Westney Consulting Group
2200 West Loop South
Suite 500
Houston, TX 77027
Phone: 713-861-0800
Toll Free: 800-648-3475
Email: info@westney.com

Strategy Development

Strategic planning begins with ensuring that management has a complete and timely understanding of the source and magnitude of all risks and uncertainties. Westney’s Due Diligence and Risk Analysis services provide the basis for developing risk-informed strategies for the front-end of the project as well as for execution and startup. Project strategies must be internally, externally, and dynamically integrated and consistent across the four project dimensions: Commercial, Financial, Technical and Execution.

Strategic Program Planning

Very large “mega” projects carry considerable risks due to their sheer size.  These size-related risk drivers include the large number of interfaces to be managed; the organizational complexity when all the partners, project teams, and contractors are considered; and the impact the project’s demand for materials and services has on the global economy.

Effectively managing these mega-projects requires a program-management approach in which the work is broken into subprojects. This allows strategic risks and organizational functions to be addressed at the program level, while tactical risks and project functions are addressed at the subproject level.

Strategic Program Planning addresses these issues in a structured way.  As an outside party, Westney’s consulting teams are able to facilitate a planning process that brings all the stakeholders together. Of particular importance for mega-projects is defining the specific allocation of responsibility and authority between the program level and each of the sub-projects. Another is the procurement and contract strategy that addresses how economies of scale can be achieved. 

A critical challenge faced by developers and independent owner/operators is the need to conserve funds during the front-end scoping and engineering definition work that leads to financial close and the release of funding for project execution.  This can pose a real dilemma, since financial close generally requires that project definition be quite thorough so that lump- sum contracts can be executed and the expectations of all financial stakeholders met.

To resolve this dilemma, Westney implements Front-End LEAN™, a proprietary process in which the results of early Predictability Calibration™ and Risk Resolution® are used to prioritize the tasks and deliverables during the front end of the project.  Front-End LEAN™ uses risk analysis to determine the best way to implement front end loading for a given project in order to optimize the time and effort required to reach sanction while still producing the predictability required by financial stakeholders. 

 

Contracting Strategy

The contract strategy is a critical part of the planning process; done well it can help ensure predictability and performance, done poorly it can cause lost profits all around.  It describes how responsibilities will be allocated between owner and contractors, how the work will be packaged and divided among contractors, how risks will be allocated and priced, which contractors will be invited to bid, and what type of contracts to use.

Contractor Due Diligence (see the Due Diligence section) is the first step in this process.  This provides the basis for developing and implementing the optimal contracting strategy, considering the project’s scope, technology, location, timing, and other factors such as market conditions and the owner’s organization capability.

Once the contract strategy is defined, of course, it must be implemented effectively.  Each step, such as prequalifying contractors, preparing an RFP or evaluating bids, requires specialist expertise and considerable experience.  Given their combination of owner and contractor experience, Westney’s consulting teams bring considerable insight to this process, combining a deep understanding of contractor operating models with experience in implementing all types of contracts to ensure the client’s objectives are met.