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.