Given the high cost to construct a project these days, any little help in lowering the price can certainly help. One of the largest expenses on any project is the cost of construction materials, and despite the fact the cost of material prices has come down a bit in the last month, prices still remain high overall compared to year-ago levels.
Owner organizations are doing all they can in order to effectively manage prices on projects. Efforts are always being put into place that can help manage invoicing, approval, and payment methods associated with construction material prices. Technology has provided some assistance to such efforts, as owners look to create a sustainable and repeatable process they can rely on.
News has come this week of The Smith Center for the Performing Arts, www.thesmithcenter.com, Las Vegas, Nev., using a payment management system to help it establish and maintain its process for managing the direct invoicing, approval, and payment of construction materials. Technology from Textura, www.texturallc.com, Deerfield, Ill., is being used for this process on the construction of a five-acre performing arts center campus, which is scheduled to open in March 2012.
As Richard Johnson, vice president and CFO, The Smith Center, points out, it’s not just about the technology but also the associated processes. By combining the two, he says the organization is able to track direct purchases of materials used during the course of the project. He says once material supplier invoices are received, the can be reviewed online by The Smith Center team. Upon approval of the invoice payment is made directly to the supplier in an electronic format.
The process, from start to finish, is not only faster than the standard method used, but also provides the level of transparency needed for an organization like The Smith Center; not to mention the fact it is creates an auditable process–which is always important for owners.
The technology features a shared database and configurable workflow engine that enables direct collaboration between material suppliers and the owner. Subcontractors, another critical piece of the process, are also able to follow a defined and repeatable process using the technology.
As the cost of construction materials continues to rise, owners and contractors can look to technology to provide some assistance. While software obviously cannot provide a fix to the high cost of materials, what it can do is help create sustainable practices that help manage the process more effectively.