Cost planning plays an important factor in construction and turnkey projects. Several factors are considered, such as the project size, location, Project tenure, and the type of project
A construction ERP software like NAVBUILD helps you to navigate rapidly evolving technologies. It is built on top of Microsoft Dynamics 365 Business Central, a global, modern Cloud ERP Platform, which is easy to implement, adapt faster, works smarter and perform better. The single Integrated end to end Industry ready solutions allows Construction managers, Project stakeholders to monitor and control the cost budget of a project, drive efficiencies and maximize project profitability .
Without an efficient ERP solution, a construction project can go haywire in terms of budgeting a construction project. As per a recent study, only 25% of projects stay within defined budget limits. It is essential to go through each stage of project construction to keep the overhead budget at bay.
The detailed procedure of project cost control typically involves project estimation, budgeting, and pre-construction analysis while simultaneously monitoring expenditure. A robust framework is essential to track actual costs, invoices and budgets. The framework is a crucial part of your construction management, and if not done right, there is a high chance that your project’s budget might get into trouble. Here’s how to benefit from using ERP in your construction firm’s cost control.
Systematic Cost tracking helps you to eliminate the heavy use of spreadsheets and other tools to support your estimate-at-completion (EAC) process. As this module is built on historical datasets and budget periods, you can conveniently align it with your ledger periods and billing cycles. It also provides trend analysis and the necessary metrics for Earned Value Analysis (EVA).
Accurate cost estimation determines a project’s success, leading to better profit margins and competitive bidding. To achieve an accurate price, you must actively prepare the breakdown of your construction activities in exact quantities and rates and include it in your BOQ.
For effective business processes, project costing must be evaluated against project deliverables. Here, the past records of project costs are stored and utilized for trend analysis, so corrective action can be taken before the actual project materializes.
When project contracts are appropriately structured and maintained, it becomes easier for each stakeholder to access information from a single place. Integrated project contracts fit well into complex construction as they lower the risk of budget overhead.
In cost-control management of construction projects, it is vital to keep an eye out for disparate software solutions for different business operations. Instead, you can implement an ERP platform, designed for your industry that will help you to have deep insight and visibility into your entire project cycle. Also, it will provide a consolidated view of all your departments from a centralized platform.
A daily update of your construction project plan helps you know the project’s progress. And in this way, you can take care of the additional costs or potential expenses in your project schedule. Another benefit of having an integrated ERP solution is that the daily project report will provide visibility in a material price change and real-time labour productivity, which ultimately helps in making intelligent decisions.
Use ERP software
An ERP software with robust functionality and an intuitive interface will help you retrieve relevant information quickly. As it is a cloud-based solution, it can be used from anywhere and anytime, so subcontractors, managers, and vendors can monitor the project cost and make necessary adjustments. For example, suppose a vendor has changed the price of raw materials and mentions that extra time is needed for material delivery. In that case, immediate changes can be made to the platform. Thereby, miscommunication regarding budget overrun or delay can be handled efficiently.
Performance review of contingency plan
Project managers must set a plan of action to prevent budget overruns while evaluating possible risks. Contingency plans at hand rescue projects jumping delivery lines and paying a higher cost. With an ERP system, you have the flexibility to overcome construction project bottlenecks and avoid any uncalled delays in the upcoming future. The platform offers a real-time view of RFIs, changed order status, and many more.
Construction cost control ensures project delivery on time and within budget. This can be effectively meted out by investing in preconfigured ERP software like NAVBUILD. Developed by CETAS, a Microsoft Dynamics Gold Partner and ISV Provider, the solution helps construction managers access an accurate view of project cost management. Visit Microsoft Appsource for trials or Contact us to develop a budget and help you make the correct decision to achieve your business goals.