Construction software packages and construction ERP software provide financial accounting and operational modules designed specifically with contractors in mind. Get up to speed on the management tools you need with our buyer’s guide below.
This guide offers direction on figuring out:
What Is Construction Management Software?
Construction management software is a tool that provides project management and cost estimating functions to help oversee and improve the management of a construction job process.
Cost accounting capabilities help project managers determine the costs of a construction job by analyzing labor, materials, equipment, and subcontractors. Facilitating the assignment of costs to individual cost categories improves the ability of project-oriented businesses to analyze cost control efforts and the profitability of individual jobs.
Construction project management software platforms help coordinate the execution of project tasks, including planning, scheduling, resource allocation, quality management, time tracking, and collaborative document sharing. Together, these features help construction businesses plan and control their build process more effectively.
Common Features of Construction Software
When shopping for construction management software, a business should concentrate on software functionalities that will boost efficiency and effectiveness. Your construction business should be honest with themselves when assessing the functionalities of construction management software: Will the features be useful or wasteful?
Construction management software isn’t one-size-fits-all, so whatever product is chosen should be tailored to your specific needs while also taking the future into consideration. Your project team will want to select a tool that will accommodate you now, and have the capacity to scale with you as you expand.
Most Requested Construction Software Features
Our recent Construction Technology Trends survey discovered that 2/3rds of construction software buyers desire job costing, project tracking, and project estimating.
Benefits of Construction Management Software
Simply put, construction management software can improve the efficiency and effectiveness of a business. Construction management software puts a lot of functionality in one place, rather than having several disjointed software products that may or may not communicate well with each other.
Manually tracking projects in a spreadsheet or jotting down cost estimates with paper and pencil might be the most comfortable way of running a business, but it’s definitely not the most efficient.
Construction management software helps to keep expenses and projects in line with functionality such as job costing, project tracking, project estimating, material take-off, time and materials billing, bid management, and purchasing.
Above all, a construction business should look at how construction management software can ease or eliminate pain points:
When shopping for construction management software, a construction business should try to solve several pain points, such as organizational oversight and document management, and not just one pain point. Having one software product to address each pain point is an expensive pain.
Best Construction Software
Do you need a simple construction solution? Or are you looking to evaluate some of the best ERP solutions for construction companies? Large or small, the following options are some of the most reviewed options:
1. Sage 100 Contractor
Sage 100 Contractor is a popular choice for small to mid-size contractors. The integrated solution offers construction management and accounting to meet your estimating, scheduling, project management, equipment management, and payroll needs.
2. ProContractor by Viewpoint
ProContractor is a cloud offering for mid-sized contractors. It offers a complete solution to handle all things construction, from accounting to estimating and project management. Former users of Maxwell Systems American Contractor will find that the solution was acquired by Viewpoint Construction Software back in 2014.
3. Procore
Procore is a construction management software offered completely online. It’s core features include project management, quality and safety, and construction financials. The software offers easy integration with other financial solutions such as Sage 100 Contractor and Viewpoint solutions to give you the experience you desire most (whether fully integrated in their platform or using a combination of software your staff is comfortable with).
Cost of Construction Software
Construction software pricing depends on your needs, desires, and expectations. In the previously mentioned buyer trends survey, 43 percent of construction businesses indicate they spend one percent to two percent of their revenue on software. That range is right in line with what partners of Software Connect say a construction business should expect to spend on software. Therefore, as a rule of thumb, a construction business might want to apply the one percent to two percent spectrum to software spending.
While that might sound like a lot of money, spending on construction management software should be considered an investment. This is particularly critical as the price of doing business in the construction industry keeps going up.
With rising material and labor costs, firms will likely struggle to maintain their margins in the coming year,' Construction Dive said in a review of construction industry trends for 2017.
Construction management software can help a business trim those costs and ensure profit margins aren’t squeezed.
By the way, it’s important for a construction business to keep an eye on how much money it’s spending on software. In the Software Connect survey, 30 percent of construction businesses were unaware of the amount of money they’re earmarking for software. How can a construction business truly measure the effectiveness of its software if it doesn’t have a complete picture of its related expenditures?
What Does Your Business Need?
When a construction business is looking at adding or replacing construction management software, consideration should be given to who’s going to be using the software and how much training will be required.
In our recent technology trends survey, 37 percent of construction businesses identified ease of use as the most important consideration when buying construction management software. That ranks as the top consideration.
Given that ease of use is vital, a construction business should pay close attention to whether any red flags pop up when construction management software is being demonstrated. Is the software overcomplicated? It is clunky? Does it cause pull-your-hair-out frustration?
If the answer is “yes” to any of those questions, then the product isn’t the right one. Construction management software makes life easier, not harder.
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Also, a construction business should be clear about who’ll be using the software and, as such, who’ll need to be trained on how to operate it. Before a business buys the software, it should inquire about the availability of training and customer support from the vendor.
Taking a DIY approach to construction management software rather than depending on professional guidance could be a costly mistake, even though help from the pros likely will add to the price tag. Foregoing professional training and customer support is a lot like driving a backhoe while blindfolded–it’s very risky.
SaaS and Cloud Construction Management Software
“Cloud computing” is a common buzzword in today’s technology environment. But what does it actually mean? IBM offers this simple definition: It’s the delivery of hosted, on-demand computing resources–such as software–over the internet on a pay-for-use basis.
Whereas in the past “people would run applications or programs from software downloaded on a physical computer or server in their building, cloud computing allows people access to the same kinds of applications through the internet,” according to Salesforce.com.
In the construction industry, the adoption of cloud-based software is a big trend, just as it is in other business sectors. In the Software Connect survey, 35 percent of construction businesses said they host or plan to host construction management software through a cloud platform, with 38 percent saying they don’t have such plans and 28 percent saying they aren’t sure.
Among other benefits, the cloud-based software provides easy access to documents.
“With cloud storage, files remain in one place, allowing contractors to pull them up on the job without having to manage physical files,” according to Construction Executive magazine. “This prevents unnecessary loss of important paperwork, reducing stress, saving time, and improving project delivery overall.”
As cloud computing advances, it’s highly likely that more and more construction businesses will host software in the cloud. Those construction businesses that fail to do so will be at a competitive disadvantage compared with their cloud-dependent peers.
Is QuickBooks a Construction Software?
QuickBooks has been used successfully by thousands of construction companies. While not an industry-specific construction software, the solution can handle the needed accounting for most construction businesses. This includes managing job costs, tracking time and expenses for projects, and running the appropriate reports on a job/project level.
QuickBooks isn’t an inherently bad product; it just may be limiting what a construction business can do technologically. Fortunately, a number of software options are available for a construction business that has outgrown QuickBooks.
The research shows that over the past few years, more than 35 percent of construction businesses have been looking to upgrade from QuickBooks in some way.
“Many QuickBooks users fall for the seductive marketing messages that boast ‘easy to set up, easy to learn to use’ and fall prey to the myth of do-it-yourself accounting,” says Nancy Smyth, author of the QuickBooks for Contractors blog.
For a construction business considering a shift away from QuickBooks, it’s important to ask this question: Is QuickBooks serving the company’s needs? If the answer is “no,” it’s time to contemplate another software product that’s more robust and geared more toward construction management.
Market Trends
Changing trends in construction technology. A recent technology survey we conducted found the following pieces of information:
Slow adoption of new technology. As noted in a report published in February 2017 by the World Economic Forum and the Boston Consulting Group, the construction industry has been slow to adopt new technology and has undergone “no fundamental change” over the past 50 years.
In line with that, just eight percent of construction and engineering professionals surveyed in 2016 by professional services firm KPMG classified themselves as “cutting-edge visionaries.” Meanwhile, 41 percent said their companies had numerous software platforms in place that are monitored manually, and just 20 percent had one fully integrated project management information system across the entire organization.
“Without fully integrated automation, the effectiveness of these tools is severely compromised,” KPMG points out.
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The World Economic Forum report declared that construction businesses have largely failed to embrace new technologies, “and the gap between the innovation leaders and laggards is widening,” according to the report.
Bottom Line
Construction management software is one key advancement that’s separating the leaders from the laggards. Whatever the reason a construction business is weighing a purchase of construction management software, it’s not a decision that should be made hastily. Relying on this guide and other research, a construction business can make a smarter choice about the purchase of construction management software, enabling the company to increase efficiency, competitiveness, and profitability.
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MRP enables manufacturers to take greater control over the manufacturing process and overall business processes. But for manufacturers looking to purchase, integrate, and deal with the implementation their first set of MRP tools or upgrade an existing software package, choosing the right solution can seem overwhelming. It doesn’t help that similar software solutions, such as ERP software, often have overlapping functionality with MRP software.
This guide will offer information on the following topics:
What Is MRP Software?
Manufacturing resource planning (MRP), also known as material requirements planning software or MRP II software, helps streamline the manufacturing process through production planning, scheduling, and inventory control. MRP allows manufacturers to plan and calculate material requirements, coordinate personnel and machine workloads, and optimally plan purchasing to meet customer demands.
MRP also aids in inventory and production schedules to produce products and complete manufacturing jobs. An MRP system determines which assemblies must be built, what materials must be purchased, and the order in which to build products to meet customer due dates.
MRP software can work for all types of companies in the manufacturing industry, including in make to order, engineer to order, and a discrete manufacturing process.
Most Common Functionalities
The functions of an MRP platform enable manufacturers to manage, coordinate, streamline, and account for all steps of the production process and overall increase productivity and efficiency. Here are some of the most common functionalities included in MRP:
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Best Products
MRP software can be highly specific to an organization’s size, scale of manufacturing, or industry. Because every manufacturing operation is different, there’s no one-size-fits-all solution; instead, there are dozens of great MRP products available to help manufacturers meet their specific needs.
An example of an MRP software is MRPEasy, a software-as-a-service production planning and warehouse management tool popular among small and medium-sized organizations. The main goal of this solution as well as other MRP options is “What is the actual production cost, and when will the order be ready?”
Fishbowl Inventory is a more complete solution that offers warehouse and manufacturing capabilities to it’s users. It markets itself as a manufacturing-focused version of an ERP, including bill of materials, inventory control, shop floor control, and more.
What About Existing ERP Solutions?
Your company may already be using a solution such as Microsoft Dynamics GP or Microsoft Dynamics NAV. These complete ERP solutions are more industry-neutral, and thus can work with a large number of industries. However, ERP vendors offer specialized services that can help implement the solution into a manufacturing environment, or perhaps include an add-on they’ve developed themselves that provides a more focused MRP approach then the base package allows.
Trends
Two noticeable trends have emerged in MRP: the evolution from MRP I to MRP II, and the evolution from MRP II to ERP. The major differences among MRP I, MRP II, and ERP come from technological advances that have led to systems that offer greater functionality and control.
What’s the Difference Between MRP I and MRP II?
MRP I is named for the first sets of manufacturing resource planning software tools originally developed in the 1970s and 1980s. Limited by the technology at the time, MRP I software offered basic accounting for master production scheduling, inventory tracking, and the Bill of Materials.
MRP II developed out of the need to link MRP I software to inventory management software and accounting software. Far more capable than MRP I, MRP II adds the ability for manufacturers to oversee the actions of the shop floor, forecast demand, and carry out robust cost reporting.
Learn more about the difference between MRP I and MRP II.
What’s the Difference Between ERP Systems and an MRP?
Enterprise resource planning systems (ERP) are large suites of tools that help plan and account for the resources of an entire organization. While incorporating some of the functionality of MRP, ERP systems handle more of an organization’s data management, including customer relationship management (CRM) tools, supply chain management tools, and accounting tools. ERP solutions can be fully integrated into an organization’s data operations to handle most major aspects of the business. It is often utilized by large businesses.
MRP, in comparison, is a narrow but highly specialized set of tools designed specifically for manufacturing purposes. More nimble than a full ERP suite, smaller manufacturers or businesses looking for complete control over their manufacturing often select MRP to oversee their manufacturing operations.
Cloud MRP
In our latest MRP Software Buyer Trends Report, “manufacturers claimed to be very flexible in how they are willing to deploy MRP software, with nearly three-quarters (71 percent) indicating they would be open to reviewing either hosted or on-site installation options. Only 15 percent insist on a hosted solution.”
Common Pain Points
The MRP Software Buyer Trends Report mentioned above (published in 2018) found the following key findings:
Over 70 percent of the manufacturers spoken with identified three features to help address common manufacturing pain points: purchase planning, demand forecasting, and master production scheduling. MRP offers specific features to alleviate each of these manufacturing pain points, making the manufacturing process more organized and transparent.
Why Are Manufacturers Choosing Software?
The five key reasons manufacturers are seeking to purchase MRP:
Upgrading QuickBooks?
At this time there is no QuickBooks MRP. However, some manufacturers continue to use QuickBooks and QuickBooks Enterprise to handle manufacturing and accounting needs. 29% plan to replace QuickBooks with a different software solution, while 20 percent stated their next MRP system will not be replacing existing software. Whether it’s standalone MRP solution or an integrated QuickBooks app like MRPEasy, there are options to consider when desiring to implement MRP into your business.
Are There Any Free MRP Software Options?
Some of the top MRP software options offer free 30-day trials of their solutions, which should give you enough time to fully evaluate an option and decide if implementation is right for you. Other times, vendors may be able to provide guided walkthroughs in the form of a webinar or a product overview video while answering any questions you have about the software.
If you are looking for a true free mrp software for small business, your best bet is to explore open-source ERP software such as Odoo, which provides manufacturing, maintenance, PLM, and quality management functionalities.
MRP Software Pricing
How much does MRP Software Cost? Some products such as Katana MRP are subscription-based, and can start at $48/month. In a subscription model, you’ll need to take into account the amount of users, the level of included support, and any additional features included with your base package.
Other options may require more of an upfront investment such as E2 Shop System, which start at a one-time cost of $4,995. These solutions tend to be locally hosted and may include one-year of support included in the cost. On-going costs will include future support, and any additional services you may need for the software.
Related Software
If MRP doesn’t fit your needs or you need additional software to support your manufacturing systems, more options are available. For software that can assist across all aspects of the business, including manufacturing, logistics, business intelligence, payroll, CRM, HR, and more, an ERP solution includes different operations that can be tailored to any industry. To handle specific manufacturing needs, like a manufacturing execution system (MES) or a quality management system (QMS), different types of manufacturing software also exist.
Choosing the right MRP software solution for your manufacturing operation can feel overwhelming. If you’re looking to upgrade your MRP or need exploring the manufacturing software landscape, Software Connect is here to help your business determine the right software for your specific needs.
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