Insufficient Planning and Poor Change Management Derail ERP Success
Enterprise Resource Planning (ERP) implementations in construction often fail due to insufficient planning, poor change management, inadequate data strategy, and missing leadership alignment.
GBQ’s Business Technology Solutions consulting team has had a number of ERP conversations with construction firms over the last quarter. These conversations start with companies seeking help in dealing with poor implementations, bad vendors, or outdated systems. Others have had to bolt on third-party applications to create a complex solution to what might be a simple problem, or have created their own out of the platform data solutions using that old accounting workhorse, Microsoft Excel.
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Real-World ERP Challenges In Construction
Case 1: Excel Overload Stifles Growth
A rapidly expanding builder selected an industry-leading ERP, but given the company processes, has had to continue operating critical financial processes in a honeycomb of linked Excel files powered by manual entry dependent on a staffing model with frequent turnover. The inefficiency in the system is holding back growth.
Case 2: CRM Promises Fall Short
A consumer-focused remodeling service selected a new ERP platform with detailed financial requirements and an understanding that the platform selected should be an “all-in-one” solution that includes CRM functionality. Once the platform was selected, the IT team tasked with implementing the choice found a vast difference between the vendor’s marketing materials on CRM functionality and the actual needs of their sales teams and customers.
Case 3: Complexity Overwhelms Legacy Systems
A construction services business has thrived with a variety of specialized services. Each service exists as a separate entity under the holding company. The firm’s long-standing Sage 50 implementation has been extended with a variety of third-party applications to support fleet management, fuel management, compliance with trucking regulations, and so on. Changes in staffing have triggered a need to select a new platform. But complexity requirements add costs to the selection process that move many platform choices outside of the company’s spending comfort zone.
Case 4: Vendor Missteps Undermine Implementation
A contractor selected an ERP based on the implementation service the platform vendor offered. What they discovered was that the implementation vendor’s help desk style was highly technology-focused and missed many of the accounting aspects of the project that were needed for success.
Seven Keys To ERP Selection & Implementation Success
Regardless of whether a firm is starting to pick a new platform, wants to improve and mature the current platform, or just fix what’s broken, here are some keys to success:
The seven keys to ERP selection and implementation success are: clear business objectives, strong executive governance, disciplined requirements and process design, rigorous vendor and partner selection, proactive change management and training, data quality and migration readiness, and phased delivery with testing and value tracking.
1. Define Clear Objectives
Define measurable outcomes the ERP must enable, such as days sales outstanding reduction, faster month-end close, or job cost variance visibility. Tie each objective to Key Performance Indicators (KPIs) and identify your baselines before selecting the anchor scope and prioritizing features. The same is true if a selection is made and a recovery must be made to rescue the current implementation.
2. Establish Strong Executive Governance
For implementation, appoint an executive sponsor, a steering committee, and a dedicated project manager with decision rights. The steering committee should not only include those most impacted, but should also include users and leadership outside of finance and accounting who might be dependent on the ERP’s features and functionality. Ensure budget, resources, and cross-functional participation and stay aligned through cadence reviews and issue escalation paths.
The same is true for a recovery or improvement project. If all users in the system are not included, that recovery or improvement project might just be the first of many.
3. Prioritize Requirements & Process Design
Document current and future-state processes, prioritize “must-have” requirements, and rationalize customizations by business value. Once processes are documented, assess them for inefficiencies. It is far less expensive to correct a process before implementation (just like it is far less expensive to correct the blueprints before the building goes up).
Companies can do this themselves or engage with a firm like GBQ to conduct a formal requirements document from which to manage and score selection.
4. Choose The Right Vendor & Partner
Companies have two choices here: buy a brand or invest in developing detailed requirements and engage in a formal selection process. In our experience, some companies want to avoid the costs of a formal selection study and go straight to vendor selection. If the path to vendor selection happens before requirements and process design are complete, it is a must that the requirements and process work are done before implementation starts. Otherwise, there is a risk that it will be sloppy, incomplete, and done by a vendor who is invested in “adding modules” to increase the recurring revenue your implementation generates.
Shortlist vendors on functional fit, integration capability, total cost of ownership, roadmap, and industry references. Evaluate the implementation partner’s methodology, staffing model, and track record. Success depends as much on the partner as the product.
5. Invest In Change Management & Training
Plan communications, role-based training, super-user networks, and adoption metrics from day one. Prepare leaders and end users for new roles, controls, and data entry responsibilities to avoid shadow systems.
This is true of new rollouts or the rollout of changed functionality after a recovery or improvement project.
6. Ensure Data Quality & Migration Readiness
Audit and cleanse master and transactional data early; define ownership, standards, and cutover strategy. Rehearse migrations with multiple mock loads and reconcile results to ensure accurate reporting at go-live.
7. Deliver In Phases With Rigorous Testing
Sequence scope into manageable waves, with scenario-based testing that mirrors real operations. Track benefits against KPIs after each wave, and adjust backlog and configurations to sustain value realization.
Construction-Specific ERP Considerations
Construction-specific considerations to keep in mind include evaluating job cost and WIP reporting, field-to-office integrations, and subcontractor and compliance workflows when selecting solutions and partners. These nuances often determine real-world fit and adoption.
Partner with GBQ for ERP Success
GBQ’s Business Technology Solutions solves business problems with people, processes, and technology. Finance and operations live or die by ERP and CRM. We guide vendor selection, manage implementations, support integrations, and keep systems optimized for growth. Reach out to me or your GBQ accounting partner to schedule a discovery meeting.
By Doug Davidson, CISA, Director, Business Technology Solutions
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