Every construction project comes with a specific budget. To ensure the project is within the budget, you need to prepare an estimate of costs that are involved in the project. ERP for constructions empowers businesses with the systematic project costing, ongoing cost management, performance tracking and vendor management.
An ERP solution for the construction industry mitigates risks related to the budget and does a lot more by taking care of the following 4 business functions:
- Project cost estimation:
Project estimates have to include the anticipated cost of unexpected scenarios that lead to project delays and add to expenses. All direct and indirect costs including expenses related to manpower and materials have to be considered. Cost of outsourced work is also part of project estimates.
Earlier, there were manual processes to gather estimated costs that took time and effort.All the components required for automation of the entire project cost estimation are incorporated in an ERP software for construction.
- Running costs
Although you have estimated the entire project cost using the project cost estimation feature, you need to keep track of the day-to-day expenses to monitor your budget.
An ERP software such as OMNI ERP offers a complete overview of the inflow and outflow of the project through a user-friendly interface. Each and every cost can be entered in an ERP along with applicable taxes and discounts. The greatest benefit here is that you’ll be able to keep your cost under control.
At present, you may be using several tools to manage your project costs such as a project planning tool, project estimation tool, excel sheets, accounting software etc. ERP integrates all these software into a single platform so that you don’t have to save several files.
You may be creating project analysis reports using a presentation software such as MicrosoftPowerPoint.
But, all the required financial reports can be automatically created in an ERP system. You can directly mail the reports or print them using the system from cloud storage. The time saved with automation can be put to better use in more critical activities by your managers.
- Performance Tracking
Every project needs to be efficient at various levels. That’s why you need performance tracking tools. An ERP platform combines all the data coming from your project team, finance team, payroll team etc. to give you a snapshot of your construction work from various perspectives.
Also, centralised data eliminates the action of copying and sending data from one team to another for data analysis. You just need to add all the specifications in the system and the analysis will take place automatically. For example, you need a report of all the raw materials sent to a construction site and the output from the site. Your ERP system will give you a resource level breakdown of how each material was delivered and utilised.
Real-time tracking of resources in the best construction management software also helps you to manage them more effectively. If idle resources are lying on a specific construction site, you can move those resources to another site where there is a requirement.
- Vendor Management
Based on the size of your business, you will be having a vendor list in place. For construction projects, you cannot rely on a single vendor for outsourcing work or buying materials. Traditional processes involved managers sending emails to vendors requesting quotes and then going through a tedious process of selecting the vendors. You may use a bidding process to give the work to the most competitive bidder. But you still end up using separate tools for running the operations.
In an ERP system, vendors can be managed using a vendor management module. This approach simplifies the entire process. You just need to upload the details of all your shortlisted vendors. Whenever there is a need, send them a notification requesting a quote. Your software displays the best quotes for your requirement.
Once you select the vendor, the vendor can accept the work and a work order gets generated. When the work is complete, the vendor can raise an invoice against the work order. Since your finance functions are already integrated in an ERP system, your finance team receives the bill, verifies it, approves it and the payment is released.
Did you notice? Here, the vendor manages all the paperwork using the vendor management portal. This means you don’t get vendor representatives visiting your office regularly for documentation work. Also, your team doesn’t need to manage everything on emails, the portal takes care of all the proposals, approvals, payments and more.
All the answers required by each stakeholder is available on the ERP platform. This way, the vendors, as well as your team members, are happy with the process.
Improve your construction project workflows with OMNI ERP modules such as project management, finance, vendor management and more. Contact OMNI ERP for Construction, Mumbai – __________________