The role of outsourcing in the project house - mining house relationship
- Authors: De Villiers, Tielman J.
- Date: 2008-11-18T09:08:18Z
- Subjects: Contracting out , Mineral industries , Project management
- Type: Thesis
- Identifier: http://ujcontent.uj.ac.za8080/10210/388910 , uj:14728 , http://hdl.handle.net/10210/1732
- Description: 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.
- Full Text:
- Authors: De Villiers, Tielman J.
- Date: 2008-11-18T09:08:18Z
- Subjects: Contracting out , Mineral industries , Project management
- Type: Thesis
- Identifier: http://ujcontent.uj.ac.za8080/10210/388910 , uj:14728 , http://hdl.handle.net/10210/1732
- Description: 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.
- Full Text:
An integrated project team strategy in the South African mining and mineral commodity industry
- Authors: De Villiers, Tielman J.
- Date: 2008-11-18T09:08:37Z
- Subjects: Project management , Teams in the workplace , Mineral industries
- Type: Thesis
- Identifier: uj:14729 , http://hdl.handle.net/10210/1733
- Description: D.Ing. , An integrated project team strategy (IPTS) does not start with a detailed list of performance measures, but with the appropriate mindset of what is in the interest of the project. The purpose of IPTS is to unite the core project participants (the 20% of project participants responsible for 80% of the impact on the project success) with a common goal, so that they focus on what is in the interest of the project and not on their company’s interest or local optimisation. Like a tripod, Integrated Project Team Strategies (IPTS) is based on three core principles - a common project incentive scheme, well-defined project success criteria and project control systems and procedures that focus on the project’s needs and do not entice local optimisation. The first leg of IPTS is that all the core project participants share in a common project incentive scheme, therefore their actions are focussed on the same target because it determines the size of their bonuses and incentives. Project success criteria are the second leg and represents the common project target. However, determining priorities in a project strategy is regularly done incorrectly with negative impact, therefore the project success and failure criteria must be well defined for all three areas namely project management, product and relationship success. This is essential for measuring the project success because it forms the basis for reporting progress the project wellbeing during the implementation phase as well as the “successful” outcome at project closure Traditional project control systems and metrics, which were used to measure the progress of the project, tend to measure progress in isolation because they do not consider the overall need of the project. Local optimisation in terms of for instance tons steel erected per hour occurs because that is how managers on the project are assessed, however, that is not in the interest of the project. Although conventional project strategies do not exclude integrated team performance evaluation, all their systems and procedures are based on the performance of a single project participant or division of a participant, thereby creating the ideal breeding ground for local optimization and moves the focus away from the overall project. When looking at some of the latest business publications like that of Eliyahu M. Goldratt (“The Goal”, “It is not luck” and the “Critical Chain”[9]) it is clear that IPTS biggest advantage is to eliminate local optimization encouraged by the more conventional project controls strategies. Because the way people are measured has such a big impact on their behaviour, project control systems and metrics are the third leg of the IPTS tripod. For these reasons, IPTS is a completely new game, which relies on deep commitment to provide a broad flexible framework for doing whatever is required in the current context to ensure project success. It is not about what happened since the deal was struck, nor who is actually responsible for it, but about the success of the project because all participants will reap the benefits of a successful project. In a sense, the demand emphasis for IPTS is shifting from a purely financial to a more strategic approach. In so doing, it is prompting more and more clients and managers into systematic re-examinations of their business models’ structures, efficiency and effectiveness for factors such as local optimization. Often stereotypically conservative and with a cultural bias for control, most clients and service providers in the South African mining and mineral commodity industry have been late and reluctant to let go of their control and associated local optimisation. However, the array of challenges confronting the industry makes control for control’s sake a costly indulgence, which cannot be afforded any longer Not only does IPTS have the ability to change lose-lose relationships to win-win relationships, but most importantly it has the ability to unite all the core project participants in a single integrated project team focusing on the same goals. A number of typical IPTS cases have been developed as part of the research and are included in this thesis as guidelines for the implementation of the research results. These cases were also evaluated practically by testing it during interviews with industry practitioners.
- Full Text:
- Authors: De Villiers, Tielman J.
- Date: 2008-11-18T09:08:37Z
- Subjects: Project management , Teams in the workplace , Mineral industries
- Type: Thesis
- Identifier: uj:14729 , http://hdl.handle.net/10210/1733
- Description: D.Ing. , An integrated project team strategy (IPTS) does not start with a detailed list of performance measures, but with the appropriate mindset of what is in the interest of the project. The purpose of IPTS is to unite the core project participants (the 20% of project participants responsible for 80% of the impact on the project success) with a common goal, so that they focus on what is in the interest of the project and not on their company’s interest or local optimisation. Like a tripod, Integrated Project Team Strategies (IPTS) is based on three core principles - a common project incentive scheme, well-defined project success criteria and project control systems and procedures that focus on the project’s needs and do not entice local optimisation. The first leg of IPTS is that all the core project participants share in a common project incentive scheme, therefore their actions are focussed on the same target because it determines the size of their bonuses and incentives. Project success criteria are the second leg and represents the common project target. However, determining priorities in a project strategy is regularly done incorrectly with negative impact, therefore the project success and failure criteria must be well defined for all three areas namely project management, product and relationship success. This is essential for measuring the project success because it forms the basis for reporting progress the project wellbeing during the implementation phase as well as the “successful” outcome at project closure Traditional project control systems and metrics, which were used to measure the progress of the project, tend to measure progress in isolation because they do not consider the overall need of the project. Local optimisation in terms of for instance tons steel erected per hour occurs because that is how managers on the project are assessed, however, that is not in the interest of the project. Although conventional project strategies do not exclude integrated team performance evaluation, all their systems and procedures are based on the performance of a single project participant or division of a participant, thereby creating the ideal breeding ground for local optimization and moves the focus away from the overall project. When looking at some of the latest business publications like that of Eliyahu M. Goldratt (“The Goal”, “It is not luck” and the “Critical Chain”[9]) it is clear that IPTS biggest advantage is to eliminate local optimization encouraged by the more conventional project controls strategies. Because the way people are measured has such a big impact on their behaviour, project control systems and metrics are the third leg of the IPTS tripod. For these reasons, IPTS is a completely new game, which relies on deep commitment to provide a broad flexible framework for doing whatever is required in the current context to ensure project success. It is not about what happened since the deal was struck, nor who is actually responsible for it, but about the success of the project because all participants will reap the benefits of a successful project. In a sense, the demand emphasis for IPTS is shifting from a purely financial to a more strategic approach. In so doing, it is prompting more and more clients and managers into systematic re-examinations of their business models’ structures, efficiency and effectiveness for factors such as local optimization. Often stereotypically conservative and with a cultural bias for control, most clients and service providers in the South African mining and mineral commodity industry have been late and reluctant to let go of their control and associated local optimisation. However, the array of challenges confronting the industry makes control for control’s sake a costly indulgence, which cannot be afforded any longer Not only does IPTS have the ability to change lose-lose relationships to win-win relationships, but most importantly it has the ability to unite all the core project participants in a single integrated project team focusing on the same goals. A number of typical IPTS cases have been developed as part of the research and are included in this thesis as guidelines for the implementation of the research results. These cases were also evaluated practically by testing it during interviews with industry practitioners.
- Full Text:
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