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AVEVA ProCon Complete Contract Control

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Improving capital project performance and profitability through Complete Contract Control

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AVEVA ProCon Complete Contract Control

  1. 1. Complete Contract Control Improving performance and profitability of capital projects June 2016
  2. 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. 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. 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. 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. 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. 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. 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
  9. 9. Contract Communication Registers 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 9 Owner Operator Portal Contractor Portal
  10. 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. 11. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 11 ProCon: POST-AWARD | FINANCIAL HEALTH
  12. 12. 8over8 - AVEVA Knowledge Transfer 12 THE ProCon CHRONICLES
  13. 13. 8over8 - AVEVA Knowledge Transfer 13 THE ProCon CHRONICLES COMMUNICATION TYPE CONTRACT ROLE TIME & DATE REVISION HISTORY CUSTOM TAGS OWNER ROLE
  14. 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. 15. ProCon Analytics & Dashboards Early Warning & Contract Management Decision Support
  16. 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. 17. 8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 17 ProCon: ANALYTICS AND DASHBOARDS
  18. 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. 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. 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
  21. 21. © 2016 8over8, an AVEVA Group company. All rights reserved. All trademarks herein are the property of their respective owners. 8over8 and the 8over8 logo are trademarks of 8over8. 8over8.com/ @8over8 /8over8 8over8.com/resources/thought-leadership/

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