The New Engineering Contract, Version 4 (NEC4) has become increasingly popular for promoting mutual trust and cooperation via proactive risk mitigation. The Early Warning Notice (EWN), a risk management tool requiring project managers and contractors to give an early warning of risk before it materialises, is a key element for the success of the NEC4.
But though the concept and value of the EWN is well understood, there are also challenges presented to clients managing complex projects. These concern significant elements of risk and, potentially, large draws on their project and management reserve budgets. How can these challenges be met?
Dealing with the Incoming Bow Wave of EWNS
Traditionally, clients have used some form of document management system to manage the various transactional processes between themselves, the project manager and supplier. These systems are robust and well understood and serve as a great platform for a consistent approach for the management and control of the workflow.
Unfortunately, an Electronic Document Management System (EDMS) presents some issues of its own. Having been designed to manage textual document versions, revisions, markups and approvals, it’s not surprising that such systems can sometimes struggle with numbers as data (with the notable exception of dates).
Generally, for an EWN or Compensation Event (CE), this means that someone along the workflow chain will need to extract that data and enter it in other systems designed for cost and schedule management, systems which are traditionally also separate, although sometimes linked by scheduled imports and exports.
From a contract manager or project director perspective though, this set of EWN documents is so much more than simple text. Collectively, they are the heart of ensuring that their projects will deliver on time and in budget. The numbers related to potential cost and time impacts are key pieces of data— data which EDMSs aren’t normally designed to handle.
An integrated platform, such as the type InEight provides, allows these individuals to deliver document workflows and numeric processing that give stakeholders along the entire value chain what they need.
Reducing Risks and Delivering Actionable, Collaborative Insights
Despite the availability of many stand-alone risk tools, it’s not uncommon to see risk management delivered by spreadsheet. Admittedly, some of these are things of beauty with multiple tabs, colours, shared sections, complex calculations, and pretty pictures but are, at their hearts, still spreadsheets.
The limitations of spreadsheets are well known but, pretty much universally, they persist because they’re accessible, easily created and amended, and make it easy to create visualisations of large amounts of data. This flexibility comes at a cost; in the trees of the register, it’s easy to lose sight of the actual forest of cost and schedule impact, failing to answer the critical question: What does it all mean?
Here at InEight, we are fortunate to be able to build directly on the work of Dr. Dan Patterson. His unique product, which delivered artificial intelligence and machine learning concepts to schedule and risk management, forms the heart of InEight Schedule.
Because of its place in our integrated platform, we can feed it information to tie EWNs to tasks in the schedule, as well as to the impacts of CEs on the accepted program. With the use of “what-if” scenarios, we can perform EWN impacted Quantitative Schedule Risk Analyses (QSRA) and, if your schedule contains cost, Quantitative Cost Risk Analyses (QCRA) too.
This turns the mass of data into something usable, providing insight across the risk space and ensuring that conversations can be focussed on what the notices mean, not just on what they say. Integrated risk also drives project and contract management behaviours aligned with the collaborative approach of the NEC contracts.
Leveraging the Forward View of Compensation Events
The availability of numeric data across the InEight platform extends to the critical contract and budget management functions. Our embedded forms capability ensures that clients and project managers have a real-time view of contract status, including changes at every stage of approval across their project, whilst suppliers can see the same for their contracts.
This is particularly powerful when taken in the context of project and management reserves where the forward view can give you advance notice that drawdown requests may be required and then handled within the same space.
Tracking Complete Audit Trails from EWNs to Change Orders
Probably the single most powerful benefit of using an integrated platform is that every event can be linked to form a complete audit trail. Not only can you see who did what and when, the InEight platform allows information to be linked to a depth we don’t believe is matched anywhere else.
From a single approved change, you can see not only who approved the CR but also:
- Each stage approval
- Each associated budget move
- Every estimate of schedule and cost impact from the initial EWN(s) to the final agreement
- Every instruction and response
- Any related changes including contingency transfer requests
- Every document, image and drawing (including versions and revisions) associated with the CE
The InEight platform manages all this seamlessly with many of these links being made automatically as workflows are completed. In fact, it’s even possible to view a 3D model of the work to place it in context of the wider project all in one, connected environment.
Encouraging Better Decision-Making Via Pertinent Project Information
Taken together, these elements represent a marked step forward in capability. Working within a single platform allows better control, visualisation and management. Actions taken in one functional area are reflected automatically across the project meaning that decisions can be made whilst in full possession of the facts.
This allows leaders to follow a complete chain of events – from cause to impact – before making their decisions. This is a capability that InEight is uniquely equipped to deliver and is excited to announce as part of our offering for the UK market.
Ready to take a deeper dive? Download the full report here, then schedule a one-on-one consultation to find out how InEight can help you succeed in your digitalisation journey.
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