föredrag om outsourcing/inhouse av pekka pakkala från vägförvaltningen i finland

November 9, 2001Pekka PakkalaPTL IT Meeting

Föredrag om

Outsourcing/inhouse

av Pekka Pakkalafrån Vägförvaltningen i Finland

på NVF 11 möte den 9.11.2001


Presentation Overview

Objectives:

Why Change Client Role Changes Models Used Innovative Project Delivery Methods Keys To Success Innovation Challenges In IT

Source: Pekka Pakkala - Finnra


Future Road Administration Perspectives

Future Funding Levels - Insufficient to meet needs

Unfair at Regional Levels Less Traffic Volume Roads Are Suffering Gravel Road Situation NEED => PROVIDE A BETTER ROAD SYSTEM IN

A HEAVILY CONSTRAINED FUNDING ARENA AND AN INTENSE COMPETITION FOR LIMITED ALLOCATION OF GOVERNMENT FUNDS



Future Client Perspectives

Why Change:

Insufficient Funds to Meet the Level of Road Care Management Fully Integrated Client Services Cost Savings (10-35%) in Long Term Contracts Risk Sharing Changing to Performance Based (Outcome Based Criteria) Partnering Potential Innovation Better Asset Management Road User Satisfaction Improved Budgeting Strategic Focus Too much Contract Administration Maintenance Budget Fluctuations



Fully Integrated Client Services

Lump Sum Contract for all activities: Routine Pavement Maintenance Asset/corridor management Vegetation control & Mowing Signs & Traffic Signals Resurfacing Pavement Rehabilitation Emergency Response Drying & Drainage Control Traffic Services Guard Rail Repair/Replacement Lighting Seal Widening & Repair Winter Maintenance



Paradigm Changes In Client Procurementof Maintenance


Estimated

Potential

Savings

Own Forces

(Method Based)

Outsourcing Long Term

Agreements

Outcome

Based

20%

35%

45%


Client Decisions

Traditional(Method Based)

Performance Based(Outcome Based)

RISKS Transferred NO YES

Keep Control YES NO

Innovation NO YES

Significant CostSavings

Minor/Some YES

Less Management NO YES

Reliance on AssetManagement

NO YES



PERFORMANCE CRITERIA

Performance Measures in PSMC Roughness (IRI) Skid Resistance Rutting Deflection (Structural Condition) Texture Cracking Residual Surface Life



Phases in Road Organization’s Reform

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5 Phase 6 Phase 7

Agency &Production

IdentifyClient and

Producer(Deliverer)

SeparateClient and

Producer CorporatizeProducer

PrivatizeProducer

CorporatizeClient

PrivatizeClient

Decreasing Government Involvement

Client Client

Road Fund

Source: World Bank, TNZ & Finnra


Client Role Changes

Need To Outsource All Capital & Maintenance Projects Need To Outsource Other Client Services Develop Clear & Well Defined Client Scope (What You Want) Develop Project Partnering Cultural Change TRUST Between Client & Contractors Developing Outcome Based Criteria Changing to Asset Management (Changing Skills) Aging Organization & Attracting New/Young Professionals Hope => Young Professionals in IT Area Risk Allocation - Which Ones to Transfer Contractors Will be Responsible for Development & Innovation



England MAC Model

Source: Highways Agency

Client

Managing Agent

Contractor

Network Board


USA Model

Characteristics 5 + 5 Year Duration Lump Sum Contract 50% Price & 50% Other (Varies in some states - Best Value) Some Outcome Based Criteria USA states still uses In-house forces for maintenance activities

Rehabilitation is not included (Resurfacing is included)

Results Innovations are realized - Equipment, Contractor efficiency,

pavement, markings & etc. (over the life time of the contract) Significant Cost Savings to Client



British Columbia, Canada Model

Characteristics Now 8 Year Duration (Previously 5 years - 3+2) Lump Sum Price 60% Price & 40% Quality Selection Criteria

Outcome Based Contract No resurfacing & rehabilitation

Results Some minor Equipment & Contractor efficiency innovations Some Cost Savings to Client Defaults due to Union labor problems & High Costs



New Zealand PSMC Model

Characteristics 10 Year Duration Lump Sum Contract Quality Price Trade Off - Selection Criteria Outcome Based Criteria Uses consultants for management & rehabilitation

Results Innovations are realized - Equipment, Contractor efficiency,

pavement, markings & etc. (over the life time of the contract) Incentives as a means to foster innovation Significant Cost Savings to Client



CONSTR.FINANCE DESIGN

PRE-PLANNING &

ACQUISITION

O & M(Operatons

& Maintenance)

UPKEEP&

IMPROVE-MENTS

FULL DELIVERY

IN-HOUSE D-B-B SEGMENTED

DESIGN-BUILD COMBINED

(DBOM)Design-Build Operate Maintain

Design-Build Finance Operate

(DBFO)

Consultants & PPP LONG-TERM

MAIN. AGREEMENTS

(PSMC)

CAPITAL PROJECTS

Index: Traditional: Green Innovative: Purple


Innovative Project Delivery Methods


Partnering Issues

CLIENT

CONTRACTOR

SUB-CONT. SUB-CONT. SUB-CONT. SUB-CONT.

SUPPLIERS

PARTNERINGPA

RTNERIN

G

PARTNERING

PARTNERING

P

RO

JEC

T


PA

RT

NE

RIN

G


Keys To Success

TRUST Partnering Cultural Change BOLD CHANGES - A Champion Among The Industry Future - Contractors will be Responsible for Development

Fully Integrated Client Services Longer Life Cycles Quality Based Systems IT Developments New Products (R&D) Innovative & Intelligent Work Places Intelligent Materials



Innovation

Long Term Agreements - Greater Than 7 Years Partnering (Both Client & Sub-Contractors) Lump Sum Contracts Provide Most Sub-Contractors With Same Long Term Agreement New Equipment Ability to Use Innovation Throughout the Length of the Contract Technical Efficiencies Efficiency in Controlling the Network Area Utilizing New Tools & Materials to Improve Efficiency & Quality Intelligent Materials



Briefing forChanges

Pre-Design Design,Engineering

Upkeep &Maintenance Construction

Briefing

Rehab orDisposal

ProductSpecification

Planning,Cost Information

Information Lifecycle

Source: VERA - Arto Kiviniemi


Information is shared inexploitable data format directly

between different systems

Goal in the Future

Source: VERA - Arto Kiviniemi

PMS

Design/Engineering

Asset Management RWIS

Product Specifications

Traffic Services Maintenance Mgmt Systems

Geometry


Challenges In IT

Interoperability New Business Opportunities E-Roads Project & Maintenance Management Integrating All Design Aspects Into Asset/Cost Management Traffic & Safety Management New Equipment Develop Young Professionals Ability to Use Innovation Technical Efficiencies Utilizing New Tools to Improve Efficiency & Quality


föredrag om outsourcing/inhouse av pekka pakkala från vägförvaltningen i finland

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