Strategic Procurement & Programme Management Improvement

Australia’s largest regional electricity infrastructure company, Essential Energy is responsible for building, maintaining and operating the power network covering 95% of New South Wales and parts of Queensland.

A government-owned corporation, it serves more than 800,000 homes and businesses across 1,500 regional, rural and remote communities. This vital service depends on an extensive portfolio of assets including: 200,000km of power lines, 1.4 million power poles, 136,000 distribution substations and 326 zone substations.

In 2015 Essential Energy embarked on a transformation programme to drive efficiencies and continuous improvement in the procurement and delivery of work across its power network.

Brief

HKA was engaged to advise on work planning, management, governance and delivery. This involved a particular focus on strategic sourcing, contract management and how supplier relationships were managed. We also assessed the organisation’s capabilities in programme and project management.

These processes were critical to the delivery of Essential Energy’s US$400 million (AS$560 million) pipeline of capital expenditure – and its strategic objectives of improving safety, productivity and competitiveness.

What we did

Our work ranged across multiple streams, from safety management to process and systems improvement. It was directed by two fundamental reviews focusing on procurement and programme management.

Our procurement strategy review drew on international best practice and required a stakeholder engagement process involving more than 20 workshops and a hundred people from across the organisation.

The review involved:

• A comprehensive assessment of capabilities in strategic sourcing contract management (SSCM) and supplier relationship management (SRM).

• Designing and developing a future-state framework and strategic procurement capability for collaborative / partnering delivery models.

• Developing the business case for these SSCM and SRM components of the business transformation programme, and an implementation plan.

• Defining a technology strategy to underpin the proposed procurement strategy.

Complementing this work, our team assessed the organisation’s capabilities in programme and project management.

To gauge maturity and practices across all functions, our consultants:

• Reviewed processes and documentation, and consulted senior staff to form a cross-sectional view of how they were applied.

• Assessed these processes and documentation against best practice and benchmarks.

• Identified and ‘templated’ good practice for sharing across the business.

• Defined the standard of maturity required in project and program management, and – based on gap analysis – developed an implementation plan to achieve it.

Outcomes

Our team devised a framework for key elements of the transformative change required by Essential Energy.

We mapped out a clear strategy to improve procurement, work planning, management and governance in line with international best practice and achieve operational efficiencies.

HKA also designed the rigorous processes required to provide Essential Energy with certainty and visibility of project and programme delivery.