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Outsourcing in Utility Networks

Outsourcing in Utility Networks. Changing attitudes to break out of the aggressive/defensive cycle caused by contractual relationships. In-house hierarchy. Client-Contractor hierarchy. Contract Development in the 1990’s. Procurement function led

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Outsourcing in Utility Networks

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

  2. In-house hierarchy

  3. Client-Contractor hierarchy

  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. 21st 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 NetworksQ: Identify up to five examples and prioritise

  7. Final Outcome • New contract focus on asset performance. • 10 key activities → 25 sub activities. Budgets & volumes agreed by activity • KPI’s: DG3 DG7 Repeat failures • £30m operation 15% reduction in 2 years 75% of savings on client side • Industry leader

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