ERP Implementation Challenges in the Real Estate Industry

Varun Tulsyan
March 27, 2024
ERP

ERP software can be costly, complex, and risky, but it can also deliver significant value and competitive advantage to your real estate company. Selecting the right ERP solution and effective implementation of the technology will provide countless benefits.

Nevertheless, even for the most prepared organizations, selecting the right solution and designing the most effective ERP implementation and execution strategy can be a significant challenge.

Let’s dive into what is ERP Implementation and what challenges a user can face in the real estate industry.

What Is ERP Implementation?

What Is ERP Implementation?

The implementation of Enterprise Resource Planning (ERP) software is a complex process that involves reorganizing business operations, managing software, transferring data, and training users to adopt the ERP software and its components.

Deploying an ERP software requires careful planning, configuration, and implementation, which can take several months. It is crucial for businesses to thoroughly assess their needs, evaluate existing processes, review past business data, and create a list of requirements to select the most suitable system. A well-defined implementation strategy and thorough preparation are key to ensuring the successful adoption of an ERP system.

Implementing ERP software presents various challenges as businesses transition from inefficient manual procedures to automated ones. The ERP system consolidates multiple corporate processes into a single platform, providing support for various functions such as engineering, purchase, sales, assets, facilities, and HR amongst others.

Now these challenges can hinder the growth of a real estate company and it’s important to know what are these challenges.

1. Choosing the Right Vendor

For a particular industry, there may be a lot of vendors selling the same kind of software. So, choosing the right vendor becomes one of the major challenges. The reason for this becoming challenging is because an ERP implementation process takes about 3-6 months and if a company chooses to go with the wrong vendor, not only they may lose revenue in the long run but also time.

In the real estate industry, it becomes more vital to choose the right vendor as the industry and the processes are too complex and chaotic. Now, if a real estate developer goes with the wrong vendor, not only will they get delayed with project completion but also not be able to executive the projects efficiently which is critical in an industry as such. A Real Estate business owner must understand that they need to have an ERP business partner that helps them manage their projects most efficiently.

One of the grave mistakes that real estate developers also make is they go with an ERP that is suited for many industry solutions. There are many ERP software in the market that have the same ERP modules catering to different industries. Now just imagine, will the ERP vendor be able to have all the features that a real estate developer needs on an everyday basis? Will the ERP software have the modules and features in-depth as in general ERP software?

So, the solution for this is to go with an industry-specific ERP vendor like In4Suite ERP that helps real estate developers not only manage their projects on a single and unified platform, but all transform their entire business digitally to make it simpler and effective to use.

2. Data Migration

Data Migration Process in ERP implementation is the process of moving the data from the original location (could be any software, Excel sheets, paper) to the new location of the current ERP software. This process can be complex, and it involves transferring all the data maintained over the years and being now managed at a centralized database.

Before moving to a new ERP or adopting an ERP, different functions of a company may have tools and software specific to the required business function. For a successful data migration, the ERP vendor needs to choose a methodical approach, including inspecting, extracting, cleansing, and transforming the data from each of these different software before importing it into the database of the new ERP software.

Some of the challenges during the data migration process can be:

Data Redundancy: The data can be redundant if multiple functions of a real estate business use the same data in different software.

For instance, a real estate developer may have CRM software having customer names and leads while also maintaining an Excel sheet having common records as in the CRM software.

These issues must be taken care of and eliminated in the data migration process so that the company does not maintain multiple and duplicate records in the database.

Data Migration Costs: The cost of migrating from one software to a new ERP software can be costly and usually it entails 15-25% of the total implementation budget. These costs involve the cost of cleaning, restructuring, extracting, and making sure the data is in place.

3. Employee Adaptability

It is important to understand that it will be a drastic change for the employee to adapt to a new ERP software when they are using legacy software or no software at all (like paper or Excel sheets). As you may know, the real estate and construction industry is one of the least digitized industries, most of the companies may not be using software.

Thus, employee adaptability becomes one of the challenges as the employees are used to using the old way, and making them move to a newer ERP software may cause some resistance. This may eventually lead to less productivity and delays which is critical in real estate projects.

In one of our recent case studies, Vensa Infrastructure was looking for software that could seamlessly transition them from manual to automated processes while meeting their unique operational needs and ensuring user acceptance without extensive customization.

For the company, user adaptability was very important as the employees had not used any software earlier. They considered going with In4Suite ERP because they found the user adaptability to suit the company’s needs and where the employees can easily navigate the data and have software to make things simpler.

Thus, resistance to change can be a formidable roadblock; getting buy-in from leadership and stakeholders across various business functions very early in the implementation process is crucial to a successful ERP implementation. It’s important to communicate all the features and advantages the users may get by using the new ERP software.

To make sure this happens, the ERP vendor must provide strong training and have superior support. The training will make sure the employees are familiar with how to add data and navigate the system and the ongoing support will make life easier for the end user.

4. Technical Challenges

During ERP implementation, some of the technical challenges that organizations commonly face include issues related to data management, integration with existing systems, data quality control, technical requirements like server modifications and hardware upgrades, and resistance to change among employees.

As mentioned earlier, data migration may come up with many challenges including costs but there will also be technical challenges involved in moving from one system to a newer and better software.

Integrating with existing systems can also contribute to these challenges where certain ERP software may not support those integrations or there might be issues at the hardware or the software end.

These challenges can impact the success of ERP projects and require careful planning and management to overcome

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What Needs to be Done to Overcome These Challenges?

To overcome these challenges, the real estate developer needs to choose the right ERP partner that can help the company overcome all these challenges. It is very important to choose a vendor that helps not only to manage the process efficiently but also supports the ERP implementation journey and otherwise.

Conclusion

We stress having the right ERP partner because if the real estate company is choosing a software that is cost-effective or choosing a generic ERP, then the costs and challenges faced by them will be stupendous, and in every business, time is money. Since the implementation for certain can take months or even years, it’s better to choose an ERP vendor that compliments the ERP implementation process and helps the company increase its revenue the right way.

Varun Surendra Tulsyan

Varun is a Digital Marketer with overall experience of 11 years including experience in B2B marketing for the past 5 years. He is the first hire for marketing at In4Velocity and is obsessed with digital marketing.