Erp Sap

The construction industry is proving to be a major driver for ERP solutions. Until now, the construction industry has proven largely barren ground for ERP vendors.

Not only has the industry been extremely fragmented, but it has been hit by low margins and intense competition that has led many companies to focus on the short term and shun the capital outlay required for long-term IT investment. As a whole, it would not be an exaggeration to argue that the construction industry is perhaps a decade behind other sectors such as the automotive, oil and gas sectors.

Now the situation is changing completely. We are seeing global consolidation, and aggressive moves by foreign players into previously sheltered markets. Construction companies are realizing that in order to stay afloat they must be cost efficient on a global basis, and need an IT infrastructure that enables them to do this.

At the moment, however, most IT solutions aimed at the construction industry are at best mid-market or specialist products, and will be far stretched to provide the integrated functionality, global support or upgradability required in the new construction market. ERP vendors will soon start stepping in to fill the gap.

The supply chain and project management functions will be the areas in which ERP packages bring most benefits to the construction industry. Construction ERP solutions will have most impact in core business areas, by facilitating, for example, enhanced project management, greater supply chain efficiencies, global sourcing capabilities, as well as enterprise-wide reporting.

Remarkably, at the moment many construction companies are still relying on a mishmash of largely paper-based processes to carry out even these mainstream processes - areas which are highly automated in other comparable industries.

But construction ERP systems will also have an impact in areas more specific to the construction industry. It is already possible, for example, for ERP systems to act as a hub to control the entire construction life-cycle, from concept visualization and design, through to manufacture and construction.

Information from CAD and object-oriented design systems can be fed through into the construction ERP package to enable faster design, more accurate project costing and greatly improved project risk management. Another growth area is that of the operation and maintenance of finished projects.

Construction companies are increasingly expected to take on responsibility for the operation and maintenance of the buildings they construct, due to the growth of PFI and facilities management contracts. SAP-Construction, for example, have met this need by producing an SAP Plant Maintenance Module as a fully integrated part of their solution.

Well-designed construction ERP solutions help you to manage your projects by offering instant access to project progress, including cost-benefit analysis and survey adjustments.