Latest News

Seven key capabilities for construction ERP

The construction ERP software market is projected to reach $15.20 billion by 2029. The increasing demand for construction ERP software that supports key business processes can be attributed to companies’ desire to streamline the management of all financial, construction-related, and project data and processes, as well as enhance collaboration within a company. Here, we share the specific functionality a construction ERP system should include to bring maximum value and efficiency to construction companies.

Project management

Depending on the size of your construction business, you can run one or several construction projects at a time. To manage your projects from start to finish, complete them on time, and avoid problems such as labour shortages, budget overruns, communication issues, and regulatory compliance, construction ERP software should include robust project management capabilities. With the project management functionality, you can accurately plan and schedule your projects and allocate relevant resources to ensure the best project outcomes.

The software can also help companies control project costs by automatically generating project budgets and providing real-time visibility into planned vs. actual project costs.

Additionally, with the integrated analytics component, construction companies can analyse previous projects and monitor the progress of the current ones to identify possible bottlenecks and take timely action before problems escalate. As part of this process, legacy app modernization can play a vital role in ensuring that outdated systems are upgraded to enhance performance, security, and compatibility with new ERP features.

Supplier and procurement management

The list of materials required for construction companies to do their job can be endless. Therefore, the software module that will help manage suppliers and materials procurement is essential. Relying on a comprehensive ERP system, construction companies can automatically create supplier lists and compare bids, key contract conditions, delivery times, and other important factors, streamlining the supplier selection process. What is more, construction organizations can monitor and assess the performance of their suppliers as well as identify and mitigate related risks, like delivery delays, sudden increases in material costs, supplier non-compliance with regulations, and more.

Field service management

By integrating field service management functionality into your construction ERP, you can enable seamless communication with your field workers and, as a result, get a broader picture of every project. Based on your project plans, you can create and manage work orders for your field workers at the construction site. Similarly, field service workers can use the software to update on the project’s progress in real time, prepare Work in Progress (WIP) reports, attach photos from construction sites, as well as send urgent change requests, and more. This way, you can capture all project-related data in real time and report on the project’s progress, issues, and inspections.

Inventory and warehouse management

Another important feature of the construction ERP software is inventory and warehouse management. As construction companies store a variety of materials required for building, keeping visibility into the company’s inventory is rather challenging.

The inventory and warehouse management software module lets you track every item by lot or serial number and efficiently manage construction materials. For example, you can use construction ERP to automatically distribute materials across the warehouse, depending on the items’ attributes, storage requirements, and picking accessibility.

If you have multiple warehouses or construction sites, the ERP will enable you to manage multiple warehouses within a single platform and automatically distribute materials from the central warehouse to other storage facilities or across construction sites.

Overall, the inventory and warehouse management functionality can help you enhance inventory accuracy, effectively manage raw materials, and prevent stockout or overstock.

Equipment management

Construction ERP software should also have the functionality to manage construction equipment to expand its lifespan, minimize idle time, and maximize efficiency. With ERP software, you can consolidate and track all information about your equipment and equipment parts within one system, including serial numbers, procurements and installation dates, and warranties to ensure its proper functioning. You can also automate warranty tracking to enable automated scheduled maintenance servicing and timely replace outdated pieces.

Contractor and subcontractor management

Most construction companies work with contractors and subcontractors to perform certain types of work throughout the building process.

With the ERP system, which stores comprehensive data on all the company’s contractors and subcontractors, including their contact information, qualifications, and certifications, businesses can ensure efficient project coordination, regulatory compliance, and minimized risk exposure.

With a tailored ERP system, construction companies can create and manage work orders for contractors and subcontractors as well as monitor and evaluate their performance. This helps ensure that project deadlines are met according to the schedule as well as quality standards and safety measures are observed.

Compliance management

Construction companies must comply with many regulations, including financial regulations, building standards, environmental policies, as well as workplace safety regulations. ERP software can help navigate the complexity of compliance management, becoming a trustworthy source of all business data and ensuring that all compliance-related information, such as contracts, certifications, and regulatory documents, is stored in one place and is easily accessible. Companies can also maintain a detailed audit trail of all financial transactions, ensuring transparency, accountability, and adherence to applicable local, state, and federal tax regulations.

With the help of ERP software, construction companies can record all workplace incidents, injuries, and near-misses and control that all employees regularly pass relevant safety training.

In addition, ERP software can also send automated notifications for key compliance activities, such as permit renewals, safety inspections, and regulatory reporting deadlines, helping to ensure timely actions.

Real-life examples of construction ERP implementation

Construction ERP implementation for Carlson La-Vine

For about 10 years, a US-based construction company Carlson La-Vine used a legacy ERP system that created more mess and additional processes rather than streamlined the company’s existing operations. After implementing a new modern construction ERP system, Carlson La-Vine got real-time visibility into their construction processes, streamlined AIA reporting and billing, payroll calculation, and compliance management, as well as reduced the time required for their field workers to generate day-to-day reports. All in all, the system boosted the company’s competitiveness and was no longer holding the company back from growing.

A customized construction ERP for Pro Dock and Door

Another example is a small New York-based construction company, Pro Dock and Door. Previously, the company used QuickBooks to manage its accounting and payroll activities. Still, with the company’s growth, it realized it needed a more comprehensive solution to streamline its operations. As a result, Pro Dock and Door implemented a customized construction ERP that streamlined not only its accounting and sales processes previously done by QuickBooks but also the operations of its field workers. The company’s employees no longer have to call their managers whenever they need to inquire about a project or make an update — everything is done right through a suite of business applications.

In conclusion

A properly configured ERP system can help construction companies address a variety of operational challenges and become a valuable tool for managing various aspects of the construction business, from finance, accounting, and HR to project, equipment, contractor, and compliance management. That is why, once you decide to implement an ERP solution, we recommend turning to professional consultants who will help you navigate potential implementation challenges and risks and maximize the solution’s ROI.