erp in construction company

10/9/2013

SUBMITTED TODr. Neetu GanapathyAssistant Professor

SUBMITTED BYVeena U.

12116

ERP in Construction Industry

Contents1. Introduction............................................................................................................................2

2. Implementation of ERP Systems in Construction..................................................................3

2.1. Material Management in Construction............................................................................3

2.2. 3-tier ERP Architecture for Construction Firms.............................................................4

3. Major ERP Vendors for Construction Industry.....................................................................4

3.1. SAP EC&O......................................................................................................................4

3.2. Microsoft Dynamics AX.................................................................................................6

3.3. Sage 300..........................................................................................................................8

3.4. Ramco ERP on Cloud for the Real Estate & Construction Industry...............................9

3.5. Sysnet Associates..........................................................................................................11

4. SONATA Software..............................................................................................................12

5. Major Indian Construction Companies using ERP..............................................................13

5.1. GMR..............................................................................................................................13

5.2. DLF................................................................................................................................13

5.3. Shobha Constructions....................................................................................................13

6. Market Analytics on ERP in Construction Industry............................................................13

7. Conclusions and Recommendations....................................................................................14

Bibiliography............................................................................................................................14

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1. IntroductionThe construction industry is a highly fragmented industry. It needs to communicate on a large scale with other related businesses such as material and equipment suppliers, vendors, subcontractors and clients. ERP systems are being used by construction companies to improve responsiveness in relation to customers, strengthen supply chain partnerships, enhance organizational flexibility, improve decision making capabilities and reduce project completion time and lower costs. These information systems are designed to integrate and partially automate many of the company’s business processes such as human resources, financial management, manufacturing, procurement, construction, operations and maintenance. The goal of ERP is to support one time entry of information at the point where it is created and to make it available to all the participants within the organization.

ERP systems could be used in the construction industry for the following general purposes:1. To improve responsibilities in relation to customers2. To strength supply chain partnerships3. To enhance organizational flexibility4. To improve decision-making capabilities5. To reduce project completion time and cost

In Residential and commercial construction companies, functional areas may include projectdevelopment, facility management, land development and acquisition, warranty and post construction support, work planning and preparation, Web-enabled services, real estate and property management, and real-estate sales and configuration management. In addition, the solution enables automated selection of homebuyer options, integration from the original sales contact through actual project system management, use of pervasive devices for remote construction processes, and easy access to executive management information. ERP systems can help push sales and project information to customers, sales representatives, construction managers, subcontractors, investors, financiers, and corporate audiences - all from one source.

2. Implementation of ERP Systems in Construction2.1. Material Management in ConstructionThe material management process combines and integrates the individual functions of material requirements planning, material take-off, vendor evaluation and selection, purchasing, expedition, shipping, material receiving, and inventory, material distribution, and even accounting functions. Those engaged in this complex process has to be coordinated and communicated effectively. This is what makes material management systems suitable to be benefited from information technology implementation.Many construction firms have got computer base material management systems (MMS), which stores, sort, combine and print data files pertaining to materials requisition, purchasing, vendor evaluation and warehouse inventories. Now the purpose is to integrate MMS with external computer systems to perform functions related to design, project scheduling and accounting, improving so cost and document processing cycle time by the used of information technology systems. Implemented information technology systems are DBMS and EDI (Electronic data interchange). DBMS permits the user to organize, store and management all electronic data relating to a major activity or area of interest, while allowing users to enter and store data for once and utilized by multiple users and application and EDI is a direct computer application exchange of business data in standard format, thus eliminating the need for the re-entering the information.

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In a study made by Lee et al (2002), a simulation model to implement ERP in the material management is created. They implemented the model based in four distinct steps, which are application integration, internal integration, external integration, and automation. This study shows that the durations of almost all of the activities involved in the material management process are successfully been reduced and even in many cases these activity durations have become eliminated. They stated in their study that an ERP system shortens procurement cycle by 80% approximately, through automating most of the repeating transactions, and by reducing manpower to perform those tasks. Hereby implementing ERP systems in the materials management area has measurable benefits in all other areas, which interface with the material management module.

2.2. 3-tier ERP Architecture for Construction FirmsShi and Halpin (2002) presented a 3-tier architecture to implement ERP systems in the construction firms which is illustrated in Figure.

A 3-tier architecture of Construct-ERP (Source: Shi and Halpin, 2002)

The first tier represents user interfaces categorized according to functions such as purchasing, operations, etc. The second tier contains the intelligent management server which includes scheduled tasks, system security and System administration. The third tier holds the central applications, such as corporate-level applications, project-level applications and back-office functions.This system works as follows:1. Define and standardize management tasks, which constitute decision- making processes.2. Identify standard functions, e.g. messenger, scheduling, estimating, etc.3. Develop an engine which allows users to construct, modify, and register decision-making process and identifies the right process for a request.4. Executes the process.5. Develop standard decision processes for procurement management.This three-tier architecture is technically and practically sound. The generic construction decision-making engine provides scalability and functionality to satisfy construction enterprise-level business management automation.

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3. Major ERP Vendors for Construction IndustryTop ERP vendors for construction industry are

1. SAP EC&O2. Microsoft Dynamics AX3. Sage4. Ramco5. Sysnet

3.1. SAP EC&OSAP has 30 years of active involvement in the construction industry, supporting more than a thousand construction businesses across the globe – leveraging the SAP for Engineering, Construction & Operations (SAP for EC&O) solution portfolio. A tightly integrated set of applications encompassing every aspect of the construction business, SAP for EC&O solutions help one complete more projects on time and within budget with fewer resources. The end result: maximum profit and business growth over the long term. These are real and tangible benefits – and that is why SAP’s construction industry customers regularly outperform their peers in revenue growth, operating margins, and return on invested capital. Some of the most important processes supported by SAP for EC&O solutions are described below.

SAP EC&O Solution Map

Building Information Modelling: With SAP for EC&O solutions, one can better manage the projects from the design stage through the entire project lifecycle, with integrated building information modelling (BIM) functionality. Allow every participant in the value chain – from designer and engineer to procurement agent, construction manager, and facility manager – to add to the information pool, generating more accurate data with less effort. This reduces friction in the design-build-manage cycle and facilitates more accurate space, maintenance, asset, and capital planning. BIM functionality also allows better analyses while

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making schedules more reliable. And with direct cost savings, business process improvements, and better decision support, one can improve project profitability on a consistent basis.

Project Management: One of the key components in any construction solution is the project management functionality. The project management solution from SAP has been proven in more than 2,000 installations worldwide. It is robust and functionally comprehensive. It cover all key project management processes and incorporate support for proven best practices to help one reach the fullest potential as quickly as possible. The following are some examples of the processes covered.

Communication Management: Efficient, effective communication is one of the keys to success in a dispersed project-oriented work environment. This is why SAP for EC&O solutions help one efficiently collaborate and share information across the project team, including joint venture partners, subcontractors, vendors, engineering partners, and owners. With integrated document management functions, one can manage the contract and project documents – update, track, and efficiently share information with all stakeholders.

Project Schedule Management: To keep projects on schedule, one need to know what the schedule is and what the reality on the ground is. Supporting both top-down and bottom-up views, the SAP for EC&O solution portfolio lets one measure actual performance against the baseline estimates so that one know how one is doing at all times. It also couples the defined project scope and budget with change-management procedures, allowing continual control of scope and costs. In addition, SAP technology enables immediate integration to market leading third-party scheduling tools.

Integrated Planning: Without a consistent, integrated view of all the running projects, it’s difficult to make strategic planning decisions at the portfolio level. SAP for EC&O solutions address this challenge by enabling the visibility one need to view and manage resources, dates, costs, and revenue across the entire project portfolio.

Resource Allocation: To ensure success, one need to assign the right resources to the right projects while balancing availability and demand from other projects. With increased visibility across all resources at the disposal, SAP for EC&O solutions make it easier for one to assign resources according to skills, availability, and capacity across all the projects.

Workforce Management: If the workforce is the most valuable asset, managing it is one of the most important jobs. SAP for EC&O solutions can help with functionality that makes it easier to manage the professional labour, craft labour, and crew production at the job site while meeting the HR requirements of a dispersed, project-based workforce. One can expedite labour more easily with complete visibility of the available skill sets and current work assignments.

Cost Control: Without strict cost control, one can quickly experience the kinds of cost overruns that can doom any construction project. To help avoid cost overruns, the SAP for EC&O solution portfolio supports integrated cost reporting for all types of costs (planned, committed, actual, and forecast). This is further enhanced with powerful exception reporting that quickly alerts potential problem areas before they derail a project.

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3.2. Microsoft Dynamics AXThe To-Increase Construction Solution for Microsoft Dynamics AX, built on Microsoft's powerful ERP system, offers a wealth of capabilities for commercial and specialty construction companies that help them win, execute, and support complex projects in a highly competitive environment. The Construction Solution enables meeting customers' expectations for responsive, informed service, bring greater efficiency to their processes, and optimize internal procedures to support a lean environment. The solution helps transform processes,

Advanced Project Management: Microsoft Dynamics AX, one of the fastest growing ERP solutions worldwide, provides a scalable enterprise solution capable handling operations for even the largest construction firms. To-Increase Advanced Project Management for Dynamics AX integrates directly with the ERP platform helps manage projects efficiently and ensure that complex change management and custom requirements do not result in ballooning costs. Enterprise reporting and comprehensive quote-to-service capabilities designed specifically for construction firms make for a powerful solution capable of evolving with the growing firm.Advanced Project Management for Dynamics AX enables one to:

Plan and run projects with competitive, profitable margins and balance margins across labour, equipment, subcontracts, materials, and expenses.

Retain and re-use experience and knowledge to respond quickly to requests for quotes while improving the quality of bids and the profitability of projects.

Control project progress, value, and costs, and align them easily with cost code structures, customer requirements, and industry standards.

Reconcile materials resource planning (MRP) and project planning, so that products and components are available on time.

Track and control workers’ project time. Manage equipment usage for best cost recovery.

Enterprise Asset Management: The solution enables businesses to make timely decisions, preventing construction equipment breakdowns and maximizing team productivity. Complete maintenance, repair, and overhaul (MRO) support enables full control over work orders, resource allocation, spare parts management, and costs. In addition, fleet management functionality allows one to manage, track, and maintain trucks, vans, or rolling stock. Whether maintaining assets or servicing customers, Enterprise Asset Management helps save time and money promptly after the implementation. Integration of the solution with Microsoft Dynamics AX, the highly regarded enterprise resource planning (ERP) system, eliminates the need to maintain separate technologies.Enterprise Asset Management allows one to:

Minimize equipment downtime and conduct informed, efficient planning. Work with a single source of business data, eliminate redundancies, and avoid having

to deploy additional software tools. By connecting ERP and maintenance processes, ensure reliable, timely maintenance

without compromising service levels or the progress of construction projects.

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Enhance team productivity by giving employees a comfortable tool for performing all tasks related to managing assets and services.

Visual Project Planning: To-Increase Visual Project Planning for Microsoft Dynamics AX provides the direct insight construction project managers need to be in control of the work. That, in turn enables them to deliver outstanding service to customers in profitable projects. The solution integrates with Microsoft Dynamics AX, the powerful ERP system, in a connected environment that offers capabilities specific to the construction industry together with a solid, proven business management infrastructure.

Other FeaturesThe core Microsoft Dynamics AX solution provides robust business management capabilities ranging from financial management to human resources (HR) management. In addition, custom modules support the following industry-specific capabilities:

1. Camp management: This functionality allows the check-in and check-out of every hire in real time. Staff use the solution to manage resident resources, camp capacity, and occupancy, as well as to perform capacity planning and to book internal transfer costs.

2. Labour-to-hire: The solution facilitates booking of costs associated with labour hiring, and processes invoices received from staffing agencies.

3. Subcontract management: This capability can be used effectively to manage subcontract scope, scope breakup, and payment milestones, change orders, etc. This functionality also allows for advance payments and deduction against advance with retention and retention release with greater flexibility.

4. Concrete: This capability enables to track concrete from receiving to pouring. It also enables the company to directly expense that concrete to the appropriate project.

5. Plant, machinery, and vehicles (PMV): With the solution, one can track owned and hired PMV to log their worked, idle, and downtime hours and to process related expenses to projects. The solution facilitates placing purchase orders to PMV supply agencies, validating and booking of invoices, and booking the transfer price of owned PMV.

6. Scaffolding: Using the solution, one can effectively manage the hiring of scaffolding to projects and then analyse the requested scaffolding versus that consumed and invoiced. Similarly, the system tracks scaffolding that has been purchased outright using a cost centre approach, and books the transfer price to the appropriate projects.

3.3. Sage 300With solutions for the entire facility lifecycle—from designing and building to sales and managing occupancy, Sage 300 Construction and Real Estate has a suite of products created to work the way one work. An integrated family of financial and operations software gives one a cross functional system that pulls everything together for streamlined, single-source control.

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Accounting: For contractors and real estate developers, Accounting automates the entire building process to help control costs and boost revenue. For real estate professionals, this accounting suite allows one to report information in any format requested by owners, investors, and lenders. From accounts payable and job costing to change orders and commitments, Sage 300 Construction and Real Estate gives one easy access to information and lets one customise the software to meet individual business needs.

Estimating: Sage 300 Construction and Real Estate allows one to build own unique, company specific database. The Database Builder Wizard walks one through the necessary steps of structuring and setting up database more quickly and efficiently than one ever thought possible. Using a number of built-in productivity tools, one will find productive estimates in significantly less time that it takes one now. And when one spends less time crunching numbers and more time analysing and fine tuning estimates, one will win more profitable quotes. And with complete Sage 300 Construction and Real Estate integration, estimate details can be passed to accounting for budget vs. actual tracking, to Project Management for change order generation, as well as to third-party scheduling programs.

Procurement: This software simplifies the RFQ and material acquisition processes. Can use the Buonet application to quickly turn estimate items into desired material groupings and perform the tasks necessary to buy out jobs. One can automatically generate and send RFQs to suppliers and subcontractors via e-mail, fax, or printed hard copy. The tightly integrated Purchasing and Inventory applications let one consolidate purchasing and replenish inventory items through a single information source. Interfaces to Job Cost, Equipment Cost, and Accounts Payable allow one to capture all material details in accounting.

Project Management: This application lets one view it all and keep the right people well informed at all times with access to up-to-the-minute costs, contracts, and document information. Open yet secure, one can decide who can pull up data, run a report, or add input. Through integration with accounting, estimating, and purchasing, one will be able to issue and see all subcontracts, change orders, purchase orders, and other project-related documents.

Property Management: With Property Management, one will have the ability to track all the project details from the initial estimate to the final phase of construction and throughout occupancy. An integrated, single source solution, one will enjoy the benefits of a company-wide solution resulting in improved communication and information sharing between departments as well as separate divisions. This adaptive solution shares data between property management, general ledger and financial analysis software minimising the amount of duplicated efforts and the rekeying of data. In addition, by using the Service Management and Job Cost modules, one will easily stay on top of property and tenant improvement issues and projects.

Service Management: Designed for the unique demands of running service operations, this software streamlines dispatching, simplifies billing and work orders, and helps dispatchers communicate more effectively with customers, tenants and technicians.

Reporting and Productivity Tools: This software system is only as valuable as the information one can access. The suite of reporting and information management tools for Sage 300 Construction and Real Estate gets one to the exact data one need precisely when one need it.

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3.4. Ramco ERP on Cloud for the Real Estate & Construction Industry It helps bolster efficiencies and visibility of Construction Companies. Helps them gain a close view of their spending vis-à-vis budgets, across projects and locations. Also, helps leverage years of experience gained by Ramco in successfully delivering technology solutions to large players in the real estate industry. This in-turn helps costs without compromising on quality and re-write industry benchmarks.

Land Bank Analysis: It is always difficult to have control over the huge land bank, and manage the complex sanctions and approval processes. Ramco ERP makes it easy and transparent.

Plan better with Land Bank Analysis Handle complex tasks confidently with Approvals & Sanctions Management Speed up processes with Critical Date Management and Escalation Workflow

Customer Relationship Management: Give view of potential customers in advance and helps companies to evaluate properties better. Keeping a close real-time watch on opportunities, from anywhere. Gauging lead generation progress anytime, and plan the next steps with potential customers. Making every customer engagement count, and remaining in close touch with opportunities that may translate into actual revenue.

Maintain status and activities concerning next engagement, information sought, site visits, etc. with optimized lead management and comprehensive Customer Relationship Management (CRM) features

Allocate leads to a sales team or sales executive Find and focus on hot opportunities by using analytical views of the leads are working

on Let the CRM track follow-ups Convert leads into customers

Property Integration: Business seems very difficult to operate if all these do not come under one roof for one to have clear visibility and control over projects, their associated plans, bookings, customer details, and so on. Ramco ERP on Cloud equips one to manage the properties in an integrated fashion, tying teams, brokers, marketing, finance and collection together.

Manage multiple companies and projects Create a complete inventory of properties of different types with all required details Easily maintain status of units, such as Blocked/ Available/ Sold Use rule-based pricing to define the prices for various Units/ Unit Types/ PLC etc. Add multiple payment plans according to their types (Construction Linked, Down

Payment, Time Linked Plans) for basic, PLC and additional services Manage early payment rebate or delayed payment interest easily with built-in features Send reminder alerts for payment as per schedule Have a consolidated view of a customer having multiple properties Manage brokers easily with comprehensive Broker Management features, including

flat or target-based multiple brokerages for different projects

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Transfer from one booking to another within or across the projects

Lease Management System: Ramco ERP on Cloud provides Lease Management to help manage the letting of properties and the administration of leases.

Define and generate inventory with status, with Lease Administration Organize the broker information and link with them properly through Broker

Management Optimize the property space with Space Management Avoid delays, with Critical Date Management Make sure money flows in on time, with flexible and automatic billing options Handle rent escalation, revenue sharing, billing date management, etc., easily Set up alerts and triggers on configurable events Manage complex revenue sharing - flat/ item group based, and period-based

Maintenance: Make the customers happy by extending prompt service to them, with Ramco’s Maintenance module. Building managers can now schedule their routine maintenance and organize the technical team for all maintenance work.

Provide the customers with a portal to lodge complaints Track the complaints with categories, like elevator, electrical job, etc. Handle predictive & preventive maintenance Schedule the fire testing and mock drills Maintain the façade lift, engineering log sheet in the system Maintain the DG fuel consumption on a weekly basis Integrate with RFID systems

Facility Management: Ramco Facility Management solution helps provide best of services in a prompt and organized manner to the clients, ramp-up resources and operations quickly, have effective delivery models and deploy newer, more efficient methodologies and practices which meets customer demands at the same time saves cost overruns.

Improve services with the Services Management module Handle modernizations smartly Be on track with utilities billing Make sure the team is there to help the customers, with better Workforce

Management.

3.5. Sysnet AssociatesSYSNET Associates (India) Private Limited is an IT Solutions company, with a mission to provide effective IT consulting solutions to customers. It has a team of very experienced software professionals, with good ERP background. Sysnet has executed several projects in the past, for a variety of customers in India & abroad, over the last 18 years. Sysnet has come out with a path-breaking and innovative software product called SpApp, to create and manage enterprise business applications. Using SpApp, several systems are already deployed. Sysnet has built an ERP system, for construction Industry on SpApp. This large ERP system is in use, at a few customer locations. This ERP system is called as PMS ERP.

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PMS ERP is a Full-fledged, Enterprise-wide, Intranet-based ERP solution built to suit any construction industry. It is a fully integrated solution for Construction business, with many business functions including Engineering, Inventory, Purchase, Projects and Marketing & Sales. PMS ERP covers all the major functions required. It provides various MIS reports, statutory reports and documents too. It is a fully functional operations information system, taking care of all key functions. PMS ERP is built using Sysnet’s AppMaker – SpApp and does not need any third party database like MS SQL Server or Oracle. It also does not need any special IT staff to maintain and run the software.

The functions covered by PMS ERP system includes: Project Engineering Purchase Management Inventory Management Sub-Contractor Management Sales Management

Project Engineering: Using PMS ERP, one can maintain any number of concurrent construction projects, with each project’s complete data accessible at any time. Each project is split into multiple stages, with many activities per stage maintained. All Material and Labour data are maintained at atomic level and summaries at project level can be viewed & printed at any time.

Budgeted Vs Actual status of a project Project BOQ status Project completion status Materials availability for a project Sub-Contractors Work Pending/Completion status. Activity-track reports

Purchase Management: The Purchase Management module in PMS ERP provides the necessary control over all purchases made for a project. Purchases can be tightly controlled with respect to the actual quantity of material required for a project. Managerial level authorizations are provided for releasing the Purchase indents and Purchase Orders.

Inventory Management: Inventory management function forms a critical aspect for Project management. PMS ERP provides a complete coverage of all material transactions and all related documentation. Closing Stock quantity and value are up to date. In PMS ERP, the stock details can be maintained for each project separately.

Sub-Contractor Management: PMS ERP has a separate module to collect the detail of the registered sub-contractors.

1. Sub-Contractor: Maintain a list of registered suppliers along with their complete contact details. Work Orders can be raised only to a registered sub-contractor.

2. Sub-Contractor Quotation: PMS ERP has the option where the quotation received from various sub-contractors for a given activity can be recorded. A price comparison statement can be generated.

Sales Management: PMS ERP has a simple yet complete function to handle the creation of invoices.

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MIS Reports in PMS ERP: PMS ERP can generate over 40 reports. The following are some of the reports PMS ERP provides. In addition to the customized reports the user can generate reports in a standard format with option to provide the criteria for the report. Reports can be exported to an Excel file or saved as an image file.

Bill of Quantity Bill Of Material Work Order Activity Progress Report Project Cost Monitoring report Sub-Contractor Payment statement Purchase Indent Purchase Order Goods Receipt Note Statement of material received Item Stock Ledger Project-wise Stock Statement Supplier-wise Bills Payable Project-wise Materials Issued Project-wise Materials Returned Project-wise Materials Transferred Invoice Details of Payment Due from Customers

4. SONATA SoftwareSonata Software Limited, headquartered in Bangalore, India, is an IT consulting and software services company delivering transformational IT solutions through customer specific Centres of Excellence. Sonata serves Software Product Companies, and enterprises in the Travel, Manufacturing, Retail and Distribution verticals across the globe. Its key service lines include Business Intelligence and Analytics, Application Development Management (ADM), Mobility, Cloud, Social Media, Testing, Enterprise Services (ERP and CRM), and Infrastructure Management services. Sonata has strategic alliances with global technology majors like Microsoft, IBM, SAP, Oracle and HP.

5. Major Indian Construction Companies using ERP5.1. GMRGMR needed an innovative IT system that could monitor its highways business. It wanted an effective governance mechanism that required minimal manual intervention in remote places on highways. Johny Paramian, CIO, GMR found a way out. Paramian integrated the company’s toll management system with its SAP ERP modules. The toll details (revenue and vehicle) are fed to the ERP system on an hourly basis along with the revenue entries for the previous 24 hours. Other transactions like materials management, general accounting, and investment management are also carried out in the ERP. This data is fed into the BPC (business planning and consolidation). The BPC provides a platform for different business functions to arrive at the annual operating plan. Once frozen, the actual figures are compared on a daily basis. This quick feedback mechanism is useful for effective decision-making. A BI tool sits on top of the entire system and provides alerts. IP cameras capture all activities of

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the toll plazas in key locations and feed it to the central control room. This system handles all day-to-day operations of the company’s toll plazas efficiently. The solution’s effectiveness stems from the successful management of three different toll-based highways in the country.

5.2. DLFTo deal with the challenges and to take fullest advantages of future opportunities, DLF management felt the need of a flexible information technology, ideally an end-to-end ERP that will integrate horizontally across business units as well as vertically throughout each unit. By early 2006, DLF started exploring for a good ERP solution that could bring all processes on to a single platform. The management evaluates all the options available in the market but after careful analysis, zeroed it down to Ramco ERP solution. The company has also deployed the well-known Oracle Financial for its corporate office.

5.3. Shobha ConstructionsShobha Constructions relies upon an Enterprise Resource Planning (“ERP”) system provided by a third party solution provider for integrating our core and back-end activities such as architecture, engineering, projects, costing, inventory, finance, sales, CRM, invoice billing, estimation, purchases, invoices, payments, tax calculations and employee salaries. We are also proposing to migrate to an independently developed enterprise resource package. Any disruption of the functioning of our existing IT systems or a delay in implementation of the new enterprise resource package or problems associated with the migration to the new enterprise resource package could disrupt our ability to track, record and analyse the work in progress, cause loss of data and disruption in operations including, among others an ability to assess the progress of the projects, process financial information or manage creditors/debtors or engage in normal business activities. This could have an adverse effect on their business.

6. Market Analytics on ERP in Construction Industry Currently, SAP, Oracle, and other companies such as Deltek, CMiC, and Timberline provide specific solutions for the construction industry. They claim that their solutions can support all the functions a construction company needs. However, most engineering and construction firms in the U.S. have implemented their ERP systems adopting a best-of-breed approach in which separate software packages are selected for each process or function rather than using the full packages of major ERP vendors. They pick several modules, such as Financial Accounting and HR, from major ERP vendors and piece them together with their own in-house developed software or other third party products using custom-built interfaces. The main reason for using this approach is that construction processes are unique for each project: each project has a different owner, is managed by a different project team, requires different specifications, etc. These three trends will have a major impact on how ERP vendors do business.

1. Mobility: The wide adoption of smartphones and tablets has changed the way distributors do business and create new opportunities. Mobile devices allow workers to use the enterprise system from anywhere. This can be valuable when distribution firms open multiple locations or sales representatives need to access product or shipment information while at a client meeting. Modern ERP solutions can help distributors accomplish more because they have

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real-time access to information. Sales teams can give prices, generate quotes, start orders and contact Accounts Receivable all while on the go.

2. Cloud services: As business becomes more global, partners need to be able to easily transfer information through the Internet. With cloud services, distributors can keep up with competition and reduce costs, and it allows companies to become more agile. This helps them better adapt to new challenges and gain new capabilities. Cloud systems have lower installation costs and can be implemented more quickly so companies can stay efficient and cut down on IT spending.

3. Business intelligence: Business analytics are gaining a foothold in many industries, and distribution will be no different. The market share for these tools is growing exponentially, firms that leverage business intelligence may be able to gain a competitive advantage through a better understanding of customer behaviour. Being able to use predictive analytics allows companies to be proactive instead of reacting when something goes wrong, and employees can access information from a variety of locations.

Companies that understand what the data trends of the past mean can plan for improved actions in the future. ERP with integrated business intelligence gives distributors greater visibility into their operations. By knowing which customers are the most profitable and the margins for the quarter, companies can pursue strategies that allow them to maximize revenue and identify areas to cut costs.

7. Conclusions and RecommendationsMajority of Construction Companies have some “know-how” about the ERP systems and they think that the implementation of ERP systems could benefit their organizations by providing better integration of working environment, more automation and more flexibility in operations and information access. However, it is found that the implementation of ERP systems needs lot of capital, human and technical resources and it will not be easy for the small contracting firms to invest their potential on such a mega-system. Hence, it is recommended that the implementation of ERP systems in the construction industry should be started with the large contracting organizations and then gradually move down. Training is another aspect, which is very crucial in the successful implementation of ERP systems. Training should be started from the top management and then move down to middle and lower management. It is also found that only a small number of ERP software are developed for the construction industry and this might be one reason of its slow implementation in the construction industry. The ERP software vendors must work with the professional in the construction industry to developed more customized solutions for the contracting firms.

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