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.