How long will that hold back our project?” You couldn’t really do much to answer that beyond provide guesstimates.
Modern enterprise resource planning systems, however, can let you create a custom report with specific, user-defined parameters that help you identify delays based on various data types. In this instance, you could search the system for historical data on project delays caused by waiting on client approvals and compile a report that averages out the duration of the delay based on waiting times.
With that information, you not only gain a clearer estimate of what to expect, but identify specific projects where delays were especially notable and delve into your records to identify the root causes of those problems.
Having identified the specific issues that cause project delays during approval cycles, you can then create workflows and reminders in the ERP platform that will notify users to send extra emails to clients or vendors, create an extra internal approval for plans or adjust supply chain procedures to accelerate operations once approval is given.
Digital technologies make custom reporting easier than ever, and you shouldn’t neglect the options at your disposal for planning.
3. Establish automated alerts
Improving collaboration during projects is a starting point, but day-to-day control can still be difficult as details slip through the cracks. This is where automated alerts and notifications become invaluable. With an ERP system that has embedded project controls, you can set parameters for acceptable operational conditions and automatically notify personnel if they are breached. Similarly, you can create custom workflows that alert users when a task requires their attention.
For example, you’ve planned a project and you know it would not be fiscally viable if you exceed the materials budget by 5 percent. You want your site managers to be able to order what they need quickly to keep everything on schedule, so you eliminate approvals for each purchase order. However, you can set alerts to notify you when cost benchmarks have been reached so you can intervene and control spending. In the same way, you can use alerts and digital checklists to monitor regulatory and internal policy compliance.
4. Make controllable projects the norm
Challenges in project planning, monitoring and control are all widely accepted in the construction industry. But it’s time for that to change. Building Design and Construction reported that digital transformation is opening the door for stronger processes and data management in the sector. Similarly, a Dodge Data & Analytics study found that mobile capabilities are having a dramatic impact on data penetration in construction settings.
Technology is changing how you can plan and control projects. Contact CMiC to learn more about how and discover what we can do to help.
The situation is easy to understand: Construction firms are facing a crisis when it comes to project management. If you run a construction organization, chances are that you’re used to spending an inordinate amount of time handling project management tasks and issues.
At the most basic level, the unpredictability in construction makes project visibility, forecasting and managing changes difficult most of the time. But these are just the entry points to the frustration facing construction firms. The even bigger issue may be—simply—a lack of project management talent.
The scale of the project management talent gap
The Project Management Institute found that the need for project management professionals across a variety of sectors is skyrocketing. Between now and 2027, the lack of project management talent could lead to a $207.9 billion loss in gross domestic product across the 11 nations analyzed in the study.
What’s more, the lack of professional project managers is expected to hobble the growth of industries around the world. The gap is most apparent in manufacturing and construction, where approximately 9.7 million project-related jobs are expected to emerge from 2017 through 2027. The next closest sector, according to the study, is information services and publishing, with the job total at 5.5 million.
The situation is dire, as evidenced by well documented studies. Construction companies can’t find the skilled project managers they need to keep up with demands. Training, succession planning and similar strategies are useful, but, at this point, it might not be enough. The solution may instead be to improve project management processes and procedures to drive efficiency and ease the workload within your organization. Instead of needing more project managers, your current experts can get more done if they’re empowered with the right tools.
Of course, updating legacy project management procedures isn’t always easy, but here’s a look at three tasks that are in desperate need of change:
1. Field collaboration
Are your project managers spending as much time on the phone or driving between sites as they are actually solving problems? It’s time to change. Mobile devices are offering construction leaders an opportunity to get the information they need wherever they are, but many builders lack the backend data and workflow management tools needed to deliver relevant data to project managers in a timely fashion.
A construction-focused enterprise resource planning system can provide the data integration, notification and alert systems needed to help project managers stay ahead of big-picture issues while they’re in the field.
2. Project implementation
Working with siloed and outdated paper-based data is preventing managers from performing adequate planning and forecasting for a project. Getting an initiative off to a good start is key to creating positive customer impressions and meeting deadlines, but it’s a huge hurdle in the industry.
A Deloitte study found that funds lost due to inefficiency in the implementation portion of a project often amount to between 30 and 40 percent of the total cost. Better controls and procedures are needed. Organizations can map their processes and workflows in an ERP system, forecast costs using reports on historic data and create a clear construction schedule quickly when managers have the information they need integrated in one place.
3. Emergency response
Construction project management isn’t just about planning and scheduling. To minimize delays, leaders must act quickly and decisively to resolve immediate problems. However, the lack of data visibility in many field settings – not to mention poor data management in the back office – leaves many project leaders to perform guesswork as the best way to respond to an issue.
ERP solutions feature dashboards, reports and data visualizations that can empower managers to gather relevant information and make decisions quickly, changing how organizations respond when something goes wrong.
Efficiency is becoming an acute need in construction project management. Embracing digital technologies, including construction-focused ERP systems with project management capabilities, can go a long way in modernizing legacy processes.
You’re sitting in your office one day when you get a call from an engineer on your team. A new interpretation of a building code forced the team to change plans for one of the basic house blueprints you use as a foundation for a variety of projects. Suddenly, you’re looking at a logistical and communications nightmare, unless your document and content management systems are up to the task.
Digital document management technologies have the potential to resolve a variety of operational challenges, and document management that is embedded into ERP systems is particularly advantageous. With this in mind, here’s a quick look at why advanced document management capabilities are so critical and how you can get a system off the ground.
Understanding the role of document management
According to a Construction Executive report, businesses need digital document management systems that empower collaboration because the solutions allow users to interact more effectively and comply with regulatory standards more easily.
Let’s revisit our introduction scenario from this point of view. When an engineer calls, saying you need to update an essential plan for code compliance, you are forced to launch a variety of processes, including:
- Replace every existing version of the older blueprint with the updated version
- Identify which active projects are using those plans and get site managers revised plans
- Update marketing and sales collateral to reflect the new base blueprint and drawing relative to the change
It isn’t enough to update your primary source blueprint; you need to get the revised version out to all of your relevant teams. If you’re using paper records, this means printing, photocopies, courier trips out to project sites or field workers making extra visits to the office. The costs, delays and potential for project setbacks escalate quickly.
With digital document management, you make the backend change and ensure the apps and services that users rely on automatically pull from that source. As such, all you need to update is the digital source file; all your teams get automatically notified about the revised plans.
Establishing digital document management
Transitioning to a digital strategy may seem overwhelming, leaving you worried that you’ll have to scan lots of paper files. But think about it:
- Your engineers are probably working in CAD systems already
- Your field teams are relying on smartphones and tablets
- You are likely in a situation where the business is becoming natively digital
In many cases, companies are actually putting a great deal of effort into sustaining paper-based systems because they want to avoid the initial disruption of going digital. Don’t wait. You can keep some legacy drawings and blueprints in paper format if you need to, but take the time to scan what you use regularly and start leveraging your digital source files as soon as possible to begin a transition.
The real key to getting document management plans off the ground isn’t so much about going digital, but about organizing and distributing files in such a way that the system is sustainable over time.
Sustaining a digital document ecosystem
Digital document management strategies often fall apart when users have to jump into specialized apps or file sharing systems to get the information they need. The extra clerical work—even when it’s easier than dealing with file cabinets—leads to operational overhead. Integrating document management tools into your ERP platform—or better yet, deploying an ERP with embedded document management capabilities—builds access to all content assets into day-to-day processes.
The CMiC construction ERP includes ‘native’ content management capabilities, allowing your employees to integrate files into workflows, easily search your database and enact controls over assets. Furthermore, document management tools are extended out to CMiC’s field-specific solutions, providing integral connectivity between the office and project sites.
Digital document management can be transformative, and ERP platforms with embedded document management capabilities ensure that construction firms can maximize the value they receive from new digital technologies.
You have a site manager facing a dilemma: A shipment of supplies just arrived damaged, making it impossible to work on the next stage of the project. There are a few options: Order replacements and delay work, change the plans to allow for alternative materials that local suppliers have on hand or adjust project strategies to allow for alternative work to be done while the supply issue is dealt with.
How would your site managers go about deciding which choice is best for this specific project? If you’re like most firms, your decision-maker will spend a couple of minutes thinking about the problem and make the choice based on anecdotal experience. Maybe the site manager knows that the vendor has a tendency to respond quickly to supply problems, for example, and determines that an immediate delay would be short and lead to less disruption.
This kind of instinctual decision-making is workable in small scale, but when you have a portfolio of projects running at once, you need your leaders to be able to make choices based on accurate data. This is where business intelligence tools come into play.
How BI works
It’s important to understand where BI fits within a broader analytics strategy. Big data is often approached as the process of gathering large amounts of structured and unstructured data and finding ways to put that information to use in day-to-day operations. For construction firms, the structured data can be transaction records, vendor performance profiles, and estimated and actual costs. Unstructured information can take the form of plans, equipment handbooks and similar forms of documentation.
As organizations engage with big data, they need to develop strategies to organize that information effectively and communicate it to end users. An enterprise resource planning (ERP) system provides the backend database for all of this information to reside, making it accessible to users across teams. BI technologies then take the data within your ERP system and translate it into reports, visualizations and similar user facing formats that let individuals act on the data.
In simplest terms, BI saves users from having to sift through large quantities of information to find out what is relevant by automatically presenting them with what is most important.
Where BI fits in construction
BI enables stakeholders within an organization to quickly access the information they need to inform decision-making in real time. Going back to our hypothetical site manager, that user could leverage BI to:
- Create a custom report for vendor shipment records and prices to identify which vendor is best suited to provide replacements and pin down the timeline for the day. This can be done in minutes, combining data from across the business.
- Chart the average cost of supplies to determine if local hardware stores or similar sources could provide a cost-efficient alternative.
- View big-picture financial details on how the business is performing to identify whether the organization can afford delays, possible overtime work or rush shipment of replacement parts.
With “embedded” BI at her fingertips, the site manager can go beyond making an estimate on the optimal decision based on experience and use real-world data to make the best choice relative to the specific set of circumstances in play at a given moment.
While these benefits are powerful in the field, they’re also extremely beneficial at the home office, where leaders can quickly ascertain business performance, monitor potential impacts to profitability across all projects and perform similar analyses in real time. CMiC makes these capabilities particularly powerful by embedding our BI capabilities into our ERP platform, creating a unified system that provides complete and timely visibility into a full range of actionable insights.
The CMiC BI advantage
Most BI solutions exist as specialized software systems that are designed to integrate with your back end databases and pull data at intervals. In many cases, this leads to limited functionality in terms of both the types of information the BI system can gather and the frequency with which it can do so. CMiC overcomes these limitations by embedding our BI solution into our ERP and field operations platform, allowing for seamless and complete access to real-time data across the enterprise. This results in a variety of benefits, including:
- Greater adoption and usage of BI capabilities because users don’t have to jump between their ERP and a separate BI tool — BI exists within the ERP.
- Simpler — and more effective — automation because the ERP can trigger automatic processes when the BI system identifies prescribed data conditions.
- Better decision-making as BI is built into existing workflows, allowing users to make better- informed choices.
Choosing an ERP with embedding BI takes away the chaos of decisions made based on anecdotal evidence and creates a structured process in which choices stem from real data and established best practices. CMiC makes this possible by making BI “pervasive” — it builds data analytics into everyday processes, ensuring users get the insights they need, where they need them, and when those insights can have the greatest impact on decision-making. It’s a whole new way of thinking about — and using — business intelligence … and it’s only available from CMiC.
When you work in construction, you face problems that businesses in many sectors don’t have to deal with, particularly in change management. Change orders arise so often that you’re left always playing catch up, which only leads to more project changes and hoops to jump through. A standard enterprise resource planning solution isn’t going to naturally align to your needs. We’ve been exploring the signs that it may be time to make a move to a new ERP, and now we’re back with the final part of our series. The last major signal that your ERP can’t keep up with the demands of your business is that it lacks the workflows needed to respond to change orders effectively.
Construction Change Management: Beyond the Disruption
Experiencing change is normal. Projects can get out of line for numerous reasons, many of which are beyond your control. What’s more, a Construction Week report explained that large-scale projects are becoming more common than ever in the industry. Firms must grapple with environmental and labor regulations, fiscal uncertainty created by shifting material costs and ever-changing timings that can be influenced by anything from customer preference to site-specific problems that delay work.
You can’t entirely prevent change from disrupting your operations, but you can work to minimize adverse impacts. According to Construction Week, many organizations engage in basic training and change management procedures to establish a work environment in which employees understand what they need to do. However, organizations often end up lacking the data they need to make effective decisions. Because of this, builders often fall into common misconceptions that limit their ability to keep up with change. In essence, many companies still make their decisions based on gut feelings.
The reason for this problem is simple: Most builders are relying on a combination of spreadsheets and ‘siloed’ information to keep up with project changes. What’s more, the report said many manual processes combine with poor data sharing to lead to inaccuracies and failed projects. The limited ability to collect data and collaborate is undermining businesses as they work to adapt to project changes as they arise.
It isn’t enough to hire and train good workers. You need to give those employees the right tools to get the job done. If your ERP can’t support the kind of data collaboration needed to keep pace with change, your projects will be set up to fail at the outset.
The Implications of Poor Change Management
Consider a commercial building project for a multi-use facility. Any alteration in the project could have an impact on a variety of stakeholders. For example, if one future tenant realizes it will need a higher-capacity hot-water heater after construction has begun, you’re left to scramble. To handle this small change order, you must:
- Get word to architects and designers to identify options for adjusting the plans.
- Identify the financial implications of proposed changes by analyzing labor expenses, supplies and material costs.
- Communicate potential changes to site managers and any impacted customers for approval.
- Ensure work and purchase orders are updated relative to the changes.
One change order can create cascading disruption. Responding efficiently demands the ability to connect with a variety of both internal and external stakeholders.
If you are using spreadsheets, paper documents and similar tools to get the job done, you won’t be able to keep everybody informed easily. Designers will need somebody to deliver details on the new water heater. In addition, they’ll need to make updates in their CAD systems and email those plans to stakeholders hoping the message doesn’t slip through the cracks. If you’re using a general ERP software system, you won’t have access to the specific workflows you need.
These types of issues don’t just come up when project specifications shift. Instead, change is the norm. You probably don’t need the Harvard Business Review to tell you that, but the academic source confirmed that just about any business strategy will eventually lead to change. Any management activity involves dealing with changes, and companies must enact systems to maintain consistency and keep costs under control as they contend with the need for frequent adjustments.
A construction ERP system can go a long way in resolving issues. An ERP platform isn’t a cure-all, but it can serve as the infrastructure that lets you make the cultural and procedural updates needed to inform all stakeholders of change orders and enact the follow-up workflows necessary in the most efficient way possible. Change is constant in construction, but transforming operations around modern digital technologies through a strategic ERP software investment can provide the basis for operational advances as builders work to deal with constantly shifting project requirements.
What happens in your organization when a site manager runs into an unexpected condition that wasn’t accounted for in the plan? Perhaps the schematics for existing piping were wrong and the site manager is now contending with an old sewer line where the crew is digging for the foundation. Does your team have the tools needed to quickly communicate the project change, assess options for adjustments and make a decision before work gets too far off schedule? If you’re like most organizations and lack a dedicated construction ERP, you probably don’t.
We’ve been exploring the signs indicating that builders need to make an ERP upgrade, and the example we just discussed highlights our theme for part four in the series: What happens when your existing construction project management systems can’t offer you complete visibility?
Unpacking Visibility Problems in Action
Let’s look back at the scenario we presented in the introduction. When finding unexpected piping at the job site, builders will generally have to complete a few processes before moving forward:
- Double check site surveys to identify if there was a misinterpretation during planning.
- Connect with the relevant land managers or municipal officials to identify if they know anything about the piping.
- Perform tests to identify what the pipes are actually being used for, assuming there isn’t a clear answer during the first two steps.
- Analyze blueprints and project plans to see if there’s a simple work-around.
- Connect with other project stakeholders to identify and enact the next steps based on this background work.
All of these tasks require communication with some combination of internal and external project stakeholders. When you’re dealing with either paper-based records or isolated digital designs, you then have to send materials back and forth and move between locations based on where information is stored. Creating a central database for project information can minimize the paperwork that goes into solving this type of problem.
According to Construction Executive, the complex nature of construction projects creates an environment where easy data access and sharing is critical. A shared data environment allows those involved in an initiative to update components of the system and have that data automatically be passed on across the team.
For example, the news source explained that architects and engineers creating 3D models of a building can upload these schematics into a central database, allowing site and project managers to easily access that data in the field. This gives the people involved in putting plans into action all of the background materials that went into the project.
Centralizing information throughout the project simplifies collaboration and ensures everybody involved can easily assess performance and status updates, the report explained. This type of visibility is critical in construction project management, and ERP systems can make it possible.
How ERP Platforms Create Transparency
In its simplest form, an ERP setup will take information that is owned by different parts of the business and make it accessible through a single connected database. This is done without creating excess complexity, because those separate solutions operate as dedicated modules within the platform.
For example, the CMiC ERP solution features a suite of ‘native’ field applications that enable a variety of key functions that site and project managers need when away from the office. These include:
- Change management tools to ensure information accuracy and make it easier to manage schedules and costs as projects go through disruption.
- Site management systems that let users enter key information in real time, giving executives immediate visibility into what is happening in the field.
- Vendor relationship management capabilities that integrate details on subcontractor activities to stabilize the project environment.
- Communication tools that track updates and notifications from stakeholders across the team.
This represents a few of the key capabilities in our field management platform, but they highlight the ways an ERP solution can drive visibility. Managers in the field use these tools to connect to the office and vice versa. CMiC also offers connectivity through a full mobile-enabled suite, taking convenience and connectivity to another level. If your ERP can’t give you the visibility you need, contact us and we can offer more details on how our solution can help. If you’re still not quite sure it’s time for an upgrade, then be on the lookout for the final part of the series, where we’ll discuss the issue of ineffective change management.
We’re back with part 3 in our series on signs that your ERP system doesn’t have what you need. In this edition, we’ll discuss how budgeting and forecasting shortcomings can limit your growth and highlight ways that an ERP solution that isn’t up to the task of supporting your operations will reveal itself.
Budgeting and Forecasting Problems are Entrenched In Construction
Many experts in the construction sector believe that budget overages are just part of the job. When discussing a commercial project that failed to control costs, one project leader told Stuff Limited, a New Zealand-based publication, that shifting economic circumstances and general unpredictability can easily cause budgets to escalate. As a result, forecasting is more of an art than a science.
A project management expert countered, telling the news source that poor budget preparation and forecasting is often the result of inadequate planning. In many cases, construction firms promote skilled workers from on-site jobs to project leadership, creating a potential skills deficit.
Who is right? It may be a little bit of both. While project management expertise can go a long way in addressing budgeting and forecasting challenges, the reality is that construction efforts do naturally involve a degree of unpredictability. In the end, the key to success is being able to use historic project data and timely information from across the organization to create a more accurate forecast of expenses. From there, effective communications that leverage a single repository of enterprise data—but that is shared across the organization—can ensure that budgets remain up to date at all times, helping teams stay on top of cost variances and their impact on the overall financial position of each job.
Solving the Budget Visibility Issue
A Healthcare Facilities Today report explained that digital technologies are helping construction firms get better at daily reporting and budget management. In particular, cloud services are empowering workers in the field to easily connect with the office and keep projects on target.
These technologies are great, but they are effective only if they mesh well with your ERP system. You can’t control costs in ‘near time’ if your project management apps don’t exchange data seamlessly and bi-directionally with your ERP setup. To improve budget and forecast preparation, many construction companies choose to undertake costly—and sometimes risky—integrations of back office and field systems.
At CMiC, we take a different approach. Our ERP platform has a modular architecture with components that are purpose-built for construction. Specifically, we offer a comprehensive project management & administration suite built on the same platform—and database—as modules that handle your project controls as well as all of your financials—budgeting, forecasting and cost tracking.
The result? This fully featured, construction-specific approach to ERP lets users gather all the data they need effortlessly. In turn, this sets the stage for budgeting and cost forecasting that delivers unsurpassed levels of speed and accuracy, while enhancing decision-making at all levels of the organization.
If your projects are being held back by a chronic lack of budget transparency and forecasting reliability, then it’s time for a new approach. Having helped hundreds of construction firms with their accounting, cost management and project controls for the past few decades, CMiC can help – contact us to learn how. And … don’t forget to check in next week for part 4 in our series, which will focus on the inefficiencies, risks and missed opportunities caused by enterprise systems that fail to deliver complete project visibility.
Outdated or ill-fitting enterprise resource planning systems can undermine growth in the construction industry. ERP limitations can leave you scrambling to keep up with projects while your business is trying to operate in a chaotic environment.
There are many indicators of when your ERP platform may be struggling to stay apace of operational demands. In part 1 of this series, we discussed a lack of scalability as a key sign that it’s time to consider a new platform. We’re back with part 2, and we’ll be exploring how manual document management processes can slow your workflows to a crawl and create confusion.
Documents and Workflows
Every business has workflows. A workflow is simply the collection of processes that are completed to handle a task. For example, requesting supplies for a project is a fairly simple task, but becomes complex when manual documents get involved. A typical workflow may look like this:
- A project manager begins by looking over work orders and analyzing the necessary supplies relative to available inventories.
- Upon identifying a need for a new order, the project manager submits a request to a supervisor, often the owner or project head in a small organization.
- From there, the leader identifies if the order is truly necessary relative to the scope of the project and, upon approval, sends it to whichever stakeholder is in charge of completing orders.
- With the supply request in tow, the purchasing manager analyzes budget information and reaches out to vendors for quotes on price and delivery.
- Once a final decision is made, the purchase order is completed and sent to accounting, where it often goes through manual filing systems to be logged as part of the project.
- When the goods arrive, the order is set as fulfilled, and new invoice and payment workflows begin.
A workflow as routine as ordering supplies can go through multiple teams, requiring a variety of forms that need to get to the right person at the right time. Even if you give managers more authority, letting them purchase goods at a hardware store and get reimbursed (simplifying the process), you are still dealing with a paper trail into which stakeholders need visibility.
An ERP Focus report explained that enterprise resource planning systems specialize in enabling organizations to establish regular workflows and automatically enact them when needed.
In the case of a purchase request, the forms would be digitized and passed between users within the system once each step has been completed. Vendor and inventory management modules can even be set to automate notifications when supplies are low or when a vendor has an especially good offer on an item you need.
In the simplest terms, the ERP solution provides an avenue for eliminating manual processes and creating transparency, ERP Focus explained. This functionality is especially vital for construction companies trying to keep up with a multitude of simultaneous, complex projects that change frequently.
Using Digital Technologies for Document Management
While our hypothetical example focused on a purchase order, the highlighted workflow could have included analyzing work orders, filing invoices and completing sales contracts with vendors. When all of those documents are filled out and handled manually, the chance for error increases exponentially.
If your ERP system is leaving you chasing down paper records and filing out forms, it’s holding your business back. What’s more, a study from JBKnowledge created in association with the Mechanical Contractors Association of America and the Texas A&M Construction Science Department found that many builders lack the IT budgets and staff they need.
With paper-based workflows holding businesses back and legacy systems requiring manual reconciliation of information, a new approach is required. Cloud-based ERP platforms with ’embedded’ document management capabilities can enable specific workflows that are essential to planning, approving, staffing, running, monitoring and closing out construction projects while eliminating the integration and maintenance burdens on IT resources.
At CMiC, we’ve purpose-built our ERP & Field platform for construction—including fully unified document manage capabilities—so you don’t have to spend time, energy and money trying to make a ‘generic’ ERP fit the way you run your business. In addition, our solution is simple to deploy and to configure to support your unique workflows.
If you’re interested in learning more about how construction-focused ERP & Field technologies can transform your business, stay on the lookout for part 3 of this series. Next week we’ll explore how a truly unified platform can inject transparency, agility and speed to your budget forecasting process.