Alliancing

Although we are comfortable with conventional forms of contracting, recent experiences has convinced us that business alliances work and are therefore our preferred modus operandi.

Alliances depend on transparency and a willingness to share risk and are therefore best managed on an open book basis where inputs are re-charged at cost plus a mutually agreed mark-up. The mutual trust and respect required to make alliances work, fit perfectly with the ACMS Shelela ethos and values.

Benefits

Alliancing is neither a simple nor a "soft" process. In our experience alliances can deliver significant advantages, such as:

• Having participated in the process from an early stage, all parties to an alliance are more likely to buy in to and strive to meet the common objective.
• Conventional forms of procurement are often tedious, time consuming and therefore expensive. Although the initial establishment of an alliance is time consuming and relatively expensive, a well run alliance is a more cost effective form of procurement over the long term.
• Alliance partners co-operate to realise efficiencies and effect improvements, thereby generating value for each other within a no-blame culture.
• Parties to a meaningful alliance often commit their best resources to it, thereby creating a high performance team which encourages a learning environment.
• Under conventional forms of contract, the risk resides with the owner of the project or service; in an alliance framework all parties can share this risk.

The members of our management team have all been fortunate to participate in some high performance alliances, and are enthusiastic about the value they can add to a project.

How it works

Business alliances are founded on common values and principles between like-minded parties. Consequently, the groundwork is critically important and requires all parties concerned to invest sufficient time and commitment. For this reason, alliances are best suited to long-term relationships where the parties know and trust one another.

The next step is to ascertain whether or not an alliance is the most appropriate commercial vehicle to deliver the objectives of the project in question.

Once the parties are comfortable with their respective cultures, values and principles and agree that an alliance is the most suitable vehicle to deliver the project, they agree an appropriate mark-up for the outsource partner.

This done, they can negotiate the desired project specifications. Factors that need to be taken into account include design, SHE Q issues, availability and cost of technology, labour (skills availability, training requirements, work permits, etc), supply chain and logistics. While the above factors are standard project planning issues, there are certain key differences in the methodology that is applied and it is from here on that benefits may start to accrue.

Once agreed, the parties cost the specification. This is a rigorous process where designs, assumptions and theories are carefully scrutinised. Where they are found to be lacking in integrity, have too much inherent risk or are unnecessarily expensive the specification is amended.

The finalised specification and resultant costs are presented to the project owner's executive for sanction. As with any project they may refuse sanction, require changes and/or some additional work or sanction the project.

In the event of the project being sanctioned the parties then plan the execution, which encompasses standard factors such as scheduling, communication, reporting, access, etc.