Why You Need Contractor Data Management During Turnaround Season

Many refineries postponed planned maintenance and improvement projects—first during COVID-19 and then amid supply-chain disruptions and pressure to ramp back up. By comparison, this Fall’s maintenance season is reportedly the heaviest in the U.S. since before the pandemic forced plants to delay all but their most urgent work. 

Bloomberg reports almost 2.5 million barrels per day of capacity will be taken offline, with more capacity cuts possibly coming early next year.   

During a turnaround, industrial plants hum with activity as an army of employees and third-party contractors put much of the facility through a complete shutdown and systematic restart. Keeping everyone safe, while simultaneously keeping projects on schedule can add huge amounts of stress to maintenance and turnaround managers. 

Lacking Contractor Data Management Oversight 

According to McKinsey, many heavy-asset businesses, including refineries, have 90% or more of their annual revenues represented in contracts with suppliers and vendors.  

Interestingly, they note the majority don’t invest their limited resources in contract development and vendor management. Total procurement operating expenses are typically less than 1% of total spending. As a result, McKinsey says, suboptimal contract terms and conditions can erode up to 9% of annual revenues.  

In this busy turnaround season, how can owners and third-party contractors get more value out of their relationships and contracts? Even powerhouse producers can struggle with how they manage their contractor spend data.  

Is your data locked inside a web of legacy systems, data silos, and inefficient processes? This could cost your company  30%-50% more than it should. This web of inefficiencies and ambiguity traps so much value that companies that update this process regularly see as much as a 10%-15% increase in annual savings, according to the ebook: Simplifying the Complexities of Contractor Spend. 

What causes many of these issues? McKinsey says a lack of oversight and contract management. If a large procurement group must execute and monitor tens of thousands of contracts annually, the sheer volume means ownership of these contracts tends to shift contractor management to those in the field requiring the product or service. Many of these contracts are managed by users who are not trained to do so. McKinsey found 80% of procurement functions are not fully aware of competitive terms and conditions. 

Unlocking the Puzzle of Contractor Data Management 

Technology has brought remarkable changes across the board for many producers in today's evolving industrial landscape. However, tech tools need to integrate with each other to ensure valuable data is not lost, especially during a high-volume project like a turnaround or outage. Industrial sites that manually monitor time and attendance, signing off on invoices in the dark, can create errors and audit issues. Not to mention – a lack of integration can cause costs to soar. By comparison, automated, integrated solutions will bring precision and reliability to streamline processes and deliver stronger insights. 

Contractor data and spend management tools can introduce a seismic shift in the way organizations manage contracts and contractors within their site-specific operations. Compared to the time-consuming manual methods, these digital automation tools turn the intricate puzzle of contractor management into a seamless and coherent picture so both the owner and the contractor are on the same page. 

By automating the data collection and analysis process, these tools lead to seamless operations by dismantling previous operational barriers. The result: costs plummet, compliance with regulatory requirements becomes a given, and transparency surges to the forefront of operations. 

Adding Control to Your Spend Management 

What truly sets contractor data and spend management tools apart? Compared to their organizational counterparts, such as ERP systems or vendor management software (VMS), contractor data management tools can focus on the intricacies of contractor and third-party service provider spending. Instead of only dealing with internal processes, contractor data and spend management zeroes in on managing spending that extends beyond company borders. 

These tools bring power so any jobsite can: 

• Oversee Contract Management: Navigate the intricate web of contracts effortlessly, with automated tools that oversee every contract term and condition—from pay rates to skill level required. 
• Track and Monitor Contractor Spend: Bid farewell to the uncertainty of spending. These tools provide real-time insights into financial outflows, ensuring that budgets are adhered to, and costs remain in check. 
• Improve Vendor Management: Seamlessly manage vendors and third-party service providers, optimizing relationships for mutual benefit.
• Enforce Regulatory Compliance: Stay on the right side of regulatory requirements with tools that monitor and enforce compliance.