How to Mitigate Construction ERP Implementation Risks?

When starting with the construction ERP implementation project, there are many inherent risks your company can experience. In fact, this can happen with any type of digital transformation project.

What is the reason for this? For one, you are replacing familiar software systems installed in your construction company with a brand-new, advanced platform. This shift will not only lead to technical risks but there can also be uncertainties related to user adoption. Moreover, in the construction industry, companies need to implement a fully integrated ERP system for managing offices and multiple on-site projects, leading to more risks.

In this article, you will learn tips for mitigating risks when implementing an ERP Software for construction.

Clarify Your Business Strategy

Unclear business objectives are one of the few issues that can derail your construction ERP implementation project. That’s why clarifying your business strategy before starting with vendor research is crucial.

Ensure to involve all stakeholders in the process, including management, executives, department managers, and construction managers. By the end, everyone should know your business objectives and how construction ERP can help support them.

Understanding these points will key top and middle management leaders to be on the same page, enabling managers to make smart decisions throughout the implementation project.

Set Realistic Expectations

Once you are done defining your business strategy, next, think about your project scope. During this process, check your cost and timeline expectations.

In your rush to solve pain points, your manager might determine too short a project timeframe or too small a budget. Moreover, vendors’ cost and timeline estimates can fall short as they don’t have a realistic view of the necessary resources and deliverables for a successful ERP implementation project.

So, make realistic estimates depending on your construction firm’s unique situation. Research industry benchmarks and evaluate how your competing construction companies meet their software needs. What type of ERP system are they deploying, how much funds are they spending, and what is their average turnaround time?

While every construction business is unique, using this data can help mitigate the risk of unforeseen costs and budget overruns.

Prioritize Organizational Change Management

While technical issues can cause ERP implementation failure, the most common causes are related to the people and processes involved in the project.

Not only focus on the technical aspects but also ensure your staff is ready for the change. Otherwise, your company could end up with a robust platform that is severely underused.

Although you might see the need for change, it’s human nature to question and even reject it. Ignoring employees’ resistance to change can lead to ERP implementation delays, quality issues, and reduced productivity.

Consider leveraging organizational change management to address change resistance and help the workforce understand and adopt the ERP system.

Optimize Your Business Process

A construction ERP software implementation provides an excellent opportunity for you to take a closer look at your business processes. Determine which workflows are frustrating to the workers and impacting their productivity.

It’s not ideal for automating inefficient processes without improving them. Map your existing workflows and outline how information is communicated across departments and from office to on-site or vice-versa. Next, determine where pain points exist and map a more optimized future.

The future state doesn’t have to be too granular. However, depending on the best practices within the selected ERP software, you should determine the finer details.

Prepare for Data Migration

Data migration is among the critical steps in the construction ERP implementation process. While you might decide not to move all data in your new cloud-based system, the data being transferred is clean, reliable, and actionable.

Don’t wait until the last minute to prepare for data migration. Instead, start laying the groundwork when you select the ERP software application. Consider formulating a data strategy defining how to manage and cleanse existing data to resolve duplications.

Summing up it all!

When implementing ERP Software for construction industry, your company can encounter many risks and challenges leading to cost overruns, delays, and disruption of business operations. However, with proper planning and following the above-discussed tips, you can mitigate ERP implementation-related risks and make the project successful. All you need to do is plan, document your construction business needs and processes, and work closely with a reliable solution partner.