Construction Industry

Let’s look into some of the major problems in construction companies who do not have or have partial IT infrastructure.

1. No electronic tracking of tasks. The project manager needs to produce manual daily production report.
2. Budget and controls done using legacy spreadsheets and this is most time consuming task and the employee is overloaded.
3. Each project has its own independent method of encoding.
4. Off-Site locations are not as organized as desired.
5. Material and Equipment usage are hard to track; there is very little writing on site.
6. The project managers do status reports but lack critical information such as
  • Inventory information
  • Budgetary information
7. Due to disorganization there is little time for follow up.
8. There is no process for
  • Payment follow ups.
  • Reminders of important issues like raising invoices.
  • Beneficial weekly status report.
  • Petty cash request and reporting
  • Evaluating the performance of the project manager.
9. Ineffective system to incorporate fixed assets into the company books.
10. No clear process to accurately track inventory at multiple sites.
11. Invoices are not raised frequently enough thus contributing to a cash flow problem.

What these construction companies could typically expect from a tailor made ERP solution is

1. Effective Processes
  • That show the progress, the amount of raised invoices, cash-flow, and inventory by projects.
  • Track project budgets. To track at an individual project level and at a summary level.
2. To be able record major project tasks over the duration of the project.
3. Accountability at each level of project progress
4. A system with the least amount of human intervention this is not limited to:
  • Tracking the project progress
  • Tracking the production and utilization of resources
  • To send alerts for delay or problems halting the project progress.
5. Each Project phase must be divided into segments for the aiding accountability at every stage. (More on this later in finance)
6. Dashboards and metrics to monitor each level of project progress.
7. Alerts to indicate and to remind the project manager if the project is not on schedule
8. Maintain log on project issues for record keeping and resolution.
9. To have a built in work flow so that it is easy for the user to know what is to be done next for each task required.

Another corner stone of tailored ERP solution will be the measuring the financials of the project. Any typical construction project is planned and budgeted. Using the ERP it will be possible to compare the planned vs actual value analysis and reporting. To illustrate with an example. Let us assume a hypothetical construction project where the planned project budget is Plan A. This plan will be the bench mark which needs to be followed to attain operational efficiency and completing the project on time within budget. Any deviation from plan A can be tracked through ERP reporting. For instance on delay of any of the tasks will be reported by the respective project managers in the ERP system. The Plan A will be compared with the changed plan as per the changes that had been made and its variance generated in the system. Tasks inter dependencies will be reflected in the system based on the input. For instance Task number 3 cannot start without completion of Task 1 or 45 % of Task 2 etc,. So system will compare generate reports on the start and end dates of each task and compared with the actual work that has been completed. If any task is out of schedule time, the system will generate alarm to remind for its respective teams as well as higher management.