2. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved.
Input Cost Inflation and
Contract Management Indiscipline
are undermining the oil industry’s
ability to deliver complex
projects successfully.
The Business Challenge
2
3. Context: Why this is a priority NOW
8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 3
THE COST/PRICE GAP FACING THE INDUSTRY
Price Index now below 100
Cost Index now at 170
Project execution
needs to capture
efficiency gains
from better
governance and
enhanced capital
discipline
Re-base the cost and price index at 100 in 2004
4. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved.
Context: Control
4
OUTSIDE OUR CONTROL WITHIN OUR CONTROL
Capital discipline and strong governance:
• Defined Business Processes
for all contractor/operator interactions.
• Structured Communication exchange
via a single channel.
• Use of Early Warning Indicators to
mitigate risk
• Collaborative Change Control
Management
• Audit Trail
5. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved.
• Enforced Discipline and Transparency
– All contractually significant communications
received, recorded, reviewed, issued via ProCon
– Repeated reminders to respond to outstanding
communication
– All Operator to Contractor communications
approved by single authority (Company
Representative)
– All parties share same database of
communication registers and final decisions
made - single source of truth
• Claims Defence Readiness
– No claims….yet, but
– Complete audit trail of key decisions made
throughout project is available
• Streamlined & Connected Decision Making
– ProCon available & used by all functions for
contractually significant communications:
• CP
• Finance
• Project Services
• Engineering
• Legal
• Stakeholders
• In first 2 years…
– 14,000+ contractual communications
– Approximately 60 variations managed
Case Study – Complete Contract Control
5
6. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 6
A contract risk management solution, that connects
all decision makers to protect capital investment,
drive performance and improve profitability when
building and operating high value assets.
7. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 7
THE ProCon SUITE
REGISTRATION
PRE-QUALIFICATION
ONLINE TENDER MANAGEMENT
CONTRACT AWARD
TENDER PERFORMANCE
ANALYSIS
MANAGE COMMUNICATIONS
CONTROL CHANGES
& OBLIGATIONS
TRACK & VERIFY PAYMENTS
& BUDGET CONTROL
MANAGE CLAIMS & DISPUTES
LESSONS LEARNT & FEEDBACK
PRE-AWARD POST-AWARD
COMPLETE CONTRACT
CONTROL
8. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved.
Organisation/Governance
• Many interfaces:
• Governments, private partners, contractors, etc.
• 1000s of contractually significant communications
• Poorly defined contract management processes
• Required compliance to governance
• Critical information scattered across ad hoc systems –
spreadsheets, emails, hard drives
• Insufficient tracking of contractual obligations
8
Extremely difficult to
defend against claims
Reactive rather than
proactive risk
management
Owner Operator
EPC/M
Supplier
Supplier
Asset Build
phase
Maintenance,
Repair,
Operations
ProCon
10. CONTRACT TEAM
Liability?
Claim Potential?
Manage Change
8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 10
COST TEAM SCHEDULE/PLANNER
TEAM
ENGINEERING/DESIGN
TEAM
FINANCE
DAY TWO ALIGNMENT
Earned Value
Cost to Complete
Time to
Complete
Delays-resourcing
Knock-on Effect
11. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 11
ProCon: POST-AWARD | FINANCIAL HEALTH
12. 8over8 - AVEVA Knowledge Transfer 12
THE ProCon CHRONICLES
13. 8over8 - AVEVA Knowledge Transfer 13
THE ProCon CHRONICLES
COMMUNICATION TYPE
CONTRACT ROLE
TIME & DATE
REVISION HISTORY
CUSTOM TAGS
OWNER ROLE
14. ERP
Document Management
Engineering
ProCon
• Contract Change Orders
• Governance and standards
• Enhanced contract
performance
• Contractor relationship
management
• Claims defence – risk
mitigation
• Business analytics –
enhanced decision making
• Tendering and contract
portfolio planning
ProCon Integration
8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 14
Project Controls
Supply Chain /
Procurement
Engineering
Management
Facilities
Management
Contractors
Document
Management
Project Control / Cost Management
Desktop
15. ProCon Analytics & Dashboards
Early Warning & Contract Management Decision Support
16. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 16
ProCon:
ANALYTICS
AND DASHBOARDS
Live Tenders Summary
Total Tender Budget Total Number of Tenders Actual Duration Vs. Planned Duration Overdue Tenders
$3.84 Billion 22 22.86% 86.36%
$1.76 B. (3)
$1.76 B. (3)
$1.76 B. (3)
$1.76 B. (3)
$1.76 B. (3)
EPC Greater than $50MM
[AG] – Major Tender Competitive Bidding
Minor Tender Competitive Bidding
[Europe] – Major Tender Competitive Bidding
Europe Approved Fast Track Tender
Tender template
NumberofTenders
Tenders due to complete
within next 30 days
0
Tenders without ProCon
activity (over 30 days)
16
Total Tender Budget
$3.84 Billion
Total Tender Budget
$3.84 Billion
Contract Commitment Vs. Tender Budget Value
-1.9%
$30.68 Million $31.26 Million
Total Contract Commitment value Total Tender Budget Value
Actual Duration Vs. Planned Duration
40.52%
By schedule time
261%
12%
-17%
-49%-54%
Award
Create documents
Dispatch/Trading
Shortlist
Review
Total Open schedule items by Completed Tenders
226
19 120 26 24 35
Award
Create Documents
Dispatch/Trading Review Shortlist
Actual Duration Vs. Planned Duration
$15.31M (2. tenders) $30M (1. tenders)
$30M (1. tenders)
$30M (1. tenders)
$30M (1. tenders)
$15.31M (2.
tenders)
$15.31M (2.
tenders)
$15.31M (2.
tenders)
$15.31M (2.
tenders)
$15.31M (2.
tenders)
Completed Tenders without Contract Awarded
1
In progress
overdue
19
3
17. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 17
ProCon:
ANALYTICS
AND
DASHBOARDS
18. 18
ProCon: Customers & Partners
[easy, transparent, secure]
“We deploy ProCon on our
16 largest projects but
there’s scope to extend it
further. The Prelude
deployment of ProCon has
been a pathfinder for Shell
and is the benchmark for
other projects to work
against.”
“ProCon’s transparency
gives you the big picture
and the close-up view
of every detail into
project-critical processes
and procedures”
BG
“Every step of the way, ProCon
creates an audit trail. Claims
avoidance is essential in Australia
where contractors will make claims
whenever they feel they can get
away with it”
“ProCon addressed an
important productivity
challenge delivering some
impressive savings — every
business day”
Woodside
“ProCon defined a robust
and disciplined approach
to high risk commercial
engagements.”
Wintershall
8over8 Limited, an AVEVA Group Company, 2016 All rights reserved.
19. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 19
ROIs confirm these beliefs…
ProCon replaced 10 lawyers at
Arrow responding to a claim for
a week; estimated savings of
1680 lawyer hours and $22m in
avoided claims
$12bn Shell Prelude -
first FLNG ever built -
zero claims
BP Angola recovered
$1bn from JV partner for
valid project changes
Oil major’s capital over-runs
reduced from 157% to 103%
of forecast budget
ProCon is saving $1m
daily at Woodside - 3% of
the Woodside capex
$22M SAVED ZERO CLAIMS +$1BN
54% SAVED +$1M PER DAY
$60-$100m
AVERAGE
bottom line savings on a $2bn capex project
20. For More Information Please Contact
Mounir Boemond, Regional Manager – Europe, Russia & CIS
m.bomeond@8over8.com
Anara Ubinamin, Business Development Executive
a.ubinamin@8over8.com
8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 20
Each sphere represents a communication
Each communication in ProCon contains:
Communication type
Role that sent and received the communication
The time and data stamp of the communication
Detailed data of the commination itself
Custom tags and attributes as needed
Contractor claims that Owner owes them $1M more
Owner PM asks the team if this is a legitimate claim?
Without ProCon try sifting through all the spheres to find the evidence to defend “NO” on the claim is almost impossible
With ProCon the PM can follow the “Chronicle” and find the evidence needed quickly with one click to reject or accept the claim
Each sphere represents a communication
Each communication in ProCon contains:
Communication type
Role that sent and received the communication
The time and data stamp of the communication
Detailed data of the commination itself
Custom tags and attributes as needed
Contractor claims that Owner owes them $1M more
Owner PM asks the team if this is a legitimate claim?
Without ProCon try sifting through all the spheres to find the evidence to defend “NO” on the claim is almost impossible
With ProCon the PM can follow the “Chronicle” and find the evidence needed quickly with one click to reject or accept the claim