E-invoicing group saves £1m

Six major contractors and 20 of their largest supply chain partners have enjoyed estimated savings of more than £1m during the first phase of their transformation from paper-based to electronic invoicing.The group has taken a lead in the use of e-technology to eliminate the high cost of handling invoices traditionally. The members opted for Tradex, the open e-business exchange, and with 18 months of experience behind them, 5% of all their invoices are now produced electronically.Top 20 contractors each issue between 80,000 and 400,000 invoices every year, while the construction industry as a whole generates about 600 million pieces of paper-based data, including orders and dispatch notes. The electronic alternative offers process savings of more than £2.50 on every document. The players in the Tradex project are Alfred McAlpine, Amec, Carillion, Mowlem, McNicholas Construction and Taylor Woodrow. They started to build their e-trading community cautiously, rolling the system out step-by-step to their supply chains.Building materials groups now involved include Hanson, Aggregate Industries and RMC, while Travis Perkins and Wolseley are two of the builders' merchants that have signed up. Among the plant hire groups to come on board are Gap, A-Plant, Speedy Hire and Hewden Stuart.Tradex is run by e-business group Causeway Technologies. Director Tim Cole said: "The six contractors shared a vision of electronic exchanges, handling what was previously being done on paper." Amec's roll-out programme saw Tradex first introduced into its infrastructure division and the group looks to move it into its rail business next. Alfred McAlpine started in its utility division and is now moving it into civils and plant."I think future growth will be exponential," said Cole, "as half of the top 100 construction groups are already warming to the idea. They are asking two questions: 'Is this the right time to take the plunge?; and is this the right way to go?'."UK construction is a £50bn industry where the value of the average transaction is about £300. Cutting the cost of each transaction would give the industry a saving of more than £1bn."