Insight into evaluating ERP software and the key points you should consider.

Everyone is now talking about the new digital world. For most, it has become very confusing with new buzzwords like building information modeling (BIM), 3D printing, internet of things (IoT), big data, laser scanning, 4D scheduling, artificial intelligence (AI), virtual reality, drones and many more that we hear about constantly. For sure, these new technologies and processes are driving us to an integrated, data-driven world. There is a big risk when we focus on these new exciting technologies but forget to base our business processes on a solid foundation of accurate, trusted data. This is what enterprise resource planning (ERP) software was meant to do, however, in the construction, engineering and construction sectors, ERP is often a dirty word and there are few examples of successful implementations.

The business system landscape for most companies in these sectors is still a non-integrated mess of multiple systems, with spreadsheets being used as the glue to try to join the data together. If we try to implement all this clever, new technology on top of a weak, non-integrated landscape, the benefits are going to be massively constrained. In short, traditional ERP has a poor track record in the construction industry. So what is the answer?

What a true ERP solution is all about

By ERP, I don’t mean simply a back-office solution for finance and human resources. True ERP is a fully-integrated process covering all the business processes and functions involved in building or maintaining assets.

This industry is all about building and maintaining assets, so one of the biggest reasons ERP has not been very successful is that most ERP solutions are product-centric and not asset-centric. The focus should be on implementing a project and asset-centric ERP solution to give our business a solid foundation from which to deploy these new technologies and processes (such as BIM).

The focus on BIM so far seems to be mainly about the asset handover process and providing a standards-based handover of consistent data to the asset owner or operator. While there is a lot of pain being felt at the handover stage of the asset’s life, there seems to be little discussion about how BIM and your other business systems should interact.

If the real BIM objectives are to deliver projects faster and at a lower cost, we need to integrate all stages of the project process with BIM and move to the vision of implementing a 4,5 and 6D implementation of BIM. This means changing the way we work and implementing new integrated processes and systems. 3D models such as BIM models are only one element of this story.

The word BIM is rapidly being replaced with terms like digital construction which are much more representative of what this is all about. So maybe the question is, how should BIM or digital construction work with ERP? For example, how should your other business processes integrate with the BIM model such as procurement, project management, project cost control, sales and sub-contract management, variation control, estimating, bid management, material control, plant and equipment hire, construction management, asset and facilities management?

The 3D model data should be the master asset data source, to drive the project lifecycle process before we reach the handover process. This is a major piece of the story for the ongoing operation and maintenance of the assets as well.

Evaluating ERP Software & Key Points to Consider

One of the big questions here is where would the BIM data go in a traditional ERP solution? Most ERP solutions have no natural home for this data. Perhaps the problem is that most ERP solutions in the construction sector have only been implemented as a corporate finance and human resources solution. Why is this the case? One view is that most ERP solutions are based on a manufacturing concept, and therefore, are a poor fit in the construction project and asset lifecycle process.

Software Selection for Engineering, Construction & ContractingIt’s very well possible that we simply need to start with making sure we have a set of business systems that match the needs of the industry, properly supporting a project and asset lifecycle-centric business. Without this solid foundation, reaching the real end goal is going to be very difficult or impossible to achieve.

For further insight into evaluating ERP software and the key points you should consider, read the complimentary Software Selection for Engineering, Construction & Contracting white paper.