A Guide to Construction ERP With Real-World Success Cases

How important is a construction ERP? Every construction project has its own distinct and stringent set of criteria, whether it be for residential, commercial, industrial, or infrastructure projects.

Let's learn about construction ERP and how two construction companies adopt construction-specific solutions to overcome industry obstacles.

About construction ERP

1. Construction ERP vs general ERP

A construction ERP system is a specific software created to simplify and maximise facets of construction companies. You can regard it as a centralised data system that oversees and combines important functions needed to complete a construction project.

An enterprise resource planning (ERP) system serves as the central data hub for many business activities with the goals of streamlining processes and increasing productivity. Consider it a digital command centre that coordinates and oversees vital facets of your business's everyday operations.

Essentially, While ERP software aims to optimise processes, construction ERP is specially designed to tackle the unique challenges for construction companies. Here are the main distinctions:

• Industry focus: While regular ERPs can serve various industries, construction ERPs are specifically designed to meet the requirements of the construction sector
• Features: While generic ERP software handles multiple business operations, construction ERPs stand out by providing specialised functions like project and field management, essential for successful construction projects.

2. Important features of construction ERP software

Construction ERP software provides special tools tailored to the demands of the sector. Examine these features to gain more insights before selecting one:

Read more: ERP & CRM Do You Need Them Both & How to Get Started?

What are the pros and cons?

1. How construction ERP helps

Construction ERP software become a vital tool to streamline business operations in the complicated world of construction, where time and margins are limited. Providing unmatched visibility and control, it works as a centralised platform that combines your project management, financial control, supply chain coordination, and field operations. Implementing ERP can be transformative in the following ways:

• Eliminated communication silos
• Quick-access & safe document management
• Integrated project scheduling management
• Accurate & optimised project costing & finance management
• Real-time office and field synchronisation
• Optimised resource management

2. Challenges to consider in advance

Although construction ERP has many advantages, several obstacles must be taken into account when putting it into practice and making good use of it. The following are some major challenges that your company may face:

• Initial cost and implementation: Construction ERP systems can be costly to establish initially and to maintain continuously, both in terms of licence fees and other expenses. To add to the overall burden, implementation calls for training expenditures, a committed workforce, and possible difficulties with data movement. Small businesses can find these expenses difficult to bear. The majority of ERP implementations go 3 or 4x over budget
• Change management: Your employees can be reluctant to implement a new system because they are already familiar with the current workflows. Training is important, but to minimise disruptions and maximise user buy-in, it's also necessary to break through ingrained behaviours and ensure user adoption
• Data integration: It can be difficult to integrate construction ERP with your current accounting, HRM, or other software. Technical know-how and cautious configuration are needed. Inaccurate or incomplete data integration might cause inconsistent results and reduce the efficacy of the system
• Security concerns: Construction projects involve sensitive data. To protect your confidential information from breaches and guarantee adherence to industry standards, you must put strong security measures and user access controls in place
• Customisation challenges: Construction ERP provides basic features, however customisation may be necessary to meet your unique business requirements. Customisation choices may vary in cost and availability depending on the vendor and system, which could lead to a discrepancy between the ideal functionality and the current solution
• Vendor selection and support: It's important to select the best construction ERP provider. To prevent compatibility problems or insufficient support later on, you must carefully consider features, scalability, compatibility, and continuing maintenance alternatives
• Continuous learning and user engagement: Maximising the system's benefits requires maintaining user engagement and making sure that learning never stops. To help users adapt and fully utilise the system, regular training sessions, knowledge-sharing events, and clear communication about its benefits are all recommended.

By being aware of these obstacles and proactively overcoming them, your company may successfully navigate the installation process and fully utilise construction ERP.

Read more: How ERP Accounting Software Elevates Finance Management

How construction companies thrive: Practical cases

1. Okland Construction

With more than a century of experience, Okland Construction is a family-run business that specialises in construction management and general contracting in Utah and Arizona. In the competitive construction sector, they oversee an amazing 50–60 projects a year while adhering to lean principles to maximise value and avoid waste.

Oakland Construction (source: Downtown Phoenix)

What challenges did Okland Construction encounter?

Okland experienced significant difficulties with scheduling and quality control despite its dedication to efficiency. Their conventional techniques, which mainly relied on labour-intensive spreadsheets by hand, proved to be tedious and unproductive. Important problems included:

• Poor schedule quality: The amount of precision and detail in the schedules was frequently not up to par
• Restricted resources: Their 13 schedulers were overworked due to manual methods, and producing reports took a lot of time and effort
• Ineffective data sharing: Timely updates and knowledge exchange across teams were impeded by inflexible data filters and antiquated techniques
• Lack of backup plans: Unexpected delays and damaged client relations resulted from a failure to recognise and evaluate possible hazards.

Finding a proper solution

In search of an improved strategy, Okland came across Deltek, the top supplier of scheduling and risk analysis software. The system's implementation significantly changed their operations in various ways:

• Significant time savings: According to scheduling regional manager Spencer Easton, report creation speed has increased 20-fold, saving both time and money.
• Improved data analysis: Deltek solution’s sophisticated features facilitate in-depth project analysis, allowing for the early detection and correction of possible problems.
• Increased customer satisfaction: Okland proactively modifies plans by anticipating possible delays with 80% accuracy, which builds client trust and collaboration.
• Simplified communication: An easy-to-use interface makes sharing and exporting data easier, improving team comprehension and decision-making.

Okland Construction's story demonstrates the revolutionary potential of construction-specific ERP systems in overcoming the difficult obstacles associated with construction scheduling. They were able to reduce risk, increase productivity, and gain a better competitive edge by adopting smart solutions.

2. Steven Engineers & Constructions

Founded in 1970, Stevens Engineers & Constructors is a pioneer in project management, engineering, and construction for a range of settings and industries. They balance a variety of demands with customer expectations and internal cooperation in their role as general contractors managing projects with budgets ranging from $1 million to $50 million. 

What challenges did Stevens Engineers & Constructors encounter?

Despite Stevens' extensive knowledge, accurately predicting how potential delays might impact their projects was difficult. Securing support for necessary changes from key stakeholders proved challenging because their methods for assessing the situation were outdated and done manually:

• Manual evaluation: Due to a lack of advanced tools, assessments took a lot of time and had trouble obtaining support from stakeholders for the necessary adjustments
• Limited data analysis: Although their current system worked well, it was unable to do a more thorough project analysis
• Transparency in the schedule: Difficulty in comprehending how individual delays impact the project timeline as a whole.

Finding a proper solution

Stevens chose the Deltek suite of products because they were looking for a complete solution, and they used its many capabilities to improve project management. By using the fixes, Stevens has succeeded in the following:

• Better schedule quality: Thorough inspections are used to guarantee that schedules are accurate and dependable
• Informed decision-making: At every project step, data-driven decisions based on deeper insights are made possible by informed decision-making
• Real-time impact analysis: Recognises the immediate effects of prospective setbacks on the accomplishment of a project
• Effective resource allocation: This is the process of identifying problem areas and efficiently allocating time or resources to solve them
• All-inclusive risk management: Performs careful and uniform risk assessment for every project
• Sophisticated reporting: Produces comprehensive reports with insightful information for higher management.

Through data-driven insights and proactive risk mitigation, this case study shows how Stevens used construction-specific technology to handle their difficulties and enhance overall project management.

Read more: Top 5 ERP Software For Small Businesses In Australia

Is it a big Yes? Tips to select your best fit

1. Identify your specific requirements & resources

This is the first and most important step. You may select a system that is specific to your organisation and not just another software burden by knowing your targeted objectives (like cost control or improved project tracking) and your pain points. Additionally, although larger companies may require sophisticated functionality, smaller businesses can prioritise user-friendly solutions:

• Needs and requirements: Identify your problems and desired results before moving further. Do you have trouble with reporting, cost control, or project management? Which particular features are crucial for your company?
• Business size & budget: Take into account your resources. while larger enterprises might need advanced functionality, smaller businesses prioritise user-friendly solutions. Budget sensibly to guarantee affordability
• Data readiness & expertise: Is your data well-structured and tidy? What degree of technical proficiency does your team have? Select a system that is both simple for your team to use and compatible with the data type you use.

2. Evaluate different vendors & software options

Consider this as conducting a study on various building materials. Here, you may evaluate top suppliers and create a shortlist of solutions that fit your budget and requirements. Having direct experience with its usability and functionality enables you to make well-informed decisions that best meet your specific needs:

• Vendor evaluation: Look into reputable suppliers and make a short list of choices that fit your requirements and price range. Examine features, cost structures, and customer service offerings
• Software demos & trials: Make sure to test-drive the programme and request demos to evaluate its functioning and user-friendliness.

3. Look for scalability and future growth potential

We understand that construction isn't static. Choose a system that adapts and grows with your business. Consider potential expansion plans and ensure the software can accommodate them: 

• Select a system that can develop and expand along with your company. Think about your goals for future growth and make sure the software can handle it.
• Ongoing Development: Choose a supplier who has a history of updating and improving their products regularly.

4. Prioritise user-friendliness and ease of implementation

The workforce that contributes to your success is your team. Give top priority to a system that has an easy-to-use interface and requires little training so that your team can adopt it with ease. In this manner, you can reduce disturbance and enhance the advantages of the system:

• Ease of use: Give special attention to a system that has a simple user interface and requires little training. It should be easy for your team to implement and maximise its advantages
• Implementation: Recognise the timetable and procedure for implementation. Select a provider who can minimise operational impact by providing seamless deployment help.

5. Seek references and user reviews

Never do this on your own. By learning from the experiences of others, you can steer clear of possible dangers, make wise choices, and select a system that has worked well in comparable settings:

• References: Talk to current users of the system you're thinking about as references. Enquire about their accomplishments, difficulties, and experiences.
• User reviews: To learn from other construction companies, read online forums and reviews.

6. Negotiate pricing and consider ongoing support options

Be confident when negotiating prices. Recall that long-term value is not always ensured by a competitive price:

• Negotiate pricing: Don't hesitate to haggle over prices under your requirements and spending capacity. Think of the overall cost of ownership, which includes continuing support, implementation, and licencing.
• Support options: Select a provider of dependable and prompt technical assistance for your needs. Look into upkeep schedules and make sure you can get help when you need it.

Being aware of these guidelines and carefully weighing the advantages of each will help you select the ideal construction ERP system. Selecting the appropriate system is only the first step, though. To guarantee seamless adoption and optimise the system's advantages, invest in appropriate adoption and thorough training for your staff. 

Keep in mind that the most important key is a successful partnership with the vendor of your choice. Make use of their support services to handle any problems and guarantee ongoing system optimisation, which will enable you to improve your building procedure and accomplish long-term achievement. Our team of Havi experts can guide your company through each phase of its ERP implementation. We may either handle everything for you from beginning to end (with continuous support) or you can choose just the services that are best in the business. Have a drink of coffee and tell us more.

References:

• TEC (2022). ERP Software Facts and Lessons Learned: How to Avoid ERP Failure?
• Deltek (2020). Okland Construction Transforms Their Project Delivery With Deltek
• Deltek. Stevens Engineers & Constructors, Inc.