ORBIZ-Case-Study-successfully-managing-alliance-contracts

SUCCESSFULLY MANAGING ALLIANCE CONTRACTS THROUGH VISUAL MANAGEMENT OF COMMERCIAL COMPLEXITIES

OBSERVATION

With 5% of the project value dependant on strategic deliverables and the prospect that under-performance would result in the loss of future work packages, our client recognised a need to increase commercial governance and introduce new performance management practices.

At a program level, deliverables related to innovation, workforce development, social inclusion, and effective engagement. At a work package level, objectives related to safety, environmental impact, sustainability, network disruption, relations with the local community and stakeholders, effective engagement, and on-time delivery.

Additionally, the alliance needed to develop a system and culture of Innovation and Continuous Improvement (I&CI) that the customer would measure for impact over the life of the contract.

ORIENTATION

Our team were engaged during the bid phase to conduct a systems review of the current project control methods to identify and recommend improvements that would meet the commercial terms of the prospective alliance contract. Once the contract was secured, our team were retained to implement our recommendations:

  1. Deploy a short interval control strategy to increase efficiency at the work package level.
  2. Introduce visual management centres to increase performance transparency through improved commercial governance and overall accountability.
  3. Develop a management system framework that would foster an enduring I&CI culture.
  4. Streamline reporting to improve information flow and strengthen project governance.

OPTIMISATION

An Earned Value Management (EVM) software tool was implemented to oversee the progress and performance of each work package from engineering through to construction.

A program-level Visual Management Centre (VMC) was developed to increase the governance of each work package whilst providing oversight of the strategic objectives set by the customer.

Functional VMCs were developed to govern Engineering and Construction delivery, creating the catalyst for I&CI through a platform of performance monitoring and problem-solving.

Structured problem-solving and continuous improvement practices were introduced with training and coaching to enable internal champions to lead innovation hubs and improvement workshops.

A new reporting process was introduced utilising data provided by the VMC system – this process was well-received by the customer leading to wider adoption.

IMPACT

  • $11m revenue uplift forecast from delivery of strategic objectives over the first five years.
  • A comprehensive performance management system established to underpin a culture of I&CI.
  • The alliance has a long term strategy to continue developing its I&CI systems and culture.