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Thames Tideway Tunnel joint venture deploys gold-star cost control with Access Coins
The three-way equal joint venture of BAM Nuttall, Morgan Sindall and Balfour Beatty (BMB) was awarded £416 million to deliver the west section of the Thames Tideway Tunnel. Also known as the ‘Super Sewer’, it is a 25km tunnel under London’s River Thames.
With three major project partners involved, a common approach was required: common processes, with common controls on a single unified system. Access Coins became the underlying central platform for their cost control on the megaproject.
Business size
Large
Industry
Infastructure
Product
Access Coins
Challenge
- Three distinct main contractors needing a central approach for controlling costs
- Over-reliance on paper-based processes risked huge administration burdens and critical errors
- Disparate data could lead to delayed or incorrect allocation of costs
Approach
- Implemented Access Coins as the central platform for the joint venture
- Helped employees raise purchase requests quickly and confidently, with built-in spending controls
- Paid suppliers faster and with fewer errors through automated invoice verification
Results
- 30% fewer delayed invoice payments through missing paperwork
- Supply chain disputes reduced by 75%
- Incorrectly coded requisitions reduced on average from 17% to around 0.5% of project monthly cost turnover
Results At-A-Glance
- Fewer delayed payments: 30% fewer delayed invoice payments through missing paperwork
- Fewer supply chain disputes: Supply chain disputes such as incorrect rates and quantities on invoices reduced from 30% of invoices to 10%
- Fewer coding errors: Incorrectly coded requisitions and call-off forms reduced on average from 17% to around 0.5% of the project monthly cost turnover
- Real-time expenditure: Real-time expenditure reports visible throughout the project, providing complete transparency from start to finish
- Fewer invoice queries: SEBS ensures costs are captured accurately, reduces the need to manually input the GRN delivery ticket and increases the volume of invoices cleared without going into query
- Less paper: Paper-based processes have now been dramatically reduced
The Thames Tideway Tunnel, also known as the ‘Super Sewer’, is a major £3.8 billion project to construct a 25km tunnel under London’s River Thames to prevent tens of millions of tonnes of pollution entering the river each year.
The 25km tunnel will primarily be used to intercept, store, and ultimately transfer sewage waste away from the River Thames. This will directly reduce the amount of waste and sewage entering the Thames, which historically could add up to tens of millions each year.
Moving From the Stone Age to the Digital Age with Access Coins
From the outset, the key priority of the finance team was to move their financial processes from ‘the stone age to the digital age’. With three major project partners involved in delivering this project, a common approach was required.
This approach would benefit from a common language, common processes, with common controls on a single unified system.
The team aimed to develop a 21st century solution from the very start of the project which was slick, quick, automated and obstacle-free.
The dangers of not deploying a single unified solution or an over-reliance on paper-based processes could not only result in huge administration burdens but also lead to critical errors. Disparate data or a breakdown of communication could lead to inaccurate data inputting, delayed or incorrect allocation of costs, and ultimately a lack of clarity on financial performance.
A New Approach To Process Control Management Systems (PCMS)
Imposing cost controls and increasing transparency is essential for construction businesses to work profitably. To start, the team focused on the vulnerable front end of project costs with the most financial risk: Purchasing.
E-requisition documents were implemented, tailored for specific budget allocations and self-populated with Work Breakdown Structure (WBS) codes. They would also include spending limits which were associated with the user’s role. By centralising these processes into a system which could be accessed by anyone, the relevant person could easily raise a requisition, minimising delays in the purchase process.
Next, the team looked at the development of project process controls, the PCMS Tree for which Access Coins would become the underlying central platform.
''By having a system that prompts, guides and questions the user at the front end of the process we have greatly reduced escalating issues at the back end.''
Mark Burrows, Finance Manager for the Joint Venture
Automating Transaction Systems
Partnering with Access Coins, the teams developed and implemented automated transaction systems, as well as enhancing audit traceability. This helped reduce wasted time as well as reducing the administration burden which comes with manual paper processing.
Following this implementation, the joint venture now operates an automated 3-way match process, in which orders are called off using PCMS tree procedures, and suppliers are requested to submit electronic Goods Received Notes (GRN) and invoices using the Coins system.
Developing New Approaches for Process Control Management
Where a standard three-way match formula is not applicable or practical, a new approach was developed called ‘Supplier Engagement for Bespoke Solutions (SEBS)’. This was designed to handle supplier purchase orders, front-end delivery and costs by leveraging collaboration with both suppliers and operational teams.
Electronic call-off forms submitted from PCMS were confirmed by the supplier and returned directly into Access Coins. This supplier order confirmation created the line item and auto generated the Goods Received Note (GRN), creating an automated two-way match.
This process ensures that costs have been captured accurately as well as reducing the need to manually input the GRN delivery ticket, whilst also increasing the volume of invoices being cleared without going into query.
Working against supplier live batching reports also helped save time and reduced churn, by producing more accurate accruals at cost period end, as well as reducing invoice queries and aged creditors.
Using Advanced Dashboards & Reporting to Unify Teams
A key challenge on this three-way venture project was to get both the suppliers and site-based construction teams on board.
This became bigger than just a process, and more about unifying teams and keeping everyone in the loop. This approach helped to remove obstacles with everyone having an understanding of the wider picture.
Regular site-based finance meetings, as well as mid-month site meetings with section managers and their core teams both increase engagement and are an opportunity to review reports such as ‘outstanding orders’ which are produced by Access Coins in advance of the formal month-end reports.
Simple to view, simple to use budget dashboards are designed to show commercial performance at a glance. They allow for data to be selected in various formats to measure commercial standing by identifying variations, risks and trends.
Furthermore, the Access Coins DSL (Detailed Source Listing) report is built into the background of the dashboard, making it easy to drill down into the details when needed.
Modernising Process Management Control Systems (PCMS)
Before implementing Access Coins, PCMS tree projects of this scale with a similar scope of works could average around £950,000 to £1,200,000 of aged debt. Over 45% of this could be attributed to invoices being delayed or on hold because of missing paper delivery tickets.
However, since the Access Coins implementation aged debt for this project is now averaging at 15%.
This has resulted in 30% fewer delayed invoice payments through missing paperwork.
Additionally, supply chain disputes such as incorrect rates and quantities on invoices have been reduced from 30% to 10%.
The introduction of PCMS processes with Access Coins has also greatly reduced human error – for example, incorrectly coded requisitions and call-off forms plagued with incorrect cost codes have reduced on average from 17% to around 0.5% of the project monthly cost turnover.
PCMS and Access Coins solutions enable real-time expenditure reports to be visible throughout the project, providing complete transparency from start to finish.
Access Coins has also helped the teams being to tackle their over-reliance on paper-based processes, which have now been dramatically reduced.
In a fast-changing commercial world, improved efficiency, compliance, profitability, and happier staff and clients are critical success factors. Partnering with Access Coins will help your construction business increase productivity and grow within a competitive sector.
