Creating a single source of truth for Clients
Public sector budgets are under scrutiny, with Government demanding ever-stricter financial governance and oversight. While other sectors have turned to digitisation to address similar pain points, the construction industry remains dominated by manual processes. The result is significant revenue and value loss caused by inefficiencies and irregularities in cost assurance and management.
Coria’s Digital Cost Assurance tool is an AI-enabled process automation solution for Defined cost assurance throughout the supply chain. It is designed for major construction programmes analysing data against contracted commercial terms in real time and at scale. It allows the user to:
Review, and evaluate 100% of all costs across their supply chain quickly and consistently
Build accurate forecasts that enable spend predictability
Increase the frequency payments, improving cash flow down throughout the supply chain
Deliver data transparency and standardisation
Increase confidence in compliance
And most important of all, improve mutual trust and cooperation across the industry
How does Digital Cost Assurance work?
Coria’s Digital Cost Assurance takes cost data supplied by the contractor or sub-contractor direct from its Enterprise Resource Planning (ERP) system and assures them against the agreed parameters of the contract or sub-contract.
Enhanced by AI, Digital Cost Assurance analyses hundreds of thousands of lines of data within minutes, dramatically reducing the time it takes to evaluate and assess defined and disallowed costs. Any data not meeting the requirements of the contract’s definition of defined cost are identified quickly and can then be flagged for correction prior to the next assessment date.
The software is designed to perpetually improve. It learns how cost data is presented, how this aligns, or does not align, to contracted cost data requirements and applies that new information in future. This continually improves the accuracy of the system, but more importantly feeds back to the humans-in-the-process to reduce variance and prompt right every time solutions. This reinforces the principles of Lean construction, reducing waste by changing mindsets, and improving quality management.
Digital Cost Assurance can ingest data either from project ledgers (spreadsheets) or directly from contractor’s ERP systems. This reduces the distraction of application for payment preparation within the contractor’s commercial teams.
By removing this time burden, change management can be the focus of the contractor’s and contract administrator’s commercial support function, addressing the root cause of time, cost, and quality misalignment across schemes.
The use of Digital Cost Assurance also means cost data is audited continuously, rather than being intermittent and at varying levels of depth.
When this is combined with the in-built facility of ECC4 to finalise defined cost for completed work throughout the project (Clause 50.9), this allows Client’s and Contractors to have much greater confidence of the final out-turn price, margins, and business returns.
The promise of faster payment cycles and commitment to achieve faster cashflow allows management teams to achieve greater cash forecasting accuracy, which is vital in an industry working with single digit percentage margins, and billions of pounds in capital.
How does Digital Cost Assurance benefit Clients?
Coria’s Digital Cost Assurance software can transform a client’s confidence in making accurate forecasts and payments, as well as transform their belief that expenditure is right and represent good value under the contract. Digital Cost Assurance helps predict expenditure more precisely, reduces the likelihood of having to return to investors for additional funding, and reduces the amount of time spent on disputing claims.
With better forecasting, unforeseen delays and budget over runs are reduced. The risks to your brand and reputation are far more managed, ultimately enhancing investor confidence, which is paramount for clients. It ensures continued investment and maintenance of a reputation for effective management of funds.
If cost data remains inaccurate at the point of assurance there remains the risk of overspend and missed commitments.
Traditional cost assurance approached using the professional services offered by market suppliers today is sold as a mitigation of this risk. However, the evidence is starkly different.
Studies by the Infrastructure Project Authority (IPA) and the National Audit Office (NAO) show that poor cost assurance contributes to project overspend in some instances up to 48%.
This reveals that despite clients recognising and commissioning mitigating measures for risks associated with cost assurance to counter its potential to contribute to project overspend, human-only based services continue to miss the mark.
In their findings IPA and NOA cited; 1) the lack of automated cost tools, and 2) poor application of the contract, as a key components of overspend.
Digital Cost Assurance by Coria is the solution to this gap in the current market.
Finally, if your organisation is part of the process of managing public money, using Digital Cost Assurance combined with behavioural nudges to the humans-in-the-loop automatically provides evidence of controls in line with Treasury regulations, helping to maintain confidence from a primary source of funding.
At a time when budgets are stretched and public spending is under immense scrutiny, it is vital that costs represent demonstrable value for money and evidence that budgets are actively managed effectively.
