Prioritize these 9 critical ERP capabilities in the technology planning for your AEC business
Architecture, engineering, and construction (AEC) companies are more and more adopting modern technology to manage their projects and client relationships, but in many cases experience functionality gaps. According to the 2017 KPMG Global Construction Survey, only 31 percent of the respondents use integrated systems for project reporting. As KPMG comments, this “means that most project managers lack the capability to control all elements of the work.” Only 8 percent have a complete project management information system (PMIS) with project and portfolio dashboard reporting.
AEC companies slow in taking advantage of tech innovation
Considering that 82 percent of the companies interviewed incorporate performance targets into all or some of their contracts, lacking project reporting would be a major liability. Project managers likely find it challenging to run their projects to KPIs if they can’t properly track and control them. For 80 percent of these AEC firms, running on schedule is the top KPI featured in their contracts. That may appear to be a basic goal, but many companies find it difficult to get there.
55 percent of the survey respondents feel that the AEC industry is ripe for disruption, and 72 percent give top priority to technology, data use, and innovation in their strategy. That would match our experience in working with AEC companies and helping them modernize their technology environments. However, only 48 percent have developed a technology and data strategy.
Mapping your business goals to any of the many software solutions available can look daunting, but, when you use the right ERP solution that is also optimized for AEC needs, you won’t need to compromise with inferior functionality. Today’s powerful ERP systems can support the standard business and productivity requirements of AEC companies, but they need to be integrated and deployed together with a comprehensive industry solution to enable a company to manage its complex project portfolio. Once that’s done and the solution is in use businesswide, it can deliver most of what an AEC business needs.
Top feature sets for an AEC technology environment
These are the nine most important capabilities AEC businesses need in an ERP system to gain control of their projects and perform to KPIs:
- Estimating and bidding with data substantiation to ensure healthy margins and competitive costs
- Project scheduling and reporting with transparent cost and resource management
- Complete financial management with control over cash flow, expenses, costs, revenues, payments and billing
- Timely, efficient, and low-overhead procurement and inventory management
- Management and maintenance of machinery, vehicles, and other equipment
- Management of the people, materials, and resources involved in delivering project-based client services, including health and safety
- Ability to manage individual projects with their changes in costs, resources, schedules, and other details, as well as the financial and operational aspects of the entire project portfolio and its financial and operational parameters
- Support for the high-potential, private-public partnerships that are so important in AEC
- A technology environment that lets you handle all these aspects of the AEC project business on a consolidated platform that enables your business roles and processes today and as the company grows
Close to 60 percent of the companies surveyed by KPMG say that they follow the industry or are behind the curve when it comes to technological maturity. The report doesn’t mention end-to-end software systems like AEC-tailored ERP, but mentions robotics, drones, building information management (BIM) systems, and the use of data and analytics to manage projects.
Before you fly drones over construction sites, you need to set the business on a firm foundation that helps the company increase its profitability and manage project operations for best productivity. Modern ERP can help you accomplish that. Download our AEC ERP checklist to learn more about the nine key capabilities your software needs and get started on the process of modernizing your technology platform.