Impact of Enterprise Resource Planning (ERP) Systems to the Construction Industry

Enterprise Resource Planning (ERP) system has become a key component of organizations all over the globe giving an edge over competitors. However, the adaptation of ERP systems in construction companies is far behind than other industrial fields. As it is a highly heterogeneous sector with a great diversity of specialties and large disparities in the size of companies, the complexity of interconnecting the projects is significant. Thus, the main objective of this research is to investigate how ERP will impact to the construction industry and establish the aspects to measure the ERP readiness before its implementation. The research was conducted using 210 financial statements from 29 construction companies. It is proved that 90% of the companies who have implemented ERP has gained significant successful rate with their construction activities. Furthermore, it is certified that ERP readiness ratios named Investment/Revenue more than 10% and Intangible Asset/Fixed Asset more than 10% are required to fulfill management and technical requirements respectively for a successful implementation. And also, it is identified that the training cost allocated by the construction companies is much lower than it requires.