ERP project management software consists of a suite of applications around project portfolio management. They include functionality for project costing and project resource management.
ERP project management systems are geared toward organizations, such as engineering firms, construction firms, consultants and architects, that bill clients based on the time their employees spend working on individual projects.
Project management modules deliver process automation and process improvement that transcends the traditional boundaries of customer resource management (CRM) and supply chain management (SCM) software to include project accounting, change management, time and expense reporting and analytics about accomplished work.
The core components of ERP project management software include:
- Project definition, which includes tasks and delivery dates and finding resources to fulfill the project
- Project costing and accounting, which looks at direct costs, materials, labor, travel and other costs associated with the project
- Project portfolio management, which provides visibility over multiple projects to see if projects are running on time and on budget
- Resource management, which is the human resources (HR) component and provides visibility into resources available for multiple projects
- Billing for projects per hour, including profitability tracking
ERP project management software gives managers insight into a project across the entire project lifecycle, from developing and selling the business or service, delivering that service, managing and operating the business to billing and collecting payment once the project is complete. The software gives these managers the data they need to assess and analyze project performance and profitability.
"Billable hours are the inventory of a project-based firm, so higher resource utilization and (better) management of project costs are key to remaining profitable," said Paul Hamerman, vice president of enterprise applications at Forrester Research.
Hamerman said that ERP project management modules help companies optimize the resources they have and assign those resources to projects that will maximize the utilization of those resources. ERP project management modules are also used to prevent projects from going over budget or running over schedule.
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About the author: Catherine LaCroix is a freelance writer based in Portland, Ore. She covers technology used in business, education and healthcare.