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Why does a practice need project-based ERP? Well, if there’s one overwhelming truism about architecture and design practices, it’s that invariably they were established by people whose expertise is not business.
Architects, designers and engineers study to follow their passion, which is design. When it comes to setting up in practice, there is a whole new raft of skills to learn and juggle. A rare few take to this like ducks to the proverbial. Globally acclaimed architects like David Gianotten of OMA in Rotterdam, for example, studied business along with architecture and he loves that side of his role. Many others struggle, however, seeing administration and management tasks as necessary evils that they have to deal with in order to survive and grow as a business.
This also applies to the individual projects they manage. It’s impossible to run an architecture or engineering project on gut feeling or design smarts alone. You need all the details at your fingertips at every moment. This means that you need visibility and insight. And, above all, you need control. The best way to ensure you have this is to always have the best project and financial management tools in place.
ERP stands for Enterprise Resource Planning or, simply put, placing all your business processes in one easy-to-manage basket. It’s using software to integrate your management systems in order to increase efficiency and make the entire process of running a business seamless from project initiation to completion.
A good ERP system integrates business information (including finance and accounting), customer relationship management (CRM), management accounting, procurement, human resources (HR), budgeting and project delivery.
Generic ERP systems can be bought ‘off the shelf’ and may be very useful for businesses with straightforward operational structures. But, for real depth of insight, a ‘one-size-fits-all’ approach may come up short.
Project-based ERP, as its name suggests, applies an integrated management system for individual projects. But it is designed to be ‘three-dimensional’ in its approach. Whereas generic ERP can tie financial data only to an account and an organisation, a project-based ERP system will align all transactions to accounts, organisations and projects.
Take billing as an example. Most generic ERP systems will offer one or two billing types. But with multiple clients requiring different formats and billing terms then you’ll need more options and greater processing ability to get the accurate picture you need.
Project-based ERP provides you with the ability to:
- track a 360-degree, real-time view of a project – enabling accurate measurement of its timelines, budget spend and billable hours
- make better decisions – precise forecasts help you to be proactive rather than reactive, and
- align people processes and tools – streamlining project delivery.
Five tips for selecting your project-based ERP
It’s clear that having a robust project-based ERP is a tremendous asset to any A&D firm, but how do you select the right one for your business? Consider these five tips to choosing the right project-based ERP for your business:
- Define clear business goals – what is the direction for your ERP project and what does your solution need to achieve?
- Involve all the relevant stakeholders – your chosen system will touch everyone in your business so they all need to be on-board from the outset.
- Define your business requirements and workflows – every single transaction is tied to an account and a department, so it’s vital to have granularity to analyse and manage the entire organisation.
- Look for a system that installs best practice throughout your business – ensure your vendor has experience within your industry for optimal success and comprehension of your goals.
- Agree on realistic implementation expectations – and never overlook the issue of change management and having a thorough approach to staff training.
How do you use a project-based ERP?
Before you set out on any journey it’s wise to avail yourself of a map. The same is true of a project. The plan you put in place will be your roadmap and reference guide. While no two projects are the same, your ERP system will be able to pinpoint certain trends from your company’s data and more accurately predict timelines, budgets and the necessary resources for each new project.
With the roadmap in place, milestone dates can be allocated, with the ERP also able to calculate the impact of variables that may arise.
As you attach the right talent to each stage of the project, the ERP can also weigh up resource pros and cons – such as calculating whether an expensive but faster working consultant will end up being cost-effective over a cheaper one that will take longer.
Budget is a major component that can change throughout the life of a project, but project-based ERP processes the data in real time to assess the difference between projected and budgeted costs against the actual costs, meaning you are able to act immediately if necessary.
Other KPIs (key performance indicators) that are measured include:
- utilisation – that your employees’ time is maximised
- realisation – that employee hours are as expected
- estimate to completion (ETC) – the amount of money or time you think will be needed to complete the project, and
- estimate at completion (EAC) – the amount of time or money the project will cost you in the end.
Not every practice leader is a David Gianotten and nobody is calling those who aren’t ‘dummies’ for not relishing the management side of the business, but a guide to project-based ERP that is clear and simple to understand will be appreciated across the board. Project-Based ERP for Dummies explains how the system is one tool that no business should be without. For the dummies and the Davids out there…
Download the Guide to ERP here.