ERP and the potential to power construction productivity
The evolution of enterprise resource pl...
We talk to some industry leading lights about the impact of enterprise resource planning (ERP) in construction.
The evolution of enterprise resource planning (ERP) software, particularly cloud ERP, has played a pivotal role in the technology strategy of construction businesses in recent years.
ERP allows everything from inventory to HR, accounting and more, to be integrated and streamlined. Combining these essential functions on one easily accessed and shared database enables different aspects of each business to elevate performance, save time and make projects easier to manage. The implementation of this software has already produced some intriguing results.
ERP in action
Shane Tate, Director of Tate Consulting, believes that construction software has changed how the industry works as a whole. Tate Consulting is currently working on a multi-million-pound development in Royal Wharf Docks, which aims to build a new town within London and includes 3,385 residential units.
"Coordinating architects, structural engineers and building services engineers is a challenge and without regular coordination, there are inevitable delays in detecting any issues which can result in considerable costs and labour further down the line," Tate tells us.
“(Using) Revit software has allowed us to overcome many problems, especially in the case of the Royal Wharf project that includes a full-sized swimming pool and gym, which created several issues with ducts that needed to be built in to the original design. This would inevitably have caused major problems on the ground if these hadn’t been resolved within this phase.”
What can ERP do for you?
To gather a deeper understanding of the benefits ERP can deliver, we spoke to James Lloyd-Townshend, CEO of Washington Frank International, global leaders in ERP recruitment. Here’s his top pointers on why construction firms need to invest in the ground-breaking software…
The construction business is awash with rules and regulations, which must be followed. Implementing a compatible and robust ERP software provides your business with visibility, transparency and data security, allowing you to meet the regulatory compliance standards with ease.
Planning and analysis
In construction, it’s crucial that you know which raw materials are required and exactly how much manpower is needed. Using a good ERP solution will make it significantly easier to utilise your resources in the most efficient way.
Construction ERP software allows you to simply figure out how much of your budget you will need for collateral expenditure, and helps you stay clear of any contractual complications for the duration of your project.
Any construction project, no matter what size, will require a host of costs to be considered, with large projects becoming very complex. Every time a construction company bids on a project, they need to provide cost estimations, which can often be wide of the mark.
Having the correct ERP software helps to provide an accurate estimation to a client, safe in the knowledge the actual cost won’t deviate too much from what was offered, avoiding any unwanted and unanticipated expenditure.
With all the data in the same location, productivity levels can soar thanks to ERP. Improved analytics can help you create automatic order forms to manage stock control as well as reports to analyse your results and efficiency. The analytical side of the service provides you with the ability to create automatic order forms which will aid you in stock control.
With the correct ERP software in operation, your construction business can become more efficient in communication which, in turn, could reduce data duplication. It would also equip contractors with the most powerful tools for their job, offering a host of features that are specifically designed for construction management, such as bid management, accounting, profitability tracking and payroll tools.
Projects can span several years and a breakdown in communication can be extremely costly, meaning communication is key. An ERP solution with in-built chat and video forums provides those involved with the perfect platform to communicate internally and make sure projects stay on track.
If you have a strong ERP in place, it’s easier to keep all your projects and data under one umbrella. ERP software products were developed to aid the manufacturing world in order to help track and coordinate projects wherever you are. A modern ERP software system offers a flexible and robust system which can be tailored to each business’s own needs.
Having a platform where all information is in one place could be the greatest time-saving decision you make for your business. It’s thought that a business will waste approximately one man month each year searching for data and documents that have gone astray. ERP will remove the risk of human error and misplaced files, helping keep core data organised.
It’s not always possible for those in the construction industry to be office-based every day. However, many ERP solutions now operate from the cloud, meaning you are able to have a real time view of all your business processes wherever you may be. This allows you to keep an eye on your essential business needs even when you’re on the go.
The future of ERP
With a recent survey of over 300 global organisations by Sana Commerce highlighting that construction companies will be more likely (84%) to sell 100% of their inventory online in the future, more than in any other sector (72% average), how else could ERP further influence the industry in the future?
The final word goes to Stuart Hall, Enterprise Sales Manager at Sage.
“Since the mid-90s productivity per hour for manufacturing labour has almost doubled. In the same timeframe, construction labour productivity has remained flat or declined depending upon the sector. Clearly, there are tools that the manufacturing sector has successfully deployed that have yet to penetrate the construction sector,” he says.
“This productivity gap must be addressed by new generation construction software. The tools need to migrate from being effort tracking and reporting applications to decision support systems enabling process optimisation in response to real world situations and customer demand. This will give greater insight to help make better and more timely decisions.
“We also expect to see tools that will allow deeper cross-project and program analysis and forecasting. It’s this insight from business software that will allow executives to model the impact of projects on their bottom line based upon historical data and proven models.”
BT and Microsoft unveil strategic partnership
BT and Microsoft have launched a strategic partnership to accelerate innovation across enterprise voice, cyber security and industry-focused services in sectors from digital manufacturing to health.
BT has already been named one of the first development partners for Microsoft Operator Connect and Operator Connect Conferencing. The renewed agreement will allow BT to build on this relationship and offer its own branded global managed voice services directly through Microsoft Teams, with an approach that further enhances customer experience and creates new opportunities for growth.
The strategic partnership will build on BT’s existing portfolio of cyber security services built on Microsoft technology. It will see the companies push forward with the design and launch of a new generation of managed security services to enable and protect the modern collaborative workplace. BT will work closely with Microsoft to develop distinct security propositions to defend customers’ operations across the cloud as well as its own IT estate.
Sustainability and collaboration on digital skills are integral to the partnership. BT and Microsoft will work together on further enhancing sustainability credentials within their supply chains and join forces on promoting digital skills in the communities.
“BT and Microsoft are at the forefront of innovation in global digital platforms and connectivity that will take technology and communication beyond limits,” said Bas Burger, CEO of Global at BT and executive sponsor of BT’s partnership with Microsoft. “This partnership will ensure all of Microsoft’s solutions work ‘Best on BT’ and support both companies’ commitments to improving digital skills in the community.”
Omar Abbosh, corporate vice president of industry solutions at Microsoft, said: “BT can use Microsoft’s cutting-edge tools to develop new communications services that meet the needs and demands of today’s customers. By aligning our visions for communication, connectivity, security and digital technology, Microsoft and BT will support real growth for businesses across the world.”
Microsoft's vision is to transform construction and built environment businesses with design innovation, a supply chain you can control, and a connected, safer, more productive workforce.
Microsoft recently unveiled strong results for the quarter ending June 30:
- Revenue totalled $46.2 billion, up 21%
- Operating income was $19.1 billion, up 42%
- Net income was $16.5 billion, up 47%
- Diluted earnings per share was $2.17, up 49%
For the year, revenues totalled $168.1 billion (up 18%), operating income hit $69.9 billion (up 32%), net income was $61.3 billion GAAP and $60.7 billion non-GAAP, and increased 38% and 37%, respectively.
“We are innovating across the technology stack to help organizations drive new levels of tech intensity across their business,” said Satya Nadella, chairman and chief executive officer of Microsoft. “Our results show that when we execute well and meet customers’ needs in differentiated ways in large and growing markets, we generate growth, as we’ve seen in our commercial cloud – and in new franchises we’ve built, including gaming, security, and LinkedIn, all of which surpassed $10 billion in annual revenue over the past three years.”
In a trading update last month, BT reported profit after tax £2m, down £446m, due to a "one-off tax charge in the quarter to reflect the remeasurement of deferred tax balances following the enactment of the new UK corporation tax rate of 25% from April 2023".