complete contract control - why it matters to your business

Complete Contract ControlAnd why it matters to your business

Middle East Rail 2016 Conference with

Abdulkareem Al-Yami, 8over8’s Regional Director - ME

8over8: Who we are?

8over8 Limited, an AVEVA Group Company, 2016 All rights reserved.

Software author that helps large and complex projects improve their performance

and profitability through complete contract control.

• Founded in 2000 and acquired by AVEVA Group in Jan 2015

• Combined revenue of £345m (FY 2014)

• Headquartered in UK, with offices in Europe, North America, Australia and the

Middle East.

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250 Capital projects, $500bn of managed assets, up to 5% saving on project costs

Traditional

Project Performance

8over8 Limited, an AVEVA Group Company, 2016 All rights reserved. 4

Understanding the key issues


EY analysis of 365 mega projects across

a number of industries:

• 64% face cost overruns

• 72% report delays

• Completion costs 59% higher than

initially estimated

Source: EY, 2014

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Credit Suisse analysis of the reasons why projects fail

Industry Performance on Mega projects


“Average value of a

construction project dispute is

$ 32.1m, taking over a year to

resolve, but the ME is

significantly higher in both”

“Growing trend of ‘mega

disputes’ where disputed sum

exceeds US$1 bn”

EC Harris, Global Construction Disputes, 2014

Industry Performance on Mega projects


Rationale

for these Statics

What happened and why?

Organization/Governance


Rail Company

EPC/MSupplier

Supplier

Asset Build

phase

Maintenance,

Repair,

Operations

Government

Extremely difficult to

defend against claims

Reactive rather

than proactive risk

management

• Many interfaces:

• Governments, private partners, contractors, etc.

• 1000s of contractually significant communications

• Poorly defined contract management processes

• Required compliance to governance (FIDIC/NEC3)

• Critical information scattered across ad hoc systems – emails,

spreadsheets, hard drives

• Insufficient tracking of contractual obligations

Contract Control Portal


AFP verification process

Managing Change Requests/Orders

Mitigating Against Claims

Managing Claims Administration

Subcontractor

PMC / Main Contractor

Subcontractor

Subcontractor

Solution:

• Standardised processes

• Contract Line Items

• Bulletproof audit trail

• Early warning indicators

Subcontractor

Subcontractor

Contract Control Portal

Contractual processes


What does ‘Complete

Contract Control’ look like?

Ensuring projects complete

on time and on budget

ProConComplete Contract Control


Improved

Capital Discipline

Collaborative

Decision MakingPerformance

Dashboards

Transparent

Stakeholder

Engagement

Optimized & Predictable

Commercial Outcomes

Communication Best Practices


Early warning indicators

Timely and regular

communication helps to

spot early warning

indicators of risk

Contractual relationships

Clarity, & consistency

ensure building a healthy

relationship between

different stakeholders

At the right time, in the right sequence

Decisions about scope,

schedule, cost changes

are made by the right

people, at the right time,

in the right sequence.

Complete Audit trail

A complete

communication audit trail

is key to managing and

defending against claims.

Independent source of truth

Regular communication

delivers tamper-proof

independent source of

truth.

Benefits of using ProCon


• Gives the user ownership of the communication channel.

• Systemizes all processes that may affect contract performance.

• Shows the real-time Financial Health of every contract,

including potential commitments and changes.

• Tracks both parties’ contractual obligations and issues

proactive notifications about potential delays.

• Contract cost and schedule data to project, business unit and

organizational level.


What does

ProCon look like?

Ensuring projects complete

on time and on budget

ProCon Functionality


Pre-Award Post-Award

• Contractor Registration

• Questionnaires

• Tender Management

• E-Bidding/Contractor Portal

• Audit

• Award

• Communications & Instructions

• Manage Change

• Manage Payment

• Manage Contract Obligations

• Manage Claims & Disputes

• Manage Closeout

Analytics

Integrations


ProCon Analytics: Pre-Award Overview

1. Gain advanced insight

2. See early warning indicators

3. Connect all decision makers

16

AuditorVenture Manager

CFO


ProCon Analytics: Post-Award Overview

1. Gain advanced insight

2. See early warning indicators

3. Connect all decision makers

17

AuditorVenture Manager

CFO


Contract Financial health

1. Budget

2. Commitment

• Potential

• Pending

• Approved

3. Expenditure

• Potential

• Pending

• Approved

4. Not To Exceed value / ACV

5. Updated in real time

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Summary

ProCon customers believe…


We’ll be using ProCon more and more. We deploy it 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 Shell projects to work against. Shell

It’s important to know that data can’t be compromised. With ProCon all information is

stored securely in one place – that’s highly reassuring for an operation like ours,

collaborating across diverse locations. Tullow Oil

ProCon’s transparency gives you the big picture and the close-up view of every detail into

project-critical processes and procedures. Chevron

I am really pleased with ProCon - all our users have adopted it enthusiastically. PDO

ROIs confirm these believes…..


• 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 $2bn from JV partner for valid project changes

• Oil major’s capital over-runs reduced from 157% to 103%

of forecasted budget

• ProCon is saving $1m daily at Woodside - 3% of the Woodside capex

Average: $20-$100m bottom line savings on a $2bn capex project

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