Ex-COINS, BIW and Conject executive, Colin Smiths takes the helm as Textura looks to conquer the construction payment management market in Europe.
Colin Smith, founder of BIW Technologies in 2000, CEO of that business through to its sale to Munich-based Conject in 2010, and then CEO of the Conject Group until December 2013, has a new role. He is now President, Textura Europe (a title that he says has more to do with US corporate job title naming conventions than any delusions of grandeur) of the Illinois, US-based, and New York Stock Exchange-listed, Textura Corporation.
Textura is little-known in Europe (so one of Colin’s key tasks will be to build brand awareness) but has established itself in the USA as a leading provider of construction management software, particularly in the area of financial transactions. It was founded in 2004 by three Price Waterhouse partners who 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.
Since this product’s launch, the company has added prequalification management, invitation to bid (in UK parlance: e-tendering), process workflow (submittal, RFI, ) exchange, take-off and estimating software, and – most recently (November 2013) – a BIM-enabled mobile and cloud solution for documents, commissioning, quality, punch list, and safety management applications, through the acquisition of Latista.
In the meantime, earlier in 2013, Textura took advantage of the improving construction economy and filed for an initial public offering (IPO), underwritten by Credit Suisse and Chicago-based William Blair & Co, and on its June debut the five million shares initially priced at $15 jumped 40%. In October the shares peaked at over $45, but in December its shares slumped after a stock commentator, Citron Research, suggested the company had misled the US Securities and Exchange Commission – something Textura strongly disputed (note: US share prices are often dogged by “short-sellers” who profit by betting on declining prices). Last week as the markets closed for the 4 July holiday weekend, the shares were trading at $24.24 – still comfortably ahead of its first day close price, and valuing the company in excess of $600m.
Textura expands internationally
Treading the same route taken by Viewpoint Construction Software when it began marketing its ERP software in Australia, Textura launched an Australasian business based in Melbourne in 2012 in partnership with Minter Ellison, an Asia Pacific law firm, providing the CPM solution to Australia and New Zealand.
Having successfully localised the CPM offering for the Australasian construction market, which has inherited many of its contractual approaches and processes from the UK, Textura CEO and chairman Patrick Allin believes the time is now right to launch a European business:
“We have been meeting with prospective clients in the UK and European markets for the last 12 months and concluded that our solutions are as applicable in these markets as in North American and Australia. We understand the need for an exceptional local team that understands the particular processes and dynamics of these markets, and we are delighted to add Colin Smith to lead operations in the UK and Europe. His proven track record of technology leadership and business development from prior roles at Conject, BIW, and COINS means our European operations will be up and running sooner rather than later.”
In the Textura news release, Colin Smith says:
“These markets urgently require new solutions. There is a pressing need for increased visibility and control of payment applications, claims and cash-flow. European industry participants need practical tools to manage their exposure and their response to initiatives like the Fair Payments Charter and project bank accounts. I believe Textura-CPM is perfectly positioned to become the de facto standard for payment application management in Europe, as it has in North America – bringing immediate and tangible benefits to our clients. CPM functionality has already been adapted to this market based on our prior experience with developers, … contractors and construction managers in the UK and Europe.”
Colin has considerable previous experience with construction finance applications. He spent some 14 years working at Team Systems (later acquired by Misys), Mentor (now part of RedSky IT), and then CSB (now COINS), providing ERP solutions to UK contractors, building some strong industry connections in a market renowned, even perhaps notorious, for its inertia and low investment in R&D. An astute watcher of industry trends, he identified the emergence of SaaS during the late 1990s, and, in partnership with two former Misys executives, he left COINS and co-founded BIW Technologies in 2000.
He told me he sees an opportunity for Textura to offer a solution to complement UK ERP offerings, streamlining a notorious bottleneck in construction transaction processes. While there are applications which construction businesses can use to manage estimating and project costing efficiently, he says they are less good at managing commercial dealings between main contractors and their subcontractors.
Having undertaken elements of a work package, a subcontractor has to apply to his customer, the main contractor, for payment for the proportion of the package undertaken. The main contractor will employ a surveyor to measure the work; after a process of negotiation, and if the application is agreed, then a payment will be certified. This multi-stage process – spanning several individuals spread across separate organisations – suffers from low transparency, as much of the process is currently paper- or email-based using data from internal back office systems. Often the subcontractor won’t know the progress of his application. Similarly, the main contractor and the surveyor will be managing multiple applications for payment and won’t have visibility of liabilities across all subcontractors. Textura CPM fills the gap between the different systems.
Colin will be rekindling relationships with COINS and other ERP vendors (it helps that Conject developed a project cost control module subsequently adopted by LendLease and Mace, among others, and which also interfaced with in-house financial management systems in those businesses), and as well as building the Textura brand he will need to build awareness of a new breed of construction software. He clearly has form on this – BIW helped popularise ‘project extranets’ for construction project collaboration during the early 2000s.
The timing is good. SaaS is now widely accepted for many enterprise functions (even though some in construction still prefer to manage their financial systems in-house and on-premise), and the direction of the UK construction industry is being strongly driven by a government construction strategy that is seeking to reduce costs and waste, speed up project delivery and improve efficiency. And having seen how poor payment practices exacerbated the impacts of the recent recession, there is also a desire to create fairer processes which don’t leave subcontractors out of pocket when their customers, main contractors, delay payments – almost half of all UK government projects now use project bank accounts (reported Construction Enquirer last week).
[Disclosure: I first met Colin Smith in 1999, and subsequently worked as a PR consultant for BIW Technologies before joining the company in 2000 as head of corporate communications, remaining there until 2009. I have since undertaken consultancy work for Conject.]