What is ERP Software?
Managing the day-to-day tasks that keep your construction company going is no easy feat. With tight budgets and hard deadlines, it can be difficult to stay on track. Managing the business itself with an enterprise resource planning (ERP) system, sharing information with all stakeholders using a project collaboration system (CDE) and keeping a healthy pipeline of work with a customer relationship management (CRM) tool software built specifically for the construction industry is vital to your bottom line and maintaining a competitive advantage.
Difference between Construction Project Management and Construction ERP Software
When it comes to project management, there are a variety of systems, software and tools. Each offers specific key features meant to address certain functionalities needed depending upon the business needs. Two systems you may be familiar with are construction project management (CPM) and ERP. Let’s take a look at the differences.CPM systems are designed to help construction firms to streamline processes, improve collaboration, and address individual construction project challenges. They are focused on automation, planning, and strategising. Among the key features are:
- Revenue, projects and cash flow forecasting
- Corporate budgeting
- Labor, materials and equipment forecasting
- Pay and payroll management
- Process and planning
ERP systems help you manage your financials, projects and resources in one platform enabling you to control change and reduce risk across the whole enterprise. Construction ERP software is designed to meet the unique needs of construction companies. Some key features include:
- Working with real-time information on business processes
- Cost estimating
- Managing bids, contracts and material, plant and subcontractor orders
- Claiming Client Valuations, Variations and assessing Subcontractor Applications and Payments
- Managing reports, documents and workflows
- Optimising supply chain management
- Managing HR, timesheets and payroll
- Managing owned plant assets and external hired-in plant and equipment
- Monitoring productivity and performance
The connectivity and full integration of construction software solutions are essential in streamlining processes and collaboration. This in turn helps you to reduce risk while improving operational efficiencies, productivity and margins across your business.
Benefits of ERP Software for the Construction Industry
From quotes and surveys to managing teams and projects, you need to find a way to do it all, to improve efficiency and communication while reducing the chances of costly mistakes. That’s where ERP software for the construction industry comes into play.
With good construction ERP software in place, all your departments will be connected, from contractors to accounting and HR. You’ll streamline collaboration and operational processes, allowing for better decision making, cost estimation, supply chain management, communication and document digitisation.
1. Streamline project management
Effective project management is important to the success of any construction project. Directing, organising, planning and scheduling are each a part of the project management life cycle. From conception to completion, it’s crucial to keep your project on track by relying on the latest construction management software.
It can be challenging to distribute tasks and monitor the progress of projects across several work locations in an efficient way, but a construction ERP system can make life a whole lot easier for project managers. They’ll be able to monitor activities, view the status of each project, develop milestones and delegate assignments. And they’ll access user-friendly tools to streamline business processes — everything from team management and accounting to cost-value reconciliation and document management.
2. Improve decision-making
Construction ERP software keeps your teams — operational, commercial, finance and site-based — connected with centralised data. This speeds up processes and makes real-time data instantly accessible from anywhere, at any time and on any device. Your teams can make confident decisions informed by accurate data displayed on powerful, user-friendly dashboards.
3. Improve cost estimation
In construction, accurate cost estimation is vital to the bottom line. The accuracy or inaccuracy of an estimate can make or break your profitability. A construction ERP solution will help you produce accurate cost estimates for materials, plant, labour and subcontractors. ERP software will also calculate overhead liabilities on lengthy projects. This allows you to provide an accurate cost estimation where the real cost deviates little from the upfront estimation as the project moves through its lifecycle.
4. Optimize supply chain management
Managing the construction supply chain is a crucial task. It involves understanding the breakdown and tracking of products, organisations, people, logistics, activities and resources. It requires meticulous attention to detail and continuous task assessment.
An ERP system can help you identify supply-chain issues at an early stage so that you can take the necessary steps to prevent delays and disruptions on site.
5. Improve communication
Poor communication leads to a loss of productivity in almost all businesses, including the construction industry. According to Client Confident research, up to £13 billion is lost in building projects in the UK owing to inefficient communication between stakeholders. Improving communication is one approach to boost productivity and, as a result, your bottom line.
When there are disconnects between teams and departments, you see a loss of productivity and a slowdown in operations, which can affect deadlines and budgets. A Construction ERP enables real-time communication across teams, ensuring that everyone is kept in the loop and can access the latest information.
6. Digitise documentation
According to UK Construction Online, “Construction is one of the largest sectors in the UK, representing around 6% of GDP, yet along with agriculture, it is one of the least digitised sectors.” As discussed in Risk Management in Construction, digitisation offers the only sure-fire way for companies to tighten up their processes, increase collaboration throughout the supply chain, manage risk, improve the quality of decision-making and ensure long-term competitiveness.
When you digitise your data, it’s all stored securely and digitally. This reduces the chance of someone accessing files without authorisation, paperwork being lost (or even destroyed) and basic human error. You’re also able to access the information at any time and from anywhere.
RedSky’s ERP Business Software Solutions
RedSky’s ERP system is designed specifically for the construction industry. It offers a smarter construction ERP cloud platform that puts the power of data at your fingertips — 24/7 and from any location with an internet connection. Our cloud-based, fully integrated, and user-friendly construction software solution boosts operational efficiencies, productivity, and profitability throughout your construction company.
With many ERP system options available on the market, it’s important to find the one that meets the unique needs of your construction business. By enabling you to streamline your processes, improve your decision-making and control your costs, RedSky’s ERP software will bring real value to your business.
Learn more about how RedSky’s construction ERP solutions can improve your profitability by requesting a demo with one of our specialists. You can also get in touch through our contact form or by giving us a call at +44 020 3002 8600.