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Alliancing – A better way to ensure project success?

alliancingOn Friday the 27th November the Infrastructure Clients group and the ICE launched their Alliancing Code of Practice (CoP) to help infrastructure companies’ work together more effectively on joint projects.

Infrastructure is the backbone of the UK economy, providing the networks and systems that supply and support reliable and cost effective transport, flood protection, energy, communications, water and waste management.

With infrastructure investment already on the rise and further confidence in the investment required being made following the autumn spending review, ensuring they are successfully developed and delivered is at the fore of IUKs thinking. This requirement to undertake projects in a better way is only further emphasised by the industries 2025 commitments.

For the many mega projects that are in the pipeline for the coming decade, due to the size and complexity of them there won’t be a single organisation that will be able to discharge the works. We see in Crossrail, Thames Tideway Hinkley Point C and a number of other mega projects that JVs are now commonplace. But is simply putting a JV together enough? Should we be pushing for closer integration in the form of alliances?

Alliances, generally underpinned by common goals and integration, find that through the collaborative way they work they generally outperform more traditional models. But they are still not as commonly undertaken as you would expect given that track record.

The greatest value will be achieved when client, partners, supply chain and in some cases stakeholder groups are all part of the alliance and aligned with agreed outcomes.

If so successful why hasn’t alliancing been taken on more?

The cultural and behavioural commitment required to make alliancing work isn’t something that comes easy to the industry. But as well as the soft skills traditional procurement and contracting practices do not marry up well to alliancing.

As described by the European Construction Institute “Alliancing is a form of long term partnering on a project [or programme of works] in which a financial incentive scheme links the rewards of each of the alliance members to specific and agreed overall outcomes and in which all aspects of the arrangement are incorporated in legally binding contracts

We are certainly seeing a shift in the industry where major projects are putting the building blocks of an alliance in place early. Many of the major infrastructure procurements that have recently happened or will soon happen have behavioural assessment as a key aspect of the process ensuring that their supply chain partners have the cultural and behavioural DNA to make it work.

We’ve seen this most recently on the Thames Tideway Tunnel where great attention is being placed on ensuring that the behaviours within the JVs demonstrate the culture required to work together for the greater good of the whole project. This is further demonstrated by the commercial model that is incentivising all JVs to work together, with one target rumoured to be the removal of 2 years from the project programme.

They know and understand that a joined up supply chain is the best way forward not to just achieve their goals but to exceed them.

This clarity in the outcomes required and ensuring that the right people are in the right place on all sides is a cornerstone to successful alliancing.

This approach also places an early emphasis on behaviour, culture and the importance of leadership – and so sets a tone for everything that follows when implementing a collaborative model.

It’s great to see clients adopting such a collaborative ethos within their procurement programme but this is only the first step with the reinforcement of the behaviours required throughout the construction phase.

This ethos creates a culture of innovation within organisations, creating an environment where ideas develop and are implemented where productivity is high and things are generally done in a better more efficient manner.

The CoP provides a good platform for consideration, it is a checklist of things to do. But one shouldn’t just pick this up make sure they tick all the boxes and think they’ll be able to run a successful alliance. The behaviours need to be ingrained and performed through the organisation. Unless behaviours change nothing changes no matter how many boxes you tick.

One surprise as a reader was that BIM wasn’t mentioned at any point in the document. The characteristics and behaviours to fully take advantage of BIM are similar to those required in an alliance. And with the governments push for level 2 and looking further ahead to level 3 and a digital built Britain I’m surprised that more emphasis wasn’t made between these two.

Further to that the report goes on to talk about a shared and open governance process. Again the link to a common data Environment is surprisingly missed.

The code of practice is a good document and gives an excellent overview of what is required and what are the pitfalls when pulling together an alliance.

There is clear evidence that especially for major projects an alliance is a valuable delivery model that drives efficiencies. There is also plenty of evidence that they are difficult to create and difficult to sustain without the right behaviours and the right people being in place.

At Invennt we have a long history of successfully implementing alliances and behavioural change programme and successfully procuring with the creation of an alliance in mind.

If you would like to discuss how we can support you in your endeavours to create an alliance or how to implementing a behavioural change programme please do not hesitate to get in touch at ben.pritchard@invennt.com or 07961071166.

Ben Pritchard

Ben joined invennt from Magnox Ltd where as a Framework manager in the Nuclear Decommissioning sector he led the procurement and commercial management of a range of frameworks and projects covering demolition, new construction, refurbishment and retrieval, processing and conditioning of waste.

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