November 2010 Newsletter - Detail
Caravel opens in WA
The Caravel Group has just opened up its third Australian office in Perth's central business district. The new office supplements Caravel's existing offices in Sydney and Melbourne, and its New Zealand offices in both Wellington and Auckland.
With the resources boom showing no signs of slowing, the need for experienced professional service delivery companies is increasing. Resources companies are pushing ahead with expansion plans but are struggling to be able to resource these growth projects with skilled and experienced staff.
Caravel has initially provided support to these companies with east coast based staff but this isn't really how Caravel likes to operate. Caravel's MD Paul Myers is a strong believer in "living the market" and is showing that he is prepared to back that belief with real commitment.
The Perth office will be responsible for the management and support of all professional services staff working in the west. Naturally the Perth office will be fully supported from Caravel’s Sydney head office and WA clients will enjoy the benefits of Caravel’s 20+ years of professional service delivery experience.
Truly “living the market” means that Caravel staff are already travelling with clients to the Pilbara region on a regular basis and have plenty of red dust under their finger-nails to prove it!
New Caravel personnel
Two new service delivery professionals have recently joined Caravel’s ranks. Mark O’Brien, a highly qualified and experienced project manager, academic and theologian joined us last month. Mark is based in Perth and is working with our client, the Iron Ore division of Rio Tinto. Mark is involved in Rio's drive to grow their Pilbara iron ore business.
Phillip Siddens, a finance industry veteran with 25 years experience under his belt also joined Caravel last month and is working with our client the National Australia Bank on a key process improvement project. We would like to welcome them both to Caravel.
Is your professional service provider sharing your risk?
Do you feel that as the client, you are carrying all of the risk in a project, with the professional service provider happily benefitting from any missed deadlines and extensions to projects? Caravel believes that's unfair and has done something about it.
Typically a client will hire a professional service delivery company to deliver services on a fixed price basis. This is very understandable as the client wants to have certainty and control over the project budget. However, this can and often does become a problem. The PSP will provide a fixed-price quotation at the very start of the project when the true scope of the project hasn’t been fully defined. This then means that as the project progresses the PSP realises that to project delivery on time and within budget will be difficult, if not impossible.
Once the project budget has been exhausted and the project not delivered, the PSP then has a dilemma; continue on with the project and lose money, or pull out and leave the client with an undelivered project and face possible legal action. Either option is undesirable.
An alternative option favoured by PSPs is to perform the service delivery under a ‘time and materials’ contract. This guarantees that the PSP will not lose money and in fact even rewards him for late delivery, by continuing to pay for services even if the target delivery date has been past. Naturally this is not an approach favoured by clients!
Caravel recognises the difficulties of the first approach and the unattractiveness of the second. For that reason we have adopted an approach called ‘fixed price with continuity’. This provides the security for the client of a fixed price proposal together with continuity of payment for the PSP, albeit at a lower rate until the project is finally delivered.
This approach is modelled on the alliance ‘gainshare-painshare’ approach, rewarding both parties for delivering the project on time and within budget, but ensuring that both parties also share the ‘pain’ if the project delivery date is missed.
For more details on how this model may work for you, give us a call.
Christmas break
Christmas is just around the corner but we won't be shutting our doors for long. Being a professional services provider, our staff and associates work when our clients work. Our supporting services will continue through the Christmas and New Year break, only closing on the statutory public holidays;
- Monday 27th December 2010
- Tuesday 28th December 2010
- Monday 3rd January 2011
If your project needs access to our support services on one of these days, please contact us as soon as possible so that we can determine the appropriate arrangements.
Breakfast seminars in 2011
We'll be running a series of breakfast seminars across the country throughout 2011. The seminars will focus on a range of topics around successful project delivery, with each seminar being headlined by an appropriate expert in the field. Details of the seminar series will be posted on our website. We'll begin sending invitations to the seminars early next year.
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