Return on investment or ROI is the ratio between net income and investment. A high ROI means the gains through the investment is higher than the cost of conducting or operating the business processes. As a performance measure, ROI is used to evaluate the efficiency of an investment or to compare the efficiencies of several different investments. Wikipedia
The construction domain of today is undergoing a paradigm shift from the spreadsheet, MS Project, Tally, Sage, Primavera era to embracing the modern technological solution like the Construction ERP Software, BIM integration, IoT, Trench technologies, to name a few. Digitization and automation have begun to emerge as the forefront torchbearer of driving construction operations productivity and feasibility.
This blog focuses on the various aspects of construction management software in helping contractors raise a favourable ration on their ROI at a low cost. So what is a Construction ERP Software? It is a digital tool to streamline, simplify, standardize, integrate, automate, the construction workflow process, operations, workforce, and the resources to seamlessly manage the entire life-cycle of the construction projects from start to finish.
What’s the aim of construction management software?
To promote 24/7 realtime visibility and control over all their construction projects and help contractors easily execute projects within schedule and with profit.
How does construction ERP software increase ROI?
As stated earlier, ROI is the ratio between the revenue generated vs the cost incurred while executing the project. To understand construction management software in boosting the ROI let us first understand the various possibilities through which ROI can be optimised for the contractor’s benefit. The factors responsible for unfavourable ROI are listed below:
- Delayed execution of the construction projects
- Improper planning leading to wastage of key resources
- Inadequate planning and organization of the workforce
- Lakh of clarity in operation workflow cycle
- Inability to access, monitor and control the projects from remote locations, and so on…
Factor #1: Delay in project execution results in additional cost in the form of overheads which are nothing but the per day operational expense. Construction Project Management Software here effectively assists the site staff, back-office employees and other key stakeholders like the regional planning heads, project managers, quantity surveyors, etc to take timely actions based on real-time data collected from multiple sources simultaneously by the construction ERP software. The time save areas are listed below:
Factor #2: Auto-generation of Key reports like; JCR, Variance reports, Subcontractor Progress Report, DLR, DPR, Client Invoice, GNR, Machine usage log, Salary and Payroll report and other 120+ reports are auto-generated by the construction management software – if done manually takes time and prone to errors.
Using construction ERP software, the project managers can:
- Capture project work orders & contract conditions
- WBS for the projects and detailed budget status
- Schedule tasks and work orders, manpower planning, resource allocation and others
- Monitor Daily Progress Report digitally even from a mobile device, and much more.
All these factors combined not only helps in the speedy execution but also in proper planning that eventually minimises pilferages and wastage of other resources.
Factor #3: ERP Software for construction helps companies to manage contract labour and contingent workforce. Manpower supply companies and labour-intensive industries use construction ERP software to do workforce planning and scheduling, camps, vehicles and inventory. A good construction management software comes with a Mobile app to manage attendance, view reports and mark labour outturn.
The construction ERP software facilitates predictable pricing based on the number of labourers managed and their logins and logouts. These factors not only help contractors maintain a disciplined and organised workforce but also promotes transparency within the organization.
Factor #4: The clarity in the operational workflow cycle is taken care of by the construction management software as it facilitates the end-users to;
- Define work-break-down structures (WBS)
- Labour, Material, and Plant (LMP) cost for each activity by plotting BOQ and internal cost codes.
- Compare actuals to zero-based budgets and plans, integrate with Oracle Primavera or MS Projects
- Use Job-Cost-Reports to monitor the progress of a project and costs.
Factor #5: As far as the accessibility issues are concerned;
The construction project management software promotes real-time visibility and control over all the construction projects both off-site and on-site. This includes but not limited to accessing DPR, DLR and Labor Out-turn Entry and Tracking, Project wise Reports and Dashboards, Employee Self-serve HR services, Approval Requests, Tasks and Messages via the Construction ERP Software Mobile App. This shrinks the otherwise vast and humongous construction sector to a level of simplicity where it can be easily understood and optimised for higher efficiency.
The construction management software is not limited to resolving just these above-mentioned factors but goes beyond and helps the contractors complete projects within schedule and with profit. The Tactive construction ERP software is built with BI (Business Intelligence) and Lean construction principles that help contractors save around 6 % of their cost on all their projects.
If you are someone looking for a clean and simple way to save your construction operation expenditure, finish projects on time and with profit, take a free DEMO of Tactive Construction ERP Software.