ERP Is Driving 5 Construction Trends
ERP (enterprise resource planning) software was introduced in the manufacturing sector in the 1990s, and rapidly spread to industries including education, finance, and healthcare. The home construction industry, however, was slow to adopt ERP software, with many smaller firms choosing an ad hoc approach to managing each business function.
Today, in an industry characterized by heavy competition, fixed deadlines, tight budgets, and uncontrollable variables such as weather and material availability, companies must operate efficiently and limit risks to thrive. For these reasons, the pendulum has swung toward embracing ERP technology.
ERP technology is now distributed throughout the organization, unifying business functions, increasing the flow of data, and supporting communication and collaboration. These effects are driving five monumental changes in our industry:
1. Data assimilation and accurate predictions: Business executives now have access to realtime accurate financial and operational data. By harnessing this business intelligence and predictive insights, they are able to consistently make intelligent strategic decisions and business investments. Trade partner management, business forecasting, and marketing now produce increased ROI (return on investment) with reduced risks.
2. Optimal resource utilization: Effective management of manpower, materials, and customer relationships drives cost-effective channeling of resources and contingency planning. When disruptions inevitably occur, the ERP system functions like a GPS (global positioning system) device, re-routing to the same destination at the same expected time.
3. Internal and external collaboration: ERP is accessible not only to company personnel, but to trade partners, and suppliers. It is a single unifying channel for realtime communication and collaboration, maintaining productivity as everyone involved works through their individual tasks.
4. Cost control: An ERP system centralizes costs estimations, bidding, and acceptance. It maintains ongoing data on cost feasibility and vendor reliability, as well as final deviations from estimates and bids. Firms with these cost control capabilities can remain consistently profitable, through economy fluctuations.
5. Future-proofing: Years ago, small and medium-sized businesses could cobble together disparate software to simulate an ERP. Today, ERP software integrates and automates a majority of business functions. As the software and our industry continue to advance, it is becoming nearly impossible for IT personnel to anticipate future software needs and compatibilities. Homebuilding firms will increasingly rely on ERP providers to ensure all integrations are seamless and successful.
By understanding trends, choosing the right ERP provider, and implementing it across the organization, homebuilders can position themselves for durable market leadership.