7 Reasons Generic ERP Tools Don’t Work in Construction
Construction businesses have a lot of moving pieces, literally.
People, materials, and equipment are constantly moving in different directions as you manage your projects. But contractors also have to deal with a mountain of data relevant to managing the business operations to ensure construction projects are completed on time and on budget. The office, field team, engineers, project owners, subcontractors, and others need to be able to connect and collaborate in real time. To manage all these business processes, most firms opt for enterprise resource planning (ERP) software.
If you already have a generic ERP, you’re probably aware of some of the common pitfalls of using software not designed specifically for the construction industry. If you’re thinking about getting a software solution or investing in a new one, you want an ERP that improves ROI and the bottom line, not one that wastes time and causes headaches. Take a minute to learn about these common challenges, and why generic ERPs come up short for construction firms.
1. They don’t serve all users
One of the biggest complaints about generic ERP is that it doesn’t work well for everyone who needs to use it. Executive, back office professionals, and operations users in the field may need different software functionality and capabilities, and an out-of-the-box solution that’s not designed for construction can’t always provide that.
2. Inadequate cost control
Generic solutions may not provide a clear view into ongoing job costs. Ideally, you want to see numbers for actual, forecasted, committed, and pending costs in real time so you can stay on top of everything, contact the appropriate people, and make adjustments as needed.
3. Disconnected billing systems
Your billing system should be connected to the rest of your software, not something that lives off on its own. Generic ERPs may not include integrated billing, and that can lead to inefficiencies, mistakes, delays in payments, and other potential problems. An integrated billing system can be automated to work directly with other construction software functions, making it a great time-saver. Plus, you won’t have to worry about someone forgetting to send a bill on time.
4. Inefficient approval workflows
Speaking of inefficiencies, approval workflows in generic ERPs can get bogged down by poor communication and time wasted looking for needed documents. Automated document approval workflows — with digital access to source documents — are a much better solution.
5. Poor vendor compliance and reporting visibility
If you can’t keep track of what your vendors are doing, it’s easy to run into problems. Generic ERPs often lack needed reports about vendor compliance. In an ideal world, you’d receive notifications when someone isn’t compliant so you could do something about it right away, and that’s often a capability a generic ERP lacks.
6. Lack of field reporting
Writing things down on paper has a time and a place, but that place isn’t necessarily out in the field — especially if the information people are writing down is important. While much of the construction industry still relies on paper, the industry is moving toward digital document management solutions and cloud-based access and sharing capabilities. Unfortunately, generic ERPs don’t allow for easy electronic field reporting via laptops, tablets, and other devices. When the field team is connected, information can be input much more quickly without the risk of it being lost or mistakes made in re-entering information.
Electronic field reporting is easy with construction software, but not with generic ERPs.
7. Weak supplemental functionality
As we said earlier, your construction business’s many parts likely have different needs. A generic ERP probably won’t include functionality that can easily handle operations like equipment management, service management, and materials management. You’d need a more tailored construction solution to get these integrated operations modules.
Opt for integrated construction software
Generic ERPs may help you get some of the job done, but as you can see, they aren’t the best solution for construction businesses. At Viewpoint, we’ve spent 35 years working with construction firms to create software designed specifically for their needs. We can help you find a software solution that gives you the functionality and flexibility you’re looking for to aid all members of your team, from your head office to your crews in the field.