I missed Day 1 of the IQPC BPM summit due to a road trip to Detroit, but I’m here this morning to hear the speakers, and this afternoon to give my own presentation. It’s a small group, probably less than 40 people, but I’ve already been hearing great things from the attendees about how much that they’ve learned from the two days so far.
I missed Jodi Starkman-Mendelsohn of West Park Assessment Centre speak first thing, but I’ve heard her speak twice this year already so just had a quick update from her at a break on what they’ve done since I last saw her.
Ron McGillis of Ontario Power Generation talked about their contractor management program, where they manage all contracts for everything that they do with power generation: everything for both construction and non-construction servicing of the 3 nuclear power generation plants, 4 fossil fuel plants, 64 hydroelectric and 3 wind power facilities in the province. This came out of their safety compliance programs, since McGillis stated that this was their greatest concern with their contractors (the WSIB people in the audience applauded at that point), and that it needed to be the same level of safety for contractors as for OPG employees.
In 2002, they did a safety audit that showed some serious problems — “systemic, cultural-based problems with the existing contractor safety management process” — and recommended some standardized processes around the safety standards for contractors. This resulted in OPG’s current policy statement that their contractors and subcontractors must maintain a level of safely equivalent to that of OPG employees while at OPG workplaces, and set out requirements that the contractors are accountable for the health and safety of their own employees while at OPG, including ensuring that they don’t harm OPG employees or the public.
They’ve come up with a contract management process that’s documented and freely available on their website. They have consistent pre-qualification processes (which would pre-qualify a contractor for working with any division of OPG), processes for awarding contracts, standard performance reporting, and training for anyone involved in the contract management process. Using the ISO standards as a guideline, they recreated a Plan – Do – Check – Act program for contract management, and defined roles and responsibilities for each contract: owner, administrator, monitor and buyer.
Every contract stipulates these roles explicitly, and also safety clauses in terms of reporting, inspections, procedures and rules. This trickles down to any subcontractors, too.
Their contract process has five steps: planning, procurement, post award (which ensures that all parties are ready to go to work on the execution), execution, and close-out.
The contract management manual is only 13 pages long, and is at a “contract management for dummies” level, with the following content:
- The steps in each stage
- Who is accountable for each step
- Forms (mandatory)
- Worksheets (mandatory)
- Job aids (good practices)
- Check lists
- Notes and references
Training was a key part of their success, including contract administration and monitoring courses at various levels of detail, ranging from 4 hours to 4 days.
From an automation standpoint, this isn’t a BPM system implementation: this is BPM in the sense of “management discipline” as defined by Gartner, where there’s a structured business process that is providing a huge benefit to the organization, but none of this process is automated. They have database applications that provide some analysis — for example, a contractor database allows for input of various scoring factors and provides a pre-qualification rating — but most of this is about getting people to follow the correct business processes. Their contract management process is so successful that it’s been adopted by some large companies and other power generation companies.
Their lessons learned for any business process change:
- Let the process “soak”, giving it some time for people to get used to it before making changes (since people will always chafe against a new process when they’re first getting used to it).
- Listen to and engage the stakeholders.
- Benchmark against other similar companies, and don’t reinvent the wheel (including using ideas from other successful organizations).
- Ensure senior management is fully committed, or you will fail.
- Ensure that you’re adequately resources for all stages of the project, including post-implementation.
At the end of the day, they’ve cleaned up all the problems identified by the 2002 audit, and has provided a consistent pre-qualification process for contractors that benefits the entire organization.
McGillis travels extensively both to make sure that the program is being implemented consistently within OPG, and as an evangelist with external companies and by speaking at conferences.
Could parts of this process be automated to some benefit? Possibly, although they’ve likely gained so much of their ROI already in terms of cleaning up the process and capturing the relevant data in their database application. Process automation might provide them with some additional visibility into the processes, although likely not much more efficiency.