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Benefits of ERP For a Construction Company (1).pdf
1. Benefits of ERP For a Construction Company
The construction industry in India has traditionally had quite an unformed approach to trade for various
reasons. The main reason for that has been that the land laws incompletely drive the account practices. That
strategy is changing now, and further and further, construction houses are looking at structuring their
business practices to gain better market share.
There are numerous other reasons why construction houses in India are now looking at Enterprise
management tools to fuel industry growth.
2. Some benefits one can expect as part of implementing ERP for a construction business:
Waste Reduction: ERP implementation allows information generation that always MUST help reduce waste.
5% waste of cement and 3% steel waste has been accepted by the industry. Since ERP Company allows the
material reconciliation procedure to be fully automated, organisations can easily reduce this waste by using
various easy-to-implement tools and processes. Due to the large amount of data affected but the small value
associated, businesses do not focus on material across the panel. ERP allows information to be processed
quickly and for a large data set which facilitates the business review of low-value material.
Better Project Planning: To get prepared to execute ERP, the organisation will be forced to look at creating
playbooks to mobilise projects. An essential part of this process is project planning. Traditional issues with
project planning or lack thereof have been many, but the lack of recorded data around what constitutes
"mobilization", in my opinion, was primary. ERP allows the data to be collated, and thus it can be summarised
into a repeatable business process based on some criteria.
Reduced inventory levels: Better visibility into material lead time can reduce inventory levels for the
community. Better planning helps forecast material demand, thus allowing businesses to purchase material
close to consumption time. ERP enables the implementation of a minimum to reorder level process that helps
address the issue of material scarcity, which organisations use to carry bloated inventories.
Better equipment utilisation: An integrated tool allows better utilisation of construction tools. It documents
requests coming in from various sites and allows management to get the most out of the available
equipment.
Easier project monitoring: Specified project planning allows for easier project monitoring. One can efficiently
monitor projects and identify key dependencies. Risk and issue management become a lot easy due to
improved visibility of information related to the project.
Scalability of operations: Due to the "formalisation" of processes. A higher % of the cost can be turned into a
variable cost. To scale up, one just needs to ensure that the tool-supported process is followed, which reduces
"onboarding" time for new resources. Techniques can be evolved once they are followed regularly, and
exceptions tend to be limited.
Improved quality of work: Traditionally, in India, the rate was not of much importance for construction houses
in India. With the growth in industry and the size of projects becoming increasingly large, quality can not be
compromised. Repeatable processes of recorded data and collated information allows organisations to
measure key indicators to improve quality across the business.
ERP Consultants India provides ERP selection, implementation, and project management services. We help
companies identify and quantify benefits that ensure focused performance.