The ERP Approach to Construction Management

Enterprise resource planning (ERP) is a method for managing everything that’s involved in delivering a product to the customer. The approach uses unified software – software that’s connected to a single database – to increase the flow of data between departments and create more opportunities for automating systems and processes. By connecting all departments together, companies experience better communication and easier collaboration. ERP was first used in the manufacturing sector in the 1990s, but the approach quickly spread to nearly all other industries including health care, education, insurance, and finance.

ERP the Construction Industry

Within the construction industry, however, companies have been slower to adopt the ERP approach. Many firms base their software decisions on the needs of individual departments instead of looking at the entire organization. The ad hoc approach to business and IT management often results in construction firms buying many apps from different third-party vendors. With too many apps, companies experience a lack of data sharing, inefficient communication and uneven use of technology and automation across the organization.

Construction firms that have invested in construction ERP software, on the other hand, have streamlined their processes, removed data silos and increased the flow of information between departments. Companies using a construction ERP platform can access tools within three main categories:

• Planning: preparing to begin a construction project

• Execution: managing everything that goes into completing a construction project

• Finance: controlling cost, mitigating financial risk and making financial forecasts

Unification with ERP Software

The ERP approach to construction management uses software to bring all operations under the same roof, but not all ERP systems provide the same level of unification. Some use a combination of different products that have been packaged together into one software solution. Usually, these products include third-party applications that have been acquired by the ERP company that owns the entire system.

When an ERP platform is a collection of third-party applications, it can still impede the flow of data across the company and create data silos. And, if the components are all made by different developers, the interface, user experience and functionality of the apps will be different. Not only does this complicate employee training, but it also makes managing day-to-day operations more time-consuming. Employees may have to log in separately to each application and keep six different windows open on their desktop just to do their job.

In contrast, ERP software that has been organically produced by a single software developer comes with multiple applications that are all connected to one database. This unified database, which facilitates company-wide data sharing, is the core feature of CMiC’s construction software. With data freely flowing from department to department, productivity and efficiency increase exponentially. (While the possibility/risk of double data entry is eliminated.)

Another advantage of ERP software is that you can create a custom solution that includes all the tools your company needs, without paying for extras you won’t use. Some ERP software companies also allow for the integration of third-party apps. CMiC, for example, has several integrations that increase the functionality we offer our clients.

To give you a better idea of how ERP applications and tools help construction executives streamline operations, we’ve created a list of some of the ways ERP systems assist in construction planning, execution, and finance.

Planning

1. Finding & Winning Customers

Opportunity management tools help construction companies manage customer relationships and identify potential projects. Companies can also increase their chances of winning projects by tracking sales performance, standardizing successful sales techniques and ensuring repeat business.

2. Receiving & Submitting Bids

Bid management software allows construction firms to track and analyze their bids. They can also integrate project estimates to keep track of the changes made across the estimating process. And when it comes to evaluating vendors, they can define exclusions and inclusions, and automate the selection process.

3. Planning Ahead

During the planning process, project managers must look ahead at company-wide resources so that they can effectively plan the project schedule. With a project resource tool like CMiC’s dynamic timeline, PMs can view a timeline of resources across the entire organization. If they need someone with a specific set of skills, they can see what individuals are available at the times they need them.

Execution

1. Keeping the Project on Track

Construction project management applications that are part of a unified software solution use data from all areas of the organization to make day-to-day job site management easier.

Whether they’re on-site or in the office, project managers can access a set of tools to:

• Record and monitor team communications

• Track and monitor expenses to keep costs in check

• Organize and manage sub-contractors

• Send and receive RFIs

• Provide stakeholders with regular project updates and reports

• Manage change order requests

• Oversee multiple job sites remotely

• Store, access and send project documents easily

2. Collaborating with Project Stakeholders

Keeping stakeholders in the loop is an important part of managing a construction project, however, it’s also time-consuming. With construction ERP, project managers can automate their reporting procedures so that they can send reports quickly and easily — right from their mobile device. And with CMiC’s platform, team members have many options for creating RFIs. They can use desktop apps, their mobile devices or they can send an email using CMiC I/O, and the ERP software will automatically keep track of any information contained in the email.

3. Getting the Big Picture with Analytics

When analyzing data, we turn into Goldilocks. There’s either too much data or not enough, and we never seem to find the sweet spot. Here’s why: a small amount of data is easy to access and report on, but this quick overview rarely gives us all the information we need. Deep data dives, on the other hand, are thorough, but they’re also time-consuming.

Project leaders are looking for the best of both worlds: specific, comprehensive data that can be quickly compiled into a big-picture report.

With construction ERP software, key players can create polished, accurate reports and provide a bird’s-eye view to project stakeholders. Monitoring all the nitty-gritty details – like ongoing transactions, budget fluctuations and last-minute change orders – is easy with custom dashboards use that provide real-time project overviews.

Finances

1. Controlling Cost

Your accounting system is the foundation of your business and financial controls are crucial to success. CMiC offers a set of construction accounting tools that you can integrate with your current billing system, including:

• Shareable analytics

• Audit trails

• Past invoices and transactions

• Ability to automate regular transactions

2. Managing People

With a master database, you can combine all employee information – profiles, time cards, payroll, and administrative data – and easily manage your team and monitor labor requirements.

3. Protecting Your Assets

When it comes to construction asset management, timing is everything. CMiC software uses cloud technology so that all data can be accessed in real-time, which means you can monitor assets like a hawk. The result:

• Improved inventory management

• Fast and transparent purchasing

• Tighter compliance control

4. Managing Risk

Corporate risk management tools protect against risk by tracking compliance with state, national and international regulations. For example, you can track and create audit trails in a central database to make sure you’re following the accounting rules of specific locations.