Does the construction industry need to embrace enterprise wide applications?

By Rob Stummer, IFS Australia and New Zealand MD.

In this article we’ll look at some of the drivers behind the trend towards construction ERP and examine the types of functionality and other requirements contractors need to look for when selecting what is often their first-ever enterprise-wide application.
The drivers for change
Many smaller contracting businesses have merged or been purchased by larger companies recently, whilst at the top of the supply chain there have been a number of mergers and acquisitions. As the construction environment becomes more complex, ERP becomes more attractive because it can be used to manage a large variety of business activities at the same time.
Traditionally, construction companies have had separate technology platforms for design, estimating, procurement, valuations and construction planning.
Bringing all of these disparate departments together, and getting them working on the same application on the same database, can solve some of the problems that many contractors have taken for granted.
Off-site construction
Today, entire plant rooms are being designed and built in modules for final assembly in position when the site is ready for them. What this means from a business process perspective is that contractors are turning parts of their operation into manufacturing businesses. As a result, they are looking to the manufacturing ERP vendors for help implementing lean manufacturing practices for construction.
Building information modelling and ongoing asset management
Considering that a building’s working life might typically be 30 to 40 times longer than its construction period, with maintenance costs similarly multiplied, the case for an integrated construction and asset management approach is a strong one. Rather than two distinct processes, more agile business systems are able to address the entire building lifecycle as a continuum. This includes the design, construction, maintenance and eventual decommissioning of those buildings.
So if the construction industry is ready to embrace the ‘enterprise solution’ approach, what should its IT decision makers be looking for?
If a software vendor suggests a different way of running your business, ask yourself is it because the software you are being offered cannot cope with the way you want it to work?
1.    Will it provide all necessary information at every level of your business in real time?
There is no longer any need for different departments, disciplines and management levels to use different software to do their work.
2.    Is it truly component based?
If a project based cost control system, for example, is to adapt to a new way of working, then it may need to undergo some fairly major changes without interrupting the current users. A reliable way of achieving this is to employ a modular software structure based on a truly component based architecture.
3.    Is it based on open software standards?
For a solution to be considered truly ‘agile’ it must employ open software standards, allowing the customer the choice of how systems are to be interfaced and by whom.
4.    Does it promote a rapid return on investment?
In the medium to long term, buying the right software system should give a positive return on investment, but in the short term it is a significant cost and that money needs to come from somewhere. The modular nature of agile solutions enables customers to invest first in the areas that cause them the greatest difficulty before others are brought online.
5.    Does it embrace up-to-date technologies as standard?
A service orientated architecture (SOA) is widely considered a ‘must have’ technology in modern software. A sound track record of successful SOA development is vital if a vendor is to produce truly agile solutions.
The construction industry is no longer restricted to a choice between industry specific point solutions and unwieldy inflexible ERP products designed for manufacturing. They now have a real alternative – agile, project centric ERP.
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