Driving Profitability through Cloud Adoption
What does it take for an architecture, engineering, or construction business to be profitable? Many look toward aggressive growth and expansion, either by geography or acquisition or both. However, growth requires significant spending on resources from new employees to acquisitions, and it takes time to see a return on your investment.
This year, market projections for engineering, manufacturing, and other project-based industries are promising–according to Deloitte’s latest Engineering and Construction Industry Outlook, transportation infrastructure spending has increased 9.4% year over year. This outlook is boosted by inflation, regulations like the CHIPS Act, and substantial investments in infrastructure.
But increased market opportunity isn’t enough to usher in an era of profitability. To achieve profitability, finance teams for project-based businesses must navigate tight budgets while staying on top of cash flow. In a time where efficiency is key to driving profitability, you need more than just growth, you must focus on squeezing more value from your technology investments. Moving to the cloud can help bridge the efficiency gap between growth and profitability.
How the Cloud Impacts Efficiency
Cloud technology is nothing new, but a surprising number of project-based businesses aren’t leveraging its full potential. PwC’s latest Cloud and Business Survey reveals only 28% of engineering and construction companies are “all in” on cloud while 11% don’t use it at all. Nearly half of the respondents (47%) reported increased value, cost savings, and greater resiliency at their organizations as a result of operating in the cloud.
When profitability goals demand greater efficiency, cloud computing can help you manage and deliver projects while cutting non-essential costs. When your business works in multiple locations–as many architecture, construction, and engineering firms do–it can be difficult to transfer data from one location to the next. By moving to the cloud, you establish a centralized, integrated platform where all job sites can operate and communicate seamlessly. Moving to the cloud helps project-based businesses:
- Reduce risk of loss from hardware failure
- Gain insight into a project’s supply chain
- Improve financial planning and analysis
- Automate manual processes
When your entire business operates in the cloud, users can check progress or update projects from any location, whether they work on-site, from home, or at the office.
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If your business isn’t profitable yet, cutting costs can help you bridge the gap. But where do you start?
Knowing where and how to cut costs is intimidating to even the most experienced finance teams. According to US Bank’s recent CFO Insights Report, 38% of finance leaders find cost cutting and driving efficiencies to be a top priority. However, more than half (56%) struggle to balance cost cutting with investments in future growth. If your organization isn’t operating in the cloud yet, investing in a cloud-based ERP can help you perfect the balancing act between lower costs and higher profits.
To avoid losing data, you must back up your information frequently. Running your own technological infrastructure adds another layer of challenge–storage for both your current and backup data requires maintaining hardware and fronting the bill for the electricity it consumes.
With a cloud-based system, you typically only pay for what you need using a subscription-based model. This drastically reduces or eliminates the need to maintain expensive hardware that quickly becomes outdated. Instead, the cloud increases your flexibility by updating automatically.
Cloud computing also simplifies financial and operational reporting. Deltek’s Vision and Vantagepoint ERPs, available in the cloud, are custom-tailored to project-based businesses, automating project lifecycles while allowing you to securely access data from a single, centralized location. Finance teams can leverage Deltek’s cloud-based ERPs for seamless billing and financial reporting.
Simplify Your Cloud Migration
Migrating to a cloud-based ERP can be daunting, especially when having to consider rebuilding your business infrastructure from scratch. How will you migrate your data to the cloud? Will you be able to access legacy data afterward?
Accessing your legacy data is important for measuring trends over time, but doing so after a cloud migration isn’t a cut-and-dry process. That’s where technology tools like Spreadsheet Server from insightsoftware can help.
Spreadsheet Server creates a secure, refreshable connection to your organizational data as a single source of truth. With Spreadsheet Server, information stored in your cloud-based ERP and legacy data are all securely accessible from one place, allowing you to move to the cloud worry-free with an application that scales with your business.
With seamless ERP integration, you can automate your reporting process and reduce the cost of error-prone manual reporting. With more accurate data, create more informed business strategies and reduce losses, setting your construction business firmly on the path to profitability.
Ready to plan your cloud migration? Ask yourself these three questions first.
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