The European arm of US construction payment management corporation Textura is starting to raise its profile in the UK, with early payment of subcontractors part of its service offering.
As I reported just over a year ago (Colin Smith leads Textura European push), Textura Europe is headed by the one-time founder and CEO of BIW Technologies and Conject, Colin Smith, and is based in Slough, Berkshire. Another European office has been established in Munich, Germany, managed by Andrea Trapp (also formerly at Conject).
During the past year, Textura Europe has been developing its core proposition, building a sales pipeline and refining the technology so that it will support UK and other European states’ payment processes. Colin is supported by another construction software veteran Paul Bamforth, right, formerly of Asta (developer of 27Asta PowerProject) and ProjectPlace, who is UK managing director (news release), plus UK-based product development, support and sales specialists.
In the US Textura a decade ago identified that the construction industry remained reliant on paper-based manual processes and decided to create an online invoicing and payment management platform, provided on a Software-as-a-Service (SaaS) basis: construction payment management (CPM). This remains Textura’s core product, and when I met Colin recently he told me the US business now estimates approximately US$2.5 billion in invoices are managed on monthly, with peak daily volumes of payments initiated by the CPM solution in excess of $100 million.
Supply chain finance
Alongside CPM, Textura now also provides a supply chain finance facility, announced in December 2014 (news release) and launched in early 2015, in partnership with Greensill Capital and Morgan Stanley. This ‘Early Payment Program‘ (EPP) enables a general (main) contractor to provide accelerated payment to subcontractors. Textura Corporation executive chairman Patrick Allin explained:
“EPP will address a longstanding structural challenge of the industry – namely, that work in process on a construction project is funded by the subcontractors. Subcontractors perform the work but are typically paid for that work 30 to 60 to 90 days later. This puts pressure on a subcontractor’s balance sheet and acts to limit a subcontractor’s ability to grow and invest and in some cases leads to business failure. This is as much of an issue for the general contractors that depend on their subcontractors’ performance as for the subcontractors themselves. Our technology and Greensill’s expertise and funding will finally enable general contractors to address this structural challenge using Textura CPM and the EPP functionality. Subcontractors have the potential to be paid up to 30 to 60 days earlier under this program.”
EPP is now being rolled-out alongside Textura-CPM in the UK. Textura’s European operation also provides a green building management tool, Greengrade, to facilitate LEED certification (news release) – which sounds similar to SouthFacing’s TrackerPlus (post) – and a field management tool, Latista (post).
As well as the usual website and social media presences (a contractor payment blog, Twitter, etc), profile-raising activities to date have included a Construction News-hosted webinar on supply chain finance (“Efficient Access to Cash for the Entire Supply Chain, broadcast on 15 July), and dissemination of a survey. And the UK Textura team have been aggressively marketing the company’s services to industry associations and main contractors. Colin said there had been “some pushback” on EPP from businesses whose experience of supply chain finance has been tainted by exposure to schemes operated by some UK-based contractors – “we need to educate the market about our better alternative,” Colin said.
An early success has been achieved. The Building & Engineering Services Association (B&ES) and its umbrella body, the Specialist Engineering Contractors’ Group (SEC Group), have formally announced their support of Textura Europe CPM and EPP as tools for improving payment practices within the construction industry. In total, the SEC Group represents some 60,000 construction industry firms employing over 300,000 people, and accounts for the largest single component (by value) of construction output.
Rob Driscoll, head of B&ES’s Commercial and legal team (and a contributor to the Textura webinar), said:
“To date, the impact and measurement of Government initiatives such as project bank accounts, payment charters, prompt payment codes and revised late measurement legislation are all hampered by lack of visibility. An online payment management system – such as Textura-CPM – would resolve the problem of how to implement and manage payment processes, making monitoring payment performance transparent and easily accessible.”
B&ES and SEC Group are currently lobbying the Government to adopt digitisation across its procurement and payment process within its property portfolio (interestingly, Lex Greensill, CEO of Greensill Capital, is also an advisor to UK Prime Minister David Cameron on supply chain finance). As I tweeted during the Textura webinar, thinking about building information management, BIM: Why make construction design digital and open, but leave payment processes analogue and closed?
Collobaration integration opportunity?
Textura certainly thinks there is an opportunity to improve collaboration by streamlining financial processes and making them more transparent; it has interfaces to ERP systems – Colin mentioned Oracle, COINS, Viewpoint and CMiC – and the continued adoption of BIM, including so-called ‘5D BIM’ where cost information is incorporated into the process, could also help Textura’s European cause.
Also, in the construction collaboration sector, there appears to be growing appetite to incorporate financial reporting functionality alongside design and construction information management. Viewpoint is moving in this direction (post), for example, as are Bentley Systems and Aconex with their acquisitions of, respectively, EADOC (post) and Worksite (post), while Conject’s financial control module is already very mature. Textura-CPM seems to be a perfect extension to such platforms; integration would enable authorised users not only to access and manage design and construction information but also to view, manage and report on related payment transactions.