Abstract
M.Phil.
The relationship between the Mining House / Owner and Project House can be spectacularly successful for both partners (and has resulted in the emergence of a few successful new project houses and plant operation companies all over the world), but can also be disastrous for both parties, if managed incorrectly. The main requirement for a successful relationship between a Mining- and Project House is that there must be something in it for both parties. This is not only measured in customer perception of value for money (Mining House) and profits by the Project House, but is also affected by mutual respect, the working relationship and the perception that both can profit from the relationship by the following activities:
• Procurement of goods and services.
• Providing assistance in absorbing and adopting process technologies.
• Addressing environmental concerns like Environment Impact Assessment, HAZOP studies as well as disaster management plans.
• A project management team who can ensure proper control and timely reporting to the financial institutions, ensuring there are no cost and time overruns.
• Provide due diligence in order to assign proper value to the assets, business portfolios, brand equity, technology/product, etc.
• For retrofits, revamps, technical/ energy audits, upgrading the processes / quality of product through minimal investment routes.
• In ensuring all aspects of quality management right from the concept to commissioning stage, involving corporate commitment to the quality management process enabling the companies to follow good manufacturing practices.
• To provide knowledge management services i.e. depth of knowledge rather than the breadth.
Until recently, most Mining Houses locked outsourcing in the back room - using it to pass off unimportant functions and processes to competent specialists so that managers could focus on more critical activities and core business. This is all changing as outsourcing is increasingly making its way into executives' strategic toolkits. In other research studies [5; C; K; N] three types of outsourcing relationships have been identified namely conventional, collaborative and (business) transformational outsourcing.
Mining Houses can use conventional outsourcing to generate cost efficiencies in support processes. Collaborative outsourcing is used both to upgrade business processes and to provide flexibility to respond to changing business needs. Business transformation outsourcing holds a higher standard and is a comprehensive approach to create both new capabilities and to use them to achieve a clear strategic objective.