Developing Overarching Kpi for Effective Contract Management Case Study Presented by Ray Carter Director DPSS Consultants

Transcription

1 Developing Overarching Kpi for Effective Contract Management Case Study Presented by Ray Carter Director DPSS Consultants 1

2 Previous Projects 2

3 Clients Include 3

4 Introduction 4

5 Presentation Context Methodology Old and New Paradigm DPSS Kpi Model Process and Outcomes 5

6 The Context. Strategic Business Partner Transactional Relationship Multi Site Operation Critical Service Cultural Issues Master/Servant Negative impact upon business performance 100k - 150k Budget 6

7 Negative Outcomes Disputes Variations Claims Cost and Time Overruns Lack of Trust Lack of Flexibility 7

8 Client Desired Outcomes Understand the process of developing effective Kpi and the DPSS model Develop a valid set of Kpi (7max) Understand the value of effective kpi Develop an robust plan to enable effective reporting, analysis and improvements Appreciate the determinates of an effective relationship 8

9 Project Methodology Joint Workshop Based To jointly select the top most important KPI from the DPSS Model that best supported the long term relationship and thereby improve results To develop and agree an implementation plan Create system to facilitate continuous improvement 9

10 Project Outcomes To develop with Client and Contract team members a series of robust and verifiable KPI, utilizing the DPSS Model to enable the efficient and effective management of the contract and thereby encourage innovation, responsiveness and flexibility 10

11 Traditional Paradigm. Contract management is the process that ensures both parties to a contract fully understand their respective obligations and that these are fulfilled as efficiently and effectively as possible to provide the best value for money. 11

12 The New Paradigm.. Contract management is a process by which a contractor is motivated and enabled to achieve extra value added, over and above that which has been specified originally and assessable against criteria in the original contract. The process should be to the benefit of both parties 12

13 Contractor Motivation- A Needs and Wants Approach AVC Esteem Social Security Physical 13

14 Stakeholders and Positions Change Agents High x Opponents x Site managers? Advocates CEO SMT Understanding of the project Indifferent The only group driving change Low Blockers Engineers Followers Finance Against Agreement with the project For 14

15 DPSS Model 15

16 DPSS Kpi Model The DPSS Kpi model is based upon the key statements approach whereby all stakeholders involved in the process are able to score consistently. It is also part of the model that the level of performance required for each category is agreed with the contractor and is dependent upon the nature of the contract and the service. 16

17 Overarching Kpi Relationships Flexibility HSE Responsiveness Innovation Site Concentric Performance Quality Cost Management Programme Information flow 17

18 The Aims of the Model Delivering the outputs to the required standard Ensuring contractors and clients are meeting their contractual obligations Early identification of problems to ensure prompt remedial action Seek innovations and service improvements 18

19 Three Key KPI. On site Relationships Responsiveness Flexibility 19

20 KPI (1) Relationship Key Statements 1. Poor, constant conflict, complete ongoing lack of communication, adversarial, noncooperation. 2. Limited contact, adversarial, some conflict, focuses on obligations. 3. Common understanding of requirement and needs, recognition of need to cooperate, willing to negotiate conflicts/disputes, exchange of value constructively, trust. 4. Mature, professional/commercial approach, recognition of contribution of both sides to manage the relationships, nurturing and developing the relationship, free flow of information/ideas, concerning, free to open discussions, candid feedback, able to cope with stresses and strains. 5. Harmonious relationship, confident, jointly agrees objectives, mutual risk and rewards approach, commitment, constantly seeking opportunities to eliminate NVAs and to add value. Our aim is to move from red to green 20

21 KPI (2) Responsiveness Key Statements 1. Failure to respond to any requests for information, support or any assistance, constant reference to contract terms. 2. Reluctant to respond, constant reference to the contractual obligations, unwilling to freely respond, very passive approach 3. Adequate response, more flexible approach, positive attitude, commercial interpretation of contract obligations. 4. High levels of responsiveness, being proactive, positive approach, appreciate the added value of being responsive. 5. Exceeding requirements, very proactive, seeks to respond before requested, culture of customer delight. Our aim is to move from red to green 21

22 KPI (3) Flexibility Key Statements 1. Very rigid approach, unwilling to react to changing situation, seeks to only to meet contractual obligations 2. Limited flexibility only when forced to deal with changing situation, unwilling approach. 3. Flexible on most occasions, seeks to interpret the contract to the benefit of both parties 4. Very flexible and co operative in the vast majority of situations, contractor seeks to be willing partner and strives to delight the client 5. Very flexible, always willing to respond to changing requirements. Our aim is to move from red to green 22

23 Example Worksheet For Each Site Soft KPI Level Jan Target level Examples where it worked well (list the main ones) Examples where it did not work well (list the main ones) May levels Flexibility 2 4 Pre job orders together contractor supply equipment not in the contract Limited flexibility during Site move to off load client materials Shortage of water wells Site client allow contractor to pre move kit To supply with experience people Cannot ? 59-3?

24 Force Field Analysis Flexibility Enhancers Backers Blockers Disarmers Increase Empower 1) Experience people. 2) Office support of local decisions. 1) Rigid Contract. 2) Unclear program/ Copy paste. 3) Negative attitude of some people. 4) Overloaded duties and paper work. 1) Review/ more user friendly. 2) Clear and specific programs. 3) Training and coaching. 4) More assistants. 24

25 Force Field Analysis Relationships Enhancers Backers Blockers Disarmers Increase Increase Support Increase 1) Management support. 2) Training. 3) Team building. 4) Good planning. 5) Joint events. 6) Reward system. 1) Lack of trust. 2) Lack of transparency. 3) Lack of communication 4) Equipment? 5) Poor attitude. 6) Lack of experience. 7) New comers to client and contractor/ Don t understand the culture. 1 & 2)Being honest and open 3) More team building and more training/ coaching. 4) Joint objectives. 5) Re-allocate people based on experience. 6) Better coaching and induction/ special relationship 25

26 Survey Evaluation Variable outcomes effective not efficient High risk and low reward inefficient and ineffective Customer delight demonstrated added value efficient and effective Mechanistic risk adverse efficient not effective Process 26

27 Actions Set up of SLA between Client and Contractor Set up a series regular facilitated joint events to review Kpi and key business improvements Joint training and development program Review of the contract 27

28 Outcomes to date Improvements in Relationship, Flexibility and Responsiveness Reduced disputes/variations Sense of Ownership of the relationship Improvements in Productivity On going Commitment 28

29 Close Out Any Questions? 29