Creating more open contracting

In the constant push for cost efficiencies and greater productivity miners are re-examining their processes and how they manage every aspect of their operation,

They are striving for greater visibility in order to gain a deep understanding of how they work, who works, and their workflow, in particular with contractors.

Sourcing, reporting, tracking, and performance management have all risen in priority, but unfortunately visibility remains clouded.

The traditional way of doing this involved delving through reams of paper, but miners began searching for a better way in order to improve their "governance, visibility in real time and control over contracting activities," at least according to Iluka and a major miner.

They focused on five major aspects to gain this greater control: contracts – including worker histories, skills, insurance, and key dates; sourcing – including procurement planning procedures and time frames; management – including performance KPIs and milestones; workflows and business processes; and project management, including prioritisation, project cash flow, and issue management.

However both miners faced the unique problem of dealing with a number of different sites which all had their own ways of operating.

The miners faced a serious hurdle in implementing a single source system that not only provided greater visibility, but also a common operating process that ensured the same measurability and reporting for each project or mine.

"Previous processes were reliant upon separate registers and databases to manage procurement and contracts for projects, claims, site instructions and communications," the major miner explained.

"We required a single source of information that would summarise the 'health' of a contract, to easily and quickly convey all costs including potential costs through unrecognised site instructions and claims," the miner said.

"The ability to standardise processes that supported various project delivery methodologies EPCM, EPC and FEED was also another key driver for us."

Iluka itself had restricted visibility into overall contract information, as there was "no reporting that was specifically targeted at contract spend, contract type, activity or performance," the miner explained.

"We required a tool that would measure these activities."

The two businesses turned to Open Windows CONTRACTS and CONTRACTS Portal to provide them with the greater visibility and support they needed combined with a capability to remotely access the data.

Iluka explained: "The CMS offered a functional and user friendly management tool and enabled the 'embedding' of standard contracting processes and workflows within the system."

The major miner added: "We used the portal to improve process approval automation, contractor relationship management and enable a centralised contract management life-cycle repository."

For the miners, it changed their whole approach as process workflow templates were now configured to enable contract managers to simply step through their day-to-day tasks whilst maintaining the organisation's structured electronic approvals.

The major has already recognised the benefits of a wide ranging contract management system, which enabled them to eliminate multiple individual registers and databases and manage the entire contract lifecycle in one centralised system

"Using an electronic approvals process benefited the organisation by reducing the reliance on forms and templates for approvals that was often a long, drawn out process," it said.

It also uncovered inefficiencies in the existing practices, allowing the miner to stamp out poor processes.

"It has brought to the foreground activities that were not good Contract Administration but were accepted as the normal practice.

"The implementation of the system has assisted us in improved cycle times from concept to execution of a contract by reducing the time frame by four weeks by being able to implement an automated and streamlined approval process

"Using the Schedule of Rates import functionality enabled quick setup of contract line items that can then be viewed and claimed for payment by external contractors via the CONTRACTS Portal," it said.

"Contractors submitting claims for payment utilise export and import functionality by exporting the current Schedule of Rates lines, updating claimed quantities and importing back into the CONTRACTS Portal for assessment and approval by contract managers."

One of the users of the program added: "I have greater oversight and visibility on what is happening within projects, in regards to contracts and procurement, providing information for effective analysis and decision making."

For Iluka it allowed them to configure end-to-end process templates that covered tender creation, evaluation and award, contract execution and performance management, through to expiring contract review and close outs.

"Once a contract has been awarded and is being managed in Open Windows CONTRACTS, integration to Iluka's finance system gives contract managers a view of related financial transactions directly within their contract management system," Iluka said.

"Supplier information is also kept in-sync using the integration to ensure accurate data is always available and maintained.

"With improved controls and vital integrations into company systems our company now experiences much better 'on-time' management of contracts," Iluka said.

"Open Windows provided a platform for data integration with our existing company reporting system for more comprehensive and granular reporting of contract activity which enabled greater visibility for more informed business decisions."

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