We have worked with many construction companies, and we enjoy assisting them with their software selection and implementation because they are akin to the mavericks of the business world — unafraid to take on big projects and make things work, no matter what happens. They have an attitude of “we may lose our shirts, but we have other projects we’re working on too,” and we admire that at ERP Advisors Group.
In this article, we will examine the unique requirements that construction companies have for an ERP system, and we will review how NetSuite performs against these requirements.
Unique Needs of Construction Companies
Construction companies have requirements that set them apart from other types of businesses, such as the initial steps of making an estimate, examining labor and materials costs, and converting that information into a quote or contract document. Once approved, materials must be purchased and labor must be sourced. One must also account for project managers communicating with corporate executives, or with those out in the field, depending on the size of the organization.
Then there is the matter of the job itself, including tracking costs and project timelines, communicating results to clients, resolving problems, creating change orders, and deciding whether to absorb additional costs. Then come the quality checks and sending invoices to clients. Finally, the accounting department needs all of this information when the job is ultimately completed. The process is extremely complex, with variability throughout.
How NetSuite Can Help
Our evaluation is that NetSuite can meet the unique requirements of the construction industry, such as:
- Process Inefficiencies – Get processes moving faster to prevent delays that can severely affect a construction company’s cashflow.
- Field Services – Utilize tools for making estimates in the field, creating or editing work orders, looking at designs, and tracking them back to labor or specific parts.
- Fabrication/Manufacturing – Help companies that pre-assemble items deliver them to a job and cost them against the project.
- Complex Payroll – Automate intricate payroll needs, such as keeping track of Davis-Bacon certified payroll or prevailing wage data.
- Contract Management – Electronically manage everything from huge multi-year contracts to individual subcontractors and change orders.
- Safety – Keep tabs on safety requirements such as hard hat compliance, or how many incidents have occurred on a particular site.
- Quality Control and Inspections – Monitor records of on-site inspections and quality of work delivered to clients.
- Project Management – Manage all the thousands of complex project milestones including resource management and allocation, with estimates on cost to complete.
Selecting NetSuite vs. Construction Best-of-Breed
There are applications that are built specifically for the construction industry, but many of these applications have fallen behind the times compared to the cloud ERP platforms. NetSuite has some construction-specific applications within their platform, and we are seeing an improved integration capability between their software and other construction-specific applications.
Here are a few reasons why you might want to choose NetSuite instead of an application built specifically for the construction industry.
Smaller companies may disappear
Sadly, some smaller construction specialty applications may not survive and if you invest in them, it may not be the right option for you. NetSuite usually has more funding going into research and development, and you can feel confident knowing that they aren’t going anywhere after you purchase their product.
Specialty products may not scale to larger companies
Small construction companies that subcontract somewhere around 100 employees can probably get away with a small application. But as they grow and scale, requiring more best-of-breed integrations, an established ERP package such as NetSuite can serve as a hub to make all of the data work together.
Customization can be tricky for construction-specific software
Keep in mind that smaller, construction-specific software packages can be difficult to customize. They do it one way, and you can get stuck with the way they do it. NetSuite can build out custom modules to do exactly what you need.
You need easy-to-use software
Construction companies often have to adjust for changing times in the market. You scale up for large projects, and then scale down when there isn’t as much work. This means you have a lot of new people coming in and out at any given time, and you want to have software that is easy to use. NetSuite can allow you to create business processes with simple applications that employees can use to enter data and get reports easily.
You want to automate processes so you can work on expansion
As complicated as the construction industry can be, there are problems that are easily resolved with automated solutions. This could be tracking all purchasing data for accounting, or electronically assigning a service ticket so workers can add their materials and time. These kinds of activities don’t need to be done manually as these problems have already been solved in NetSuite. Utilizing the technology that is there allows you to take on more clients or expand into new types of design and architecture.
If you’re still not sure about whether to choose a construction-specific software or go with a trusted ERP system like NetSuite, we can help. Unlike some advisory firms, ERP Advisors Group never receives referral fees from any company to recommend a particular software application. Our goal is to help you determine exactly what you need, then assist you with the selection of the software that best fits your requirements. Contact us today for a free consultation.