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Owners and Developers Gain Control of Construction Payment Management

How can property owners and developers increase efficiency, visibility, and control in subcontractor payment processes? Three executives representing the public sector, a real estate investment trust, and a nonprofit healthcare organization shared their insights during a panel discussion at the Oracle Industry Connect 2018 conference in New York City.

Although each organization hails from a different industry sector, they’re all optimizing payment processes with the help of Oracle Textura Payment Management Cloud Service. Oracle Textura Payment Management supports a collaborative approach among owners and contractors that streamlines and automates payment activities, such as invoice reviews, lien-waiver collection, and electronic payments.

Bye, bottlenecks!

Emmanuel Hangar, contract administration supervisor at the Denver International Airport, described delays associated with a previous paper-based payment process. Approvals required 12 signatures from people in multiple locations.

Bottlenecks have disappeared now that the process is managed in the cloud. Executives also have greater visibility into the status of payment applications, including where they stand in the approval process.

Hangar also praised the customer service he’s receiving from Oracle, which is “very owner-forward,” he said.

Mitigating risk

Regency Centers, an owner-operator and developer of shopping centers, began using Oracle Textura Payment Management to electronically pay general contractors and their subcontractors in the aftermath of the last economic downturn.

The company had discovered that instead of using a payment to pay its subcontractors, a general contractor had applied the money to a different project.

“We wanted to mitigate our risk,” said Sarah Espinoza, manager contract administration. “We were doing paper pay applications [and] we were getting a lot of liens on the property, which is unusual for us.”

With Textura, the company can manage the payment process electronically, including automating the exchange of lien waivers for electronic payments. A couple of pilot projects proved the effectiveness of the cloud application, which is now being used broadly.

“The system allows us to have much more visibility,” she said. “We know who the subcontractors are. General contractors enter them, and they get paid by us. It’s a lot more transparent. We couldn't ask for more.”

Partners HealthCare

Partners HealthCare relies on Oracle Textura Payment Management to help manage large capital projects and address the challenges of paying contractors in a timely manner.

One recent project consolidated administrative offices (covered by 17 individual leases) into one location that spans a million square feet and represents $350 million in construction expenses.

The Oracle solution enabled the organization to specify 16 levels of approval for the application of payment, with each person responsible for an individual component of the project.

“The architect, the owner's rep, our internal project manager, our project control person signed each silo,” said Stephen Denis, project controls manager, with Partners HealthCare. “We're looking to use it across all our projects in the future.”

View the full panel discussion on-demand to learn more about how each organization overcame key challenges associated with construction payment management.

For more insights from Oracle Industry Connect, read our wrap-up report.

Discover how Oracle Construction and Engineering is helping power project success for asset-intensive industries.

 

 

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