June 23, 2021

Construction industry supply chains reshaped by technology

Paper and spreadsheets meets digital solutions

The construction sector relies heavily on having coherent workflows and paperwork. This ensures the smooth completion of project assessments and facilitates timely assessment and subsequent claim approvals on any given project.

However, collaboration and communication along the supply chain are long-term pain points for the industry. Companies today are facing job fragmentation, inefficient and inconsistent contract approaches, and disputes over claims. We put this down to the fact that many organisations are still using pen and paper or spreadsheet-based solutions as part of their administration processes.

As the data being collected at job sites increases and owners demand real-time insights, this approach is increasingly insufficient. In order to accurately and efficiently log documents, payments, schedules and tasks, project and accounting teams must look to invest in resource planning and payment solutions that automate workflows.

According to a recent survey of the construction sector across ANZ by Frost & Sullivan, 33% of companies have deployed digital payment tools, but adoption is dispersed and ad hoc. In addition, 30% are still working primarily with spreadsheets. The survey also found the top issues the construction industry is facing when it comes to payment data management systems and current processes were high payments processing costs (60%) and delays in getting or sending claims (60%).

Early movers adopt digital solutions to benefit whole supply chain

Pockets of early movers are adopting technology solutions in order to resolve ongoing issues. The introduction of cloud-based tools is helping construction industry players to automate complex, cumbersome and manual tasks, and more effectively handle payments and progress claims from a single interface. For instance, project and accounts teams are able to streamline management of payment claims with the ability to approve claims while onsite.

As a leader in the development of cloud-based software designed to create workflow efficiencies for head contractors and subcontractors, we believe the goal for the sector needs to be not just digital adoption but consistency of platforms and processes against the supply chain. Our experience shows that progress claims software reduces time, costs and management complexities by making collaboration easier. Being able to capture everything from retention and variations to managing compliance documentation in a single view for CEOs to contract administrators and subcontractors is critical.

In fact, we’ve seen a reduction in processing progress claims by up to 50%, enabling users to spend more time on higher value opportunities and less time reconciling spreadsheets or chasing down paperwork. Furthermore, construction companies that have been early movers in this space enjoy industry credibility for paying vendors on time and, as such, are able to attract top-notch subcontractors to bid for their projects.

Progress claims management improved with digital solutions

We have direct experience in witnessing how technology solutions can empower construction companies when it comes to automating administrative tasks and improving supply chain management.

For instance, Parkview Constructions, an Australian construction firm that manages projects across the property market value chain, implemented the Payapps cloud collaboration tool to assess and approve progress claims submitted by their subcontractors. This helped to reduce operational cost for the company as stakeholders could assess claims on any device and minimise the risk of receiving late claims from their supply chain. The adoption of Payapps has also increased operational reliability due to the consistency, transparency, flexibility and user-friendly features of the platform.

Kapitol Group also implemented Payapps’ payment solutions to improve operational efficiency across the company. This move was driven by the recognition that the company needed systems that supported people to focus on higher value tasks rather than paperwork. Kapitol Group was looking to improve efficiency, quality, sustainability, and culture in order to meet the changing demands on the industry.

Tom Littlehales, Kapitol Group Commercial Manager, says, “There’s a huge shift in the sort of work the industry will be doing over the next five to 10 years. And paramount is our ability to be adaptable by taking advantage of digital solutions to improve the way that we do that work and demonstrate our point of difference to the industry.”

Whether the goal is to improve reputation, ensure better compliance, free up employees to focus on high value tasks, or be a leader in a changing industry, one thing is clear: digital solutions are reshaping how the construction industry manages supply chains and collaborates with key stakeholders at every level and companies must adapt or fall behind the wave.