Saturday, October 15, 2011: 05:35:20 PM


Large-Scale Concerns

Pradeep Gupta talks about the importance of using correct ERP solutions to efficiently manage large-scale projects

Continuous pressure from global competition coupled with the recentlyimposed increased legislation makes it essential for EPCI contractors to deploy a business solution that can keep pace with this volatile sector. The necessity of a comprehensive business solution is also felt because it is extremely important to recognise the close relationship between the multiple processes involved in the making of a facility. For example, design and construction processes and numerous operational tasks have a variety of inter-dependent sets of characteristics, which are unique to various facilities.

Pradeep Gupta

Every construction is custom-designed and often requires a long time to complete. Each construction site has its own peculiar conditions, and is influenced by natural, social and other local conditions such as weather, labour supplies etc. These conditions may also differ from one site to another. Difficulties in anticipating future requirements due to long lead times in project completion and the ever-changing market demand leading to design changes during construction lifecycle are ever so common.

With the availability of robust ERP solutions, such as the IFS Applications, contractors have a solution that can be precisely configured to match the demands of complex projects. In addition to this, these solutions also come with the benefit of inherent integration characters, which means that they can easily be adapted to accommodate any additional support that might be required to match future changes in the industry. In-depth project functionality, total integration and unmatched usability make IFS applications viable solutions to keep the business heading in the right direction.

The ERP Calling
ERP solutions help to keep the contractor’s finger on the industry’s pulse and upbeat. It also keeps people throughout the organisation fully informed by making relevant information available in real time. The solution’s inherent transparency and total integration enables employees to deal effectively with the day-to-day running of the business and to handle risk with a new degree of confidence. IFS applications offer the opportunity to cover the entire project’s lifecycle with one integrated application. For example, after the project’s completion, the project helps in creating the most effective maintenance and servicing programmes for customers and also helps the organisation to be perfectly positioned when the time comes to decommission the project.

As an ERP vendor, IFS specialises in the construction, contracting and the infrastructure sector, and integrates key areas including:

CRM, Bidding and Estimating
􀁘 Project planning

􀁘 Risk management

􀁘 Contract management

􀁘 Engineering and design

􀁘 Procurement and supply chain

􀁘 Manufacturing and fabrication

􀁘 Construction, installation and

commissioning project cost and progress control
􀁘 Service and asset management

􀁘 Finance and project accounting

􀁘 Human resources

􀁘 Document management

Total Lifecycle Support and Globalisation
The need to manage the complete asset lifecycle is business-critical—it involves the design, procurement, manufacture, building, construction and installation, commissioning, maintenance and service, spares and supply chain, repair, refurbishing and disposal. IFS business solutions have the security of a world-class project lifecycle solution that enables the management of all stages of a project’s lifecycle within one, totally-integrated software solution. And with IFS applications, contractors have a solution that supports multiple languages and local fiscal regulations, making it ideal for companies that operate on a global scale.

ERP solutions have fully-integrated project budgeting and forecasting capabilities, which allow periodic reviews to be conducted with greater efficiency so the completion estimates are more predictable. It is also linked to the work breakdown structure and project plan, and provides support for progress and earned value management. This helps companies to manage future costs rather than historical ones.

Factors Effecting ERPs
With ERP solutions, companies have the security of risk management that extends beyond the bidding phase, and provides the capability to respond to myriad situations. As competitive pressures continue to grow, it is reassuring to know that solutions such as the IFS have a fully-integrated project risk management solution that allows the risk consequence to be thoroughly evaluated and corrective actions to be swiftly implemented. ERP vendors’ experience in the industry and the policy of development in collaboration with its customers is reflected in the comprehensive range of capabilities provided for. Every aspect of the solution has been carefully considered and designed to provide the user with total control— in any situation.

To prevent it from becoming isolated from the main business system, the project plan becomes an integral part of the solution. It draws up work lists for the engineering, procurement, manufacturing, installation and construction teams, so they are all working as per the master project plan. Full two-way integration is also available with leading tools such as Primavera and Microsoft Projects.

Estimating accuracy is critical as project margins become increasingly tight. Today, most estimating tools are not integrated with the main project cost-control system and are not aligned to the work breakdown structure, making it extremely difficult to measure the accuracy of the estimate. With ERPS such as IFS applications, the project estimating process is integral, ensuring that accuracy measurement is automatic.

Managing project change has always been one of the biggest challenges for contractors. ERP solutions have many integrated features to manage project change such as change requests, document management, project base-lining, project budgeting and forecasting revisions, contract change management and audit trails and approval workflow. By being able to clearly identify scope changes and ensuring that they are managed with a proper integrated workflow, a huge difference to a project’s profitability can be made with the selection of the right solution.

Project Management
For the smooth delivery of a project, companies have to work with the clients in order to deliver a complete solution. Joint venture, sub-contracting and outsourcing is increasing, thus placing a substantial strain on many companies trying to keep control of their projects. ERP solutions offer powerful functionality to meet these needs. The subcontract management component allows complex sub-contracts to be managed; webcollaboration portals for these are also available. These advanced features are fully integrated with the overall project management solution.

Site work has traditionally been managed using paper-based systems or non-integrated tools, but the need to have fast and accurate feedback from the construction site is crucial to keep a project successfully on track. ERP solutions have a number of features to help in controlling the site execution work, including web or mobile options for time and status recording, sub-contract work instructions and work order management. The solution also offers a world-class asset and service management solution where the contract is to manage the assets.

Custom-made Solutions
The ERP solutions provide a comprehensive set of integrated components to cover the complete contract lifecycle. To be successful in the EPCI marketplace, a company has to have functional strengths in many areas. In particular, a strong project solution is essential to manage project cost-control, planning and progress tracking, risk management and project accounting.

The Contract Management Manifesto

􀁘 Contract management manages many types of contracts and has been designed to handle complex contracts where client variations are usually the norm. This also covers complex sub-contracting activity.

􀁘 A strong fully-integrated accounting solution is often very important. Of particular importance is the focus on project accounting and multi-country, multi-currency requirements.

􀁘 The world-class asset and service management components allow clients to manage their own internal assets and equipment, in addition to managing and servicing their clients’ assets.

􀁘 The human resource components provide functionality to manage all personnel issues including time and expense recording, skills and certification, recruitment, employee development and training.

􀁘 The document management capability allows all project documentation to be managed, including revision control, document deliverables and approval workflow.

􀁘 The supply chain solutions provide a comprehensive solution for procurement, manufacturing and inventory control.

􀁘 The engineering components provide tools to manage the project equipment list and include integration with CAD tools.

The author is the Practice Head – Ports, EPC, Manufacturing at IFS Solutions India Pvt. Ltd

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