The following article is sponsored by NexTec.
According to Statista, construction spending was higher in 2021 than in 2008. This is significant because in 2008, we were in the middle of the Great Recession. Even though 2020 and 2021 brought the pandemic and major challenges with it (labor shortages and material price increases, just to name a few), the construction industry still did better than during a major recession. That said, there are common challenges construction firms face every day—pandemic or not—and leaders in the industry have found a solution: cloud ERP solutions with cloud construction management software.
5 Common Construction Challenges
When looking at construction industry challenges, there is a common theme, and that’s a lack of communication. Communication, according to the Corporate Finance Institute (CFI), is a critical life skill. The company writes, “From a business standpoint, all transactions result from communication. Good communication skills are essential to allow others and yourself to understand information more accurately and quickly. In contrast, poor communication skills lead to frequent misunderstanding and frustration.”
We see ineffective communication in countless construction projects, causing them to run over on time and budget. In one way or another, communication and the lack thereof are the root cause of the following common challenges:
- No Project Visibility
Often, accounting and project management teams operate in silos (meaning, the right hand doesn’t know what the left hand is doing). Business leaders do not have visibility into costs compared to budgets, completed tasks, time by employee and project profitability. Communication and collaboration—building blocks for a successful project—are not happening.
- Costly Delays
“Delay” is a dirty word in the construction industry, but it happens all the time. Changes to RFIs, project issues or timecard questions that are not communicated between field and office teams cause the “D” word to come into play. Field and office teams that do not or cannot streamline their exchange of information deposit a quarter in the swear jar every project.
- Manual Workflows
Manual workflows are the bane of any construction business. The number of steps it takes to get an answer to a project question can be excessive. For example, the subcontractor’s question goes to the contractor. The contractor submits an RFI to the architect. The architect requests clarification from a consultant. Then the answer is relayed back through the same channels. What happens? Quarter in the swear jar.
- Difficulty Communicating with Stakeholders
Common challenge #4 says it all. Communicating with stakeholders is difficult, especially when communication is in the form of emails. Dozens of emails every hour creates clutter and confusion. Issues escalate because they’re not identified and acted on in a timely manner.
- No Mobile Access
Being able to access critical business information from the office or the field is not always possible. If a construction firm does not provide mobile access, they have effectively stopped their teams from being able to update project information from the field, slowing down the communication process even further.
Modern ERP Software to the Rescue
Traditionally, the construction industry has not been at the forefront of technology adoption. However, Henry D’Esposito wrote in a recent Construction Executive Magazine article that the pandemic sparked drastic changes. “In 2020, 67% of construction firms enabled remote work for construction office jobs, driving up industry need for cloud-based digital collaboration platforms.”
Construction management ERP software falls under the category of “cloud-based digital collaboration platforms.” It handles accounting, project management, payroll and inventory in a single, cohesive platform. Communication is easy when business applications are seamlessly integrated and team members have access to the same information, at the same time. Cloud construction ERP software is the tool project managers can use to overcome common industry challenges.
For example, with ERP software, project managers have full visibility into each project and can track projects in real time. From monitoring active and completed tasks and time by employee to project profitability, they are on top of information instead of behind it. They also have drill down capabilities to see budget vs. actual costs, change orders, compliance issues and more and can communicate accurate information to field techs, office staff and clients.
The dreaded and costly delays are eliminated by the streamlining of data sharing between the office and field teams. With ERP software, changes made, such as RFIs, project issues and timecards, are updated and synchronized in one place, which means everyone connected to the project will be on the same page.
Automated workflows replace the time-consuming and error-prone manual processes. This decreases the number of steps required to get an answer to questions in the field. Cloud-based construction management ERP software enables construction firms to also eliminate duplicate data entry, ensures that action items are addressed in a timely manner and provides the business intelligent tools they need for insights on current and future projects.
Additionally, project alerts through ERP software helps construction firms know when issues arise, while an Outlook add-in organizes emails. Centralized storage for drawings, photos, change orders and other documentation along with job-specific dashboards aids the collaboration efforts.
Finally, cloud construction management software enables every employee to log on to the system anytime and from anywhere. If they need to update project data, they can do so from wherever they are at the time they need to do it; the information is then updated in the system and available to all stakeholders. Direct communication with stakeholders equals time savings as does taking away the need to search for contract, insurance, RFI (and more) information when it’s in one, central and easily accessed location.
The Future with Cloud Construction Management Software
Construction firms are forging ahead even as they continue to face internal and external challenges. Those who choose to implement cloud construction management software will be able to overcome these challenges, especially in terms of communication, and compete successfully in today’s digital economy.
NexTec Group, an award-winning business software consulting firm, has been advising businesses for over 25 years, and our How to Compete in Construction with Modern Software guide offers further insights into overcoming barriers in construction and the key features to look for in modern construction software. We highly recommend construction firms research and evaluate Acumatica Cloud ERP and their Acumatica construction software.
Born in the cloud, Acumatica is a mobile solution that provides single-platform control over projects, finances and operations and seamlessly integrates with specialized, third-party applications. Project information including job costing, budgets, compliance and billing is up-to-date and accessible with any web-enabled device. Acumatica’s construction software is a comprehensive project management and communication tool for every construction business.
To learn more about Acumatica, contact our experts today. We’d love to chat.