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Outsourcing in Utility Networks Changing attitudes to break out of the aggressive/defensive cycle caused by contractual relationships.

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Presentation on theme: "Outsourcing in Utility Networks Changing attitudes to break out of the aggressive/defensive cycle caused by contractual relationships."— Presentation transcript:

1 Outsourcing in Utility Networks Changing attitudes to break out of the aggressive/defensive cycle caused by contractual relationships

2 In-house hierarchy Function SM FLM Teams FLM Teams SM FLM Teams FLM Teams SM FLM Teams FLM Teams

3 Client-Contractor hierarchy Function Client Contract Management Inspection Teams Contractor SM FLM Teams FLM Teams SM FLM Teams FLM Teams SM FLM Teams FLM Teams

4 Contract Development in the 1990’s Procurement function led Schedule of rates contracts – 100’s of prices items Many KPI’s – 20+ but lack of focus Client side costs increase – contract management Contractor side costs decrease – competitive bidding Net cost reduced but only for initial years

5 21 st Century Solution Partnering, Alliancing leading to Improved Relationships But where is “Appreciation for a system”? Does the client & contractor really understand contractual risk and accountability?

6 Water Supply Networks Q: Identify up to five examples and prioritise ContractorWorking WellCould Do Better Us55 Them55 ClientWorking WellCould Do Better Us50/1 Them1/210+

7 Final Outcome 1.New contract focus on asset performance key activities → 25 sub activities. Budgets & volumes agreed by activity 3.KPI’s:DG3 DG7 Repeat failures 4.£30m operation 15% reduction in 2 years 75% of savings on client side 5.Industry leader


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