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.
The global construction industry is set to grow at a compound annual rate of 4.2 percent for the 2018-to-2023 period, Research and Markets found. By 2023, the sector will be valued at $10.5 trillion. Opportunities for business expansion are apparent, but the sector isn’t exactly bursting at the seams. The businesses with an operational edge could put themselves on the fast lane to a market advantage, but that raises the question: Are you one of those businesses?
The answer is complicated, but we can assure you of one thing: You won’t keep up with the industry’s changing demands if your enterprise resource planning system can’t scale with your needs. You can’t afford to run into project delays, fiscal headaches and procedural nightmares because your legacy ERP isn’t fit to adjust to your changing business demands.
Does Your ERP Have What You Need?
With the wakeup behind us, an introduction is in order. We believe construction firms need ERP solutions built for their specific workflows. The days of getting by with QuickBooks or trying to fit a traditional enterprise ERP into your operational model are fading. But we know that an ERP migration can be a long and complex process. Given this situation, we’re here to offer some advice on when it’s time to migrate.
In this five-part series, we’ll explore how you can identify the need for an ERP migration. To start, we’ll look at the problem of limited scalability and—if you’re experiencing it—you’re not alone.
Traditional ERP Systems Falling Behind
The ERP sector has gone through a transition in recent years with more solution providers embracing the cloud. The rise of cloud computing isn’t news, but it’s a big deal for ERP platforms, as organizations have long considered their data to be too precious to trust to such a technology setup. Now, organizations are realizing that stagnant legacy ERP systems are holding their businesses back, while cloud computing keeps maturing. The balance has shifted to the cloud in the ERP sector.
Michael Guay, research director of ERP strategy for Gartner, told CIO magazine that businesses need to rethink how they handle ERP decisions. In the past, organizations had to balance getting solid base functionality with adding best-of-breed components. In essence, companies had to sacrifice what they wanted because significant customization wasn’t feasible. That’s changed in the cloud.
“The reason a lot of people were dissatisfied with their ERP system [was because] the decision was not ‘Should I buy from one or two vendors’ – if you were an Oracle shop you bought from Oracle,” Guay told CIO. “Often, that meant you had a functional app that didn’t suit the needs of the business, so you had to customize a solution and that leads you down a very bad path.”
In construction, you may have resigned yourself to adapting your workflows to ‘generic’ account software or ‘traditional’ ERP configurations. With cloud solutions, such as CMiC Enterprise and CMiC Field, you don’t have to make those kinds of sacrifices.
How a Scalable Cloud ERP Platform Changes the Sector
When your ERP model isn’t able to scale or adjust to your business, you often have to modify processes and practices, adding workarounds and operating with exceptions to what would otherwise be an optimal set of workflows. Across multiple complex, interdependent processes, this adds up to chaos.
You can’t have one project manager updating a bill by emailing accounting while another logs into Quicken at the end of each day and a third hands your accountant a paper form. Sustaining business growth in fast-moving industries requires standardization, and digital technologies are empowering construction firms to connect data and users across teams. Now you’re stuck trying to manually track all of this information in an ERP interface that isn’t well-configured for construction workflows and lacks the management tools you need to keep up with all of the projects you have running. This situation isn’t tenable.
If your ERP system can’t scale, you will inevitably run into problems trying to grow your business. Want to learn how an ERP purpose-built for construction can change this dynamic? Contact us today. If you still aren’t sure whether you need a new ERP, be on the lookout for part 2 of this series, where we’ll discuss how unnecessarily complex document management procedures can quickly undermine projects, and what an ERP & Field platform can do about it.
If you’ve been in construction for a while, you know that, as an industry, we have a productivity problem. We often deal with rework because poor design or a lack of visibility requires the inefficient repetition of tasks. We face environmental conditions and supply chain problems that slow us down when we least expect it. We even have safety, training and other staffing challenges to contend with. In construction, being productive isn’t ever simple… but—like many players in the industry—are you stuck with a yawning productivity gap?
The short answer: No. Many firms are running into completely avoidable problems because they have neglected to update their information systems to solve the visibility and communications shortcomings that undermine productivity at every turn. You can step up and solve your organization’s efficiency problems. The first thing to do is take them seriously.
Construction Productivity May Be Worse Than You Think
You’re probably aware of how quickly projects get stuck due to budget, supply and/or staffing issues, but have you thought about how these problems become additive and escalate? According to the McKinsey Global Institute, the construction industry leaves a whopping $1.6 trillion of potential revenue on the table as a direct result of low productivity.
According to the research firm, the global construction sector represents almost $10 trillion in annual spend. Think about that. Collectively, construction firms are foregoing 16 cents of revenue for every dollar spent due to sub-optimal productivity. And although it’s an industry-wide problem, you can’t afford to sit back and conclude that there’s nothing you can do about it.
The simple reality is that other industries that have faced similar productivity challenges have pushed through and found success. Take manufacturing. Lean operations, connected devices, big data, automation and just-in-time supply chain management have all become prevalent in global manufacturing operations. In construction, many organizations are still relying almost exclusively on paper-and-pen recordkeeping, spreadsheets and basic accounting software to manage projects.
McKinsey explained that the construction industry has fallen behind when it comes to deploying and using digital technologies. In terms of digital maturity, the construction sector is 2nd-worst among U.S. industries and dead last in Europe.
However, it isn’t too late to begin closing the gap. Launch—or accelerate—your digital journey… it’s the only way to make meaningful productivity improvements a reality. Here’s how:
Put In Place a Tailored ERP System
Most enterprise resource planning (ERP) software can be delivered through the cloud, delivering price and deployment flexibility that smaller organizations can afford. You can’t coordinate operations to boost productivity when your workers are dependent on spreadsheets and paper records to get the job done. But you can when employees are all working from a central, mobile-enabled ERP that is purpose-built for construction-industry workflows.
Start By Solving Specific Problems, and Work Your Way Out
Deploying a complete ERP system can transform your business, but it may be a lot to chew in one bite. By honing in on a single, critical issue, you can focus your productivity efforts and measure your gains. For example, a Quality.org report explained that embracing digital technologies helps firms eliminate rework. The improved communication and collaboration ends up paying for the investment by ensuring that tasks are completed correctly the first time, preventing duplicative efforts, compressing timeframes and reducing risks.
Unify the Office and the Field
Driving solid productivity gains in construction is often a matter of effective synchronization between the office and the field:
- Accounting needs invoices in a timely matter to collect bills in time to order products for future projects on schedule.
- Project managers need real-time inventory updates so they can tweak work orders relative to changes in supply availability.
- Engineers depend on quick notifications of design problems that arise in the field to adjust plans before productivity slows.
- Executives need complete data related to challenges when they arise so they can make well-informed decisions quickly and effectively.
You can’t meet all of these needs if your field staff and your office-based resources aren’t working from the same source of truth. A single ERP and field operations platform breaks down barriers between headquarters, field offices and job sites, eliminating the operational obstacles that impair your ability to secure, manage and deliver multiple projects profitably.
Embracing modern digital technologies can seem overwhelming for any construction firm. For the past 40 years, CMiC has made the digital journey predictable, transparent and cost effective for hundreds of construction and capital projects firms. Our ERP platform is architected specifically for these industries, minimizing the amount of customization, management and maintenance you’ll need to take on as you tackle your productivity challenges and realize your true potential.