Nov/Dec 2012

Expectations for ERP technology in the coming years.

Throughout 2012, Constructech magazine has featured a special section helping contractors make the right decisions around ERP (enterprise resource planning) technology. Starting with the basics around simply identifying the need for the technology,

[March/April, ‘12, The Enterprise, Evolved, p29], the series has also touched upon the proper steps in software selection for different types of contractors [May/June, ‘12, Multiple Ways to ERP, p18], as well as tips and proven tactics around deployment methods [Sept/ Oct, ‘12, Time to Deploy ERP, p28].

This month, the series culminates with a look at what is next for enterprise technology in the construction industry. Roger Kirk, president and CEO, Computer Guidance Corp., www.computerguidance.com, Scottsdale, Ariz., sits down with Constructech magazine Chief Editor Mike Carrozzo to discuss what we should expect for the construction enterprise ahead.

Constructech: Roger, if you were to look at all the trends that are occurring with technology, which ones stand out and look to have the greatest impact immediately?

Kirk: I think the best place to start is with the cloud. I saw a stat recently that said today’s usage is only in the single digits, the number of businesses that have some system deployed in the cloud. That number expects to climb to around 60% by 2014 where businesses will have some type of solution running in the cloud. So without a doubt there is definite growth around the cloud, and you are seeing that have an impact in construction.

That being stated, one of the things you are seeing is contractors are looking for that old cliché of “turning on a switch” and want availability of their systems 24/7 with full high availability, disaster recovery, and backed up, and that is what a hosted solution will provide them. Still, we as software providers cannot influence contractors regarding their need to go to the cloud; it is more of a mindset of the customer. We have some contractors that still want a full on-premise solution with those same capabilities I just described: full back up and redundancies, etc., (so in that regard) I don’t think we should convince them that a hosted solution is the way to go. It is a preconception of the customer (of what they are comfortable using), and what their business demands. The vendor will not convince them to go to the cloud, but offer cloud as a solution implementation or deployment option. It’s like you and I; I might like one computer system, you like another. There is nothing right or wrong, or bad or good about that; it is just the way we are wired.

Constructech: How about those companies that might be somewhat reluctant to go to the cloud, yet still want to and go step by step, perhaps just a bit at a time?

Kirk: When you start talking about something like ERP it is hard to do piece by piece; it’s almost an allor- nothing (proposition). Clearly, they will have other solutions in place like email or project management (with which) they might want to experience cloud with first. That being stated, our role is to make them feel confident that the vendor they are choosing has all the safeguards in place to make sure they are going to have a great experience with the excellent performance and security that is necessary.

Constructech: So then, how else do you see the market changing in construction and how are technology providers evolving to meet this changing market?

Kirk: Three things jump out at me right away: mobility, ECM (enterprise content management), and decision support. You have mobility because you see that need to put solutions out at the source—the jobsite—to help improve productivity and to provide better information at source (of creation). That starts to reach things like equipment, timecard, (field) reporting … mobile project management, and extends to BIM (building information modeling). These types of solutions are being deployed extensively today and the proliferation of field-based apps helps improve jobsite communications and productivity and data capture from (the) field.

You have machine-to-machine for collection information on equipment that is equipped with data-collection systems that integrate into the ERP application. Information such as equipment usage, idle time, fuel consumption, and meter readings are being passed seamlessly from the operating system back into the financial system without any individual intervention.

Then you have ECM, and if you are simply doing your imaging storage and document workflow, it improves productivity. But then you have those launch points in your ERP—being able to approve information from the field (and) access documents seamlessly and remotely.

The decision support comes in where you are building solutions that reside in dashboards and (have) advanced reporting that allows users to access ERP (data) from their iPad, for example, and look at things like productivity reports, labor-earned reports, financials, etc. Having all of that integrated back to the ERP and then providing remote access for the data.

Constructech: These things you discuss all center around the need for data. Do you find the generational change in construction is driving such evolutions in technology, and that demand for more data?

Kirk: Without a doubt. The value and benefit of technology is catching on in construction. Of course, five years back or so we saw this tremendous lag in adoption, but the market has made a quantum leap and is now demanding technology. That means we as vendors must stay one step ahead of the demand and provide the types of tools we just discussed.

Constructech: As we look forward, what can we expect from technology? How will solutions continue to evolve and what should the industry be looking, ultimately, to get out of its investment in technology?

Kirk: I think if you look at the future and you look at the current landscape for technology solutions, there are some strong accounting applications, job costing, general ledger, payroll, etc. In reality, there are only so many ways you can slice and dice job cost and general ledger information, and most vendors have done a great job at doing just that.

I would say that the next step is with the continued deployment of self-service applications. Like, for example, in the HR (human resources) area so that the ERP is providing the workforce with full access to information employees are looking for, like online check stubs, W2 and earnings, etc. HR is certainly nothing new, but it is more about continuing to give users self service (to data).

Then you have BIM and all the talk about 3D and 4D and 5D and taking all of (that data) to leverage a true open architecture so that when you turn over a building the maintenance is managed from the model … the ERP info is managed seamlessly. This needs to make it so the BIM model is alive … and now you have a maintenance system tying into that BIM system. That interaction is no different than with something like estimating interacting with job cost; it is now ERP and equipment maintenance and management interfacing with BIM.

There are other exciting opportunities, but it all comes down to you having great core accounting. What we see is ERP systems have extensive amounts of features that are most likely being underutilized in construction. A major part of the strategy going forward for vendors needs to be in providing strong client services in order to perform gap analysis; (things like) the function reviews, business process consulting, basic training on critical functions; all to ensure the technology that is being deployed is useful.

Overall, all these technology tools are great and the bar is moving up to the next level, but we often hear from customers that the technology is being underutilized. Whether it’s us, or other vendors in the market, the message is that users often don’t leverage all that comes with their ERP. What will really be important as we move forward is we need to ensure the tools are being used at the appropriate level within the organization and users are experiencing the ROI they expected when they installed the ERP initially.

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