An industry that still relies heavily on manual processes, physical work and human labor, the construction sector is ripe for a digital overhaul. And while innovations like 3D printing, self-healing concrete and sensors that monitor for safety hazards are all slowly making their way onto global jobsites, the very nature of construction still requires much manual intervention and physical effort.
“Technology has the potential to help improve the scalability of business models and utilize assets more effectively,” World Construction Network points out. “However, the construction industry has consistently been a slow technology adopter. Emerging use cases of technology such as artificial intelligence (AI), the Internet of Things (IoT) and augmented reality in construction means that there are no longer any excuses, and companies must invest and adopt to stay competitive.”
Citing a recent GlobalData report, World Construction Network says the key barriers construction companies face are a lack of financial resources allotted for technological innovation (36%), a lack of sufficiently skilled labor (34%) and a lack of awareness of new technology (28%). “These are worrying statistics as a lack of technology investment is a vicious cycle,” it adds. “If technology is not used to improve the efficiency of projects, the industry will not be able to keep up with increasingly large and complex sites, strict project deadlines and tight profit margins.”
Making the Difference: NetSuite Cloud ERP
Construction firms must jump through a lot of hoops on the way to a completed job. It starts with an estimate and a thorough review of material, labor and other costs associated with the project. And because these projects extend out for months or even years, all that data has to be kept updated and accessible throughout the lifespan of the project (or even beyond that, in some cases).
Once a quote or bid is approved by the project owner, the firm has to buy materials, source the labor and align with any subcontractors needed to get the job done. Project managers have to be able to communicate effectively with corporate executives, field supervisors and other stakeholders who help to get the projects over the finish line. Along the way, construction firms also have to track costs, adhere to project timelines, create change orders, resolve issues and communicate with their clients.
It's not at all unusual for construction firms to base their decisions on dozens or even hundreds of different spreadsheets that are rarely kept updated or reconciled. This leaves the construction management process up to guesswork and can often mean the difference between a profitable or unprofitable job. NetSuite, on the other hand, gives team members all of the data they need to be able to make smart, informed decisions and take corrective actions before issues escalate into serious financial problems.
Good Cash Flow Management is Key
Construction businesses need to continually fill their cash coffers in order to fund new projects, pay their expenses (e.g., overhead, materials, labor and operating costs) and continue growing and thriving. But in an industry that often operates on thin profit margins, it may just take one slow-paying customer to change a company’s cash flow from positive to negative. When they understand the issues that can hamper cash flow, deploy strategies that boost cash flow and use software to manage that cash flow, construction firms can stay viable and in business for a long time.
With NetSuite, construction firms get automated billing and invoicing management, access to real-time metrics, and overall visibility into a company’s cash flow and cash position. In addition, NetSuite Project Accounting automates and manages project invoices to reduce delays and monitor project profitability metrics, so they’re completed on time and within budget.
Making the Move From Spreadsheets to Cloud ERP
For the organization that still depends on spreadsheets, disconnected software applications, email and phone calls to run its operations, managing construction projects takes too much time, manpower and effort. A powerful tool that helps companies improve their efficiency, productivity, profitability and compliance, NetSuite Cloud Enterprise Resource Planning (ERP) offers a broad range of capabilities and benefits for growing construction firms.
Here are five reasons all construction firms need NetSuite:
- Improved visibility and control. The ERP gives construction companies a single, unified view of their business, including financials, project management, inventory, resources and more. This unified, detailed level of visibility and control can help organizations readily identify and address problems, make better decisions and streamline their operations.
- Increased productivity. NetSuite helps organizations increase productivity by automating the many manual tasks that go into running a growing construction firm. By automating invoicing, reporting and payroll, for example, companies can free up their employees to focus on value-added, strategic initiatives.
- Better collaboration. NetSuite improves collaboration across a construction firm’s various departments and teams. This leads to more efficient workflows, better communication and improved decision-making.
- Reduced costs. With NetSuite in place, companies can streamline their processes, operate more efficiently and eliminate waste. This not only helps reduce costs, but it also ensures that organizations can operate more profitably.
- Improved compliance. NetSuite helps construction companies comply with the many different regulations (e.g., labor, safety, environmental protection, etc.) and avoid the related fines and penalties. With all eyes on sustainability right now, compliant construction firms stand a better chance of winning projects and attracting repeat customers.
Construction firms that replace their spreadsheets and manual processes with NetSuite also get real-time insights into all aspects of their operations, mobile access that allows managers to stay on top of things even when they’re out in the field, and a highly scalable ERP that will grow with the company.