This post is part of the CMiC blog series where we explore terminology that every construction leader should know.
ERP has become a major differentiator for successful construction firms in recent years. Leaders with access to the strongest solutions can act faster and more precisely than if they were using less advanced platforms. For example, many of today’s ERP solutions are built to augment and automate job costing, budget creation, change order management and many more crucial workflows.
ERP solutions are evolving all the time, and it can be difficult for construction leaders to keep up. To make matters worse, some firms and ERP experts use software terms in different ways or use several terms for the same idea. To help you make sense of product features, developer claims and software categories, we’ve created this glossary of ERP software terms. Think of it as a cheat sheet to help you during product demos and vendor meetings. But first, let’s introduce ERP:
What is ERP?
Enterprise resource planning software (ERP) is a suite of business management tools that collect, manage and interpret data. They’re built to offer a consistent view into crucial business dealings and often include the following features:
Real-time data tracking
Financial forecasting
Worker and supply scheduling
Communication tools and storage
Management dashboards
Some ERP solutions are built for a specific industry and will include specialized tools to save time on common industry tasks. CMiC Enterprise is an example of construction ERP software.
Learn more about the Business Benefits of a Construction ERP Built on a Single Database Platform.
ERP Glossary
APIs
An Application Program Interface. Open APIs give developers programming access to a software application, allowing them to develop integrations for connecting the application to other software. Twitter, for example, has an open API that allows developers to create separate applications for scheduling tweets
Bridges
A more casual term for describing software integrations. When connecting two pieces of software that were created by different developers, software vendors or IT managers will build bridges between the applications so that they will share information. Before you purchase, it’s important to understand the risks of bridged construction software.
BYOD (Bring Your Own Device)
When construction companies want to encourage the adoption of mobile tech, they often ask employees to use their own devices. These devices can be set up with self-service access portals to business systems and help businesses cut hardware costs and improve employee engagement.
Change Management
The process of communicating the effects of an upcoming change to everyone in the organization and designing training and educational programs to ensure the change happens smoothly. Because implementing an ERP platform is a dramatic change that affects so many people, effective ERP change management is crucial during an ERP implementation.
Cloud Computing
Allows companies to store their data on off-site servers that they connect to and access over the Internet. To store data in cloud databases, business rent storage from companies offering cloud computing services. Many ERP vendors now offer cloud ERP options alongside local software licenses.
Consolidated/Centralized Data
Project and company data that is all stored in a single database. Consolidated/centralized data creates more efficient workflows by giving all team members access to accurate, up-to-date information.
Dashboard
A user-interface that integrates key business information, such as KPI’s, in a graphical and easily accessible manner. Dashboards in ERP are often role-defined and customizable.
Flexibility
In ERP, flexibility refers to the relative ease with which a system or program can be adapted to accommodate a changing business environment or new business model.
Functionality
The spectrum of tasks that a computer program or ERP system can perform.
Hardware versus Software
Hardware refers to the physical computer, device or machine; software is the computer code for a program, operating system or application that instructs that hardware to perform certain tasks.
For example, the CMiC platform is a piece of software, and the servers that store all the data stored within the CMiC database are examples of hardware. Cloud computing has reduced the amount of money companies spend on hardware because instead of purchasing expensive servers, they can store all their data on an off-site server that they pay for on a subscription plan.
Integration
The process of combining all business software into a single, whole system. This often involves connecting a software application with limited functionality, to a larger full-service ERP system.
Internal Network
To store data, companies use either an internal network or a cloud database. Internal networks require construction companies to own their own hardware. This gives them the most control over their software and security but requires significant upfront and ongoing costs including hardware installation, electrical bills, the cost of server real estate and salaries for IT staff.
Cloud deployments are typically more flexible in terms of cost, offering pay-as-you-go payments that scale with your business. They may also make data easy to access with in-browser login capability.
Job Costing
A cost methodology in which all the costs associated with a specific project or manufactured product are recorded in a cost ledger over time and totaled at the end of the project or manufacturing process.
KPI (Key Performance Indicator)
Key performance indicators are measurements of job performance. For example, revenue is a KPI of sales, inventory is a KPI of supply chain management and profit is a KPI of business leadership. Ideally, all KPI are aligned around an organization’s strategic objectives.
Legacy Systems (or Applications)
The term “legacy systems” refers to computer programs written specifically for a single organizational function, before the days of integrated software or ERP systems. Legacy systems tend to be highly customized and can be difficult to maintain.
Nervous
“Nervous” in the ERP world, is a term used to describe daily or hourly variation in data as it changes in response to real-world occurrences. People unfamiliar with real-time data and integrated systems are often uncomfortable with a constantly changing picture and prefer working with static data that may be inaccurate.
Point Solution AKA Stand-Alone
A point solution is a software application built to solve a specific problem or manage a specific department (ie. project management software, accounting software, blueprint sharing apps, etc.). When a firm’s software system is entirely made up of point solutions, they end up with a “best-of-breed” solution instead of a “unified” or single-database solution.
Scope Creep
Scope creep refers to the unintended expansion of the project deliverables and specifications after the client and construction company have already agreed on a scope of work.
Unified Software
Most frequently, “unified” refers to a single-platform solution with a suite of tools for managing all core business processes. CMiC, for example, includes a variety of tools that are natively built to work together. As a result, the CMiC platform offers a single, reliable database through which all data can be found.
Sometimes, “unified” may be used interchangeably with “integrated” to refer to the bridging of several applications. For a full breakdown, check out our blog Making Sense of Construction Software Jargon: Unified, Stand-alone & Integrated.
Workflow Management
Workflow management is the process of controlling, communicating, and following up on a human approval chain with the intent of making it more efficient. Workflow management is typically used for processes like product adoptions or policy change approvals.