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TECHNOLOGYfocus<br />

The cost of going carbon free<br />

How ERP systems can help<br />

housebuilders keep costs under<br />

control, including the hidden<br />

cost of sustainability<br />

For housebuilders, cost control is a<br />

constant balancing act. Juggling<br />

material prices, labour expenses,<br />

and tight timelines leaves little room for<br />

error. The Building Cost Information<br />

Service has flagged dramatic increases in<br />

the cost of building houses over the past<br />

three years, with most of the blame lying<br />

within increases in material and shipping<br />

costs triggered by economic uncertainty<br />

and rising interest rates.<br />

Housebuilders are also facing additional<br />

pressures with the new 'Part L' building<br />

regulations, which demand new homes<br />

must produce 31% lower emissions than<br />

the older standard. This will lead to more<br />

than just the increased costs in materials<br />

and labour, with a demand for newer and<br />

more sustainable building materials, a<br />

scarcity of builders trained in their use,<br />

alternative supply chains, and closer<br />

cooperation with architects having to<br />

design buildings with lower embedded<br />

carbon emissions.<br />

ADAPTING ERP FOR A SINGLE<br />

SOURCE OF TRUTH<br />

In this pressure cooker environment,<br />

adopting an Enterprise Resource Planning<br />

(ERP) system can be a game-changer,<br />

helping to both slash costs and boost<br />

profitability. An ERP system is a<br />

centralised platform that integrates all<br />

critical business functions, from<br />

procurement and inventory management<br />

to project planning and financial reporting.<br />

This connects the back office to the<br />

building site, helping everyone from<br />

project managers to procurement<br />

specialists work from the same data set<br />

and collaborate seamlessly on house<br />

building projects.<br />

Traditional methods of managing<br />

construction projects, using<br />

siloed data and manual processes, are<br />

prone to inefficiencies and costly<br />

mistakes, whereas working from a single<br />

source of truth helps construction<br />

companies navigate project blockers with<br />

ease. The single source of truth also<br />

provides a stable platform for integrating<br />

newer technology and demands, such as<br />

the implementation of carbon friendly<br />

materials and practices in housebuilding,<br />

as required by the UK Government.<br />

There are, therefore, many reasons for<br />

adopting an ERP system to help house<br />

builders protect their profit margins.<br />

CUTTING PROCUREMENT COSTS<br />

While ERP can't change the prices of<br />

materials, it can help cut costs elsewhere<br />

by streamlining the procurement process,<br />

from identifying the best suppliers to<br />

negotiating price discounts. With new<br />

materials, new suppliers and an<br />

increasing demand for sustainable<br />

resources, the market is going to be much<br />

tougher than it is today.<br />

ERP systems built for construction<br />

feature built-in tools that track material<br />

usage, analyse both past projects and<br />

help you evaluate future trends, and<br />

recommend cost-effective alternatives.<br />

This empowers housebuilders to negotiate<br />

bulk discounts, plan deliveries and reduce<br />

waste and overstocking through real-time<br />

inventory tracking and using forecasting to<br />

anticipate future needs. Integrated<br />

supplier portals can improve<br />

communication and collaboration with<br />

suppliers, fostering stronger relationships<br />

with key vendors.<br />

PLAN HOUSEBUILDING PROJECTS<br />

WITH PRECISION<br />

ERP systems transform project planning<br />

from an intuitive art to a data-driven<br />

science. By centralising project data,<br />

16<br />

January/February 2024

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