When it comes to selecting an enterprise system for your construction company, the right approach is crucial.
There are some key considerations to this decision-making process:
However, businesses in every industry have specific challenges when they’re making a selection. Below you can explore each consideration in scenarios that apply to construction companies.
You can also read a more detailed analysis of the selection process in our article 5 Key Considerations for Enterprise System Selection.
For construction companies, certain business processes are especially important:
By taking a holistic view of your process needs, you’ll be able to better determine if you want to build a single, integrated system or a system with separate applications.
Determining an ERP tier for your company is an important, complex decision based off many different variables.
A brief outline is provided below:
Choosing an ERP tier is specific to every company. A lot of companies make costly mistakes by choosing the wrong tier and then spend even more money correcting this error.
There’s a wide range of variability, and some of these factors could include:
If you’re a high end commercial builders working on skyscrapers and strip malls—projects that involve a large numbers of subcontractors—it’s likely you’ll choose a Tier 1 system, but the choice isn’t always so clear.
For a company with 150 employees and revenue of $50 million a year, a Tier 2 system is the initial, obvious choice. However, your company might have a small number of high-value contracts and a low amount of transactions. If you’re primarily tracking payments from subcontractors, you may not need a Tier 2 system.
Likewise, a smaller company with 10 employees working on residential homes may choose a functional Tier 3 system as a cost-saving measure. However, if your projects tend to have lots of little transactions and a high number of subcontractors, it could make more sense to go with a higher tier initially. This could avoid the larger cost of changing tiers later on.
As you can see, choosing a tier can be a complex process, and it must be given careful consideration.
There are three options for ERP deployment:
Cloud deployment is proving to be a safer option for construction firms who want to invest in safe, lean IT infrastructure—especially smaller companies that don’t have a large IT budget.
Cloud deployment also allows for the use of technology accessories out in the field. Field technicians and project managers working on a jobsite can easily access the system from their mobile devices and tablets increasing efficiency and access to real time data.
Once you’ve decided on a deployment method, you’ll also have to consider how configurable you want your system to be and whether or not you’d like to choose an industry-specific solution.
Mid-tier horizontal systems have strong budgeting, project management, payroll and estimating features—capabilities that suit many industries.
Unfortunately, they don’t come pre-built with construction industry-specific project cost categories or change order management. They do, however, allow you to create:
Many of the horizontal systems also have mobile applications that can be accessed onsite.
Vertical ERP systems provide the following for residential and commercial builders:
These systems could also come with property management modules for related real estate industry needs.
However, their integration capabilities are less sophisticated than horizontal systems. For example, vertical systems typically don’t have mobile applications because vertical systems are traditionally personal computer (PC) based.
Define the following processes in your scope:
These business process requirements should be your ultimate selection decision criteria and specifically based on your company’s needs.
Make sure to clearly define your needs in your request for proposal (RFP), so the vendor you ultimately choose can set up the system to your specifications.
Here are some questions to consider as you’re going through the procurement process:
To read a more detailed analysis of the selection process, please see 5 Key Considerations for Enterprise System Selection.
For more information on how to choose an enterprise system that works well for your company’s specific needs, please contact your Moss Adams professional.