Navigating Construction in 2025

Challenges for Construction Companies and How Cloud ERP Technology is Solving Them

ARTICLE - The construction and fit-out industry faces mounting challenges as it heads into 2025. Persistent supply chain disruptions, labor shortages, and the growing demand for real-time data are straining companies to their limits. Yet, cloud ERP (Enterprise Resource Planning) technology is proving to be a game-changer, helping firms overcome these obstacles and thrive.

Key Challenges in 2025

1. 1. Supply Chain Disruptions Supply chain instability continues to plague construction. A survey by InEight found that 56% of industry leaders see material shortages as a significant challenge. Events like the COVID-19 pandemic and geopolitical tensions have caused delays and cost hikes, with steel prices alone surging 215% during the pandemic and remaining elevated. These disruptions put immense pressure on already thin profit margins.
   2. Labor Shortages Another critical concern is the labor shortage. In 2023, the Associated Builders and Contractors reported a shortfall of 546,000 workers, a gap expected to persist. With an aging workforce and a lack of younger entrants, this issue has delayed projects and driven labor costs upward by an average of 5% annually since 2021.
   3. Lack of Real-Time Data The absence of integrated, real-time data systems exacerbates inefficiencies. McKinsey reports that 95% of construction data goes unused, leading to miscommunication and delays that cause budget overruns, averaging 28%. With centralized access to project data, firms can make informed decisions quickly, often resulting in delays and financial losses.

How Cloud ERP Technology Addresses These Challenges
Cloud ERP platforms are transforming construction by integrating workflows, automating tasks, and providing real-time visibility across operations. Here’s how they tackle the industry’s pressing problems:

1. 1. Smarter Supply Chain Management Cloud ERP systems offer end-to-end visibility into procurement, inventory, and logistics. Predictive analytics help anticipate material shortages, enabling companies to reduce delays and control costs. According to the Construction Industry Institute, firms using cloud ERP report cutting material waste by 20–30%.
   2. Enhancing Workforce Efficiency By automating routine administrative tasks like payroll and compliance tracking, cloud ERP frees up staff to focus on value-driven activities. This not only boosts productivity but also alleviates the strain caused by labor shortages. Data from Softeq shows that companies using such systems have achieved a 40% increase in workforce efficiency.
   3. Real-Time Data for Better Decisions Cloud ERP centralizes data, providing stakeholders with instant access to project insights. Deloitte notes that firms using real-time data systems have reduced project delays by 25% and improved budget adherence by 15%. This capability fosters collaboration and ensures timely decision-making, which is crucial in today’s fast-paced environment.

“Cloud ERP isn’t just about efficiency—it’s about empowering construction firms with the tools to make smarter, faster decisions in an increasingly complex industry.”

- Andrew Coghlan, CEO, FullClarity

NetSuite + FullClarity: A Purpose-Built Solution for Construction
NetSuite, a leader in cloud ERP, and FullClarity, its construction-focused partner, have joined forces to create a comprehensive solution tailored to the industry. NetSuite + FullClarity offerings address construction’s unique needs:

• • Construction Accounting and Compliance: Automates complex tasks like revenue recognition and compliance tracking, ensuring accurate financial management and regulatory adherence.
  • Job Costing and Forecasting: Provides real-time tracking and predictive tools, reducing financial surprises by up to 30%, according to internal FullClarity data.
  • Billing and Claims Management: Streamlines claims preparation and billing cycles, improving cash flow—a critical factor as Dodge Data & Analytics reports that 74% of construction companies face cash flow challenges.

“We bridge the gap between generic ERP systems and the specific demands of construction. With NetSuite and FullClarity, firms gain the tools to manage complexity and drive results.”

- Andrew Coghlan, CEO, FullClarity

Looking Ahead
The challenges of 2025 demand innovative solutions. As exemplified by NetSuite and FullClarity’s partnership, Construction for NetSuite ERP technology equips construction companies to handle supply chain volatility, labor shortages, and the need for real-time data with confidence.

By embracing digital transformation, construction firms can streamline operations, enhance efficiency, and remain competitive in an increasingly demanding market. For companies ready to adapt and grow, the future is bright—and powered by technology.

If your construction company or project-based business is ready to supercharge operations with construction-specific capabilities that deliver real-time project visibility, automated job costing, efficient vendor management, and future-proof scalability—all in one seamless platform - contact us to arrange a consultation with one of our industry experts.