Oracle's Acquisition of Textura Simplifies Financial Supply Chain for Construction
FREMONT, CA: A whooping $633 million valuation was fixed as Oracle announced its acquisition of Textura, a provider of cloud-based solutions for construction industry. Textura’s expertise in the field spans around the aspects like initial bid estimation, subcontractor management, communication and collaboration, invoicing and payment, to help forge the workflow automation and maintain transparency for complex construction projects.
“We saw there was now an opportunity to deliver Internet- based solutions that would allow all the parties in a construction project to work together to be much more efficient than they were in the paper-based world,” says Patrick Allin, Chairman and CEO, Textura.
Oracle Primavera, a proprietory Oracle product delivers a complete suite of cloud solutions for project, cost, time, and risk management, while additionally complimenting other Oracle solutions, such as Project Procurement.
Textura’s payment mechanism works in a way that participant in the supply chain get paid only when suppliers at other tiers are paid. But even with Textura’s assistance, engineering and construction (E&C) functional gaps still exist for Oracle in the E&C project lifecycle. The terms of a contract can be one of the challenges, for instance- majority of contractors don’t pay until they themselves earn revenue. Another issue surfaces in tracking payment progress, and contractors are required to bill as they progress throughout the project. Retainage is another key aspect as most of the contractors withhold 5-10 percent of each billing cycle, till the project has been completed. The need of the hour is integrating a software solution to not only manage end-to-end project lifecycle for every participant in the E&C supply chain, but also facilitate a rapid flow of capital to subcontractors which is again inclusive of a supply chain risk management perspective.
This is also an era where Oracle would be seen catching up to SAP/Ariba’s game-changing investments in trade financing, ushering capabilities like invoice discounting, supply chain finance (SCF)/reverse factoring, inventory financing, and more. Textura surfaces in this context as their acquisition shall help in dominating a specific vertical.