Commercial Transformation and Resource Support
Summary
Avove engaged Deecon to enhance the operating model of their commercial function and processes. This included addressing a backlog of around 300 Final Accounts, a significant amount of outstanding Compensation Events (CEs), and improving commercial governance and reporting. We engaged with Avove stakeholders to identify pain points and proposed solutions by delivering multiple project workstreams. We facilitated a transformation of the ‘Requisitions & Diversions’ function through a re-structuring of the team and re-alignment of the upstream and downstream Application for Payment processes whist ensuring contractual compliance. The team subsequently introduced a bespoke tracking tool for CEs and implemented an integrated Cost Value Reconciliation (CVR) system. This solution streamlined processes, improved data accuracy, and resolved legacy payment issues.
The Requirement
Deecon was engaged by Avove to support the commercial function as part of its long term strategic business transformation. Deecon provided Subject Matter Experts to join the Avove Commercial Team to take charge of the Requisitions & Diversions function to oversee contracts in Clean Water and Wastewater schemes with Severn Trent Water. Our team was engaged to drive commercial and contractual best practices, review commercial governance, support business as usual commercial activities and help in the close-out of legacy projects.
The Solution
Deecon’s team engaged and integrated with the existing commercial team. It was important to build relationships with internal stakeholders, understanding Avove’ ways of working, gain familiarity with existing systems and identify areas of inefficiencies or opportunities across existing BAU practices.
Through extensive stakeholder workshops and process assessments, our team identified key opportunities for improvement:
Duplicated, manual tasks were reducing the commercial team’s ability to focus on BAU activities
The team structure, ownership and accountability of roles and responsibilities were not optimised
Insufficient commercial resource and expertise within the team
Sporadic and undocumented processes led to inconsistencies and miscommunication, often relying on word-of-mouth exchanges
Misalignment on upstream and downstream application for payment processes
The need for significant data cleansing of ProScope, affecting over 3500 projects and 4000 CEs, was paramount to ensuring data integrity
Deecon tackled the above issues by establishing various project workstreams:
1. Transformation Workstream
Deecon led the management of the Requisitions and Diversions (Reqs & Divs) function. As such, we engaged and negotiated with the supply chain on re-alignment of the Application for Payment process to ensure timely payment of work done including compensation events done with the agreed assessment interval.
We worked with the Commercial Leadership team to design and implement a new team structure including updated roles and responsibilities to give more control and accountability of the different work areas within the Reqs & Divs function.
We developed and introduced new Compensation Event Tracking and Cost Value Reconciliation tools, both to provide cost assurance upstream and downstream, and to proactively identify financial risks and poor performance on projects. We also ensured alignment of the new tools with Avove’s existing Workflow Management System (ProScope).
2. Final Accounts Workstream
We had a dedicated team working with Avove Reqs & Divs team members to clear out a backlog of 300 final accounts. This included ensuring substantiation of all works completed, evidence of compensation events applied for, and engagement with both subcontractors and the client to agree and sign off Final Accounts.
3. Legacy Overpayment Issues Workstream
We conducted a forensic review of multiple downstream legacy overpayment issues. This included establishing evidence of payment duplication, engagement with the subcontractors and Avove’s finance team, and the issuance of payless notices.
4. Resource Augmentation Workstream
We provided Subject Matter Experts to support the existing Avove Reqs & Divs team to manage and support BAU work within the West Diversion work area. This includes providing commercial management expertise to incorporate best practices as part of BAU activities, relationship management with subcontractors and the client, reduction of outstanding upstream compensation events and resolution of outstanding subcontractor payments.
The Results
The project successfully cleared the backlog of 300 Final Accounts, significantly reducing the outstanding financial risk. A new CE tracking tool was implemented, providing real-time visibility of outstanding CEs, allowing for timely follow-up and resolution. By integrating the CVR into ProScope, the team gained greater control over project costs and revenues, which improved overall financial management.
Data cleansing across the 3500+ projects and 4000+ CEs improved the reliability of information flowing into the system, enabling more accurate cost estimation and reporting. These improvements reduced the need for manual interventions, freeing up the team to focus on higher-value tasks.
Our expertise and contribution enabled Avove to have a more efficient commercial governance framework that allowed the commercial team to better manage their tasks and accurate reporting, ultimately leading to long-term improvements in business performance.