The construction business in the Middle East is rapidly gaining momentum in the post-pandemic era. Most leading construction companies are forecasting a healthy growth period in the coming years.
In the domain of Enterprise Resource Planning (ERP), the Middle East and Africa represent the 4th largest global market. At a CAGR of 8.3%, this market is projected to grow from a value of $44.47 billion (in 2022) to $71.34 billion by 2030.
What’s driving ERP adoption in the Middle East? Is this growth likely to spill over to the construction industry? Let’s examine these questions.
The business imperatives behind ERP implementation are well-known. They usually include:
- Reducing operational expenses.
- Improving customer service.
- Gaining a competitive advantage.
This suggests that as construction projects and operations get more complex, ERP solutions like Oracle ERP can help these companies streamline their disparate processes and reduce the misalignment between various departments. The value seems obvious. Let’s explore the details.
Here are 6 reasons why construction companies must adopt a powerful ERP solution:
On-time project completion
In a professional and value-focused market like the Middle East, construction companies work on “thin” profit margins when implementing any new project. In this scenario, any project delay can lead to significant revenue losses for these companies.
Through ERP solutions designed for the construction domain, companies can have maximum control over their in-progress projects, thus enabling on-time deliveries. Through cross-department collaboration, an integrated ERP tool can help with:
- Proper resource allocation
- Optimized utilization of available resources
- Accurate budget planning
Over time, construction ERP solutions can streamline projects across many clients, thus minimizing downtime and delays
Construction cost management
Proper cost management is critical to the success of any construction project in the Middle East. Construction projects comprise various cost elements related to:
- Procurement of materials
- Labour and supply chain costs
- Project-related costs
With the right ERP tool, construction companies can perform efficient financial management and estimate the differences between projected and actual costs.
Besides, for running projects, ERP can facilitate the real-time monitoring of project profits (or losses) and generated revenues. Through visualized dashboards enabled by ERP, project managers can identify areas of cost escalation and take remedial actions.
Effective project management
Every construction project involves multiple phases including:
- Materials procurement
- Resource scheduling
- Sub-Contractor Management
- Labour and equipment allocation
Without efficient project management, companies cannot expect timely delivery of any project. Ineffective project planning can lead to cost overruns and delays.
ERP solutions like Oracle have in-built modules for project management designed for the construction domain. With an ERP in place, front-end managers can track and analyze real-time data related to raw material procurement and project progress. Besides, project management can help them streamline their billing cycle and boost their team’s productivity levels.
Efficient labour and payroll management
As a labour-intensive domain, construction companies depend heavily on subcontractors and contractual workers besides their in-house employees. On their part, ERP solutions help them streamline labour and payroll management. For instance, construction companies can distribute labour resources based on their skill sets and availability.
For payroll management, ERP solutions offer a host of capabilities including:
- Accurate calculation of labour wages and overtime pay
- Compliance with existing labour laws in the Middle East
- Tracking of worker attendance, hours worked, and work efficiency
Effective management of project-wise labour costs
Improved decision-making
Using real-time ERP data from various processes, business leaders can make informed decisions related to ongoing projects and company financials. For instance, with data-driven decision-making, project managers can identify early signs of bottlenecks – and take corrective action to tackle the problem.
Business leaders can also “drill down” into ERP dashboards to get insights into construction budgets and forecasts. For instance, when purchasing project materials, procurement managers can look at real-time data ranging from purchasing budgets to the current status of purchase orders.
Similarly, using real-time inventory data, companies can avoid delays in obtaining inventory items and the related inventory cost escalation.
Accurate forecasting
Accurate demand forecasts are crucial for the financial solvency of any construction company. With its in-built demand forecasting functionality, ERP solutions can help companies plan their projects and related activities.
Through effective supply chain management, companies can accurately forecast demand for specific construction materials, thus enabling benefits like:
- Shorter procurement lead time
- Reduction in excessive inventory items
- Improved supply chain costs
Based on current industry and market trends, construction ERP tools can forecast future projections, thus enabling better risk management. Similarly, project managers can leverage ERP capabilities to forecast revenues likely to be generated from on-time project completion and delivery.
How ERP can future-proof the construction industry
ERP is not a “one-size-fits-all” solution for the construction business in the Middle East and across the globe. Customized for every business requirement, ERP solutions can help construction companies make informed decisions about different aspects of their operations.
Oracle ERP is among the industry-recognized ERP solutions designed for the construction and engineering domain. As a recognized Oracle partner, Shahgaron has years of industry experience in the Middle East with a specialized understanding of the construction, Engineering & Contracting Spaces/ Businesses. We offer Industry specific Oracle ERP solutions.
Why Engineering & Construction Businesses should choose Shahgaron as your Oracle partner?
Here’s why:
🔹 20+ years of Oracle experience with Engineering & Construction Vertical
🔹 Shahgaron E&C solutions to streamline end to end processes:
- Bill of Quantity (BOQ) Management
- Sub-Contract Management
- Project Site Material Requests
- Equipment Rental (PMV)
- Scaffolding Rental
- Manpower Management
- Camp Management…etc
🔹 Integrating Oracle with existing systems to minimize disruptions and ensure seamless data flow across the organization
🔹 Focus on leveraging Mobile App’s, AI, IoT, and machine learning.
We can help you implement your next ERP project. If interested, contact us now.