Peer-to-Peer

ERP for construction

Growing at an  average CAGR of 40 percent, Tantia Constructions was looking for an ERP package which could match its agility and enable controlled business growth. By Tanu Talwar

Tantia Constructions is a construction company based out of Kolkatta. From its incorporation in 1964, the company had relied upon a manual system to manage its documents and was heavily dependant upon physical files containing valuable documents, records, project applications, payments, transactions, customer relations etc. This manual system worked fine until the company expanded and experienced a phenomenal growth in its business to find that it was surrounded by islands of paper files that needed to be managed, updated and preserved. Experiencing problems such as incomplete client information, untraceable accounts and the lack of an effective mechanism to address customer queries, the company decided to take its first step in deploying a connected IT infrastructure and implement an ERP solution called ERP matrix in 2004.

Islands of fragmented information

Although the company had implemented an ERP system, the solution primarily looked after its accounting operations. Data entry and material management related to construction projects continued to be handled manually using physical files and Excel spreadsheets. Siddhartha Tantia, VP, Corporate Planning, says, “Being a construction company we had huge volumes of important documents containing project reports defining individual project status and material requirements that needed to be continuously updated.” However, with the records being maintained in a physical form it had become a cumbersome process to keep track of different projects operating at various stages in the project lifecycle.

“We have been in operations for over 40 years. Over the years we have grown exponentially and have expanded our reach to 20 project sites with one regional office in Delhi. However one of the major challenges faced by us during this period has been to save and preserve records as they are needed for future reference,” adds Tantia. With no systematic IT infrastructure in place the company found files containing incomplete information, errors as well as incidents of misfiling that caused hassles at various administrative levels.

Furthermore, with no defined procedure of information transfer, the company was spending valuable time in sending information from one project site to another resulting in additional hassles and low productivity. With the data only to be entered at the company’s headquarters in Kolkatta, it was necessary to collect and collate information and records from the companies numerous sites and then put them together at the main branch. The procedure not only proved to be tedious and cumbersome but also inefficient as the manual consolidation of data resulted in fragmented pools of information. Tantia says, “With no centralised procedure and the operations being managed manually it had become an increasingly time consuming and a tedious task to collect files from each project site and then collate it with the main database at our headquarters.” Then again, accessibility was a major problem and there was no tracking or monitoring mechanism in place to obtain the immediate status of a project resulting in unnecessary delays and errors on different fronts. Besides, facing hurdles such as the lack of transparency, additional retrieval of important data and data analysis had become a tiresome and a long drawn process.

After much deliberation the company decided that in order to keep pace with its rapid growth it would first have to change its IT infrastructure if a comprehensive overhaul of the internal systems was to take place. “Our company is growing at an average CAGR of 40 percent each year and we needed an ERP package which is scalable, robust, can match up to our agility and enable controlled business growth,” explains Tantia.

Zeroing in on best practices

The company evaluated a number of ERP solution vendors including Microsoft and Oracle but finally decided to go with SAP. Siddhartha Tantia states, “For a construction company, the quality and timeliness of its data spells success or failure. The SAP solution offered us with industry proven best practices and the ability to expand the solution according to our changing needs.” Another factor which helped Tantia Constructions, decide in favour of SAP was that the core features included a project system amongst other modules like finance and controlling, material management and sales and distribution which fitted neatly into the company’s core business requirements.

Once the company zeroed in on SAP ERP, it chose Caritor as its implementation partner and began the execution cycle in October 2005. A 20-member team from Caritor studied the requirement of the company in order to come up with a suitable solution. Besides engaging the implementation partner the company also bought in its own team of five members representing five key departments in the company to give a detailed picture to the execution partner of their business requirements. Excellent communication and coordination between the management, core team and consultants ensured that the process was completed in just eight months. However during this period the team was faced with certain major challenges:

• Fragmented data: As an established construction company, Tantia had huge piles of records and data. Then again with no systematic storage of information a major task for the team was to collate and gather as much data as possible and update it accordingly.
• Employee inhibitions: Having no experience in working with SAP, the employees were initially apprehensive about switching to the new system. They preferred the manual system of file handling despite it being tedious as they feared that the new one would be complicated to understand and difficult to use.

To proceed with the implementation it was necessary for the team to overcome these challenges. After an in-depth understanding of the business process, the functional consultants proceeded to re-engineer the system. Orientation and re-orientation as per SAP standards and precise testing gave way to full steam implementation. In order to overcome employee apprehensions, Caritor not only provided on the go training but also conducted a two-day training session taking up employee queries after the implementation was complete.

Reaping rewards

The implementation of the SAP ERP solution has benefited Tantia Constructions in more ways than one. First and foremost, the four core modules of implementation, finance and controlling, material management, project system and sales and distribution have been extremely beneficial to Tantia Constructions’ business. The solution has enabled the company to standardise and integrate all its processes across the country. With a centralised system in place, data is now accessible from all locations and can be entered on-site. Moreover, the interconnected system automatically updates all related data upon entry, providing reliable and up-to-date information. It has not only put an end to the tedious and long-winded process of entering, re-entering and checking data for each calculation but has also enabled the company to significantly cut down its bandwidth requirements.

For the existing 60 users, the clarity and the structure of the information of the system allows for quicker and easier decision making. Amongst other benefits, the one that has truly benefited Tantia Constructions is the technology functionality and adaptability of the SAP solution. “We along with our implementation team could leverage the flexibility of SAP modules and innovate with the project system to suit our requirements,” adds Siddhartha Tantia.

With the company planning to grow its business overseas, it’s relying on the scalability and the control over business offered to it by the solution.