Core Utilities
Cost and value data visibility drives
improved business performance
Core Utilities is a multi-disciplinary utility contractor
operating across all utility sectors in the UK. Core is facing
growing demand from its customers who require more complex and
sophisticated multi-utility solutions with increasingly tight
budgets; as such cost control and financial management is of
paramount importance.
This presented Core with a significant challenge. They did not
have a robust Cost and Value Reconciliation (CVR) process embedded
in their business and as a result their approach to financial
control of projects was quite often ad hoc. Continually they faced
possible financial failure of schemes. Consequently their
understanding of current assets and liabilities was potentially
blurred and did not realistically reflect the current financial
position of a specific project.
EC Harris was appointed as commercial consultants to develop and
implement a CVR system. This would enable project costs to be
monitored and controlled on a timely basis, primarily to establish
the respective profitability, and secondly to identify any
financial difficulties.
Creating solutions
EC Harris consultants developed a CVR process which fulfilled
the client’s operational, financial and commercial needs.
The first step to achieve this was establishing the reporting
requirements for one project. This solution was then rolled out to
all of the projects being delivered. The project team then created
the base parameters for the CVR, identified the data required to
facilitate an effective template and subsequently devised a
comprehensive CVR template.
Given the levels of financial information required for
population each month, the team worked with the client’s IT
department to minimise manual data entry for each project CVR. The
CVR template was tested with live project data for two financial
period ends.
A series of presentations were also conducted with the client’s
project managers in an attempt to embed commercial acumen within
the organisation. This was a significant area for improvement given
the potential future constraint this could cause.
Adding value
The new CVR template provided a common reporting process across
the client’s business. It has the capability to handle in excess of
400 projects per month and provides management information on a
project by project basis which has increased visibility and
informed smarter decision making. CVRs can now be compiled on a
timely basis for all live projects, compared to a previous rate of
10%-20% using the manual process.
The use of the client’s IT system served two purposes; firstly
it greatly reduced the manual input time and facilitated more time
for a proactive review of ‘problem’ projects. Secondly, the client
received a legacy of reduced operational time and cost in
establishing problem projects and resolving the issues.
The process has facilitated the faster completion and greater
accuracy of financial reporting. It has reduced the need for
repetitive project reviews and enabled a ‘do it right first time’
mentality. Previous iterations of the CVR process required numerous
requests for information which was effectively a reactive process.
The new system, by automatically generating data, has enabled
proactive approaches to reporting accruals, WIP and maximising the
value of variations.
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