Use ERP to Improve Your Company’s Governance

 In Resources

What motivations have been key in your company recognising that you might want to improve on your current software and implement an integrated ERP (Enterprise Resource Planning) system? Motivations we most often come across are:

• To improve profitability,

• To have a system that can handle your current growth and give you back control,

• To allow your company to take on more projects, or

• To make your company more appealing to investors, mergers or buyers.

Implementing an ERP system is a great way to go about achieving these things, however there is a great benefit of ERP that is often forgotten – Governance.

Governance is not just a “buzz word” used by multinationals. It is now a reality that good governance is required by all companies if they are to grow sustainably, reach their potential and become true industry leaders. Governance is the combination of both business (corporate) and technical (IT) governance whereby an organisation’s management approach, processes, procedures, IT systems, reporting capabilities and risk management influence how the company is run, how well it performs and its overall sustainability.

The Australian Institute of Company Directors (2009) state that there exists a strong link between governance and a company’s bottom line, finding that good governance is critical for businesses with respect to business performance, performance management, risk management and compliance.

So, as good governance results in all the above positives, wouldn’t it be great if there was a way to get good governance practices happening at your company, fast? Good news, there is! ERP systems, when used effectively, have many significant advantages for construction companies. Below is how an ERP system assists in improving your company’s governance practices.

Business Performance:

• An ERP system gives you access to accurate information in real time. This means that better strategies and business decisions can be made. Further, the transparency ERP systems provide you with is key in gaining confidence from shareholders and investors.

• ERP systems certify the accuracy of financial statements and disclosures and can ensure that your company carries out these procedures in an efficient and effective manner. This is the key to achieving good governance and also sees time and effort savings at your company.

• Transactions can be traced from within your ERP system and transparency into the financial affairs of your company is achieved.

Performance Management:

• ERP systems take information in the most efficient way and give information out to the right people in the most efficient way. What this means is that your people know where they are and where they are going at all times. Project A can be compared on many levels to Project B so you always know what’s going right, what’s going wrong and what should be done.

• With individual logins, you can track and report on how individual employees, departments, project teams offices etc. are performing relative to others and relative to previous projects. This means people are made accountable for their actions, rewards are given fairly, problems are identified quickly and overall transparency is improved.

Risk Management:

• With duplication removed and processes streamlined, the risk of inaccuracy is significantly decreased.

• Access to the information you need, when you need it, removes the risk of uninformed decisions being made that risk the future and reputation of your organisation.


• ERP systems make your business comply with regulations and, with good ERP systems being updated regularly, you can have peace of mind knowing that compliance can be built into company processes.

• Your company can use the functionality built into your ERP system to conduct your own system and business audits plus test your system security controls.

• Financial period closures are completed more efficiently, accelerating the process of report publication for the financial period.

• As most ERP vendors are proactive and plan for relevant future regulation changes, you can be sure that when carbon outputs, employee diversity or organisational sustainability needs to be reported on – you will be ready.


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