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August 24, 2020

6 Undeniable Benefits of ERP Software for Construction Companies

300CRE2Construction companies can no longer ignore ERP solutions. Improved efficiency is now required to stay profitable in the U.S construction industry.

The United States has the largest construction market on the planet. Statistics available online show that annual expenditures on projects are currently over 1.293 trillion U.S. dollars and forecasted to reach $1.53 trillion by 2022. This means that there’s a lot of room for growth in this industry.

However, this growth comes with new challenges for contractors. Undoubtedly, there will be more competition in this industry. This will lead to contractors bidding low on projects to edge out others.

To remain competitive and profitable, your company must present a competitive bid with low overheads. And one of the best ways to achieve lower costs is by implementing a proven enterprise resource planning (ERP) application like Sage Intacct for Construction

What Is a Construction ERP Software Solution?

This is a special type of ERP system created to meet the specific needs of construction companies and contractors. It has modules to plan, schedule, estimate costs, allocate resources, and manage subcontractors.

Some ERP systems have features for comprehensive accounting and financial management and payroll, while others may allow you to integrate your favorite bookkeeping application. The main characteristic of an ERP system is that all project data is available in a database.

There’s no need to maintain multiple applications that create data silos and hinder business intelligence. But before we look at the main benefits of an ERP solution, let’s examine the main modules of a Construction ERP.

What Are the Modules in a Reliable Construction ERP?

Typically, you should look for these modules in a construction ERP:

  • Project management
  • Risk management
  • Service management
  • Document management
  • Real estate management
  • Contractor and sub-contractor management
  • Financial management and payroll
  • Inventory management

What Are the Benefits of Using a Cloud-Based ERP Solution?

Hosting your management software in the cloud helps you to avoid all the bottlenecks and expenditure on hardware. In addition to providing a mobile and flexible system, it also offers you these benefits:

1. Optimized Planning

Planning involves estimating costs and revenues, scheduling, and assessing risk. During this process you need to list various requirements for the success of your project.

Working with an ERP system makes the planning process easier and faster. You will have tools to create timelines and make more realistic labor and resource estimates.

Effective planning makes project execution easier and it mitigates waste. Your ERP software will retain the same data used during the planning process, and it will be available for constant review after the project starts.

2. Improved Estimation

Before you start your project, you must submit your bid. This bid is based on estimated costs.

While most clients desire to have high quality work, they usually opt for the lowest bid that matches their cost estimates. That’s why you must not rely on error prone spreadsheets or estimates that you can’t defend in front of your client.

Using an ERP system will help you to develop estimates with greater precision. You can easily pull them from the actual cost of recently concluded projects with similar design and build requirements.

Your cloud-based ERP software can link up to databases with the current prices of raw materials, equipment rental, and labor in the region where the project will be executed. This way, your estimated costs will not deviate from the actual project costs.

3. Efficient Project Management

Large and mid-sized construction firms with projects on multiple sites usually find it difficult to track project metrics efficiently. Project data for each site needs to be transported to and from each job site.

Having important information trapped in data silos makes it hard for project managers to monitor expenses in real-time or allocate resources to the tasks that need them most.

However, with a proven construction ERP system like Sage Intacct for Construction project managers can track the status of projects. They can also delegate tasks to the right team members, monitor time sheets, and ensure that each worker spends the right amount of time on every task assigned.

4. Business Intelligence

ERP systems are usually centralized sources of project data. They provide a detailed view of the project including information about material and tooling costs, milestones reached, revenue collected, and amount spent on labor.

Prompt access to complete project data makes it easy to evaluate the profitability of a project. It also provides data for informed decision making. When bidding for new projects, you can see whether you have a comparative advantage in completing such projects profitably.

5. Effective System Integration

Your ERP brings together all the important information processing systems in your company. You can integrate the processing of accounts, bill payment, financial management, people and HR management, material and tool management, relationship with subcontractors, and management reporting.

One of the greatest benefits of a construction ERP is that it is optimized for mobile access and you can use it across different operating systems and mobile devices. So, if your staff need to access your system, they can log in securely from a web browser on an iPhone, iPad or laptop. You can also protect your system from unauthorized access with different security and authentication methods.

6. Higher Return on Investment

ERP systems enable construction firms to do away with manual, error-prone, and time-consuming processes. ERP software provides the tools to reduce the cost of materials and labor and the cost of processing information. This, in turn, leads to more profitable project execution.

Since the Sage Construction software can be implemented in modules, it is suitable for startups, well-established contractors, and large-scale construction companies whose turnover runs into hundreds of millions of dollars annually.

In addition to reducing operational costs, using an ERP helps you to complete projects on schedule without exceeding budgets. This will give you an excellent reputation in the industry and open doors for more successful contract bids.

See a Reliable Construction ERP at Work

Contact us today for a free virtual demo of the Sage Intacct for Construction software. You will discover how to integrate all your project operations and make your projects more profitable.


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