3 principles of a successful qualification workflow
Why it’s hard and how it can be done
When it comes to the construction qualification workflow the term “successful” can mean many things, so let’s be clear: as the landscape for construction management firms continues to shift towards a heavier focus on data-driven decision making, success hinges on the positive collaboration between risk management and operational teams. Many contractors fail to implement this type of workflow for a variety of reasons. Each company’s unique structure, the inherit nature of decentralized office locations (job sites), long standing relationship-driven decision making, and many other reasons factor into resisting change. Nonetheless, to effectively manage this important risk requires the ability to communicate and work together across departments.
Achieving success, as we’ll explore below, is not about reorganizing the workflow, but rather can be accomplished through the strategic use of technology and adherence to a few key principles. Likewise, for each new principle, we are faced with many of the same challenges that created a barrier to implementation in the first place. The difference this time, however, is that with thoughtful technology there is indeed a path towards success. At TradeTapp, we’ve identified three key principles of a successful workflow, and for each, we’ve outlined the requirements that influenced and ultimately drive our technology based solution.
Principle #1: be comprehensive
This sounds fairly obvious, but it’s nonetheless true: evaluations are most effective when they leverage a comprehensive profile of information and data. With subcontractors: project history, past safety performance, backlog position, and quality of work are all key indicators of potential risks, in addition to the traditional analysis of financial health.
What it requires: efficiency
Collecting more data, efficiently, was a huge reason we found inspiration in Intuit’s TurboTax. What we love about the TurboTax product is its ability to keep things simple, collect a lot of information, and do so efficiently. They do a great job at making sure nothing is missed, but also not wasting anyone’s time. We’ve carried these same principles into our data collection module.
Sidebar: One of the first things we often hear is that it’s frustrating to chase down all the data necessary from subcontractors. Typically, contractors have a fair amount of back and forth, before receiving all the data they need. So it begs the question, how can contractors be comprehensive without slowing down the process even further? Answer: this is why a user-friendly and thoughtful data-collection platform is so important!
Principle #2: be project based
We encourage our clients to be project based in their evaluations. While it’s certainly important to understand a company’s financial or safety standing independent of any other variables, it lacks the context of assessing the actual fit with the award they’re being considered for. The specifics of the project (i.e. it’s duration, location, award size, market sector, ownership type, etc.) are significant factors to be considered at the time of award.
What it requires: the right tools & speed to analyze
The primary reason it’s difficult to be project based in each evaluation is because contractors typically rely on third-parties for their subcontractor vetting. One of the major downfalls of relying on third-parties for their subcontractor vetting is that the analysis is typically general in nature. The demand on time and resources is too high so rarely, if ever, are project-specific parameters considered in the evaluations. Furthermore, the information may even be out-dated by the time it is being used to drive a decision.
Technology can help change this reality twofold: first, data is collected annually and then updated where applicable at the time of award (all web-based). This can facilitate a continuous qualification cycle and also allow for a specific evaluation at the time of award or bid. Secondly, what we’ve done with TradeTapp is to give users a tool where they can plug in the specific scenario of a subcontract award and run an evaluation of that project in realtime.
And that’s the key: timing. To have project-based evaluations that don’t create bottlenecks for the purchasing and award teams is fundamental towards having a collaborative workflow that works for both parties. Ultimately, decisions need to be made quickly and communicated with enough time to be considered during the bid leveling process. TradeTapp’s project specific underwriting tool does effectively this, allowing for a speedy evaluation of a potential award, and then also facilitating the communication from one stakeholder to the next.
Principle #3: be practical!
Without a doubt, the most important principle of the prequalification workflow is that it needs to be practical. Far too many existing vetting “solutions” are absolute in their nature — with outputs like “approved”, “disapproved”, “yes”, or “no”. Being absolute in qualification leaves puts operational teams in a corner when they are handing the realities of project budgets, ownership demands, or the like. Instead, we propose a “yes, but” approach for each evaluation, which is to say “yes we can make this award, but here are the risk management controls we need to implement in order to do so intelligently.”
What it requires: sophistication & communication
Creating a “yes, but” approach requires sophistication in analysis — the ability to leverage the comprehensive set of data described in principle #1 in order to drive decisions. In addition, being sophisticated means an ability to factor industry data as well as trending performance into our overall evaluation. Only when we properly understand the specific risks of an award can we accurately devise a plan to mitigate those same risks.
Finally, having a practical “yes, but” approach requires effective communication from the risk management teams to their operational counterparts. In the Construction Industry by nature, almost everything is two weeks behind schedule, so something like reviews from risk management teams are easily swept aside if they only compound the problem. With an effective technology solution communication can occur timely, clearly, and be accessed from anywhere.
If you’re interested in learning more about TradeTapp’s pricing, our progress, or just want to say hey please reach out to us at info@tradetapp.com.
