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By Margaret Lindquist | October 2021
Alston Construction, a general contracting, construction management, and design-build services firm, is experiencing a decade-long period of growth, from approximately US$200 million in revenue 10 years ago to more than $2 billion today. When Alston CFO Adam Nickerson joined the company in 2012, one of his early moves was to begin implementing a solution that he’d used at his previous company: Oracle Textura Payment Management Cloud Service.The cloud application helps general contractors, owners, and subcontractors simplify the billing and payments process, mitigate risk, and improve compliance management. Once implemented, Nickerson was able to automate the company’s manual pay application and its verification and approval processes.
Under the leadership of Nickerson, the company moved to a project accountant model, in which one accountant works directly with a construction project manager on specific projects. Previously, Alston used a shared-services model where a group of accountants serviced all projects. Nickerson’s vision was that the project accountant role would become one of true partnership with the project manager. Oracle Textura supports this new model by freeing up the project accountants’ time for more valuable contributions to the success of the projects and, ultimately, the company.
Alston’s success is a hopeful sign in an industry where many professionals are waiting for payment practices to improve. According to a 2020 survey by Oracle Construction and Engineering and Construction News, 40% of readers felt that payment practices weren’t improving and 37% felt that they had gotten worse. Thirty percent of firms were waiting more than 60 days for payment.
Improving this situation comes down to building trust, says Mark Webster, senior vice president and general manager for Oracle Construction and Engineering, of which Oracle Textura is a part. “Subcontractors are the lifeblood of construction projects but paying them in a timely fashion is a problem in the construction industry,” says Webster. “Textura has enabled contractors to create better relationships with their subcontractors. It has reduced friction in the marketplace. It has led to fewer disputes and less litigation.”
US$1 trillion: the value of construction projects managed with Oracle Textura Payment Management since 2006.
The proof of this is visible in the rapid adoption of Textura over the past 14 years. In 2018, Textura reached a milestone of US$500 billion in construction value managed on the platform—a number that took 12 years to achieve. Only four years later, in 2021, that number has doubled—representing subcontractor payments on more than 78,000 construction projects valuing US$1 trillion. Webster is grateful to the loyal customers who have made this level of growth possible, and for allowing his team to grow along with them. “I want to thank all of the customers that have trusted us to handle this complex problem for them,” says Webster.
Mike Antis has seen this trust firsthand—or rather, first hug. A few years ago, Antis, global vice president for Oracle Textura, went to the office of a contractor who had implemented Textura about six months earlier. “When I walked in with our rep, the accounting team lined up at the door to hug each of us for changing the way that they operate,” he says. “They said to us, ‘For the first time in as long as we can remember, we can actually take vacations.’” That’s because they weren’t tethered to their desk making sure that cash flow was still moving as it needed to, both into their own business and out to their subcontractors.
The Oracle Industries Innovation Lab in Chicago showcases the on-the-jobsite technologies that are transforming construction jobsites, such as the Internet of Things, drones, autonomous equipment, and augmented reality.
But the engineering and construction industry’s back-office revolution is having just as much of an impact on bringing the industry into the 21st century. “A lot of construction is generational, it’s family businesses,” says Antis. “Most organizations in the industry looked at things and said, ‘Well, this is just how we’ve always done it.’” At the same time, though, they’re open to new technologies—many construction executives clearly understand just how manual, paper-laden, and inefficient their processes can be.
“We think it’s part of our responsibility to help our customers build that relationship with their subcontractors. That trust extends from Oracle to our customers and out through their network of suppliers.”
Dozens, if not hundreds, of subcontractors can be involved in a single project, so companies need transparency and visibility into their finances. “The financial health of the supply chain depends heavily on payments and cash flow for the suppliers and subcontractors who rely on these funds to pay employees, pay other expenses—and simply put, to remain in business,” says Antis.
This increase in visibility around finance tasks has freed construction industry leaders to focus on more important things, such as safety on the jobsite or delivering quality products. “By eliminating tedious manual activities, many customers say they’ve been able to grow substantially without bringing on new finance people,” says Webster.
For example, Alston has managed a 10X increase in revenue without a commensurate increase in the staff responsible for managing accounts payable. “We would need three project accountants for every one now if we went back to the old manual system,” says Nickerson. With Textura, Nickerson’s project accountants can see what’s been approved across all their projects, what the deadlines are, and manage their job cost report that shows where projects are at any time of the month, so that it’s easy to identify problems before they grow.
For Webster, the degree of trust companies have in the Textura product is illustrated by the fact that once they start using the product, very few ever stop. “We think it’s part of our responsibility to help our customers build that relationship with their subcontractors,” he says. “That trust extends from Oracle to our customers and out through their network of suppliers.”
Illustration: Wes Rowell