Managing the Project Delivery Culture - David Birch - National Grid


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  • Stage 4.0
    Considers the need for boundary capability increases, potentially required as a consequence of changing generation and demand background (in line with the RIIO-T1 Network Development Policy process)
    The System Operator (SO), TNS, leads this stage which also considers operational, regulatory and commercial solutions
    The Transmission Owner’s (TO) role is to identify and cost reinforcement solutions (build options or ‘SMART’ options) for the SO to consider using a least regret cost benefit analysis approach.
    Recommended solutions with spend in the next ten years that meet a potential reinforcement driver shall pass through Gate A0 into Stage 4.1
  • (Project Engineer’s view on unapproved CENs, EWNs, etc)
  • Managing the Project Delivery Culture - David Birch - National Grid

    1. 1. Managing the Project Delivery Culture David Birch EVA 19 20th May 2014
    2. 2. National Grid – Overview 2  Electricity and gas utility company that connects consumers to energy sources through its networks – efficiently and sustainably  Owns and operates the high-voltage electricity transmission network in England and Wales, and the high pressure gas transmission system across Great Britain  National Grid gas distribution business delivers gas to 11 million homes and businesses in England  In 2013, agreed RIIO-T1 (Revenue=Innovation+Incentive+Output) price control with OFGEM to deliver UK investment of ≈£2.5bn a year for 8 years  Challenged to deliver ‘same for less’, or ‘more for less’
    3. 3. Project Delivery using Network Development Process 3 4.0 4.1 4.2 4.3 4.4 4.5 Transmission Network services Electricity Transmission Asset Management (ETAM) ETAM Capital Delivery (ETAM for Sanction) Capital Delivery ETAM Controlled utilising an EV Management system for Projects in 4.4 Execution
    4. 4. Flexible suite of procurement options for delivery: • Inter AAA competition • EPC framework • professional services framework • Front End Engineering Design (FEED) framework • direct allocation • bulk purchase Contracting Strategies 4 Pre RIIO New regime Area Alliance Agreement (AAA) Contracts • direct allocation by region • joint teams • target cost
    5. 5. Systems and Data Architecture 5 Project Monthly Review
    6. 6. Project Controls – High Level Process 6 Governance Documents 4.1 Establish Portfolio 4.2 Select Option 4.3 Develop 4.4 Execute 4.5 Review /Close PEP - Sanction Project Brief (Handover to CD) A2 B DC E Project Manager’s Report) Baseline Risk Management & Analysis Monthly Reports NDP Monthly Update Cycle Calendar ProjectControls BusinessProcesses Workbook Develop supporting reference Guides Work Breakdown Structure (WBS) – Scope Capture Baseline Change Control Risk Evaluation and Analysis Base Estimates & Contingencies Cost-Loaded Schedule Creation Progress Update & Forecasting Schedule Management / Analysis Reporting (Project, Portfolio ,RIIO) Cost Management / Analysis AllBusinessProcessesinonesystem
    7. 7. Develop - Project Execution Plan (PEP) 7  Scope  WBS  Estimates @ CBS Level 8  Baseline Schedule (cost loaded)  Risk Register  Contracting Strategy  Informs the sanction paper (governance)  Works Information
    8. 8. Develop - Estimate Build-up and Contingency Governance 8 NG Programme Contingency NG Project Contingency Estimated ‘Contractor Project Risk Allowance’ Base Cost Estimate NG Scope An agreed quantified allowance to fund NG Project risks An agreed quantified allowance to fund Contractor Project risks An agreed quantified allowance to fund NG Programme Risks . DoA (Only IG). Indicative TargetCost SanctionValue Additional Scope contingency established and managed by ETAM QRA⃰ ⃰ Additional Scope Contingency ⃰ ⃰ Additional scope contingency included within sanction value for projects by exception ⃰ ⃰ Values initially determined via a Quantitative Risk Assessment workshop and running a Monte Carlo analysis on the outputs, project and programme contingencies are re-assessed following agreement of Target Cost with contractor
    9. 9. Execute - Baseline Change Control 9  Enables rigorous governance – sanctioning process  Project Manager autonomy within Delegations of Authority (DoA)  Scope  Key milestone movement  Budget  Contingencies:  Project contingencies > DoA  Programme contingencies  Spend profile > £1m between financial years
    10. 10. Execute – Reporting Calendar (Work in progress) 10 Contractor upload of SAP Financial Data D - 6 Project Reviews D +2D - 2 P6 Contractor upload into NG P6 Database and data validation Business Review Meetings (every 3 months) D +10 Portfolio and Programme Reports Analysis D+7-8 NG assessment SPMs and team D +6 Data Reports to Teams PE and Contractor Pre-submission review Monthly Delivery Reviews SAP & NG P6 upload into COBRA plus data validation Challenge & Update Analysis Management Reviews DataLockDown D+3 D +15 Change Board Monthly Executive Review
    11. 11. 11 Execute - Forecasting Target State Timely Monthly forecasts that are: A comprehensive view of future project costs (from contractor, National Grid and any third parties) Based on Current delivery strategies Known Events and Risks before they hit formal change control Performance Trends Divided into Work/Cost Breakdown Structure (allowing for elemental comparison with baseline and performance metrics) Monthly update to answer two primary questions: 1. What is the project completion? 2. What will be the outturn cost?
    12. 12. 12 Target Reporting Suite  Cost Performance Report – detailed and summary level review of EV performance metrics (down to Level 4 in National Grid space linked to Contractor’s activity level plan)  Cost Report – individual project and programme level review of outturn-cost predictions and Fiscal Year budget performance from Forecasts including Risks & Trends  Project & Programme Change - Contingency use and Trend dynamics Dashboard  Schedule integration - issues report: outage risks fed from Project @ Risk process; critical completion and predecessor milestone movements  Programme and Delivery Unit performance - dashboards (abstracting key data points, exceptional variances with analysis (milestones, EV, FY and ECC vs. Sanction)
    13. 13. Expected Results and Future Direction 13 Access to reported data via drill-down and use of dashboards By Portfolio, Programme and Project
    14. 14. Expected Results and Future Direction  Dynamism, with drill down through layers of information  Single source data (through systems linked by data bridges noted in slide 5)  Discipline in managing data to achieve the quality to maintain meaningful reports  FY management for tactical control related to budgets and in year performance  Population management on a rolling programme through audit trail on changes (month on month)  Move to incorporate and use BIM 4th and 5th dimensions 14
    15. 15. EVM Maturity Assessment  Standard APM 32-point spec for EVM systems  Actions in place to achieve mature state  7 Business Processes & 40 Standard Operating Procedures 15 1 Define authorised work and resources via contract work breakdown structure (CWBS) 2 Establish Organisational responsibility for work achievement via OBS 3 Ensure management subsystems support each other, the CWBS and the OBS 4 Identify who is responsible for overhead cost control 5 Integrate CWBS with OBS 6 Schedule all Authorised Work logically 7 Identify interim goals (milestones) by which to measure work achievement 8 Establish/Maintain at the Control Account Level, a Performance Measurement Baseline 9 Establish budgets by elements of cost 10 Establish budgets at the Work/Planning Package Level 11 Sum of all Work Packages + Planning Package budgets = Budget Cost Account 12 Separately identify and control the use of LOE 13 Establish budgets for overhead costs 14 Identify MR and UB (undistributed budget)separately 15 CBB = BAC + MR 16 Formally record all direct costs and establish budgets in a consistent and comparable manner 17 Prohibit multiple accounting as direct costs are summarised through the WBS 18 Prohibit multiple accounting as direct costs are summarised through the OBS 19 Record all allocable indirect costs 20 Identify applicable unit costs 21 Establish an acceptable material accounting system 22 Identify performance measurement data elements at the C/A level on a monthly basis 23 Identify schedule and cost deviations on at least a monthly basis 24 Identify overhead performance measurement data as needed 25 Sum performance measurement data elements through the CWBS and OBS 26 Identify management response to variances 27 Develop EACs and compare to staffing plans, and the CBB 28 Incorporate all authorised changes in a timely manner 29 Reconcile original budges with current budgets 30 Control retroactive changes to records 31 Only the Senior Manager or the Customer may revise the CBB 32 Document PMB changes 0 1 2 3 4 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 1516 17 1819 20 21 22 23 24 25 26 27 28 29 30 31 32 April 2015 Maturity Enduring Maturity
    16. 16. Thank You, Questions