At a Glance
- Tollway operator in the Philippines partnered with Renoir Consulting to enhance its project delivery processes and improve operational efficiency.
- Despite past successes, the client identified opportunities for improvement, with challenges including fragmented project management, long procurement lead times and low negotiation effectiveness.
- The client achieved significant improvements through a structured approach led by Renoir, including PHP 46M+ saved through more effective negotiations.
Key Results
- 300%+ improvement in negotiation effectiveness, resulting in PHP 46M+ savings.
- 70% reduction in overdue purchase requisitions, with a 42% improvement in processing time.
- 48% reduction in average lead time, improving from 54 to 28 days.
Background
The client is the leading tollway operator in the Philippines and is instrumental in infrastructure development and the promotion of trade and commerce. Despite a history of successful project completions, the client’s rapid growth necessitated further enhancements to its project delivery and commercial management processes.
Analysis
Despite a track record of successful project delivery, the client recognised the importance of continuous improvement.
Existing basic processes, while in place since the company’s early days, had not kept pace with the client’s rapid growth, leading to unstructured project reporting, a lack of end-to-end project manager ownership, non-standard project progress tracking, fragmented project plans, and the formation of informal project teams contributing to a silo effect. An internal analysis revealed several key areas requiring attention:
- A siloed approach to project management was identified as less beneficial than engaging cross-functional teams with clearly defined roles and accountability.
- End-to-end project planning, including the implementation of milestones or “stage gates”, needed enhancement.
- The client also needed to develop project management skills as a core competency throughout the organisation rather than relying on a few senior managers. It also lacked consistent project reporting tools for better accountability, meeting behaviour, quality, and tracking.
- The commercial and user departments had unclear responsibilities. Procurement planning and the submission of purchase requisitions needed improvement.
- Tracking and monitoring tools were needed to oversee processing times, workload volume, and non-compliant purchase requests.
- The commercial management team faced challenges with negotiation effectiveness and compliance to internal Service Level Agreements (SLAs).
These factors contributed to delays in project execution and increased operational costs.
“Through improving our commercial processes, and aligning our commercial team under Finance, rather than Operations, we have seen significant operational and financial improvements. We are now able to better define our risk tolerance for large projects, identify where contractors add a risk premium, and effectively reduce our project cost through a structured and more aggressive negotiation process.”Â
– PresidentÂ
Project Approach
To address these opportunities for improvement, the client partnered with Renoir Consulting, which involved a full-time task force from the client working under the guidance of consultants from Renoir.
A Management Action Team (MAT) was established to oversee the development and implementation of improvements across Project Management, Commercial Management, and Field Implementation.
This team focused on achieving improvements in behaviour, process, systems, and cost.
Implementation
Improvements in end-to-end project delivery were achieved through the development of three interconnected management systems:
The Project Management Control System (PMCS) served as the overarching framework for project delivery, providing project managers and delivery teams with a toolkit for planning, monitoring, reviewing, and reporting on progress and issues.
To test its reliability, the system was piloted on four projects of varying complexity, and the pilot project managers received training in its use. This marked the initial step in developing project management competency across the client’s organisation.
The Commercial Management Department Control System (CMDCS) focused on reducing procurement lead times and costs through improved negotiations. The task force developed tracking and reporting tools, along with a departmental scorecard, to enhance performance focus. This system was designed to reduce procurement lead times, resulting in a decrease of 54 days to just 28 days. This signifies a significant increase in the speed and efficiency of the commercial department’s processes for fulfilling service requests.
The success in the commercial team was attributed to the implementation of new tools and processes and hands-on coaching provided by the taskforce and MAT team.
The Field Management Control System (FMCS) ) enhanced the team’s ability to control contractors, ensure accountability and provide accurate, timely information to senior project managers, thus overseeing the entire project lifecycle.
This system supported the PMCS by ensuring proper monitoring of cost, quality, and time at the point of execution. This led to reduced field delays and faster decision-making and problem resolution.
Results
Implementing the PMCS provided a consistent and structured approach to project delivery, equipping project managers with essential tools for effective management.
The CMDCS led to significant improvements in the efficiency and effectiveness of the commercial department. Notably, the commercial team secured over PHP 46 million in additional cost savings through more effective and structured negotiations, improving negotiation effectiveness by over 300%.
They also reduced the lead time for procurement requests from 54 to 28 days by 48%. The commercial team also experienced a 42% improvement in processing time, significantly reducing overdue purchase requisitions.
The FMCS enhanced the client’s ability to hold contractors accountable, reducing field execution delays and expediting project decision-making. The alignment of the commercial team under Finance, rather than Operations, further contributed to significant operational and financial improvements, enabling better risk tolerance definition and the effective reduction of project costs through a more aggressive negotiation process.
The overall outcome of client’s partnership with Renoir was an increased level of confidence and reliability in project delivery for the client, positioning them for smoother operational and financial performance as they pursue their expansion program.
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