United Utilities
Robust cost integration tools underpin
'best in class' delivery of expenditure programmes
EC Harris was commissioned to work in an
integrated team with United Utilities in producing a full set of
unit costs for Infrastructure Capital Delivery (ICD).
This project presented a significant challenge
for the integrated team as United Utilities had never produced a
full set of unit costs for ICD and no data points existed in United
Utilities’ existing Unit Cost database.
The team was required to:
- Make data more visible, auditable and
justifiable to the client and the Regulator
- Provide up-to-date and accurate cost data
required for the PR09 process
- Provide information to support investment
decisions to maximise potential profit and to inform cash flow
predictions
- Provide quality data for the procurement
strategy and tender evaluation models on actual real data.
The purpose was to create an efficient model
to collect and analyse actual outturn costs and provide real time
management information. This would lead to an integrated and
accurate unit costing system that would enable a robust PR09
Infrastructure Capital Delivery submission and would be embedded as
‘business as usual’ going forward.
Creating solutions
The project was managed and delivered as an
integrated team between United Utilities, EC Harris and other
consultants. United Utilities had one project manager responsible
for the project and EC Harris appointed a commission manager to
support the project manager in leading all facets of the
commission.
To meet United Utilities’ requirements, EC
Harris mobilised a multi-disciplinary team with a range of
professional skills including: Project Management, Quantity
Surveying, Information Systems consultancy, Estimating and Project
Controls.
Initially the integrated team developed an
optimum process to collate data manually for unit cost purposes,
ahead of programme, for the initial draft of the PR09
submission.
This involved filtering data from United
Utilities and contractor systems and implementing an area element
coding process for all of the various construction activities
within ICD. This was presented on a standardised data collection
sheet. In conjunction with the manual process, United Utilities
developed a web enabled Cost Integration Tool (CIT) to replicate
the process developed by the integrated team.
Working in partnership with United Utilities,
the EC Harris team supported the implementation of the CIT by
drafting bespoke training and protocol material, delivering formal
training sessions, carrying out user acceptance testing and upon
going live ensured all projects collated manually were coded
correctly on the CIT.
The CIT was successfully launched and is being
implemented by the EC Harris ICD Estimating delivery team. It is
becoming embedded in the day to day running of the client’s
business.
Adding value
The processes developed and the CIT provided
extremely accurate cost data, with only +/- 1% margin for error -
giving the Regulator utmost confidence in United Utilities’ PR09
proposal.
The manual data collection exercise and the
CIT provided further reassurances to both the client and the
Regulator by providing: a full audit trail; increased confidence at
project specific level by achieving a latest best estimate; more
accurate cost data; easily accessible comparative data between
estimated and actual outturn costs and increased accuracy of base
rate data for unit costing.
The CIT proved significantly cheaper and
faster for United Utilities than the previous manual process -
capturing more than 80% of project data at circa £200k per annum in
comparison to the manual process which captured 25% of project data
at a cost of more than £500k per annum.
A combination of EC Harris’ water sector
knowledge, understanding the regulatory process, experience in
delivering multi-serviced solutions and bespoke web-based systems
allowed us to deliver the required solution to United
Utilities.
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