The construction industry is project heavy. By being managed project-by-project, the spend is often both disjointed and very convoluted. More often than not, when it comes to the cost of individual projects, managers can’t or won’t factor in indirect expenses (such as travel costs), even though these construction procurement costs are critical for any type of project-based activities.
Instead, project managers often focus solely on the direct construction procurement costs such as material and labour costs. Thus, neglecting a significant part of the total spend.
The reason why this happens varies from person to person, company to company, project to project. But based on our experience, this can often be traced back to the lack of easily accessed, reliable and concrete cost data.
The importance of concrete cost data
Knowledge is power, and data is knowledge.
Having access to vast amounts of cost data is necessary for you to get the most out of your suppliers. It gives you important insights into both direct and indirect costs concerning the procurement process for construction projects and the industry as a whole. This cost data and information will give you an edge when negotiating with your suppliers, or at least level out the playing field.
Procurement software for construction
The difficult part of it all is accessing the cost data. While you can scour the net and contact manufacturers for the cost data yourself, it’s a fairly convoluted process requiring both time and effort. Instead, you can use a so-called construction procurement software. It’s a specific type of procurement system in construction to access indices on all relevant cost drivers such as raw materials, manufacturing costs, tax & transport costs, labour costs and currencies.
Using construction procurement software is on the rise of becoming one of the most prevalent procurement strategies in construction for two reasons:
- It saves a lot of time allowing you to focus your efforts on your core business and preparing for the negotiations with suppliers.
- Gives you access to reliable and continuously updated indices to be utilized in a fact-based negotiation strategy.
Using Prognos as your procurement software in construction
Using Prognos as your procurement system in construction gives you access to all the cost data you need in order to get the most out of your suppliers, with data tailored for your specific situation. The Prognos system gathers data from multiple sources to give you up to date data in one place for raw materials, manufacturing costs, tax & transport, labour costs and currencies.
Prognos is available as two different platforms:
- From our platform Prognos Tailored you can access interactive, continuously updated, reports where you can drill down in your materials, compare the prices to your own cost development, export the graphs, or export the underlying data for further analysis. The reports are customized for you by Prognos, leaving you to focus on the negotiation strategy and not on finding the data. You also get access to several different features including: should cost trackers, selected indices and country focus.
- With Prognos Online you get access to over 8 000 indices on raw materials, components, wages and currencies in an interactive online tool capable of transforming the data to fit your needs.
Get in touch with us to try out the Prognos platform today and experience all the benefits it means to use them.