ERP and Its Importance in the Evolving Built World–2023 Project Management & Oversight Recap

BuiltWorlds’ Benchmarking Program provides members with aggregated data and reports that allows them to compare their technology adoption with peers, identifying gaps in their tech stack for growth. Data is sourced from comprehensive surveys about the current state of the built world, helping to identify top solutions that have been implemented within five essential categories: Preconstruction, Project Management & Oversight, Offsite (Modular) Construction, Field Management Solutions, and Tools, Equipment, & Robotics. Within each category are Technology Specialties that further break down viable solutions. In this piece, we will be discussing the Project Management & Oversight, specifically within the lens of Enterprise Resource Planning, or ERP.

In the AEC industry, ERP systems are used to help streamline the construction process–from designing and planning, to project delivery and maintenance. This solution integrates data and processes into a centralized database that coordinates and manages a multitude of tasks including project scheduling, budgeting, asset management, procurement, and human resource management. ERP systems improve collaboration, increase productivity, and raise revenue for users, all while having a low maintenance cost.

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What is ERP?

BuiltWorlds breaks down Enterprise Resource Planning management technology into 5 functionalities, Integration Across Projects, Automation, Operations Data Analysis, Asset Management, and Owner Relationship Management. As the built world continues to grow more complex and demanding, solutions need to adapt alongside this, bringing softwares such as ERP to the forefront. By reducing redundancy and connecting communication between different departments and stakeholders, project performance is on the rise when ERP solutions are implemented. Although these systems are instrumental to project success, there are still challenges within these solutions that can lead to delays, cost overruns, and poor performance. Some of these challenges include data security, user adoption challenges, integrations challenges, limited customization, and vendor lock-in.

Key Shifts in ERP Recently

When looking back to 2022, all but one survey respondent with an annual revenue over $80M identified the use of an ERP system. Responses also showed that companies with >250 employees all used an ERP system on several projects, if not all. According to surveyed qualified metrics, the average solution rations were fairly low across the board. It was clear that users wanted a solution that was more accessible and useful for workforce management and materials management.

A key trend identified from the 2023 data was the identification of “Custom (in-house) Solutions” as primary ERP solutions. With contractors more heavily relying on self-built platforms to increase customization and functionality for a project, external partners will continue to feel the decline of adoption for their solutions. In 2023, Procore was identified as the most adopted solution by survey respondents. This solution reported as above average within the following functionalities, adoption/utilization, ease of use, project controls/management system integration, and HR/payroll system integration. Although it was highly rated within its functionality, contractors are left feeling wary of its use because of the steep price. Procore ranked lower than its peers within client relationship management, enterprise planning & resource optimization, and supply chain/asset management. With these ratings, it shows that even the strongest solutions within Enterprise Resource Planning systems are not meeting the needs of users.

What is the Future of ERP?

Looking ahead, the near future of ERP integration within the built world appears to be promising given the steady flow of venture capital investments. The growing demand for these systems within the AEC sector has attracted the attention of investors, increasing innovation and competition within the market. Despite the availability of ERP solutions with various functionalities, contractors are still looking to utilize more satisfactory solutions. As technology continues to evolve, ERP providers will need to center their work around improving user experience, scalability, and integration capabilities to lead within the market. The industry is likely to see the emergence of ERP solutions that are tailored to meet the unique needs of a project, transforming the way contractors manage their operations.

A way to remain connected to emerging technologies is through sourcing rising leaders within the industry. BuiltWorlds' 2023 Building Tech 50 List can be used as a resource to see what companies are bringing strong solutions to industry players.

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