Five key Benefits of ERP for Construction Companies


The UK construction industry is one of the largest sectors, accounting for around 6 per cent of GDP. You might think that the construction industry is slow to change, but there is more to this than meets the eye.

Admittedly, the construction industry has lagged in regards to digital transformation, with over half of the UK construction industry decision-makers acknowledging the problem. There is a silver lining: Construction companies are finally starting to recognise just how large a benefit digital transformation can be.

Still, there is much work to be done. According to this SAP report, 70 per cent of the world’s population will live in cities by 2050. Also, the global GDP of worldwide construction will grow to 13.2 per cent by 2020. Since many unforeseen challenges are now facing the industry, the time to digitize is now.

While digital technologies may seem a world apart from construction, ambitious companies can attract the right talent and jump in anyway. Now, 81 per cent of decision-makers stated that they’re going to ramp up efforts to improve the digital side of their business.

That doesn't mean digital transformation will be easy. To facilitate change, technology needs to be standardised up and down the supply chain. The workforce must be readied for digital transformation as well. Plus, profitability needs to be increased so companies can secure the funds needed to invest in digital transformation.

Many companies have found themselves stuck in a vicious cycle. Productivity is low and digital transformation could help. However, low productivity is producing weak profits, which makes it difficult, if not impossible, to make major investments in digital transformation.

Regardless, forward-thinking companies are pushing ahead, harnessing digital technologies to carve out competitive advantages. Yesterday’s back-office systems will no longer cut it in a mobile-empowered, digital-enabled world.

By embracing digital transformation, construction companies can break the cycle, increasing productivity and profits even in spite of headwinds. Digital technologies can be used to boost productivity, improve service delivery, manage and mitigate risks, cut operating costs, and improve relationships with suppliers.

If not thoroughly planned, digital transformation can be a confusing and complex journey. Also, each company embarks on a journey unique to their background and future objectives. A good start, for SMEs in the construction industry, would be to implement an ERP system. Yet, not all ERP systems offer the same level of transformation. What is important is to utilise an ERP system that is customisable according to the specific needs of construction businesses. This then enables organisation-wide data sharing.

As information flows freely between each company department, it facilitates better productivity and efficiency. You can eliminate manual processes, control expenses for raw materials, stay compliant with regulations, manage contracts efficiently, and deliver your projects with ease. While there are many reasons to implement an ERP suite, here are the five key benefits for the construction companies.

Rethink Retail: Five key Benefits of ERP for Construction Companies

1. Opportunity Management It's important to streamline operations in terms of managing customer relationships while realising potential sales opportunities. Construction companies can improve their chances of winning new business if they have instant access to data and successful sales performance metrics which can be standardised for repeatable success.

2. Project Management An end-to-end integrated ERP enables project tracking from beginning to end. Project managers must have access to data on company resources so that they can efficiently plan project schedules. ERP solution such as SAP Business One allows complete visibility into the workforce for specific skillsets for every project. Plus, there is an added benefit of managing multiple projects and sub-projects with several tasks and sub-tasks.

3. Project Accounting Those who work in the construction industry have a keen awareness of tight budgets and deadlines. Yet, unforeseen circumstances can still come into play. This is where project accounting can help. It isn't a stretch to say that your financial controls are vital to the success of your business. With a project accounting module, your business can view important business reports and metrics such as:

  • Audit trails
  • Past invoices
  • Cash flow
  • Budget

4. Time and Materials Management With an ERP system like SAP Business One you can control company-wide inventory for the better management of your distribution processes. View planned versus actual costs and enjoy full project visibility.

5. Project Quotation  It's essential to offer data-driven quotes to your clients to ensure your company's finances remain in order. With access to a central database, you can conveniently view all your business content electronically from resources to materials and time.

Rethink Retail: Five key Benefits of ERP for Construction Companies

Final Thought

According to SAP, the world’s infrastructure will double two times by 2050. ERP is about creating a unified resource which enables data-driven management decisions that expedite the strength of your business. Furthermore, you get to keep your projects on schedule and budget while being prepared to successfully meet the infrastructure challenges of the future.