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The bottom line: benefits of digitisation in real terms

By Matt Nichols, Divisional Director

Digitisation has been a key discussion point in the construction industry for some years now, with some very clear, positive arguments for an evolution in systems, processes and methodologies in order to facilitate greater transparency, automation, integration, collaboration and ultimately productivity.

What is often articulated less successfully is the practical, real-terms impact digitisation can have on your bottom-line and how you can evolve your operations to unlock these benefits. Waste management is a crucial part of this picture, as for most large businesses within the industry the activity represents an administrative challenge – a high volume of low-value transactions, spread across a number of locations. We have learned a great deal through all the challenges of the last year, working in new ways, and as we move forward following the pandemic there is certainly a clear desire amongst businesses to rethink their processes and look for ways to drive sustainable improvements.

The real case for digitisation

Based on Reconomy’s unrivalled dataset in the construction sector, if you are a large housebuilder you are likely to have processed 26,000 transactions (and invoices) related to your waste management activity between January 2020 and February 2021 – a little over 12 months. For a large construction contractor, it is likely you have processed approximately 18,000 transactions in that timeframe. The scale of the numbers may surprise you, but what is even more striking is the total cost associated with this activity and therefore the potential for meaningful savings.

An estimate by research and analysis group, Gartner, as reported on accountingweb.co.uk puts the cost of invoice processing at somewhere between £4 and £25. So, taking even a mid-range cost of £15 per invoice, the total costs for all activity involved in processing waste management invoices since 2020 will be just under £400,000 for a large housebuilder and £270,000 for a large contractor.

Imagine the impact it could have if you digitised this process end-to-end – from purchase to pay – the efficiencies you could gain and the benefit to your bottom line. Gartner also estimate that costs for automated processes can be up to 20 times lower, so even thinking conservatively, if you could realise half of that saving, that’s £360,000 of cost removed for a large Housebuilder and £240,000 for a large construction contractor. A considerable prize, especially in times such as these.

Quite apart from the significant costs savings outlined above, you would benefit from a more dynamic, accurate and future-proofed process that represents a sustainable way of operating with less waste in both time and materials.

A full solution

Reconomy have been investing in technology to modernise and improve waste management for many years and have a unique process – already bringing benefit to customers today – that offers digital solutions at every step, from raising purchase orders to paying your invoice. At the front end, our PunchOut Catalogue functionality can give large businesses with de-centralised purchasing full control and visibility of all purchase orders. A real benefit for central procurement teams, providing great data to drive management decisions.

Our suite of apps, including SiteBuddy and Tipping, then give a route for on-site staff to call-off the services they require against agreed purchase orders, 24/7, with no need for a phone call or email. Thanks to our digitalXchange, which includes integrations with leading supply chain software systems alongside our own proprietary solutions, orders are passed digitally to local service providers. Once completed, all compliance documentation and data for the waste movements are transferred dynamically back into our Reconomy Portal for customers to view and analyse – in close to real-time.

Finally, through our EDI invoicing options and linkages with systems such as COINS and TRADEX, you can achieve high levels of ‘straight through processing’ or ‘right first time’ documents, reducing the need for costly administrative effort.

So, the case for reviewing your processes and adopting a digital mindset is compelling – and if you haven’t done this yet for your waste management, the question is; what are you waiting for? Get in touch with Reconomy and we’ll be happy to give you some advice.