Common Construction Problems: How Can ERP Software Help Solve Them?

by Lalithaa

Construction is among the faster-growing industries worldwide. But as the industry grows, it poses several challenges to the construction companies. From managing contractors and subcontractors to procuring construction materials and optimizing human resources and assets to meeting strict budget and project deadlines, the operational costs tend to add up quickly. All these challenges make it difficult for companies to keep track of office and job site operations.  

It is when an efficient ERP Software for Construction Industry comes to the rescue. Implementing an ERP system lets you quickly automate your construction processes and store valuable data in one place. Moreover, construction industry-specific ERP software is packed with customized modules to meet the unique requirements of each construction business and provides 360-degree visibility and efficiency perks.  

This article uncovers the common construction industry-specific problems that can be fixed by implementing an ERP system. 

Common Challenges in Construction Industry 

Here listed are some common challenges in the construction industry: 

  • Extended Cycle Time

Cycle time can be defined as how much time it takes from starting a construction project to its completion. A construction company can have a longer cycle time due to inefficient planning and management. It further increases the risk of lower margins and higher labor expenses with unsatisfied clientele due to missed deadlines.  

  • Inaccurate Data and Reports

You can often find inaccuracies in the construction company’s equipment or material data records. According to an Autodesk and FMI Analysis survey, around half of the respondents states that inaccurate, insufficient, redundant, or inconsistent data leads to a negative outcome for one in every three construction project decisions.  

  • Cost Overruns

 An unanticipated change in the project budget increasing the overall project cost is referred to as a cost overrun. McKinsey report states that 98% of major construction project reports cost overruns account for more than 30%. 

  • Lack of Streamlined Communication

Effective information exchange becomes essential for the project’s success in the construction industry, with several professionals working from various locations and contractors working at the job site. It has been observed that there is mostly a communication gap between managers working in the office and contractors working on the site, resulting in increased construction complications.  

How Can ERP Software Help Fix Construction Challenges? 

construction ERP system can effectively help resolve the above-discussed challenges by offering the following: 

  • Data-Driven Project Planning

An ERP helps consolidate a construction company’s entire network of data sources. It allows businesses to use consolidated data better to plan construction projects. You can plan for all labor requirements, expenses, estimated profits, and essential materials and tools. Data-driven planning help identify the risks and bottlenecks during the project’s initial phase, further reducing lead cycle time.  

  • Cost Estimation and Minimization

Construction ERP helps managers precisely estimate raw materials, labor, design, and project timelines. This application can also be utilized to calculate the profit and loss for each construction project, which further aid in managing and forecasting time and budget for upcoming projects.  

  • Workflow and Process Customizations

With a robust construction ERP platform, you can create unique workflows and processes before commencing the project. Moreover, you can specify the order for sending data or reports across departments. It simplifies department communication and improves process efficiency and collaboration amongst key stakeholders.  

  • Managing Projects

A construction ERP system is an ideal solution for construction companies to manage their multiple projects simultaneously in real-time successfully. Such platforms also optimize the projects by identifying and deploying the right resource at the right location and time.  

  • Improved Communication and Collaboration

Communication and information exchange are two crucial elements for managing internal operations across all departments in construction companies. Deploying an ERP system is the ultimate solution for fostering seamless real-time communication and information exchange. It further helps boost construction project efficiency and empowers employees in decision-making.  

Summing up it all!

 Advanced technology can simplify everything. According to 96% of industry leaders, technology can improve productivity, especially in the construction industry. By implementing a top-notch construction ERP system, you can easily overcome typical challenges in the construction sector. The application can help businesses simplify their construction operations while providing access to accurate reports and ensuring quality and on-time delivery. It’s recommended to consult a professional to implement robust ERP construction software. 

You may also like