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Implementation of ERP Systems in the Construction Industry

Implementation of ERP Systems in the Construction Industry

Published 25 Aug 2022

An Enterprise resource planning (ERP) system is an integrated software application that helps construction companies execute projects more efficiently and cost-effectively. Although the benefits of ERP solutions in construction have led to an increase in its adoption, many have cited failures during the implementation process.

50% of ERP implementations indeed fail the first time, but you can be on the successful side with the right plan and guidance at every stage. And that’s precisely why we have created this comprehensive guide.

ERP system for construction industries
We’ll talk about how to implement an ERP system and the potential challenges you might face. Let’s get started!

Guide to the ERP Implementation Phases

As with any other technology, you must follow the right steps to implement ERP. Here are the four key stages of implementing ERP successfully.

1 - Choice

The first step to ERP implementation is choosing the right software and modules. As a rule of thumb, select a tool designed for your industry and location. For instance, if you’re in Dubai, choose ERP intended for construction companies based in the UAE.

Once the choice is made, work with your team and an ERP consultant to identify issues and potential solutions. The project team will better understand the company's unique challenges, while the consultant will provide objective third-party insight.

Once you've identified problems and potential solutions, it's time to create a scope of work document that includes a project plan that outlines how the ERP will solve each problem. Once again, working with both sides' knowledge and experience helps ensure everyone is on board.

Last but not least, define the budget and timeline before moving forward with implementation to prevent surprises down the line.

2 - Development

This step entails customizing the ERP for your business’s unique needs and creating training materials for your team.

It is a good idea to involve key employees and process owners in this process to familiarize them with the new system and its features. This also allows them to ask questions and make suggestions that can help improve functionality and user experience.

The following activities may also take place during development:

Create training programs for users who need extra assistance learning how to navigate through new software.
Decide the integrations you need.
Import data from your current systems to the new ones.
Create test cases for various functions of the system.
Test and evaluate results for each function to ensure they’re working as intended.

3 - Deployment

Deployment is one of the main phases of an ERP implementation. This is where your new system goes into production.

Here are some of the key aspects to consider during deployment:

Validate imported data: Run through all your data files and ensure they are accurate and up-to-date. If there are any issues with the data, fix them immediately.

Set a “Go Live” date: After validation and fixing any errors, it's time to set an official date for when everyone will use their new system!

Train employees on the new system: Employees should learn how things work to do their jobs quickly and efficiently. This will also help you realize your ROI faster than it would without adequate training.

4 - Maintenance

Once your ERP system is up and running, it's time to consider its maintenance. Unfortunately, many companies don't give this enough attention during the initial implementation phase because they're so busy setting everything up. However, taking care of your ERP system is crucial, as it helps ensure everything runs smoothly for years to come.

Maintenance tasks may include:

Installing new patches or upgrades when they become available
Verifying that all applications are running with current versions of their software components
Taking regular backups to prevent disruptions

Additionally, you can gather employee feedback on how they are using it to optimize the processes further.

Challenges in Implementing a Construction ERP System

The construction industry has been slow to adopt ERP systems, but as the sector grows, it's becoming necessary. Here are some challenges to implementing an ERP system for construction industries.

1 - Traditional Software vs. New Technologies

Many construction managers still rely on manual labor and age-old technology and are not keen on adopting new systems. The reason could be anything.

They might feel that new technologies will negatively affect their productivity, and employees might lose focus on their core activities. Or maybe they’re skeptical about the time it will take to learn about the tool.

The first step towards breaking the barrier is educating them on the ERP system and its benefits for the organization. Also, highlight that ERP is not for replacing human resources. Instead, it is to enhance their productivity and efficiency.

2 - Business Structure

How you perform day-to-day activities might differ from how it would be after ERP implementation.

For instance, you might use multiple systems to track attendance, plan raw materials, and store construction documents. The entire organization would have become comfortable with this system, making it harder to adopt a new approach.

After the ERP implementation, everything will be digitized. Understand that having a digital record of the work orders removes any possibility of errors and improves transparency (highlighting who processed those orders with a detailed description).

Implementation of ERP Systems in the Construction Industry

3 - Project Management

When implementing any new software system, there are usually changes in roles and responsibilities among employees who work closely with each other. And if they’re working on projects that require collaboration between multiple departments, the problems could increase.

For example, suppose an architect doesn’t communicate with a contractor about changes in the design. In that case, delays or mistakes could impact construction costs and deadlines.

However, that’s not the case with ERP, as it improves collaboration and enhances project management. For example, managers can track the materials used, workers’ compensation, project progress, and more from one solution.

4 - Employee Training

Training employees on new software can be a challenge. Employees may not have time in their schedule to attend training sessions, or they might not be interested in it. As a result, it takes time to realize the ROI of ERP systems.

However, when you partner with a reliable ERP company like FirstBit, you get premium support from experts who can quickly train your employees on the system. We ensure that their schedules aren’t interrupted while helping them understand how the software works and how it will impact their work.

Wrapping Up: Get Started with FirstBit ERP Software

Implementing ERP in the Construction Industry

The reasons for implementing an ERP system are endless. It helps you manage your workers, plan projects, materials, and forecast costs. However, implementing an ERP system comes with its own challenges, which can be minimized with the right team like ours!

By choosing the FirstBit ERP software for your construction business, you will get premium support during implementation and training. And since experts in the UAE design the software, it complies with all the local laws and regulations and doesn’t require additional effort from you. For instance, you can generate VAT reports in a single click!

Watch a helpful video on what you can achieve with FirstBit ERP. 

Book a free demo with us if you’re still wondering how the FirstBit ERP software can help your business!

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