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Construction, today, similarly to the Global economy comes to a HALT!
From Oil & Gas, to Buildings and Infrastructure, capital projects in all sectors within Engineering & Construction (E&C) are suffering major economic disruption.
With an emphasis on the regions we operate, mainly SE Europe and MENA, but with global applicability, we put together 9-Tips, beyond the obvious, that can mitigate the risk and reinforce business sustainability with the utilization of construction-expert business applications.
1. Increase your bidding opportunities and your presence
Times like these, Stay Calm and Accentuate Business Confidence.
The best way to do that is to market your company by taking part in as many Bids as are available. After all, bidding is power, and it showcases your efficiency and accuracy to the ‘larger’ players.
Along with your operational excellence in the local market conditions and specific types of works, these ingredients can generate Win-Win synergies. As a result, they can open new markets and increase your business opportunities.
For example, a good Bidding software would help you accelerate your Bidding process and utilize your key staff remotely. It would also help you estimate better and win more projects.
2. Control Procurement and Purchasing. Materials handling
Procurement and Purchasing is one of the most important business areas where Contractors lose money.
Consider the anarchy of who is requesting, for what and when, and the timing of placing and executing orders. In addition, there are limited options for quotations and a lack of objective evaluation, transparency and speed of execution. Yet these are only a small part of the problem.
Instead, use a software that consolidates similar materials from different BoQ codes and groups subcontractor packages. It should also generate/send electronic Requests For Quotations (e-RFQs) and align BoQ codes to certified Subcontractors and/or Suppliers. Such a software can save money and time.
Moreover, based on automatic evaluation suggestions of submitted quotations, the software will enforce transparency. It will also lay the foundations for Cost Control in resource consumption, on-site.
3. Restructure your financials
First, banks will need comprehensive evidence and documented proofs in order to extend your credit lines, restructure your financials and get better terms.
In addition, a solid Business Plan can assist you in seeking new financial injections from equity investors and venture Capitals.
Finally, a software can enhance your gross-profit margins, smarten your positions and justify your cash flow with Business Analytics. As a result, it will help your Financials, Accounting, Investment and Treasury teams get the ‘Yes’.
4. Lower your Insurance Costs. Get better Financing terms
Leverage operational excellence and highlight your corporate managing processes with de-facto methodologies and best practices on Project – Construction – Quality and H&S Management. In this way, you create sufficient grounds to lower your insurance costs and get better financing/leasing terms.
Similarly, a software that proves with tangible and personalized reporting that you have Projects Performance under Control is invaluable. You Manage, because you Measure. As a result, it helps you get the required terms and also adds true value to your Company.
5. (Re)Negotiate with Subcontractors and Suppliers
Negotiating and re-negotiating in a productive manner the deliverables and the terms and conditions with your subcontractors and suppliers can benefit your profit and cashflow without ‘hurting’ your partners. However, this is a very ‘thin line’ to walk. It requires you to provide alternatives and be flexible.
For example, a software can reveal opportunities in supplying and storing materials to your subcontractor or providing a subsidized financial credit line to your suppliers. This can save you money and help them do their work. Meanwhile, they still get paid when deductions and retentions apply and when you approve certifications.
In addition, a software with a dedicated Subcontractors management module will streamline certifications-invoices-deductions and retentions and facilitate electronic reconciliation and contract management
6. Sublet/Sell machinery that you don’t utilize. Leaseback
Idle construction equipment, machinery spares and parts require maintenance and storing, which generates a significant financial burden. However, there are always going to be opportunities for selling, renting and leasing back.
In periods when work is low and machinery sits idle, you have to think not as a ‘Buyer’ but as a ‘Seller/Lender’. Large marketplaces are on the web. So, placing your available assets, spares and parts there can generate selling or renting opportunities. Also, knowing your current assets capitalization and applying remedial retrofitting when possible to increase their value can prove invaluable for leaseback.
In practice, a software with construction-machinery management and maintenance business logic can provide all the necessary information in terms of usability, preventive and corrective maintenance and align spares, parts adjusting current asset value.
7. Get rid of materials in stock
Similarly to machinery, materials also generate residual cost due to storing, packaging and warehousing. In fact, redundant materials, some of them with expiration dates, can generate selling opportunities before their disposal.
First, know the excess in materials and their scheduled (or not) utilization on a project. Then integrate with an international marketplace or auctioning platform. As a result, you can generate selling opportunities, create income and reduce storing and logistics.
8. Get advantage of hiring high-caliber professionals, remotely
Until now, companies were using human resources within the geographies they operated, considering that their physical presence day-in and day-out was a standard requirement. Likewise, companies hired experts for different disciplines via HR agents, locally.
The ‘New Normal’ requires a different mindset.
Therefore, use software that can match specialties and roles and collect the HR requirements. It can then publish jobs on the company’s website and facilitate the hiring process end-to-end, based on predetermined HR criteria.
The software will also collect, store and organize all resumes from HR applicants. In turn, it builds a database you can use in due time. Depending on the type of services, professionals can provide the required services, remotely, on-demand, and reduce the company’s operational costs.
9. Get into Public-Private-Partnership (PPP) Projects
Getting into PPP can generate a new sustainable ‘long-tail’ income revenue stream and can transform your business in the long-run.
Nationalization will come in many forms. For instance, Governmental and semi- Governmental Authorities will materialize lucrative PPP tenders to attract private investments and unlock money funding and global trade.
In short, the right qualitative and quantitative checks and balances, along with compliance and regulatory auditing within the framework of your IT operations, will increase your business acumen. They will also give you the added value to become a PPP player.
For more information, please contact DANAOS Projects Software Solutions
www.danaos-projects.com
Tamani Arts Offices – Office# 1923
Business Bay – Dubai, UAE
PO BOX 24051
Email: sales@danaos-projects.com
