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Dealing with mini contracts in next to no time

Contractor portal solution saves handling time
Dealing with mini contracts in next to no time

The control of process engineering plants is always a very time and cost- intensive business. To arrange for maintenance work to be carried out, plant operators have to conclude a substantial number of extremely small contracts. These time-consuming processes are not unknown to large enterprises in other sectors of industry, either. German Telecom, for example, has remedied the problem in its Purchasing department for AEC and EPC projects by using a contractor portal solution from RIB.

Contractor processes in the EPC and process industries are normally handled with SAP or other popular ERP systems. After all, SAP solutions are used as standard by most major plant engineers in the chemical, oil and gas industries. Big companies generally resort to SAP systems to manage their accounts payable information and therefore like to fall back on this proven concept for contractor management. For complex tenders, however, the commercial supply chain management system often comes up against limitations. Large-scale projects require detailed evaluations with multi-stage work specifications. These are often difficult to administer with standard ERP systems, involving a considerable amount of customising. This not only strains the nerves of project and company managers, but also drains their budgets. What are the technical processes involved in a large-scale EPC project? Companies formulate a requirement, estimate the costs, select an appropriate group of bidders, then prepare a detailed request for quotations, evaluate contractors’ replies and finally sign contracts with the chosen companies. As the SAP system usually only lists creditors, the problems frequently start when it comes to selecting contractors for different types of work. Nevertheless, companies do not want to be without a permanent link to their SAP system. The process industry relies on release-safe commercial software for bookkeeping records and cost definitions.

Instead of migration, RIB therefore suggests full integration: the software solution embraces end-to-end management of all technical processes, such as tendering and handling of outline contracts. Big companies can select all potential vendors for specific types of project work directly in RIB-EPC. These processes, as well as the transparent exchange of bookkeeping records, news and status information, can be integrated into the company’s ERP system whenever necessary. Several interfaces – for smooth communication between technical and commercial processes within a large-scale project and for handling maintenance work – have already been certified by SAP. RIB has also been a SAP Software Partner since April 2008.
Work order process
However, it is not only the efficiency of data communication with the general contractor or plant engineer’s ERP system that is important. The contractor process is confused because the contractors are not quite clear about which information the client requires, and the company is not able to make an intelligent and lucid assessment of the plethora of different formats. As there is so far no general standard for data formats and processes in the client-contractor tendering procedure in the EPC sector, total chaos is occasionally inevitable. Infor-mation is missing from the bidding documents, clients are not fully informed about all the subcontractors working on the project, contractors are unable to view work descriptions or general business terms and large e-mail attachments disappear in the data nirvana or spam filter.
RIB operates a contractor portal specifically for these contractor-client processes that sends status reports to participating contractors via e-mail. All structural data can be called up directly over the Internet and either filled in online or processed offline, depending on its complexity. A specific reminder function alerts contractors to the deadline for submitting quotations. This completely paperless process not only accelerates communication substantially, but also checks that processes are plausible and complete. This means that incoming contractor quotations can be easily compared. General terms of business, work descriptions and other documents of relevance to the process can therefore no longer be forgotten.
A specific client function tells clients which information has to be entered in the forms. Clients thus receive the documents of all bidders in a standard format and relevant information is always available. Contractors likewise save time when filling in the forms. The platform produces an audit-proof log of the activities of all those involved. All safety-relevant components have been certified to the international standard IT-SEC. On top of this, the application is already SOX-certified in practical use at German Telecom.
Outline contracts are also handled in a continuous dialog between the work order component, RIB and SAP: they can be generated either directly in SAP or within the RIB portal, with order and outline contract numbers being transferred straight from the ERP system to the portal. If an outline contract is accepted by the contractor, it covers all work items. The subsequent check and acceptance of work is done on the portal by the client prior to transferring the data to the SAP system. The SAP system ensures that an invoice can only be generated if a corresponding order has been entered. Within the process, general contractors and plant engineers can define the amount for which an instant credit note is initiated in the SAP system. This saves companies arduous second or third checks for mini contracts and considerably accelerates the processes.
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