Initially adopted to streamline operations and unify data across departments, ERP software revolutionised construction management in the late 1990s and early 2000s.
ERP was especially useful for the construction industry as it brought together scattered and siloed project teams under one system.
Throughout the 2000s, ERP systems became increasingly popular, thanks to innovations like real-time data processing. Cloud hosting further accelerated adoption into the 2010s.
The Risks of Sticking with Legacy ERP
As construction continues to face new challenges, from shifting regulations to rising costs and changing client expectations, many companies remain hesitant to upgrade due to concerns about cost and disruption.
But the real cost lies in maintaining these outdated systems, which can lead to inefficiencies, data silos, and missed opportunities.
While legacy ERP systems may have served businesses well in the past, their limitations are becoming more apparent, and their limited functionality and lack of scalability, may actually be preventing growth and creating inefficiencies in daily operations.
Why Construction Companies Need to Modernise Their Legacy ERP Systems
Limited Functionality
Legacy systems often lack features that are essential for modern construction management.
Today's ERP solutions offer advances such as automated workflows, mobile technology, and advanced analytics and forecasting.
These improvements directly impact efficiency and productivity, which is critical in an industry with slim profit margins. Without these capabilities, companies are likely to fall behind.
Scalability Issues
As construction companies grow and take on larger or more complex projects, legacy ERP systems will struggle to keep up.
Modern ERP systems are built to scale, accommodating everything from increased project volume to more complex operations.
Upgrading allows companies to avoid the limitations imposed by older systems, ensuring they are well-positioned for future growth.
Cybersecurity Risks
Older ERP systems, especially those without regular security updates, are far more vulnerable to cyberattacks.
Construction businesses handle sensitive project and client data, making security breaches costly and damaging.
Modern, cloud-based ERP systems offer better security, as providers regularly update and patch vulnerabilities, ensuring data remains protected.
Integration Challenges
Legacy ERP systems often have difficulty integrating with modern tools, like field management software or mobile applications. In contrast, modern ERP solutions offer open architectures and native APIs that enable seamless integration with other systems.
This flexibility is crucial for companies looking to enhance their workflows and avoid inefficiencies caused by disconnected systems.
High Maintenance Costs
Maintaining and patching outdated systems is not only costly but also diverts resources away from other priorities.
Upgrading to a cloud-based ERP eliminates the need for in-house IT teams to manage hardware and software maintenance.
Additionally, cloud ERP providers handle regular software updates, ensuring companies always have access to the latest features and security patches.
Difficulty in Attracting New Talent
A company relying on outdated systems can struggle to attract tech-savvy talent.
Younger, digitally proficient employees may be deterred by legacy ERP systems that feel clunky and inefficient.
Offering modern, intuitive software solutions can make a company more attractive to prospective hires, whilst also having huge impact on your current staff, giving them better tools to carry out their work.
Lack of Real-Time Data and Business Intelligence
In a fast-paced industry like construction, having real-time data is crucial for decision-making.
Many legacy systems do not have the capability to provide real-time insights, leaving business leaders without the necessary information to make informed decisions.
Modern ERPs offer advanced analytics and data dashboards, empowering teams to monitor project progress, costs, and resource allocation in real-time.
No Remote or Mobile Access
Legacy ERP systems often don’t support cloud-based remote access, which slows operations and complicates remote work.
In contrast, modern ERP systems offer mobile access, allowing construction professionals to view and update project information from any location, improving collaboration and efficiency on the go.
By continuing to rely on a legacy ERP system, construction companies risk being outpaced by competitors who are adopting modern technologies to improve their workflows, client relations, and overall business performance.
ERP Upgrade Success Story – A&G Services
One company that faced these challenges head-on is A&G Services, a HVAC, Mechanical, and Plumbing contractor based in Fort Worth, Texas.
Gretchen Riddle, Controller at A&G Services, shared their experience of working with a legacy ERP system:
“A&G was on a first generation ERP. It was simple but it wasn't scalable, so it didn't grow with us. There was a lot of double-checking to make sure that (the legacy ERP system) was talking back and forth all the time.
When we wanted to add a field solution it wasn't available, so we had to add a third-party software that didn't want to talk directly to the system. That software was cloud-based, but the legacy ERP was not, it was strictly server based.
That was those were our biggest struggles, getting everything working together at the same time.”
A&G's legacy ERP was also server-based, limiting their ability to work efficiently from different locations.
After reviewing several options, the company made the switch to Access Coins, a modern, cloud-based ERP designed specifically for specialty contractors. The results were transformational:
“The visibility (of the new Access Coins ERP system) is absolutely paramount for us. Project managers are able to see their cost and their job progress in real-time.
They're able to see that in real-time, all the time, wherever they are. If they're on vacation, if they're on the job site, if they're in the office, if they're at home, they're able to see that.
They're able to get information out of this system that they had to go to somebody else to gather information from, and now that extra step is gone.”
Since implementing the new ERP system only 12 months ago, A&G Services has achieved impressive results:
- $850,000 worth of additional service agreements in the first year, thanks to streamlined processes.
- Payroll processing time reduced by more than 50%.
- Days to Bill (BTB) dropped from 25-30 days to just 10.5 days.
- 16% growth in turnover since implementing the new system.
The Time for Digital Transformation in Construction is Now
Construction companies that were early ERP adopters shouldn’t be punished for their forward-thinking decisions.
However, it is a reality that many of these legacy systems no longer serve their original purpose and are holding companies back.
Upgrading to a modern ERP solution is not just an investment in efficiency and productivity; it’s an investment in the future of the company.
A modern ERP will lead to better cost control, higher employee satisfaction, and a competitive edge in a rapidly changing industry.
Upgrade to Access Coins – an ERP Built for Construction
Access Coins is a construction-first ERP system with a huge range of features and functionality developed to help construction businesses maximise efficiency and control costs.
- Collaborate, control and connect with Access Coins – control and track all aspects of the construction lifecycle from a single source of truth.
- Gain project and financial transparency through real-time centralised data.
- Expert implementation, with dedicated product training and customer support.
Explore our construction ERP software to find a solution that aligns with your business goals and optimises your operations.
