ERP IN

CONSTRUCTION
INDUSTRY

SUBMITTED TO
Dr. Neetu Ganapathy
Assistant Professor

SUBMITTED BY
Veena U.
12116
 ERP in Construction Industry

Contents
1. Introduction............................................................................................................................2
2. Implementation of ERP Systems in Construction..................................................................3
2.1. Material Management in Construction............................................................................3
2.2. 3-tier ERP Architecture for Construction Firms..............................................................4
3. Major ERP Vendors for Construction Industry......................................................................4
3.1. SAP EC&O......................................................................................................................4
3.2. Microsoft Dynamics AX..................................................................................................6
3.3. Sage 300..........................................................................................................................8
3.4. Ramco ERP on Cloud for the Real Estate & Construction Industry...............................9
3.5. Sysnet Associates...........................................................................................................11
4. SONATA Software...............................................................................................................12
5. Major Indian Construction Companies using ERP..............................................................13
5.1. GMR..............................................................................................................................13
5.2. DLF................................................................................................................................13
5.3. Shobha Constructions....................................................................................................13
6. Market Analytics on ERP in Construction Industry.............................................................13
7. Conclusions and Recommendations....................................................................................14
Bibiliography............................................................................................................................14

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1. Introduction
The construction industry is a highly fragmented industry. It needs to communicate on a large
scale with other related businesses such as material and equipment suppliers, vendors,
subcontractors and clients. ERP systems are being used by construction companies to
improve responsiveness in relation to customers, strengthen supply chain partnerships,
enhance organizational flexibility, improve decision making capabilities and reduce project
completion time and lower costs. These information systems are designed to integrate and
partially automate many of the companys business processes such as human resources,
financial management, manufacturing, procurement, construction, operations and
maintenance. The goal of ERP is to support one time entry of information at the point where
it is created and to make it available to all the participants within the organization.

ERP systems could be used in the construction industry for the following general purposes:
1. To improve responsibilities in relation to customers
2. To strength supply chain partnerships
3. To enhance organizational flexibility
4. To improve decision-making capabilities
5. To reduce project completion time and cost
In Residential and commercial construction companies, functional areas may include project
development, facility management, land development and acquisition, warranty and post
construction support, work planning and preparation, Web-enabled services, real estate and
property management, and real-estate sales and configuration management. In addition, the
solution enables automated selection of homebuyer options, integration from the original
sales contact through actual project system management, use of pervasive devices for remote
construction processes, and easy access to executive management information. ERP systems
can help push sales and project information to customers, sales representatives, construction
managers, subcontractors, investors, financiers, and corporate audiences - all from one
source.

2. Implementation of ERP Systems in Construction

2.1. Material Management in Construction
The material management process combines and integrates the individual functions of
material requirements planning, material take-off, vendor evaluation and selection,
purchasing, expedition, shipping, material receiving, and inventory, material distribution, and
even accounting functions. Those engaged in this complex process has to be coordinated and
communicated effectively. This is what makes material management systems suitable to be
benefited from information technology implementation.
Many construction firms have got computer base material management systems (MMS),
which stores, sort, combine and print data files pertaining to materials requisition, purchasing,
vendor evaluation and warehouse inventories. Now the purpose is to integrate MMS with
external computer systems to perform functions related to design, project scheduling and
accounting, improving so cost and document processing cycle time by the used of
information technology systems. Implemented information technology systems are DBMS
and EDI (Electronic data interchange). DBMS permits the user to organize, store and
management all electronic data relating to a major activity or area of interest, while allowing
users to enter and store data for once and utilized by multiple users and application and EDI
is a direct computer application exchange of business data in standard format, thus
eliminating the need for the re-entering the information.

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In a study made by Lee et al (2002), a simulation model to implement ERP in the material
management is created. They implemented the model based in four distinct steps, which are
application integration, internal integration, external integration, and automation. This study
shows that the durations of almost all of the activities involved in the material management
process are successfully been reduced and even in many cases these activity durations have
become eliminated. They stated in their study that an ERP system shortens procurement cycle
by 80% approximately, through automating most of the repeating transactions, and by
reducing manpower to perform those tasks. Hereby implementing ERP systems in the
materials management area has measurable benefits in all other areas, which interface with
the material management module.

2.2. 3-tier ERP Architecture for Construction Firms

Shi and Halpin (2002) presented a 3-tier architecture to implement ERP systems in the
construction firms which is illustrated in Figure.

A 3-tier architecture of Construct-ERP (Source: Shi and Halpin, 2002)

The first tier represents user interfaces categorized according to functions such as purchasing,
operations, etc. The second tier contains the intelligent management server which includes
scheduled tasks, system security and System administration. The third tier holds the central
applications, such as corporate-level applications, project-level applications and back-office
functions.
This system works as follows:
1. Define and standardize management tasks, which constitute decision- making processes.
2. Identify standard functions, e.g. messenger, scheduling, estimating, etc.
3. Develop an engine which allows users to construct, modify, and register decision-making
process and identifies the right process for a request.
4. Executes the process.
5. Develop standard decision processes for procurement management.
This three-tier architecture is technically and practically sound. The generic construction
decision-making engine provides scalability and functionality to satisfy construction
enterprise-level business management automation.

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3. Major ERP Vendors for Construction Industry

Top ERP vendors for construction industry are
1. SAP EC&O
2. Microsoft Dynamics AX
3. Sage
4. Ramco
5. Sysnet

3.1. SAP EC&O

SAP has 30 years of active involvement in the construction industry, supporting more than a
thousand construction businesses across the globe leveraging the SAP for Engineering,
Construction & Operations (SAP for EC&O) solution portfolio. A tightly integrated set of
applications encompassing every aspect of the construction business, SAP for EC&O
solutions help one complete more projects on time and within budget with fewer resources.
The end result: maximum profit and business growth over the long term. These are real and
tangible benefits and that is why SAPs construction industry customers regularly
outperform their peers in revenue growth, operating margins, and return on invested capital.
Some of the most important processes supported by SAP for EC&O solutions are described
below.

SAP EC&O Solution Map

Building Information Modelling: With SAP for EC&O solutions, one can better manage the
projects from the design stage through the entire project lifecycle, with integrated building
information modelling (BIM) functionality. Allow every participant in the value chain from
designer and engineer to procurement agent, construction manager, and facility manager to
add to the information pool, generating more accurate data with less effort. This reduces
friction in the design-build-manage cycle and facilitates more accurate space, maintenance,
asset, and capital planning. BIM functionality also allows better analyses while making

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schedules more reliable. And with direct cost savings, business process improvements, and
better decision support, one can improve project profitability on a consistent basis.

Project Management: One of the key components in any construction solution is the project
management functionality. The project management solution from SAP has been proven in
more than 2,000 installations worldwide. It is robust and functionally comprehensive. It cover
all key project management processes and incorporate support for proven best practices to
help one reach the fullest potential as quickly as possible. The following are some examples
of the processes covered.

Communication Management: Efficient, effective communication is one of the keys to

success in a dispersed project-oriented work environment. This is why SAP for EC&O
solutions help one efficiently collaborate and share information across the project team,
including joint venture partners, subcontractors, vendors, engineering partners, and owners.
With integrated document management functions, one can manage the contract and project
documents update, track, and efficiently share information with all stakeholders.

Project Schedule Management: To keep projects on schedule, one need to know what the
schedule is and what the reality on the ground is. Supporting both top-down and bottom-up
views, the SAP for EC&O solution portfolio lets one measure actual performance against the
baseline estimates so that one know how one is doing at all times. It also couples the defined
project scope and budget with change-management procedures, allowing continual control of
scope and costs. In addition, SAP technology enables immediate integration to market
leading third-party scheduling tools.

Integrated Planning: Without a consistent, integrated view of all the running projects, its
difficult to make strategic planning decisions at the portfolio level. SAP for EC&O solutions
address this challenge by enabling the visibility one need to view and manage resources,
dates, costs, and revenue across the entire project portfolio.

Resource Allocation: To ensure success, one need to assign the right resources to the right
projects while balancing availability and demand from other projects. With increased
visibility across all resources at the disposal, SAP for EC&O solutions make it easier for one
to assign resources according to skills, availability, and capacity across all the projects.

Workforce Management: If the workforce is the most valuable asset, managing it is one of
the most important jobs. SAP for EC&O solutions can help with functionality that makes it
easier to manage the professional labour, craft labour, and crew production at the job site
while meeting the HR requirements of a dispersed, project-based workforce. One can
expedite labour more easily with complete visibility of the available skill sets and current
work assignments.

Cost Control: Without strict cost control, one can quickly experience the kinds of cost
overruns that can doom any construction project. To help avoid cost overruns, the SAP for
EC&O solution portfolio supports integrated cost reporting for all types of costs (planned,
committed, actual, and forecast). This is further enhanced with powerful exception reporting
that quickly alerts potential problem areas before they derail a project.

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3.2. Microsoft Dynamics AX

The To-Increase Construction Solution for Microsoft Dynamics AX, built on Microsoft's
powerful ERP system, offers a wealth of capabilities for commercial and specialty
construction companies that help them win, execute, and support complex projects in a highly
competitive environment. The Construction Solution enables meeting customers' expectations
for responsive, informed service, bring greater efficiency to their processes, and optimize
internal procedures to support a lean environment. The solution helps transform processes,

Advanced Project Management: Microsoft Dynamics AX, one of the fastest growing ERP
solutions worldwide, provides a scalable enterprise solution capable handling operations for
even the largest construction firms. To-Increase Advanced Project Management for
Dynamics AX integrates directly with the ERP platform helps manage projects efficiently and
ensure that complex change management and custom requirements do not result in ballooning
costs. Enterprise reporting and comprehensive quote-to-service capabilities designed
specifically for construction firms make for a powerful solution capable of evolving with the
growing firm.
Advanced Project Management for Dynamics AX enables one to:

Plan and run projects with competitive, profitable margins and balance margins across
labour, equipment, subcontracts, materials, and expenses.

Retain and re-use experience and knowledge to respond quickly to requests for quotes
while improving the quality of bids and the profitability of projects.

Control project progress, value, and costs, and align them easily with cost code
structures, customer requirements, and industry standards.

Reconcile materials resource planning (MRP) and project planning, so that products
and components are available on time.

Track and control workers project time.

Manage equipment usage for best cost recovery.

Enterprise Asset Management: The solution enables businesses to make timely decisions,
preventing construction equipment breakdowns and maximizing team productivity. Complete
maintenance, repair, and overhaul (MRO) support enables full control over work orders,
resource allocation, spare parts management, and costs. In addition, fleet management
functionality allows one to manage, track, and maintain trucks, vans, or rolling stock.
Whether maintaining assets or servicing customers, Enterprise Asset Management helps save
time and money promptly after the implementation. Integration of the solution with Microsoft
Dynamics AX, the highly regarded enterprise resource planning (ERP) system, eliminates the
need to maintain separate technologies.
Enterprise Asset Management allows one to:
Minimize equipment downtime and conduct informed, efficient planning.

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Work with a single source of business data, eliminate redundancies, and avoid having
to deploy additional software tools.

By connecting ERP and maintenance processes, ensure reliable, timely maintenance

without compromising service levels or the progress of construction projects.

Enhance team productivity by giving employees a comfortable tool for performing all
tasks related to managing assets and services.

Visual Project Planning: To-Increase Visual Project Planning for Microsoft Dynamics AX
provides the direct insight construction project managers need to be in control of the work.
That, in turn enables them to deliver outstanding service to customers in profitable projects.
The solution integrates with Microsoft Dynamics AX, the powerful ERP system, in a
connected environment that offers capabilities specific to the construction industry together
with a solid, proven business management infrastructure.

Other Features
The core Microsoft Dynamics AX solution provides robust business management capabilities
ranging from financial management to human resources (HR) management. In addition,
custom modules support the following industry-specific capabilities:

1. Camp management: This functionality allows the check-in and check-out of every
hire in real time. Staff use the solution to manage resident resources, camp capacity,
and occupancy, as well as to perform capacity planning and to book internal transfer
costs.
2. Labour-to-hire: The solution facilitates booking of costs associated with labour
hiring, and processes invoices received from staffing agencies.
3. Subcontract management: This capability can be used effectively to manage
subcontract scope, scope breakup, and payment milestones, change orders, etc. This
functionality also allows for advance payments and deduction against advance with
retention and retention release with greater flexibility.
4. Concrete: This capability enables to track concrete from receiving to pouring. It also
enables the company to directly expense that concrete to the appropriate project.
5. Plant, machinery, and vehicles (PMV): With the solution, one can track owned and
hired PMV to log their worked, idle, and downtime hours and to process related
expenses to projects. The solution facilitates placing purchase orders to PMV supply
agencies, validating and booking of invoices, and booking the transfer price of owned
PMV.
6. Scaffolding: Using the solution, one can effectively manage the hiring of scaffolding
to projects and then analyse the requested scaffolding versus that consumed and
invoiced. Similarly, the system tracks scaffolding that has been purchased outright
using a cost centre approach, and books the transfer price to the appropriate projects.

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3.3. Sage 300

With solutions for the entire facility lifecyclefrom designing and building to sales and
managing occupancy, Sage 300 Construction and Real Estate has a suite of products created
to work the way one work. An integrated family of financial and operations software gives
one a cross functional system that pulls everything together for streamlined, single-source
control.

Accounting: For contractors and real estate developers, Accounting automates the entire
building process to help control costs and boost revenue. For real estate professionals, this
accounting suite allows one to report information in any format requested by owners,
investors, and lenders. From accounts payable and job costing to change orders and
commitments, Sage 300 Construction and Real Estate gives one easy access to information
and lets one customise the software to meet individual business needs.

Estimating: Sage 300 Construction and Real Estate allows one to build own unique,
company specific database. The Database Builder Wizard walks one through the necessary
steps of structuring and setting up database more quickly and efficiently than one ever
thought possible. Using a number of built-in productivity tools, one will find productive
estimates in significantly less time that it takes one now. And when one spends less time
crunching numbers and more time analysing and fine tuning estimates, one will win more
profitable quotes. And with complete Sage 300 Construction and Real Estate integration,
estimate details can be passed to accounting for budget vs. actual tracking, to Project
Management for change order generation, as well as to third-party scheduling programs.

Procurement: This software simplifies the RFQ and material acquisition processes. Can use
the Buonet application to quickly turn estimate items into desired material groupings and
perform the tasks necessary to buy out jobs. One can automatically generate and send RFQs
to suppliers and subcontractors via e-mail, fax, or printed hard copy. The tightly integrated
Purchasing and Inventory applications let one consolidate purchasing and replenish inventory
items through a single information source. Interfaces to Job Cost, Equipment Cost, and
Accounts Payable allow one to capture all material details in accounting.

Project Management: This application lets one view it all and keep the right people well
informed at all times with access to up-to-the-minute costs, contracts, and document
information. Open yet secure, one can decide who can pull up data, run a report, or add input.
Through integration with accounting, estimating, and purchasing, one will be able to issue
and see all subcontracts, change orders, purchase orders, and other project-related documents.

Property Management: With Property Management, one will have the ability to track all the
project details from the initial estimate to the final phase of construction and throughout
occupancy. An integrated, single source solution, one will enjoy the benefits of a company-
wide solution resulting in improved communication and information sharing between
departments as well as separate divisions. This adaptive solution shares data between
property management, general ledger and financial analysis software minimising the amount
of duplicated efforts and the rekeying of data. In addition, by using the Service Management
and Job Cost modules, one will easily stay on top of property and tenant improvement issues
and projects.

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Service Management: Designed for the unique demands of running service operations, this
software streamlines dispatching, simplifies billing and work orders, and helps dispatchers
communicate more effectively with customers, tenants and technicians.

Reporting and Productivity Tools: This software system is only as valuable as the
information one can access. The suite of reporting and information management tools for
Sage 300 Construction and Real Estate gets one to the exact data one need precisely when
one need it.

3.4. Ramco ERP on Cloud for the Real Estate & Construction Industry
It helps bolster efficiencies and visibility of Construction Companies. Helps them gain a close
view of their spending vis--vis budgets, across projects and locations. Also, helps leverage
years of experience gained by Ramco in successfully delivering technology solutions to large
players in the real estate industry. This in-turn helps costs without compromising on quality
and re-write industry benchmarks.

Land Bank Analysis: It is always difficult to have control over the huge land bank, and
manage the complex sanctions and approval processes. Ramco ERP makes it easy and
transparent.
Plan better with Land Bank Analysis

Handle complex tasks confidently with Approvals & Sanctions Management

Speed up processes with Critical Date Management and Escalation Workflow

Customer Relationship Management: Give view of potential customers in advance and

helps companies to evaluate properties better. Keeping a close real-time watch on
opportunities, from anywhere. Gauging lead generation progress anytime, and plan the next
steps with potential customers. Making every customer engagement count, and remaining in
close touch with opportunities that may translate into actual revenue.
Maintain status and activities concerning next engagement, information sought, site
visits, etc. with optimized lead management and comprehensive Customer
Relationship Management (CRM) features

Allocate leads to a sales team or sales executive

Find and focus on hot opportunities by using analytical views of the leads are working
on

Let the CRM track follow-ups

Convert leads into customers

Property Integration: Business seems very difficult to operate if all these do not come under
one roof for one to have clear visibility and control over projects, their associated plans,
bookings, customer details, and so on. Ramco ERP on Cloud equips one to manage the

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properties in an integrated fashion, tying teams, brokers, marketing, finance and collection
together.
Manage multiple companies and projects

Create a complete inventory of properties of different types with all required details

Easily maintain status of units, such as Blocked/ Available/ Sold

Use rule-based pricing to define the prices for various Units/ Unit Types/ PLC etc.

Add multiple payment plans according to their types (Construction Linked, Down
Payment, Time Linked Plans) for basic, PLC and additional services

Manage early payment rebate or delayed payment interest easily with built-in features

Send reminder alerts for payment as per schedule

Have a consolidated view of a customer having multiple properties

Manage brokers easily with comprehensive Broker Management features, including

flat or target-based multiple brokerages for different projects

Transfer from one booking to another within or across the projects

Lease Management System: Ramco ERP on Cloud provides Lease Management to help
manage the letting of properties and the administration of leases.
Define and generate inventory with status, with Lease Administration

Organize the broker information and link with them properly through Broker
Management

Optimize the property space with Space Management

Avoid delays, with Critical Date Management

Make sure money flows in on time, with flexible and automatic billing options

Handle rent escalation, revenue sharing, billing date management, etc., easily

Set up alerts and triggers on configurable events

Manage complex revenue sharing - flat/ item group based, and period-based

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Maintenance: Make the customers happy by extending prompt service to them, with
Ramcos Maintenance module. Building managers can now schedule their routine
maintenance and organize the technical team for all maintenance work.
Provide the customers with a portal to lodge complaints

Track the complaints with categories, like elevator, electrical job, etc.

Handle predictive & preventive maintenance

Schedule the fire testing and mock drills

Maintain the faade lift, engineering log sheet in the system

Maintain the DG fuel consumption on a weekly basis

Integrate with RFID systems

Facility Management: Ramco Facility Management solution helps provide best of services
in a prompt and organized manner to the clients, ramp-up resources and operations quickly,
have effective delivery models and deploy newer, more efficient methodologies and practices
which meets customer demands at the same time saves cost overruns.
Improve services with the Services Management module

Handle modernizations smartly

Be on track with utilities billing

Make sure the team is there to help the customers, with better Workforce
Management.

3.5. Sysnet Associates

SYSNET Associates (India) Private Limited is an IT Solutions company, with a mission to
provide effective IT consulting solutions to customers. It has a team of very experienced
software professionals, with good ERP background. Sysnet has executed several projects in
the past, for a variety of customers in India & abroad, over the last 18 years. Sysnet has come
out with a path-breaking and innovative software product called SpApp, to create and manage
enterprise business applications. Using SpApp, several systems are already deployed. Sysnet
has built an ERP system, for construction Industry on SpApp. This large ERP system is in
use, at a few customer locations. This ERP system is called as PMS ERP.

PMS ERP is a Full-fledged, Enterprise-wide, Intranet-based ERP solution built to suit any
construction industry. It is a fully integrated solution for Construction business, with many
business functions including Engineering, Inventory, Purchase, Projects and Marketing &
Sales. PMS ERP covers all the major functions required. It provides various MIS reports,
statutory reports and documents too. It is a fully functional operations information system,
taking care of all key functions. PMS ERP is built using Sysnets AppMaker SpApp and

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does not need any third party database like MS SQL Server or Oracle. It also does not need
any special IT staff to maintain and run the software.

The functions covered by PMS ERP system includes:

Project Engineering
Purchase Management
Inventory Management
Sub-Contractor Management
Sales Management
Project Engineering: Using PMS ERP, one can maintain any number of concurrent
construction projects, with each projects complete data accessible at any time. Each project
is split into multiple stages, with many activities per stage maintained. All Material and
Labour data are maintained at atomic level and summaries at project level can be viewed &
printed at any time.
Budgeted Vs Actual status of a project
Project BOQ status
Project completion status
Materials availability for a project
Sub-Contractors Work Pending/Completion status.
Activity-track reports

Purchase Management: The Purchase Management module in PMS ERP provides the
necessary control over all purchases made for a project. Purchases can be tightly controlled
with respect to the actual quantity of material required for a project. Managerial level
authorizations are provided for releasing the Purchase indents and Purchase Orders.

Inventory Management: Inventory management function forms a critical aspect for Project
management. PMS ERP provides a complete coverage of all material transactions and all
related documentation. Closing Stock quantity and value are up to date. In PMS ERP, the
stock details can be maintained for each project separately.

Sub-Contractor Management: PMS ERP has a separate module to collect the detail of the
registered sub-contractors.
1. Sub-Contractor: Maintain a list of registered suppliers along with their complete
contact details. Work Orders can be raised only to a registered sub-contractor.
2. Sub-Contractor Quotation: PMS ERP has the option where the quotation received
from various sub-contractors for a given activity can be recorded. A price comparison
statement can be generated.

Sales Management: PMS ERP has a simple yet complete function to handle the creation of
invoices.

MIS Reports in PMS ERP: PMS ERP can generate over 40 reports. The following are some
of the reports PMS ERP provides. In addition to the customized reports the user can generate

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reports in a standard format with option to provide the criteria for the report. Reports can be
exported to an Excel file or saved as an image file.
Bill of Quantity
Bill Of Material
Work Order
Activity Progress Report
Project Cost Monitoring report
Sub-Contractor Payment statement
Purchase Indent
Purchase Order
Goods Receipt Note
Statement of material received
Item Stock Ledger
Project-wise Stock Statement
Supplier-wise Bills Payable
Project-wise Materials Issued
Project-wise Materials Returned
Project-wise Materials Transferred
Invoice
Details of Payment Due from Customers

4. SONATA Software
Sonata Software Limited, headquartered in Bangalore, India, is an IT consulting and
software services company delivering transformational IT solutions through customer
specific Centres of Excellence. Sonata serves Software Product Companies, and enterprises
in the Travel, Manufacturing, Retail and Distribution verticals across the globe. Its key
service lines include Business Intelligence and Analytics, Application Development
Management (ADM), Mobility, Cloud, Social Media, Testing, Enterprise Services (ERP and
CRM), and Infrastructure Management services. Sonata has strategic alliances with global
technology majors like Microsoft, IBM, SAP, Oracle and HP.

5. Major Indian Construction Companies using ERP

5.1. GMR
GMR needed an innovative IT system that could monitor its highways business. It wanted an
effective governance mechanism that required minimal manual intervention in remote places
on highways. Johny Paramian, CIO, GMR found a way out. Paramian integrated the
companys toll management system with its SAP ERP modules. The toll details (revenue and
vehicle) are fed to the ERP system on an hourly basis along with the revenue entries for the
previous 24 hours. Other transactions like materials management, general accounting, and
investment management are also carried out in the ERP. This data is fed into the BPC
(business planning and consolidation). The BPC provides a platform for different business
functions to arrive at the annual operating plan. Once frozen, the actual figures are compared
on a daily basis. This quick feedback mechanism is useful for effective decision-making. A
BI tool sits on top of the entire system and provides alerts. IP cameras capture all activities of

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the toll plazas in key locations and feed it to the central control room. This system handles all
day-to-day operations of the companys toll plazas efficiently. The solutions effectiveness
stems from the successful management of three different toll-based highways in the country.

5.2. DLF
To deal with the challenges and to take fullest advantages of future opportunities, DLF
management felt the need of a flexible information technology, ideally an end-to-end ERP
that will integrate horizontally across business units as well as vertically throughout each
unit. By early 2006, DLF started exploring for a good ERP solution that could bring all
processes on to a single platform. The management evaluates all the options available in the
market but after careful analysis, zeroed it down to Ramco ERP solution. The company has
also deployed the well-known Oracle Financial for its corporate office.

5.3. Shobha Constructions

Shobha Constructions relies upon an Enterprise Resource Planning (ERP) system provided
by a third party solution provider for integrating our core and back-end activities such as
architecture, engineering, projects, costing, inventory, finance, sales, CRM, invoice billing,
estimation, purchases, invoices, payments, tax calculations and employee salaries. We are
also proposing to migrate to an independently developed enterprise resource package. Any
disruption of the functioning of our existing IT systems or a delay in implementation of the
new enterprise resource package or problems associated with the migration to the new
enterprise resource package could disrupt our ability to track, record and analyse the work in
progress, cause loss of data and disruption in operations including, among others an ability to
assess the progress of the projects, process financial information or manage creditors/debtors
or engage in normal business activities. This could have an adverse effect on their business.

6. Market Analytics on ERP in Construction Industry

Currently, SAP, Oracle, and other companies such as Deltek, CMiC, and Timberline provide
specific solutions for the construction industry. They claim that their solutions can support all the
functions a construction company needs. However, most engineering and construction firms in
the U.S. have implemented their ERP systems adopting a best-of-breed approach in which
separate software packages are selected for each process or function rather than using the full
packages of major ERP vendors. They pick several modules, such as Financial Accounting and
HR, from major ERP vendors and piece them together with their own in-house developed
software or other third party products using custom-built interfaces. The main reason for using
this approach is that construction processes are unique for each project: each project has a
different owner, is managed by a different project team, requires different specifications, etc.
These three trends will have a major impact on how ERP vendors do business.
1. Mobility: The wide adoption of smartphones and tablets has changed the way distributors
do business and create new opportunities. Mobile devices allow workers to use the enterprise
system from anywhere. This can be valuable when distribution firms open multiple locations
or sales representatives need to access product or shipment information while at a client
meeting. Modern ERP solutions can help distributors accomplish more because they have
real-time access to information. Sales teams can give prices, generate quotes, start orders and
contact Accounts Receivable all while on the go.

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2. Cloud services: As business becomes more global, partners need to be able to easily
transfer information through the Internet. With cloud services, distributors can keep up with
competition and reduce costs, and it allows companies to become more agile. This helps them
better adapt to new challenges and gain new capabilities. Cloud systems have lower
installation costs and can be implemented more quickly so companies can stay efficient and
cut down on IT spending.

3. Business intelligence: Business analytics are gaining a foothold in many industries, and
distribution will be no different. The market share for these tools is growing exponentially,
firms that leverage business intelligence may be able to gain a competitive advantage through
a better understanding of customer behaviour. Being able to use predictive analytics allows
companies to be proactive instead of reacting when something goes wrong, and employees
can access information from a variety of locations.

Companies that understand what the data trends of the past mean can plan for improved
actions in the future. ERP with integrated business intelligence gives distributors greater
visibility into their operations. By knowing which customers are the most profitable and the
margins for the quarter, companies can pursue strategies that allow them to maximize revenue
and identify areas to cut costs.

7. Conclusions and Recommendations

Majority of Construction Companies have some know-how about the ERP systems and
they think that the implementation of ERP systems could benefit their organizations by
providing better integration of working environment, more automation and more flexibility in
operations and information access. However, it is found that the implementation of ERP
systems needs lot of capital, human and technical resources and it will not be easy for the
small contracting firms to invest their potential on such a mega-system.
Hence, it is recommended that the implementation of ERP systems in the construction
industry should be started with the large contracting organizations and then gradually move
down. Training is another aspect, which is very crucial in the successful implementation of
ERP systems. Training should be started from the top management and then move down to
middle and lower management. It is also found that only a small number of ERP software are
developed for the construction industry and this might be one reason of its slow
implementation in the construction industry. The ERP software vendors must work with the
professional in the construction industry to developed more customized solutions for the
contracting firms.

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