As demand from customers, stakeholders, and asset owners rises, Construction and Engineering (C&E) organizations are recognizing the need to deploy new software into their operations. However, not every ERP vendor will adapt to new industry regulations, customer requirements, sustainability reforms, new technology, or modern construction methods. The consequences of not investing in new technology can often result in entirely abandoned or orphaned products.
Findings from the 2021 Construction Survey by Software Advice show that 53% of construction businesses have implemented a new construction-specific project management tool in the last 12 months. The decisions were made to mitigate customer, stakeholder, and asset owner impatience with project delays and process gaps in operations, by introducing more artificial intelligence (AI), Internet of Things (IoT), and virtual/augmented reality (VR/AR) into business strategies. Despite the roadblocks experienced in the past 18 months, technology investments are front and center—predictions from GlobalData show an estimated $1 billion in AI platform spend by 2024.
Choosing the right ERP infrastructure is crucial, and when disruptive technologies deliver on their promises, it results in great project management. IFS recently commissioned IDC to conduct a study on the metrics and value of enterprise software solutions in the industry. The study found that the software can speed up product and order delivery times by 14% and increase productivity of supply chain and offsite manufacturing teams within construction organizations by 17%.
Choosing ERP software is not a decision that should be taken lightly given the complexities surrounding the products and the vendor licenses, and contractors must make sure that the selected ERP vendor is heading in a direction that aligns with the C&E organization’s business objectives.
KNOW THE DESTINATION
Looking further than the next few software releases will require effort and vision. Knowing the strategy of a software vendor in terms of technology and functionality allows C&E organizations to align business strategies in response. For systems, programs, and investments that underpin the C&E business, clear visibility into where an enterprise software product is going can be gained through a detailed roadmap from the vendor. Having a roadmap will stop C&E organizations from developing or purchasing capabilities that will come as a standard in future releases. Within this roadmap, vendors should outline the anticipated trends and assumptions of where the industry and its customers are headed and what added capabilities and architectural changes will be made to the product to help customers adapt. Additionally, it should include release plans and dates for new features and enhancements.
C&E organizations should ensure that they are provided with a copy of the roadmap in writing and strong evidence that the vendor is delivering on their roadmap objectives. Additionally, it’s wise to inspect where most of the investment is dispersed within the vendors portfolio. While they may not broadcast this, it’s worth taking the time to check recent news announcements and release notes to identify what the vendor is allocating funds towards.
If funds are not being put towards the product you are considering, it could mean that the product will turn into a burning platform—which could mean that the product will be discontinued, leaving you out on a limb.
TOO MANY ERP OPTIONS
Understanding the software’s purpose will ensure that C&E organizations are making the best selection to benefit their business. It is important to account for how many different ERP products are offered by the vendor. The more products a vendor offers, the more areas they must divide research and development funds between.
ERP products and modules sometimes come by acquisitions, this means they have been developed independently from each other through different databases, data structures, and technical architectures. Some software vendors will offer a sprawling spectrum of enterprise applications—meaning true investment into disruptive technology will be limited and not enough for significant business transformation.
The effects of vendor consolidation can also be damaging for C&E organizations reliant on a particular module or functionality. In such a maturing software market, consolidation is a clearly established trend. However, in its rise, consolidation has caused many enterprise software products to be widowed or orphaned by the purchasing conglomerates who may have little interest in continuing any research and development plans. Sometimes, the product is discontinued, and customers are pushed onto another product in the portfolio. Other times, enterprise application products are purchased by vendors that announce new products to unite them all but may not reliably do so.
RIGHT CHOICE YIELDS SOLUTION
When selected properly, an industry-specific ERP solution can help construction companies manage numerous projects at one time by keeping employees consistently informed at each step of the project, as well as next steps. This includes informing the organization if they are falling behind on a deadline or giving them advance notice if they are going to surpass a budget, giving the organization time to get back on track. This allows organizations to be proactive rather than reactive and deliver their Moment of Service™ to stakeholders and asset owners.
Integrating software designed to support BIM and other construction processes and technologies can be immensely beneficial. By providing advanced problem-solving, improved planning, and increased efficiency, BIM has seen a steady adoption rate of 50% in the last 6 years. C&E organizations have realized that without such technologies, business objectives will be difficult or even impossible to achieve. Research by Dodge Data and Analytics shows that 61% of contractors found that BIM helped reduce project errors, 55% experienced a shortened communication time, and a further 82% saw a positive return-on-investment because of BIM introduction.
There are many factors to consider for C&E companies looking to invest in new ERP software and the notion of “buyer beware” has never been better advice. Vendors will be quick to tell purchasers what they want to hear, how much they need the application, and the benefits it will deliver in the future. However, it’s important to remember that the best predictor of future behavior is past behavior. Organizations should ask themselves, did the vendor keep its promise last time? Did product roadmaps stick or slide? The answers will be critical in helping C&E organizations select an enterprise application that will deliver business value to their company.
About the Author:
Antony Bourne is senior vice president of IFS Industries. For more about IFS, visit www.ifs.com.
Modern Contractor Solutions, February 2022
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