LAS VEGAS—The construction industry faces many challenges—tight margins, complex projects, stressed supply chains, and labor shortages. Furthermore, the construction industry is made up of thousands of small and midsize subcontractors, which have historically been underserved by technology solutions and have historically found it challenging to share data in an effective way.
Source: Acumatica
At the same time, the industry is undergoing significant transformation. Improved business management tools, mobile and wearable technologies, IoT sensors, AI, and data analytics are rapidly changing this industry. But small and midsize subcontractors have difficulty accessing all these innovations and the increased efficiency that comes with them.
However, that world is changing. The small and midsize construction market is now getting renewed focus, and this is where cloud-based ERP systems come in. Cloud-based ERP systems are easier to implement and maintain than traditional on-premises ERP systems, and one of the leaders is Acumatica and its Construction Edition.
The Construction Edition is a robust, cloud-based ERP solution, tailored for the complex needs of small to midsize contractors and subcontractors. At the core of its efficiency is its real-time field reporting capability, which empowers stakeholders across the entire project life cycle with immediate, accurate data insights. Acumatica touted recent enhancements to this industry edition at its annual customer conference in Las Vegas last month.
Acumatica’s Construction Edition has many advantages, particularly the solution’s real-time field reporting capability. Those features include:
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- Mobile app for instant data capture: Field personnel can log critical information such as progress updates, labor hours, material usage, and equipment status directly from their mobile devices. This data seamlessly integrates with the central system, eliminating manual data entry and delays.
- Dashboard-driven visibility: Real-time data populates dashboards that are accessible by management, project managers, and field teams. These dashboards offer customizable views on key performance indicators such as budget control, schedule adherence, and resource utilization, enabling proactive decision-making.
- Automated workflows and alerts: Based on predefined parameters, the system triggers automatic notifications for critical events such as project milestones achieved, budget deviations, material shortages, or changing weather conditions. This ensures timely action and avoids costly delays.
- Document management and collaboration: Integrated document management allows instant access to project plans, drawings, and other critical documents for field teams. Real-time updates ensure seamless collaboration and version control.
What is the upshot of fully embracing real-time field reporting? Real-time data empowers all stakeholders to make informed decisions, leading to better project outcomes. Streamlined data capture and automated workflows reduce administrative overhead and increase productivity. These insights help mitigate project risks and optimize resource allocation, leading to cost savings.
Significant Competition in Construction Arena
Acumatica has carved a niche for itself in the construction space, but other providers have seen the opportunity and are chasing it as well:
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- Sage Intacct: Sage Intacct has shown a renewed focus in the construction space. It recently acquired BidMatrix, a bid analysis package, through the purchase of Bridgetown Software. The package is part of Sage’s construction and real estate software line. It follows the May 2023 purchase of Corecon, which makes preconstruction and project management software. All this is in addition to Sage 300 Construction and Real Estate, which is based on Sage’s acquisition of Timberline in 2003.
- Infor: With its long history in the construction industry, Infor offers a comprehensive suite of construction-specific functionalities with its Infor CloudSuite Construction solution. Infor is known for its capabilities regarding project management, scheduling, cost control, collaboration, estimating, bidding, and procurement.
- Microsoft Dynamics 365: Microsoft Dynamics 365 offers various solutions and modules for construction, with capabilities spanning project management, financials, and field service, which are frequently updated. (Microsoft recently announced many upgrades to Dynamics 365, infusing its Copilot generative AI (Gen AI) solutions deeper into its D365 modules.)
Acumatica’s Construction Edition has built a strong foundation in the cloud ERP market. With its robust features, commitment to innovation, and competitive edge, the edition is helping small and midsize construction businesses build success for years to come. By tailoring its offerings to the specific needs of these subcontractors, Acumatica is positioning itself to capitalize further on this growth market.
Industry Editions
For those unfamiliar with Acumatica, some background: The Seattle-based cloud ERP vendor developed an interesting way to cost-effectively address the needs of customers in certain industries by packaging its products into industry editions. Each industry edition marries Acumatica’s horizontal functionality (primarily financials, distribution, and customer management) with industry-specific modules, such as construction, manufacturing, distribution, and retail. A new industry edition is coming later in 2024: Professional Services Edition. Acumatica launched the Construction Edition in 2014; it and the Manufacturing Edition are the two fastest growing editions.
The industry editions are primarily sold through a network of VARs, which is an Acumatica staple. Acumatica’s customer count also includes customers of its OEMs, which private-label Acumatica as the core of their next-generation ERP systems for small businesses. The Acumatica ecosystem had a strong 2023. “It was our best year ever, exceeding all our targets and expectations,” Acumatica CEO John Case said at the customer conference.
“The work we’ve done over the last three years to create native industry editions of our product has been an incredibly valuable exercise,” Case said. “All of our growth is coming from the big industries like manufacturing, distribution, and construction.”
The many Acumatica customers that we have interviewed rave about the system’s ease of use. It has a reputation for an intuitive interface, requiring relatively minimal IT expertise for implementation and adoption. Acumatica’s industry editions are also highly customizable, allowing businesses to tailor the solution to their needs and workflows. One key factor in that regard is Acumatica’s commitment to open APIs, which enable integration with existing software solutions.
A Cautious Approach to Gen AI
Regarding the topic of the year, Gen AI, Acumatica has long used “traditional AI” in its industry editions and will add more AI and Gen AI functionality in 2024. However, it is taking a decidedly slower and more cautious approach than many of its competitors. We asked Acumatica Chief Product Officer Ali Jani about Acumatica’s philosophy in this regard. Jani said:
“When it comes to decision-making, generative AI is not very good. You have to rely much more on traditional AI. A lot of studies show the way generative AI works is very similar to how our brain operates, but they haven’t been able to cross the bridge for decision-making yet. And that’s going to be maybe 5 to 10 years away, in our opinion, because it’s extremely expensive.”
The AI moves that Acumatica will make in this regard will always be based on customers and how they are using it, Jani said. “We’re not in a rush,” he said. “We don’t want to put features out that are going to get outdated a year later.”
Jani was blunt about AI when he was asked: What are you hearing from customers about AI?
“They don’t care about AI. They care about results. They don’t want to spend the time. You’ll get one champion at the customer client who gets excited about it, but he can’t bring everybody else along. And … they don’t want to do it themselves. They want it from the vendors they trust, but they want the vendors to ramp up that automation and decision-making. I think it will change. I think people are scared … especially with what’s happening with the media. They don’t trust their data, but they also don’t trust AI at all with everything that’s going on.”
Jani’s comment brings to mind the words of the late, great business-management writer Peter Drucker: “People don’t care about technology. They care what technology can do for them.”
By Tom Dunlap, Avasant Research