Contract Management Excellence to improve end-to-end Project execution
Situation at the start
The Group has recognized that a portfolio of large troubled projects destroys the profit margins forecasted at the outset. In order to “stop bleeding” the Group has launched an ambitious strategic initiative within its largest divisions aimed at improving the overall execution of large projects. Focussed specifically on improved quality, cash, cost and engagement. Within this initiative, a set of actions was been identified to cover hot issues along all steps of any typical project lifecycle, balancing improvements on actual execution (to secure results today) and capability building (to sustain results tomorrow).
Contract Management (“CM”) emerged as a new global key function to support the overall business and projects execution, requiring a new CM organization and community to be established centrally and across the Group. The Group Contract Management unit then developed a staged roadmap for achieving CM Excellence across the following dimensions:
- Mission, strategies and policies
- Processes
- Organization, people & skills
- IT and Data
- Information methodologies
- Decision making & control
- Execution support to Countries and Business Units
The challenge
How can Contract Management grow quickly to bring a competitive advantage for the divisions by improving profit margins on projects and increasing securization? How can the division be recognized by customers as best in class in project tendering and execution?
The goal
EFESO was engaged as global partner to support the Group in:
- Improving CM Organization, Skills and Processes.
- Recovering profitability of selected projects leveraging on Claim Management and professional contract administration.
Putting strategy into action
« Boosting performance by acting on Value, Flow, Asset and People dynamics»
Under the Organization, people & skills dimension, EFESO has supported the development and roll-out of a CM Functional Competency Model & Assessment system.
The CM Functional Competency Model is grounded on eight key contract management Competences which are deemed essential for a CM, ranging from Professional & Contract Management general skills to Contract preparation, negotiation, administration, scope change management, close-out & disputes.
A pool of more than 100 Contract Managers worldwide has performed an assessment over such competencies, and has subsequently attended a Face 2 Face reviews with assessors in order to highlight gaps and draw a personal development plan in line with Group CM function targets.
Under the Processes dimension, EFESO reviewed the Group Contract Management Framework and provided recommendations for improvement along the eight key contract management Competences as defined by the CM Functional Competency Model. The work has been then integrated into the new digital Learning suite of the Group.
In order to recover profitability on a big and troubled infrastructure project, EFESO supported a business unit of the Group by assessing the contractual and execution situation, recommending a negotiation strategy and then developing a commercial claim for Extension Of Time and related compensation for delays and disruptions caused by the client’s client during the execution of the project.
Deliver concrete results
« Improving your results today, securing your results for tomorrow »
After having evaluated the identified competence gaps, the Division is currently implementing specific learning and training programs to close those gaps in each country. In parallel, improved capabilities and drafting of commercial claims have been used in negotiations to reach beneficial settlement agreements.
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