Article
Background
The construction industry is arguably one of the most challenging and dynamic environments from both project delivery and commercial control point of view. Each project is unique in terms of its work content, execution methodology, and contractual terms and conditions. Construction projects need to contend with numerous internal as well as external challenges.
Having worked in the construction and projects industries for more than two decades delivering comprehensive ERP and construction software solutions (Xpedeon), we have observed that projects contend with the following key challenges resulting in a substantial impact on costs, margins, and cash flow:
- Continuous flow of changes to design and work content due to various factors
- Changes to project delivery plans due to dependencies, site conditions and legislative factors
- Delays on account of availability of material, labour and plant and equipment
- Delays resulting from timely decision-making
Impact to your business
The challenges and factors enumerated above, result in cost escalations both hidden and obvious, which when not effectively controlled and managed can substantially erode or completely wipe out project margins. They also result in delayed ability to recognize revenue which further results in delayed cash flow and increased financing costs.
The Xpedeon Solution
Xpedeon Job Cost, CVR, and Contract Management software part of the overall ERP solution provide a robust mechanism capture and control:
- Project Budgets
- Strict controls to traceably make changes to project budgets based on various types of variations
- Live and comprehensive capture of transactions in a fully integrated manner by employing industry specific functionality
- Instant reporting of Start and Current Budgets, current costs and Forecast Cost and Margins at completion, using the Cost and Value reconciliation approach
- Total visibility of the effect of changes on project costs resulting in effective Variations and Claims processing
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