COLLABORATIVE SPEND MANAGEMENT SOLUTIONS FOR AEC - Vortal
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COLLABORATIVE SPEND
MANAGEMENT SOLUTIONS FOR AEC.
ARCHITECTURE, ENGINEERING AND CONSTRUCTION
AEC FACES SEVERAL CHALLENGES.... IT IS A PROJECT PROCUREMENT INDUSTRY
WITH A REGULAR NEED TO DISCOVER NEW, QUALIFIED AND COMPETITIVE
SUPPLIERS, AND A DECENTRALIZED PROCUREMENT CULTURE. DIGITALIZATION
OF THE CONSTRUCTION INDUSTRY IS NOT ANYMORE AN ‘IF’ OR ‘WHEN’.
THE CHANGES ARE HAPPENING NOW!
VORTAL: THE #1ST GARTNER MAGIC QUADRANT ESOURCING
PROVIDER SPECIALIZED IN AEC INDUSTRY
COLLABORATIVE SPEND MANAGEMENT
SOLUTIONS FOR AEC ARCHITECTURE, ENGINEERING
AND CONSTRUCTION
Population growth statistics paint a rosy future for the construction industry. With the global population
predicted to hit 9 billion by 2050 and two out of every three people living in cities by 2050 the demand for
construction has never been greater. Worldwide, construction is already one of the largest industry sectors,
accounting for more than 11 percent of global GDP and expected to grow to 13.2 percent by 2020, according
to a 2014 PwC report.
But focusing on this strong demand obscures a more precarious reality. Underlying challenges in productivity,
profitability, performance, labor and sustainability could derail the industry’s growth.
Today, the construction industry is at a crossroads. Companies that address these challenges head-on and
re-imagine their business processes will be poised for significant growth. Businesses that fail to take the
challenges seriously, however, will face an uphill battle for viability.
AEC is by definition a scattered industry, each project will probably be set in a different location. Supply
chain dynamics are critical. Getting the right suppliers for each project, qualifying them and assessing risk
is of the essence. Innovation driven from the Supply Chain is highly valuable impacting competitiveness
and the modernization of production processes in order to achieve higher productivity and reducing the
environmental footprint. Supplier scouting is a very important and recurrent activity.
TAKE A LOOK ON THE NEXT PAGES TO KNOW HOW
WE CAN HELP YOUR COMPANY TO THRIVE.
8
Purchasing and Supply Management Solutions for AEC 01
TOP 4 CHALLENGES AEC IS FACING
#3. SKILLED LABOR SHORTAGES AND SUPPLY
#1. PRODUCTIVITY AND PROFITABILITY
CHAIN DYNAMICS
Currently, the barriers to entry in construction are The construction industry is bracing for a dramatic
low, creating a saturated marketplace with heavy reduction in workforce. Besides the difference between
competition. This competition is shrinking profit generations (baby boomers and millennials) with
margins and constraining essential reinvestment in new different work ethics, attitude and outlook the recession
technology and better business practices. Stagnant drove many skilled craftsmen to leave the industry
construction labor productivity is compounding this and never return. By 2020, millennials are expected to
problem. Productivity within the construction industry represent half of the global workforce– many with little
has remained stagnant over the last 50 years if to no experience or interest in the construction industry.
compared with other industries. On the other hand the combination of increasing project
complexity and decreasing experience is a risk multiplier,
A high percentage of direct labor time on mega- increasing the risk of deliverable delays, quality
construction projects is spent waiting for materials and construction problems, and employee safety concerns.
equipment, traveling to the area, taking early breaks, and This affects the General Contracts and the whole Supply
planning how to do the work. This lack of productivity is Chain and by being so the Supply Chain demands
reflected in the bottom line, where typical margins for deeper analysis and care than ever before. Finding new
construction companies range between 2 and 8 percent. Suppliers, qualifying them and assessing risk is a critical
Consequently, construction companies find themselves activity in AEC.
trapped between shrinking profit margins and stagnant
productivity, unable to generate the profit necessary to
invest in critical technology.
#2. PROJECT PERFORMANCE #4. SUSTAINABILITY CONCERNS AND INNOVATION
The opportunities in construction are growing, but so is The construction industry is the top global consumer of
project complexity. With companies already operating raw materials. Carbon emissions, climate change and
under razor-thin profit margins, a single production water management are two environmental issues that
surprise can wipe out profits for the whole company. pose a growing challenge to the construction industry.
Design complexity compounds this problem. As Smart planning, sustainable design, new materials that
designs become larger and require greater efficiency, are more environmental friendly are of the essence to
construction companies struggle to keep up. reduce energy consumption and pollution, but require
a new approach. Again, suppliers have an active role
The lack of on-time and on-budget projects is telling. innovating in materials and production processes.
According to the 2015 KPMG Global Construction
Survey more than half of all construction companies
experienced one or more underperforming projects in
the previous year.
HOW DOES TECHNOLOGY AND PROCESS INNOVATION ADDRESS
THESE CHALLENGES?
Purchasing and Supply Management Solutions for AEC 02
EMBRACING DISRUPTION AND PREPARING FOR THE DIGITAL FUTURE The construction industry is at an inflection point, analogous to the move from landline telephony to cellular technology. Digital technologies are disrupting the industry, providing new opportunities to address the challenges of poor profitability/productivity, project performance, skilled labor shortages, and sustainability concerns. Digitization of the Construction Industry is not anymore an 'if' or 'when'. The changes are happening now. The industrialization of construction and the application of proven manufacturing technology, online collaboration with stakeholders and best practices will help companies drive reliable outcomes and improve margins. Digitization will increase productivity, reduce waste, and mitigate the adverse impact of on-site surprises. Digitization will improve most of the processes and push cooperation between partners, suppliers and subcontractors to a new level. The end result: a more productive and profitable industry that builds more sustainable assets. Construction companies must take steps now to join the digital future and stay ahead of the competition or risk being left behind. Purchasing and Supply Management Solutions for AEC 03
WHERE TO START? PROCUREMENT: A FUNCTION RIPE FOR EVOLUTION Savings in Procurement directly impact results. AEC companies face new demands and heightened expectations to improve shareholders returns and improve operations, all in an environment where project complexity is increasing due to the challenges presented. These new demands are in addition to the constant pressure to deliver projects on time and on budget. One way AEC firms can get their operations in shape is to optimize their supply chain with the objectives of optimizing costs and streamlining. Purchasing and Supply Management Solutions for AEC 04
WHY IS PROCUREMENT SO
CHALLENGING IN AEC?
T '
1) 2 TEAMS INTERACTING WITH SUPPLIERS IN 2) CENTRALIZED AND DECENTRALIZED PROCUREMENT
2 DIFFERENT STAGES
Due to its geographic dispersion, the construction
The commercial team needs prices from the market to industry is made of several construction sites, combining
estimate costs and deliver proposals to win construction categories managed through centralized procurement
projects. After the award, it is required to transfer the with categories managed through decentralized
prices and assumptions to be used in the production procurement. The need to have a single large network
stage, where new Request for Quotes take place , this of qualified suppliers and subcontractors becomes even
time run by the central Procurement Department or by more important.
each Construction site team, in order to renegotiate the
prices and manage commercial margins. The estimations
teams need to have access to all the potential suppliers
of the company to produce the most competitive
proposals. Suppliers tend to be more motivated to bid for
the production stage rather the estimations stage.
L
3) REQUIRE LARGER NUMBERS OF SMALLER PURCHASES,
MORE FREQUENTLY
While the amounts of each purchase may be lower, the
number of transactions can be higher and more frequent.
If handled manually, this can require a significant amount
of resources.
0
4) BE DIFFICULT TO COMPARE & EVALUATE
Due to the extension and complexity of services to
contract, it is frequent to have thousands of items to
compare, with alternatives and variant proposals. It is
frequent to split parts of the same tender by several
suppliers or subcontractors.
Purchasing and Supply Management Solutions for AEC 05
Q â
5) REQUIRE SIGNIFICANTLY MORE AND 6) HAVE A SMALLER AVERAGE SPEND
ARIED SUPPLIERS
Because purchases range over a wide variety of
Building strong relationships and managing a larger product categories and suppliers, the purchase
number of suppliers is inherently challenging. It’s more volume is often not large. This lower average spend
difficult to measure supplier performance for 100 per supplier means procurement lacks leverage in
suppliers versus 10. contract negotiations to drive lower pricing and better
terms.
p
7) SEVERAL ECOSYSTEMS OF PREFERRED SUPPLIERS
Each construction site is typically managed by a
team with preferred suppliers, those suppliers who
they have a more established relationship with.
It is common to have preferred suppliers in one
construction site that are not invited to bid in other
construction sites of the same company.
VORTAL Central Purchasing Bodies
Purchasing and Supply Management Solutions for AEC 06
DEMAND AGGREGATION
01 #1 PROFITABILITY
Gathering the needs from several projects in order to
leverage negotiation and attrack suppliers. Category
Management approach is a must. Not applicable to all
categories of spend.
eSOURCING PLAN 01
02 #2 PERFORMANCE
From the Commercial phase to Production plan and
control all spend per project and category. Have an
high level view of whats being bought and what is still
is to be negotiated. Zoom in if you want to. Control
02
your Company’s performance.
SRM & SUPPLIER SCOUTING 03
03 #3 SUPPLY CHAIN #4 INNOVATION
Having a competitive supply chain involves discovering the right
suppliers that can deliver and provide innovations. When each
new project starts, a new supply chain for that PROJECT is born -
in new territories, this can prove critical. We provide you with the 04
tools to manage your existing suppliers, as well as identify and
introduce new ones.
eSOURCING
04 #1 PROFITABILITY #3 SUPPLY CHAIN #4 INNOVATION
Ensure you get the best proposals from your
incumbent suppliers or new ones. Open the
possibilities for Suppliers to propose new approaches
to production or materials. Exposing suppliers to a
competitive environment delivers savings of up to
20%.
Purchasing and Supply Management Solutions for AEC 07
eAuctions are tools for enhancing negotiations. When
used for tendering appropriate requirements and
categories, they deliver significant savings and other
benefits
From eSourcing events you can establish Framework
agreements. This is particularly useful for tactical
sourcing. Provides each project access to negotiated
items of recurrent consumption with ease and the
best conditions.
DATA INTEGRATION
Integration with ERP or other systems is essential to
progress with digital transformation. Avoid repetitive
data entry activities and ensure all the necessary
data is received from your ERP and sent back to the
system.
Purchasing and Supply Management Solutions for AEC 08VORTAL SUPPLIER SCOUTING SERVICES
Finding Suppliers that meet the needs of our clients.
Companies often struggle to find suppliers that meet specific criteria. Whether you are searching for a second supplier,
or a new supplier to support a new market entrance or a new product innovation, VORTAL can assist your supplier
scouting efforts and effectively identify new vendors to support your business expansion. Before going in to a new
geography your company can acess a Database of Pre-Qualified Suppliers to establish the most assertive commercial
approach.
Vortal Suppliers Scouting provide a link and scouting services for buyers to engage with suppliers. It’s a service that
allows a Buyer to identify new partner across the globe, get structured data about the profile, competencies and
qualifications combined with a personalized support to assure a responsive and dynamic network able to address the
buyers needs on time.
The service is highly scalable, combining online and semantic search based on a tailor made ontology, and able to
address both local, international and global needs.
VORTAL SUPPLIERS SCOUTING FRAMEWORK
DISCOVERY DATA ENRICHMENT PROFILING NURTURING
Online Search Financial data Categorization Push for proposals
Landing pages Risk Qualifications Online Support
Online marketing Geographies Certifications Webinars
Associations Databases providers References Helpdesk
Chambers of Commerce
Ontological Semantic Mapping with Qualification &
Customer Success
Matching external data sources readiness to use
300.000 SUPPLIERS IN 4 COUNTRIES IN ALL CONTINENTS
250.000
32.000
1.500
2.700
5.000
300
Purchasing and Supply Management Solutions for AEC 09¢ S
FOR BUYERS FOR SUPPLIERS AND SUBCONTRACTORS
8 Cost savings - Achieve savings up to 20% due 8 More sales - Access to more business
to more competition – wide supplier network, opportunities, automatic matching, great
suppliers scouting, usability and ease of volume of leads and less dispersion of
access business sources
8 More Efficiency - Manage efficiently project 8 Avoid mistakes and exclusions - Better
sourcing either centralized, decentralized or visibility throughout the process – access
mixed, demand aggregation, sourcing events to sourcing events, information, timelines,
and contracts. From scratch and from libraries statuses and alerts
of templates
8 Lower costs with lead generation - Cost
effective lead generation when compared to
8 Time savings - Save up to 60% of time spent traditional processes
analyzing and comparing proposals and going
through unstructured workflows 8 Better insights about competition and
the market - Structured benchmarking
around categories of spending, clients and
8
Better analysis and decision - Make better competitors via a market intelligence suite
decisions bases on more information available
from contract consumption, suppliers 8 Better customer service - Strengthen
evaluation and performance in each category relationship with the current customers
and project
8 Better auditability - Traceability and visibility
over spending on a wider perspective, contract
consumption and compliance
8 Better Risk Management - Through
partnership with D&B and Bureau van Dijk we
provide access to diverse financial information
to help the decision making process and
supply chain risk management
Purchasing and Supply Management Solutions for AEC 10PROJECTS AND COMPANIES IN
THE AEC SECTOR USING VORTAL
TO IMPROVE MARGINS
We started to engage the AEC sector in 2001,
with our suite of services evolving with each
project and client. The following are examples.
Purchasing and Supply Management Solutions for AEC 1110 MILLION PASSENGERS SERVED ANNUALY
MAIN GOAL SOME NUMBERS
1) Provide a single Collaborative Procurement Tool
for the Consortium 508 RFPs
2) Support Requisition to Contract (no ERP was
used)
3) Single Channel to reach Suppliers (SRM)
6.500 Proposals
4) Savings due to competition between suppliers
5) Discovery of new Suppliers
1097 Suppliers Bidding
6) Transparency and Access to all Stakeholders
(Board of each Company, Central Purchasing Units,
289 Awarded Suppliers
Site Managers)
7% savings comparing to Budget
“From the beginng the Airport had an innovative platform of collaboration among contractors,
suppliers and subcontractors. This project was worthy of note throughout due to its exceptional
use of the platform, and even became a veritable casestudy, providing regular RFX into
VORTALeconstroi along with information, training and analysis of the several different indicators
ROGÉRIO FEIO of use, leading to a new dynamic for a market that eas totally open and competitive within the
Project Director organisations.”
FROM THE BOOK “A NEW AIRPORT FOR THE NORTH WEST OF THE IBERIAN PENINSULA”
Purchasing and Supply Management Solutions for AEC 12NEW HYDROELECTRIC PLANT VENDA NOVA III
320 MILLION EUROS (2012-2015)
1441 GWH ANNUAL PRODUCTION
MAIN GOAL IMPLEMENTATION
1) Provide a single Collaborative Tool for the
Consortium One Single access (account) in VORTAL
2) Combine Centralized and Descentralized was set with five Departments, one for each
Procurement company of the Consortium and one common
3) Single Channel to reach Suppliers (SRM) to all, once they decided to split purchasing
4) Savings due to competition between categories between the four companies to
suppliers be done by their Central Purchasing units and
5) Transparency and Access to all Stakeholders smaller purchases to be done on site using the
(Board of each Company, common department. Centralized Purchasing
Central Purchasing Units, Site Managers) Units organized the RFP, gathered the proposals
online and presented the Comparative Analysis
to the Consortium that had the final decision.
At the end they used the same support, the
same suppliers network nevertheless following
their own workflows combining centralized and
decentralized procurement.
RUI MARTINS “The adoption of the technology was almost immediate once it provided the environment for
MSF Porto competing companies to work together involving their Central Purchasing Units.”
Purchasing and Supply Management Solutions for AEC 13NEW EDP LISBON HEADQUARTERS
54 MILLION EUROS (2014 – 2016)
46 THOUSAND SQUARE METERS
MAIN GOAL IMPLEMENTATION
1) Suppliers Discovery for innovative solutions
2) Integration between Commercial and After the invitation to bid from EDP, the project
Production teams had to be properly analysed and planned. RFI's
3) Demanding dealines required agile were then performed in VORTAL by the Mota-
communications with the Suppliers Network Engil commercial team. Upon award the Central
4) Integration with ERP (from Requisition to Purchasing Unit and Production Manager were
Order) able to assess all RFI documentation as a base
5) Transparency and Access to all Stakeholders for the RFP phase. This shortened the time
needed for supplier/solution evaluation and
time-to-execution. Being a consolidated tool
in Mota-Engil this serves only as an example.
Mota-Engil Group performs over 20.000 RFX
events each year in VORTAL.
“Integration of VORTAL with SAP ERP ensures a perfect alignment of processes between
production and purchasing. ”
PEREIRA DA SILVA
MOTA-ENGIL CPO
Purchasing and Supply Management Solutions for AEC 14q ∞
INTEROPERABLE NETWORK OF BUYERS AND SUPPLIERS INNOVATIVE TECHNOLOGY
VORTAL is an eSourcing Suite Provider and an
eCommerce Suite Provider. VORTALnext> The platform represents the next level
of user interface with a social network-like work area.
VORTAL supports its operation in a collaborative This introduces proven best practices around the social
and interoperable network of Buyers and Suppliers, networks, like the procedure timeline and the string
increasing benefits for buyers (more competition) and of related communications under each procurement
suppliers (more business opportunities). process.
This approach also represents a significant reduction in VORTAL’s know how about Procurement has also been
the effort and time needed to start generating tangible determinant in supporting the technological innovation
benefits by adopting the platform. Every time a new of the Platform. That’s why VORTAL is able to provide
buyer enters the eMarketplace, it will start getting libraries of sophisticated tender templates according to
an immediate advantage, of a trained and motivated categories of needs, libraries of evaluation models using
network of suppliers. multi-attribute and multi-level criteria and state-of-
the-art features to support collaborative evaluation of
proposals, dynamic negotiation or contract awards.
N Q
AEC PROCUREMENT KNOWLEDGE SUPPLY CARE & SUPPLIERS SCOUTING
Vortal has been delivering Procurement Platforms
for mult-national AEC companies since 2001. We The success of your eSourcing or P2P project depends
understand and accommodate the different approaches on how both buyers and suppliers are supported
to purchasing, whether centralized, descentralized or during the transformation process. Vortal has proven
mixed. With deep industry knowledge, VORTAL is a
methodology for introducing new suppliers to the
trusted technology vendor in the global AEC space.
network, assisting with user adoption and ensuring
VORTAL’s deep procurement domain expertise maximum advantage from them is achieved.
underpins the ongoing technological innovation of the
Platform. This enables VORTAL to provide libraries of Multi-language helpdesk support.
sophisticated tender templates according to categories
of needs and libraries of evaluation models using multi-
attribute and multi-level criteria. Together with other
state-of-the-art features, VORTAL supports collaborative
evaluation of proposals, dynamic negotiation and
contract awards.
~
SUPPORT TO BUYERS AND
SUPPLIERS
Purchasing and Supply Management Solutions for AEC 15And it’s all certified
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