Consolidation in the Construction Industry

Many smaller contracting businesses have merged or been purchased by larger concerns recently, while at the top of the supply chain there have been a number of huge mergers and acquisitions. This activity has created larger construction conglomerates with multiple divisions, each often operating in different disciplines and starting with unique business models. Faced with the challenge of managing a multiple-division enterprise, the directors of this new breed of construction company have been attracted to ERP as a way to gain visibility of business information across their newly enlarged enterprise. It is vital to know quickly how each operating unit is contributing to the whole business so that any restructuring or rationalization that is required may be planned with a full understanding of the facts.

As the construction environment becomes more complex, ERP becomes even more attractive because it can be used to manage a large variety of business activities at the same time. A traditional ‘builder’ may well be able to manage with conventional construction software packages, but once the business expands to incorporate utilities, road building, rail maintenance and the extraction of aggregates, most legacy systems will be entirely unable to cope.


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