Can you virtually raise your hand if you agree with this statement:
Enterprise resource planning was never a good idea when it was an attempt by tech companies to cover all bases with a single, on-premise solution.
For all the hand-raisers - thank you.
Now that ERPs have relocated to the cloud, the status has not changed. While probably well-meaning, software engineers who load apps that manage every aspect of business onto one platform deprive GCs of expertise in any of them.
Single source software that tries to merge the management of finance and human resources, documents, projects and field operations produces a bland mediocrity that fails to measure up to construction demands for perfection.
Knowing It Was Wrong from the Beginning
Developers of ERP software offer reasons to use a single-source provider, but they are usually the things that contractors dislike the most. Almost no one who ever used a one-size-fits-all product likes it more than a better option that works perfectly. ERP software may have been useful for inventory control in manufacturing when it started in the 1960s, but it was never a good fit for construction. The growing acceptance of ERP allows companies to depend on it for most business functions today, but it becomes more unsuitable with every new feature that developers design.
Software Performance Failures
Proponents of ERPs claim that it improves customer satisfaction, and it may when it improves on-time delivery of internet purchases or enhances production planning. The objections that contractors raise most often show the mismatch between the practical and theoretical that produces a waste of time, energy and money from using ERP software.
The complaints that we hear most often from general contractors whose information technology departments have invested in expensive ERP software make the point that it complicates their job.
More than revealing the frustration of missing the point more often than hitting it, the negative comments create a wish list of tasks that software should perform.
“We need key project controls with features that help manage construction job costs.”
“Instead of cash-flow curves and detailed forecasting, we could use help in handling change orders and estimating.”
“We handle our customer relationships in person on job sites, and we do not need a CRM feature in ERP to do it for us.”
“For us, automation of routine tasks that dominate the software doesn’t let us use it for construction management and reporting job status from the field. We can use accounting software for order entry, invoicing, payroll and other office functions.”
“We need something that can deliver cost control, handle approvals, give us integrated billing, keep track of our vendors and make reporting from the field easy to do.”
“ERP marketing tells us that it can handle production planning, coordinate distribution channels that enhance on-time delivery of products and streamline process scheduling. We just can’t figure out how any of that relates to construction.”
Accountability in all aspects of construction remains a chief goal of GCs, and it shows up in permitting, equipment acquisition, on-time delivery of materials and reporting as well. Safe and efficient work environments can exist when contractors, subcontractors, project managers, job site field staff, architects and project owners maintain open communication lines that provide transparency.
Jobs can grind to a slow halt when any element is missing, and massive ERP platforms do not address the critical details on construction jobs. Nothing in the software deals with practical solutions to essential concerns of projects such as operational efficiencies, worker safety or quality -- issues that are paramount to general contractors. Managing customers in the digital age, a central feature of ERP software, has no application in the construction field.
Deciding What to Do About It
Software that does everything but does nothing well can hinder advances in technology, and it limits opportunities to benefit from innovative and expansive thinking. General contractors know better than most people that being a jack-of-all-trades and the master of none produces less than stellar performance. Mediocre results almost always mean that GCs must accept “good enough” as the best available solution, but it keeps you from being as productive and efficient as you want to be.
Software that does everything but does nothing well can hinder advances in technology, and it limits opportunities to benefit from innovative and expansive thinking
Specialization within the construction industry allows you to work in the area where you have the greatest strength, and software developers can take a hint from your practical approach to productivity and efficiency. No one company can support aggressive technological innovation because they focus too much within the lens of the company.
Hoping to provide in-depth expertise across multiple areas is a dream that ERP developers may think that they possess, but no one can be an expert in every field. Competition in the open market creates better products when developers offer innovative concepts that challenge the status quo.
Finding Alternatives to ERP
Practical alternatives that GC’s can find outside of single-source ERP packages include looking for ways to connect best-in-class solutions from leaders within each tech space. When you choose the most appropriate and efficient solutions in each category, you can assemble a set of tools to get the efficiency that you require of yourself and everyone else on the job. Alternatives include these:
An integration platform as a service (iPaaS) provides access to automated tools that can help you create connections across software applications, your data and processes. One more use of the cloud that you can anticipate, it will save you the trouble of integrating your hardware and software in your own data center.
An Application Programming Interface (API) will help by allowing two software applications to interface with each other.
Build Your Own
It had to be said, but we hope by now, you surely know that looking for one tech company to deliver all your needs is the wrong way to go. Just as bad – or maybe worse – could be a decision to create, staff and operate your own in-house system that takes you away from full-time attention on what you are an expert in – building.
ConTech has taken off over the last decade and we don't foresee the waves of innovation stopping. While many are turning to solutions to consolidate their technology, let's remember that the ability to choose best-in-class technology from a market built by experts who specialize in niche functionality will help you find the best solutions for your needs.
While you can aggregate niche functions into a platform approach, an "all-in-one-get-everything-you-need-to-run-your-construction-company-in-one-place" approach may leave you actually wanting for more.