Commercial Function Transformation and Process Improvement
Summary
Avove engaged Deecon to address the inefficiencies in their commercial function and processes, including a backlog of around 300 Final Accounts, outstanding Compensation Events (CEs), and inadequate commercial reporting.
Avove Requisitions and Diversions (Reqs & Divs) function faced several challenges relating to contract compliance and commercial management. We engaged with Avove and their client to identify pain points and proposed solutions by delivering multiple project workstreams.
We facilitated a transformation of the Reqs & Divs 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 CVR system. This solution aimed to streamline processes, improve data accuracy, and resolve legacy payment issues.
Situation & Approach
Through extensive stakeholder workshops and process assessments, our team identified key inefficiencies:
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
Lack of sufficient 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. This will ensure timely payment of work done, including compensation events, with the agreed assessment interval.
We worked with the Avove Commercial Leadership team to design and implement a new team structure including updating roles and responsibilities which will give more control and accountability of different work areas within the Reqs & Divs function.
We developed and introduced a new Compensation Event tracker and Cost Value Reconciliation tools, both to provide cost assurance upstream and downstream and allow early identification of financial risks and poor performance on projects. We also ensured alignment of the new tools with Avove existing Workflow Management System, ProScope.
2. Final Accounts Workstream
We had a dedicated team working with Avove Reqs & Divs internal team members to clear out a back log of 300 final accounts. This included ensuring adequate substantiation of all works completed, evidence of compensation events applied and involved engagement with both subcontractors and the client to agree and sign off on final accounts.
This workstream allowed for the clearance of legacy final accounts and queries, freeing up the Commercial team to focus on higher value tasks.
3. Legacy Overpayment Issues Workstream
We conducted a forensic review of multiple downstream legacy overpayment payment issues. This included establishing evidence of payment duplication, engagement with the subcontractors and Avove finance team, and issue 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 with 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.
Results
The project successfully cleared the backlog of 300 Final Accounts, significantly reducing the WiP. A new CE tracking tool was implemented, providing real-time visibility of outstanding CEs, allowing for more 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.
The enhancement of the Avove Reqs & Divs function through a team restructuring and re-alignment of the downstream Application for Process has created a more efficient, automated function. This allows the commercial team to better manage their tasks, ultimately leading to long-term improvements in business performance.