What You Need to Know Before You Implement a New ERP System in Construction

Construction company employees navigating a new ERP system on a laptop

The use of an enterprise resource planning system to streamline processes and unify the systems within your construction company can help you speed up production, reduce human error, and save money. Unfortunately, whether this is your first introduction to ERP software or you’re planning to make a change to a different ERP solution, implementing the system and training employees can pose unexpected challenges. To avoid implementation challenges, there are certain steps you should take to prepare for some of the challenges of a new ERP system. 

Common ERP Implementation Problems in Construction

When you’re preparing to introduce a new system to an entire company, you should expect some growing pains and difficulty adapting. It’s true that ERP software should make cumbersome processes easier, but learning new procedures can be difficult. Understanding common challenges can help you prepare for difficulties during implementation and keep them from derailing you. These are the most common challenges that construction companies face when installing a new ERP system.

Reluctance to Adopt New Technology

Many long-term employees in the construction industry are resistant to change. It’s a common concept that technology is a poor replacement for manual labor. Although that’s not the exact purpose of ERP systems, you might end up with employees working twice as hard in an attempt to double-check the system for faults.

Difficulty Changing Procedures

Changing or introducing ERP software is a major change to the way daily tasks are carried out. Expectations are generally inflated, and results are slow to take hold. Confusion and disappointment result, eventually leading to increased resistance. When employees avoid utilizing the software, failures are on the horizon.

Limited Training

Many companies fail to realize the impact of using an entirely different system. Expecting everything to fall into place or assuming employees will learn as they go is a poor way to implement a new ERP system. Untrained employees are more likely to make mistakes and feel apprehensive about using new software. Complete end-to-end training from the software provider is more likely to yield successful results. 

Poor Communication

Every member of your team is affected by the transition that comes with the use of new software. ERP software is designed to increase collaboration, streamline processes, and coordinate programs for improved function and productivity. When employees within a company fail to communicate about the successes and failures of new software, there’s no room for improvement. Routinely gather feedback from all employees to determine what types of problems they encounter. 

Lack of Structure During Implementation

Simply dumping new software into a company and expecting employees to forge ahead is a recipe for disaster. Unfortunately, many companies fail to take the time to create a plan for implementation. Without designated employees or teams to implement steps in an organized manner, the implementation will be chaotic. Also, you’ll receive mixed feedback.

Planning Ahead to Avoid ERP Implementation Failure

The introduction of an ERP system should affect everyone in the company. Ultimately, the software should make processes more streamlined and daily tasks easier. Still, it’s essential to remember that the implementation phase might feel like the software is slowing down production and complicating daily tasks. From choosing the software that’s right for your company to the moment you see the results of the system in action, investing in a new ERP system is a monumental task. Use these tips to prepare for the potential challenges ahead and plan a successful ERP implementation.

Keep All Employees Informed

Lack of communication is one of the biggest reasons employees distrust individuals in leadership positions. Long before the purchase and implementation of a new ERP system, it’s important to share information and get feedback from employees of all levels. Discuss the potential benefits of a new system and ask employees about the areas that could improve with a new system. As the situation progresses, have regular meetings to keep everyone on the team updated and ensure all questions and concerns are addressed.

Don’t Focus Your Choice on Cost

An ERP system is an investment designed to help your company increase its profits. Skimping on the cost likely means a more expensive and difficult implementation process. It also means a system with fewer features and a lower threshold for long-term success. When choosing ERP software, consider the ways the software can increase the company’s profits by eliminating human error and missing paperwork. Examine the features of the system and how it works to improve processes and daily tasks. A streamlined system that’s easy to use is more likely to pay for itself over time than a complicated system that employees dread using.

Invest in Training

Leaders in construction companies don’t have time to become experts in software design and implementation. Instead, you should be able to depend on your software provider for complete, comprehensive training that makes each employee feel comfortable using the system. When comparing software providers, ask specific questions about the expected short-term and long-term implementation costs. Learn the details of the services that make up these costs and how different types of training will benefit your company over time.

Lower Your Expectations

The full benefits of your new ERP system will take a few years to be fulfilled. Changing ERP systems is a disruptive event for your entire organization. Don’t expect the process to go smoothly and the entire system to go live in a matter of a few weeks. Instead, prepare your employees for the bumpy road ahead. Set milestones to measure success on a realistic timeline and avoid disappointments along the way. Rushing the implementation process can lead to fewer realized benefits or even a failed system that doesn’t work for your company.

Don’t Cross the Finish Line Early

Successful implementation of an ERP system shouldn’t be measured by how quickly you go live. When you make your ERP software choice, consider all the organizational benefits offered by the system. Also, consider how this functionality can improve and streamline daily tasks for every member of your team. Getting your new system online is only the first step to complete ERP success. Typically, the beginning steps of utilizing an ERP system only cover business functions. If you fail to move beyond this point, you’ll never reap the organizational benefits of a complete, working system.

Benefits of a Successful ERP System

employees looking at productivity analytics after implementing new ERP software

When facing the many hurdles of implementing a new ERP system, it can seem like the risks outweigh the benefits of such a system. However, a successful ERP system is a valuable investment that can provide many benefits for your organization. ERP software doesn’t just streamline processes and eliminate burdensome tasks. It also gives your company a competitive edge and improves customer relationships. Here are a few of the benefits of a successful ERP installation.

Improved Collaboration

Construction is a multi-faceted industry with many working parts. An ERP system provides a centralized database that stores all points of information. Instead of chasing a document trail through multiple subcontractors and vendors, each employee will be able to access current information wherever they are.

Increased Productivity

Stalled production on any construction project is a common problem due to tedious tasks and missing documents. When every cost must be approved before the next steps can be taken on a project, your company loses precious time. ERP systems can automate tedious tasks, making data more accessible and eliminating human errors. This frees up team members to take on additional tasks and complete projects quickly.

Simplified Compliance

The construction industry is filled with government regulations designed to enforce safety for contractors and customers. These regulations serve an important purpose. But it can be difficult to keep up with changing regulations and requirements. Even if you run a safe job site, noncompliance with local, state, or government regulations can lead to steep fines and penalties. The right ERP system has tools to manage risks and keep up with current safety regulations.

Happy Customers

A fully utilized ERP system can provide customer relationship management (CRM) tools or offers the option to integrate them into the system. A CRM provides your team with immediate access to customer contact information, order histories, and billing information. The ability for all team members to quickly access customer information leads to more streamlined services and helps customers feel heard. 

Money Saved

A managed ERP system is a significant investment for any company. However, the long-term benefits of a properly implemented system will likely pay off your investment and more. ERP systems save organizations money through:

  • Increased production
  • Improved communication
  • A unified system
  • Reduced human error
  • Elimination of missing documents
  • Pay app information

When considering a change to your construction company’s ERP system, it’s important to realize the system is an investment that will pay off over time. Failing to implement the system properly will lead to disappointment and poor results. Before deciding on ERP software that will benefit your construction company, take the time to discuss the details extensively with your provider. You should feel comfortable about your knowledge of the system before making this important investment.

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