As construction companies continue to increase the amount of data they are storing digitally, it’s becoming increasingly important to be able to sort through what is valuable information that can lead to beneficial action over what is simply noise. Using the right ERP (enterprise-resource planning) platform is critical to separating the wheat from the chaff when your company profits are on the line.
To get the most out of their data, companies in the construction industry will need to invest in a fully integrated construction ERP solution in order to streamline data analysis throughout the company. Using data properly will lead to better budget and time estimates, lower project risk through better simulations and insight, and allow users to make the right decisions faster.
A common predicament complicating the ability to process data effectively is the over-reliance of Excel for some construction management needs. Various studies have pointed to somewhere between 88%-94% of all spreadsheets have errors contained within them and that the majority of these are caused by human input. By using construction management software that has OCR (optical character recognition), a company can help to reduce errors in the information being used to make decisions. OCR can enable a business to automatically scan for invoice numbers, dates, and amounts, then have these numbers stored in the system without the need to risk human error. With the information stored in a document-management system, auditing also becomes easier as the company’s data is easily organized and accessed through OCR search functions.
One of the ways to ensure that you are using your data to make the right decisions is to use an accurate financial reporting tool. Financial reporting can help companies lay down the foundation for developing strategies to tackle the constantly changing issues facing the construction industry by illuminating areas that might be having problems. A good financial reporter app will provide for easy analysis with drill down features right from a financial statement in order to stay on top of transactions as they happen.
Once a company has ensured that the data they are using is free of errors and that the financial information is accurate, the use of a business analytics tool in the ERP solution is necessary to cement a strategy going forward. The business analytics tool must be easy to use and designed for the end user and not an IT or technical tool. Breaking down data into user-defined KPIs (key performance indicators) in a graphical heads-up display can provide realtime information so managers can quickly assess how a project is performing. By being able to choose KPIs, a company can focus on the issues that are important to them.
Through reducing the risk of human error using OCR, getting financial reports in order, and utilizing analytics to process and analyze information, companies in the construction industry will be able to wade through the ocean of data and come out more profitable than before. The construction industry will need to take full advantage of the construction ERP software available to them to be able to achieve that goal.
Mark Liss is president at Explorer Software. Upon leaving public accounting, Mark worked as the controller for a two different construction companies—first in Colorado and then in Arizona. He was also part owner of a construction company for several years.