In my role as director and consultant with BSCM Operational Risk, clients and service providers talk to me about issues they have faced which might have been avoided if the contract mobilisation had been more robust. Based on their and my experience, I consider these to be the five golden rules to getting it right.
1. Involve the experts in the procurement process
Whilst procurement managers are experts at procuring, they are not experts at facilities management or engineering. Selecting a service provider to manage all your facilities is a decision that should be made on more than price and promises. The facilities managers and engineers will know which are the searching questions to ask and can properly evaluate the answers.
2. Audit, audit, audit
Once the contractor has been selected, it is common practice for the existing equipment to be audited prior to the commencement of the contract, to build an asset register so that both parties know the current status and the costs to bring everything up to the necessary standard. The resulting agreed actions can then be incorporated into the final contract.
I have come across a situation where a contractor was instructed to do a full survey and conditions status of all the plant, but didn’t do so. Three years later the contractor said some of the plant was inadequate and needed replacing, much to the surprise of the client. Who is to blame here – the contractor for not doing the audit, or the client for not checking it had been done?
3. Reporting the right KPIs
Again, this is where the involvement of both the experts and management is required to ensure that the key areas have been identified and can be reported on. There will be many different areas of reporting, but I do sometimes see the bulk of the KPIs focussed on contract and service level agreement compliance, with minimal reporting on the actual performance of the facility or the plant. Or worse, reporting of factors that are peripheral to maintaining the uninterrupted operation of the facility.
In other words, don’t forget the importance of the critical outcomes of a successfully managed contract at the expense of the process of managing it!
4. Get the contract wording right
During the contract mobilisation period, typically three months, there will be many areas debated and agreed, such as reporting, the results of the audit and asset register, specific compliance requirements, training of client teams. The initial draft contract needs to be updated to include all these before it is signed. If something is omitted from the contract, it is difficult, if not impossible, to retrospectively ask for this service to be provided within the agreed fees and terms.
5. Project management
Contract mobilisation should be managed as a distinct project in its own right. The better it is managed, the fewer the chances of a dispute during implementation, which is to the advantage of both client and service provider.
Many service providers will have experienced contract mobilisation project managers who can work with the client’s team to make the process effective and efficient.
And if Riskenomics is to be used for the project – whether to manage critical systems, audits, compliance, business continuity or the whole facility – it also excels as a project management tool for contract mobilisation and ongoing management!