ERP for Construction and Infrastructure: 8 Benefits To Smooth Out Your Firm’s Boom-and-Bust Cycle

As a leader in the construction space, you’re accustomed to boom-and-bust cycles and experienced at having to keep the lights on during lean periods. With that said, recent market conditions have gone beyond the standard definitions of boom or bust, making for a hard-to-define and very unpredictable climate.

What can you do to build consistent prosperity as factors like high inflation, labor shortages, and interest rate increases put stress on your business? Your internal management approach and your choice of enterprise resource planning (ERP) technology can play a significant role. You may be surprised at just how impactful an integrated next-generation construction ERP solution can be.

Challenges Facing Construction Businesses

The ever-evolving economic factors putting pressure on your construction company demand a response. The winds within the industry can change seemingly overnight, making it important that you have the technology in place to roll with the punches — or even get one step ahead of the next move.

While there are a near-unlimited variety of factors that can put your bottom line at risk, you can get a solid overview of the issue by looking at three: inflation, labor, and interest rates. Alongside the problems brought on by these issues, it’s worth noting how a construction ERP deployment can help your business cope.

Rising inflation means higher material costs

Construction firms have spent several years coping with rising material costs. Following a devastating series of increases during the COVID-19 pandemic due to supply chain breakdowns, inflation took hold. Since there’s little your business can do to directly lower prices or single handedly fight inflation, your response will have to be an internal one.

• How construction ERP helps: With an effective ERP solution, you can gain visibility into your costs. By integrating your business’s financial and operational sides, you can overcome the silos that would otherwise prevent you from making clear, fully-informed budgeting decisions. You can use increased visibility into costs to highlight problem areas and make adjustments like renegotiating contracts, resequencing scheduling, or proactively adjusting billing.

Worker shortages mean you’re paying premium wages

There are a number of factors and high-level policies that can affect the availability of skilled workers for the construction sector. And when there are few people, you may end up paying more. Recent data and analysis have borne this out. The General Contractors Association of America issued warnings about a lack of training and work authorization programs and noted that hourly earnings for production and nonsupervisory employees had risen 4.5% year over year to $36.55.

• How construction ERP helps: One way to offset high costs during tight labor markets is to achieve more productivity with your organization’s current staff. A high-quality ERP solution delivers this improved productivity by reducing manual calculations and automating common tasks. This technology can also assist with retention, as “digital-native” younger employees will feel more positive about working in a connected, efficient workplace.

Increasing interest squeezes cash flows

Interest rates that remain high, even as other large-scale factors change around them, can have a direct impact on your ability to run a profitable construction business. High rates constrain both your ability to borrow and potential customers’ ability to start new projects. This calls for drastic measures to repair your cash flow.

• How construction ERP helps: A modern ERP for construction delivers real-time data access as well as forward-looking analysis and insights. With this knowledge in hand, you can make strategic decisions about how you manage your cash. Such information is especially useful to protect your budget when planning a major move like a merger or acquisition.

8 Benefits of ERP for Construction Firms

An ERP platform can become the heart of your firm’s digital operations, serving as a central source of data truth and the connector between all your construction management software. As it unites your information and people, it can have a massive effect on your overall performance.

The following are eight specific advantages of using ERP software tuned for the construction industry:

1. Simplified, User-Friendly Operations

Working on the construction project management aspects of jobs can be complex — add in resource oversight and finances, and there are several difficult processes ongoing in your office at any given time.

A well-designed ERP system streamlines all these operations and provides a single interface for users across teams and functions. This is especially important when your firm is running multiple jobs at a time, or you’re working with a limited number of people.

2. Enhanced Productivity for Staff.

In addition to simplifying back-office work through a unified and well-designed interface, a purpose-built construction ERP solution can deliver another major advantage for staff: increased productivity via automation.

Common everyday tasks such as data entry can take up large portions of an employee’s time and attention. Automating this work not only puts more hours back in your team’s days, it decreases the risk of human error brought on by data entry mistakes or the proliferation of inconsistent offline spreadsheets.

3. Visibility and a Single Source of Data Truth

All that information uploaded into the business’s systems — as well as the content already residing in its disparate servers and applications — becomes part of one whole when you use a capable construction ERP system. Since numerous functions — from planning to governance and beyond — count on data consistency and visibility, this is a major advantage.

Over the past decade-plus, the use of cloud computing has delivered a new level of data access. Cloud-based construction ERP technology allows employees at various locations to work from a consistent set of figures, whether they’re logging in from one of multiple offices, from home, or from a construction jobsite.

4. Actionable, Real-Time Insights.

Acting as a source of data truth doesn’t just mean providing access to the raw numbers. High-quality construction ERP software also includes analytics tools that allow users to derive insights about patterns in the information. This allows your firm to make intelligent decisions in the management of its contracts and jobs, getting ahead of potential issues.

The most useful data-derived insights come via dashboards and visualizations that clearly display trends. Such user-friendly analytics tools help leaders make quick decisions based on solid facts.  Those decisions can shape day-to-day work or the direction of the entire firm’s strategy for months to come.

5. Enhanced Ability To Collaborate

Cloud-based ERP systems offer more than data access to team members around the world — these technology tools also provide spaces for collaboration. By interacting directly with important documents such as blueprints, as well as contracts, financial information, and more, team members can ensure colleagues see all their comments and changes.

These collaboration features remove the risk that comes from emailing documents back and forth. When users are constantly creating new versions of important files, it can be difficult to know which takes precedence, potentially leading to confusion, delays, and costly mistakes.

6. Smooth integration of disparate tech systems

One of ERP’s most important roles is as the connective tissue between the systems responsible for discrete functions like inventory and asset management, finance and accounting, construction project management, governance, resource allocation, field reporting, and more. Clear communication between these systems leads to faster, more accurate work.

Information can easily be lost in translation when the pieces of your technology stack don’t talk to one another. A slow, inaccurate work environment can result from such a lack of connectivity and integration. The best ERP technology will integrate with a wide variety of other construction software tools from various manufacturers to ensure the business is able to build a unified environment.

7. Accurate, streamlined financial management

Financial management is one of the areas where it’s especially important to work with an ERP system designed with construction in mind. Solutions that include reporting, job costing, and automated billing features targeting construction firms can become an essential part of your organization’s tech stack faster.

The best ERP systems will also include analytics features dealing directly with finance and accounting. Giving financial employees and departmental leaders a clear, at-a-glance way to engage with performance data can help with budgeting in terms of time spent on tasks as well as decision-making accuracy.

8. Built-in governance and compliance

Managing multiple kinds of regulatory compliance is a major priority in the construction sector — and is just the beginning. Being in line with rules should be a starting point for your firm, rather than an ultimate goal. Purpose-built ERP systems come with governance features built in, easing the process of getting into compliance.

Regulations applying to construction firms cover everything from digital matters such as data storage to Occupational Safety and Health Administration (OSHA) rules relating to safe job site practices. Having an accessible place to store important information relating to compliance programs, such as employee certifications and test results, is another vital role of construction ERP technology.

Investing in tools and technologies that can increase productivity should be a major priority, and the features of an ERP platform add up to deliver improved performance throughout your organization. Especially when viewed as a connective system at the heart of your business’s tech stack, the quality of your ERP matters.

See how an ERP system provides access to accurate production-related data and other vital information for your construction firm.

How To Find the Best Construction ERP Software for You

It’s important to note that there’s a difference between purchasing a construction ERP system and purchasing the best construction ERP software for your specific needs. By reviewing a particular solution’s list of features, you can ensure that it will be able to deliver the construction management advantages described above, rather than falling short.

• Scalable, cloud-based design: Cloud access is the key element in many enterprise software deployments — ERP is no exception. Cloud-based solutions are accessible from anywhere, which is especially important to construction managers accessing and entering real-time data from the job site. The cloud also enables scalability, so you don’t have to replace your solution as your company grows and it allows you to receive automatic updates, ensuring the solution doesn’t fall behind on new features or security patches.
• Purpose-built features for construction: Customizing a general ERP solution to suit construction usage can be far more expensive and time-consuming than using a product designed from the ground up to suit the sector. Features such as raw material management, compliance, project accounting, and field reporting may be lacking in solutions not meant for construction use, along with the ability to seamlessly work with specialized documents such as blueprints and 3D building models.
• Governance, compliance, and data security features: Noncompliance and more general governance failures can come with severe consequences. Whether it’s an OSHA fine for employee certification record-keeping violations, a loss of reputation after a data breach revealed insufficient data security, or anything in between, a destabilizing event can set construction companies back. This is why it’s essential to find ERP software with effective security and governance features.
• User-friendliness and accessibility: No technology tool can reach its fullest potential if it’s difficult for end-users to engage with. Not only does a complex or unfriendly interface cut into efficiency gains, it can discourage users from working with the technology at all. By purchasing a user-friendly ERP solution, you can deliver quicker uptake and deeper engagement with the construction software’s feature set.
• Ability to integrate with other technology: Because creating a connected, consistent software environment is one of the major objectives associated with modern ERP use, it’s important to ensure your chosen system integrates with the other parts of your tech stack. Native integrations can deliver effective data movement between platforms, saving time and making your team more efficient.

Selecting technology that doesn’t truly meet your organization’s needs will likely prove costly, whether over the short or long term. Whether you go over budget customizing an ERP platform that lacks specialized features for the construction sector or are forced to replace an unsuitable or non-scalable system within a few years, the costs of suboptimal ERP deployments add up.

Once you see the power of a purpose-built construction ERP system, with a long feature set and support from a knowledgeable team of experts, you’ll realize the value this technology can deliver for your business.

Get Started Experiencing the Benefits of Construction ERP

As a modernized, scalable cloud-based ERP solution designed for the construction industry, Acumatica can serve as the centerpiece of your firm’s tech stack, providing a single source of truth and uniting all your disparate systems to enable more effective operations every day. Its specialized modules deliver forecasting, payroll, billing, compliance document management, mobile access, and more.

Whatever processes your organization is currently following, the new system can integrate smoothly into your workflow and begin delivering value on a short timeline. When an expert team from Net at Work handles your Acumatica ERP implementation, there’s no need to worry about whether the system will be configured correctly — you can be sure you’re off to a good start.

Net at Work experts understand how to tailor systems to construction companies’ specific requirements and minimize the disruption of a new solution coming online. Following the ERP implementation, they remain available for ongoing support. With such a knowledgeable partner organization on your side, your team can stay focused on value-adding work without worrying about optimizing your ERP deployment.

Learn more about construction ERP systems or contact us.