Why choose a construction specific IT solution?
This new article from COINS product team reviews the importance of selecting a construction specific solution opposed to a traditional ERP.
Moving beyond traditional enterprise resource planning (ERP) solutions in construction
Traditional enterprise resource planning (ERP) systems are comprehensive information technology (IT) solutions that function to simplify operations by bringing all of a company’s business processes together as one. They provide many benefits and great value, but in the construction industry, their success is mixed.
The industry’s high volume of stakeholders and range of specific functionality hamper the success of traditional ERPs. Thankfully, industry focused solutions – like Construction Industry Solutions (COINS) – exist, with foundations built to aptly serve construction customers. These solutions consider industry particulars and complexities and pose an architecture that’s designed to flex when projects or priorities evolve.
Inspired by the published papers described herewithin, this article explores where and why traditional ERPs fall short, and the importance of choosing an organic solution that’s born out of – and specifically serves – the construction industry.
ERP systems integrate and manage a company’s operations, financials, supply chain, reporting, manufacturing, and human resource activities. When aligned and implemented, these IT solutions promote collaboration across functions, increased visibility, and data-driven decision making. They are lucrative among the manufacturing and service industries, delivering increased compliance, operating efficiency, and consistency across organizations.
In the construction industry however, traditional ERPs often fail to deliver. The main reason for this is, of course, complexity. As described by Wood & Gidado[i], the inherent complexity of construction projects is unique. Complexity is the result of a number of factors, including the interdependency and high degree of interaction between project parts, and the fact that many projects evolve as they progress. In addition, numerous subsegments and specialities are complicated by varying project conditions and stakeholders.[ii]
On site, many professional disciplines must work together. Successful execution requires access to, “a common set of records that describe the project, design drawings, its tasks, the materials to be used, and so forth. If different parties do not share the same information, mistakes are made, resulting in cost over-runs and safety issues.”[iii]
With all of these nuances, a holistic IT solution must work with the complexities of the industry’s project management activities, costing, disaggregated supply chain, and contractual relationships. It must support the management of labor resources throughout different parts of the construction sectors, as well as the various legislative requirements construction firms encounter in different operating environments.iii
General ERPs can only meet these requirements with altered functionality. And according to Chung et. al, construction companies that extensively customize pre-integrated business applications from ERP vendors encounter greater challenges in implementing the systems, resulting in time delays and cost escalations.ii
A general ERP that is over customized will not function as it was initially designed. Instead, construction companies are better to invest in a solution that is built on the same principles by people who have lived, worked in, and know the world of construction. COINS offers that solution.
Efficiency goals can be attained if you focus on clear, quantified business outcomes and trust in a company that leverages decades of industry specific experience to create value-added solutions. With 30 years and 4,000 man-years of unrivalled, incremental construction industry knowledge, COINS is that company.
Moving beyond what a traditional ERP offers, the COINS Construction Cloud provides a single source of truth for executives, managers, construction workers, and supply chain partners throughout the entire construction lifecycle. The cloud seamlessly binds all business processes, ensuring information flows between the site and the back-office, and among all stakeholders, both internal and external.
COINS Construction Cloud comprises a suite of software solutions covering nine functional areas. Each of these areas is served by one or more COINS applications that integrates seamlessly with the next to create a tailored solution. Companies can cherry pick the applications that are right for them or choose full platform adoption to transform their way of work.
Buying into a solution requires more than a simple IT shift; at COINS, we believe operational decisions – even ones that seem solely IT-focused – should be made in concert with business leaders. In fact, according to Voordijk et. al., failures in the implementation of ERPs are often caused when IT requirements supersede business strategy.[iv]
COINS arms decision-makers with a full-view understanding of what’s happening across their organisation, allowing them to make more informed decisions that better align with business priorities. Informed decisions lead to higher efficiency, better outcomes, and increased profitability.
[i] Wood, H., & Gidado, K. (2008). Project Complexity in Construction. Cobra 2008, January 2008, 1–13. https://doi.org/10.1136/bmj.d1875
[ii] Chung, B. Y., Skibniewski, M. J., & Kwak, Y. H. (2009). Developing ERP systems success model for the construction industry. Journal of Construction Engineering and Management, 135, 207-216.
[iii] Mitchell, David. (2008). The changing IT needs of the construction industry. Ovum / Omdia.
[iv] Voordijk, H., Leuven, A. V., Laan, A., (2003). Enterprise resource planning in a large construction firm: implementation analysis. Construction Management and Economics, Vol. 21, No. 5, pp. 511-521.
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