Using i2 iBase to manage supplier risk and ensure quality on a billion Euro project to redevelop a shopping centre in Finland.
The Tapiola Center Development Project stands as a shining example of effective risk management and quality assurance in the construction industry. This ambitious project transformed an existing shopping center into a new five-floor experience, featuring around 100 shops and boasting 450 parking spaces.
Managed by LähiTapiola Real Estate Asset Management Oy, they prioritized avoiding potential issues caused by financially unstable subcontractors. By successfully implementing i2 iBase for their comprehensive investigations, LähiTapiola ensured punctual completion, stringent quality standards, avoided suppliers going bankrupt, and achieved significant cost savings.
Challenge
With a contract value of approximately €1.5 billion, this project was of significant importance and it was essential to minimise the risks of working with companies that could potentially jeopardise or delay the project. LähiTapiola addressed this challenge by dedicating a team of investigators to scrutinize the financial history of all subcontractor applicants.
iBase played a pivotal role in searching for individuals and their associated companies with a track record of financial issues, utilizing diverse data sources such as LähiTapiola's records, financial documents, and public company records. The investigation, involving 349 enquiries and 940 companies, resulted in blocking 133 companies from participating.
Notably, as awareness spread about this proactive approach, the number of blocked companies decreased over time, indicating that potential subcontractors who knew they would not pass scrutiny did not apply.
Solution
Before adopting iBase, risk analysis was infrequent and relied solely on the practical experience of building inspectors. LähiTapiola’s adoption of iBase introduced informed decision-making by providing comprehensive financial histories of companies and their key personnel.
People associated with financially troubled companies were flagged, preventing their interaction with LähiTapiola and the project. The system enabled accurate partner assessments, contributed valuable statistics for decision-making, and ensured ongoing scrutiny of applications from flagged individuals.
iBase has since become an integral tool for risk management assessments, preventing money-laundering activities and aiding in risk classification.
Above is an example of an iBase chart used by the company to identify connections and proved to be an invaluable analysis tool.
Benefits
- On-Time Delivery: The project was completed without delays.
- Financial Stability: No bankruptcies or unexpected departures of contractors/subcontractors occurred during the project.
- Cost Savings: The total project cost was lower than budgeted which in part is due to the resilience of the chosen contractors and partners.
- Social Responsibility: By ensuring that only honest and well-maintained companies were awarded contracts, the project contributed to social responsibility and ethical business practices.
- Industry Adoption: The concept of using rigorous background checks for contractors and subcontractors gained popularity among major operators in the construction industry.
- Government Recognition: The Finnish Ministry of Finance hailed LähiTapiola's approach as the most effective means of preventing the growth of the gray market.
- Industry Recognition: LähiTapiola received a quality award for its exceptionally accurate background-checking process for contractors and subcontractors.
Conclusion
The Tapiola Center Development Project, by the successful application of iBase for risk management and background checks, set a remarkable precedent in the construction industry.
This case study underscores the importance of proactive vetting and quality control measures, that showcases how to deliver cost-effective, timely, and high-quality project outcomes. Beyond its immediate success, this approach serves as a model for the industry, emphasizing the significance of social responsibility and ethical business practices.
About LähiTapiola
LähiTapiola Real Estate Asset Management Oy specializes in real estate portfolio management, offering a comprehensive range of services to optimize and maximize the profitability of real estate investments. Their services cover various aspects of the real estate lifecycle, including portfolio strategy development, transaction management, market and portfolio analysis, as well as building development. The company also manages real estate funds, providing a structured approach to investment.
About iBase
iBase is an intuitive intelligence data management application that enables collaborative teams of analysts to capture, control, and analyze multi-source data in security-rich workgroup environments.
It addresses the analyst’s daily challenge of discovering and uncovering networks, patterns and trends in today’s increasing volumes of complex structured and unstructured data. i2 iBase provides a multi-user data sharing environment that combines rich analysis and visualization capabilities with dissemination tools.
To find out more about iBase or our other products, view our product range or contact us.