27.6 C
Thursday, June 13, 2024
HomeProcurementSmart Procurement Technologies for the Construction Sector

Smart Procurement Technologies for the Construction Sector

Smart procurement technology is moving rapidly in the construction sector. The sector professionals believe that an effective procurement is synonymous to a successful construction project. Technological innovations have an impact on every aspect of the construction industry. There are practical applications and benefits of modernizing the procurement processes. Cutting-edge technology is rapidly evolving, which has a significant impact on how the industry operates and how future projects are executed. To Invest in the latest smart procurement technology is undoubtedly a smart business move. This article discusses some smart procurement technologies that can help to achieve a company’s goal and stay competitive in the construction sector.

Cognitive Computing and Artificial Intelligence

Interrelated procurement smart technologies like Cognitive computing and Artificial Intelligence make it possible to collect, store, organize and analyse all related supplier data which includes spending, costing and contract management to the procurement processes. Besides optimizing the workflow from purchase order creation, invoice processing, and approval, it also automatically incorporates the correct vendor and contract data for swift and optimal purchasing while eliminating and blocking invoice fraud. It enhances and secures contract management and automatic data population from the vendor database. Cognitive computing can check vendors and contractors that are not currently under contract which can possibly give better options than those with existing contracts. In most cases the procurement team will generate suggestions on what contract should be used, how much money could be saved, and other supporting data. It helps to pre-approved legal phrases and templates that allows for much faster contract creation and implementation for contract issuance.

Robotics Technology

Robotics process automation or RPA in construction sector is a software that recognizes, learn patterns and able to perform rule-based tasks. This process is used to automate multiple repetitive manual tasks (e.g., P2P tasks), drive efficiency, reduce errors and risks in execution. Robotics process automation (RPA) solutions also deploy and replicate tasks like processing information, interacting with ERP systems, and sending emails. The procurement function in construction sector has a lot of time-consuming, manual processes that are ideally suited to be used with robotic process automation (RPA) technology. RPA is also a significant contributor in the automation of transactional procure-to-pay processes and in executing and bidding transactions by leveraging systemic controls and well-defined business rules. The RPA software can extract order details from an invoice, use the details to search, find and match the PO in the database. If all documents are matched, it will forward the invoice to the accounting team for payment, resulting to a faster, efficient and accurate transaction.

Intelligent Content Extraction

Optical character recognition and learning algorithms in construction sector is for reading unstructured documents such as PDFs of contracts, specifications and bills of material and extract critical pieces of data like pricing tables, payment terms, delivery terms and termination clauses that would have taken days or weeks to review. It is also utilized to capture documents and incorporate data into the downstream systems. Optical character recognition has been around for a long time but is vastly underutilized in procurement. In Invoicing alone, the amount of time and money that could be saved by using optical character recognition technology and intelligent documents processing (IDP) properly. Optical character recognition (OCR) can actually be a catalyst for further digital transformation in construction sector. OCR technology in the construction sector will help make immutable files searchable, editing files easier and also prevent human errors on top of saving money and time.

Blockchain Technology

Blockchain technology is a disruptive technology that has a big impact in construction sector, and reduces existing gaps in the digitalisation of construction procurement. Blockchain in procurement is used as a secure software with no third-party involvement and all the transactions are archived and performed on a secure digital ledger. The system is decentralized and the stakeholders can directly partake in the transactions. It helps in cost cutting as well as prevention of fraud. It helps one save out on bulk transactions and the data recording methods, safeguard the integrity of the digital information with notifications. Moreover, it is impossible to alter the data as all transactions are linked together. Blockchain in procurement gives transparency and security. Blockchain is likely to influence many aspects of construction management, from contracts, materials procurement and asset management to payments. Blockchain technology can be utilized in the construction sector, to ensure that the data related to the project is encrypted and proprietary information stays protected. Decentralized project information is accessible from anywhere which enhances operational efficiency by the use of smart contracts.

Sensors and Wearables Technology

Sensors and wearables technology are devices that can detect, capture, and record physical data in construction. Sensor devices can monitor the movement of goods and inventory levels for reordering, and enable audit tracking during site visits. Smart sensors technology create visibility across the procurement supply chain that can be used to understand and anticipate demand, optimize sourcing, and inventory. Transmission standards such as Wi-Fi, RFID, Bluetooth and others are then used to communicate this data to other sensors, controller devices, centralized management platforms for analysis. Construction sector should consider the variety of smart sensors available and determine how to better enable the supply chains and procurement from end to end. Smart sensors and wearables in construction industry are enables remote and wireless communication. Variations in delivery, and consumption of raw materials can be captured through sensors that digitize the status and transaction of materials from warehouse to construction site.

Advanced Analytics and Virtual Reality

Smart procurement technology that combines statistics, machine learning, and artificial intelligence with multiple third-party data sources to predict most likely scenarios for cost fluctuations, demand, supplier risks and enable proactive decision making. Some of the challenges range from supplier related issues such as quality concerns or missed deliveries to inaccurate data. Advanced analytics can play a significant role at almost every stage of procurement process. The use of advanced analytics can transform all three major areas of procurement such as procurement planning, strategic sourcing and supplier selection. Advanced analytics delivers major value in the procurement process by consolidating vendor opportunities resulting to direct cost improvement. It also identifies and provides sensitivity analysis in multiple demand scenarios.

The full content is only visible to SIPMM members

Already a member? Please Login to continue reading.


Casey Ching Heng Chuan, ADPSM. (2021). “Artificial Intelligence for Procurement Agility”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/artificial-intelligence-procurement-agility/, accessed 16/09/2021.

Coseer. (2021). “Cognitive Computing for Procurement and Contract management”. Retrieved from: https://coseer.com/blog/cognitive-computing-for-procurement-and-contract-management/ , accessed 28/09/2021.

Jo Tan Ling Ling, ADPSM. (2021). “Digital Technologies for major procurement projects”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/digital-technologies-for-major-procurement-projects/ ,accessed 15/09/2021.

Jovana I. (2021), “5 Benefits of open innovation supported with crowdsourcing”. Retrieved from:https://innovationcloud.com/blog/5-benefits-of-open-innovation-supported-with-crowdsourcing.html , accessed 13/09/2021.

Megan N. (2020). “Smart Sensors are a changer for the Construction Industry”. Retrieved fromhttps://www.euroscientist.com/smart-sensors-are-a-game-changer-for-the-construction-industry/ , accessed 15/09/2021.

Nick Lai Weixuan, ADPSM. (2021). “Digital Technologies for Cognitive Procurement”. Retrieved from SIPMM: https://publication.sipmm.edu.sg/digital-technologies-cognitive-procurement/, accessed 15/09/2021.

Peter Evans G. (2020). “Digitalizing the Construction Industry”. Retrieved from https://www2.deloitte.com/us/en/insights/topics/digital-transformation/digitizing-the-construction-industry.html , accessed 12/09/2021.

Spend Edge, (2021). “Robotic Process Automation: The Vital role of RPA in Procurement”. Retrieved from: https://www.spendedge.com/casestudy/robotic-process-automation-the-role-of-rpa-in-procurement , accessed 13/09/2021.

Maricel Punzalan
Maricel Punzalan
Maricel Punzalan (Kim) has 14 years of extensive experience in the specialised field of procurement and contracting, and specifically in the construction industry. She holds a Bachelor degree in Industrial Engineering, and she is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Kim is completing the Graduate Diploma in Procurement and Supply Chain Management ​(GDPSCM) on January 2022 at SIPMM Institute.

Most Read