Cross-functional collaboration

Even within construction companies that have remained independent, the efficiencies offered by the right enterprise-wide application can create a competitive edge. Traditionally, construction companies have been extremely departmentalized. There were separate departments supported by separate technology platforms for design, estimating, procurement, valuations and construction planning. In many cases even the planning process itself was carried out on a different system at tender stage to that used to manage the project during construction.

Unfortunately, in many cases few (if any) of these ‘point solutions’ were integrated with the core financial system. This meant, for example, that site based valuations and applications for payment were often carried out in complete isolation from the so called cost control process undertaken in the accounts department. It could take weeks to reconcile the two figures, and only then would it be clear whether or not a project was making money. In an industry where real-time information is so desirable, the inefficiencies of maintaining all these data silos has been questioned time and again by CIOs joining construction from manufacturing, financial and other industries. Bringing all of these disparate departments together and getting them working on the same application on the same database can solve some of the problems that many contractors for decades have taken for granted. In a situation where prompt information is necessary, the inefficiency of such systems requires immediate substitution, and the full integration of all business processes into a single system, such as ERP. By unifying all of these departments on a single platform and data set, it becomes possible to put in information and receive an accurate picture of the project from financial and operational perspectives in real time.

This type of unified platform is crucial for proper cost-value reconciliation. Traditionally, as a contractor measured earned value on-site, the back-office accountants would tally supplier invoices and determine the costs. However, reconciling the cost and value figures takes time and effort, and if any action is needed to correct a problem, the project manager may be the last one to know. But with ERP based cost-value reconciliation, an accurate view of the financial health of the project can be brought up in real time, anytime. This allows a contractor to make smaller and more measured adjustments as work progresses instead of drastic action when it is already too late.

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