How to effectively deliver CapEx projects with third-party integrators

Posted by Steve Beyer on Nov 29, 2016 12:59:52 PM

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It's that time of year when you look towards the end of the calendar in an attempt to squeeze whatever remaining capital can produce some effective results for your operations. Or you may be looking ahead to the new year, plotting and planning how to best tackle the most important and complex challenges facing your business.

Third-party integrators, who are expert in optimizing systems' performance and/or delivering specific technology work scopes, are important partners who can be especially called upon to take advantage of this unique time of year. Our collective Subject Matter Expertise (SME) combined with a broad skill set and diverse talents make a strong system integrator a great partner for tackling those end of year projects and delivering next year's major upgrades.

Here are several areas to consider for managing expectations to achieve your best possible outcomes.

Find a Like-Minded Partner

First of all, align your styles and validate that the team you're working with, and the company you plan to engage with, shares your values and understands the things that are most important to you. In other words: get to know the management and the project team leadership that you'll be dealing with. Communication and negotiation are critical to your success, and having your finger on the pulse of the relationship and being aligned with one another's values will be critical. It is reasonable to expect that there will be some differences of opinion, and potentially misunderstandings. Being able to professionally and equitably work through those will be paramount to both parties' satisfaction and success.

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Set Priorities

Prioritize the activities that you seek to have accomplished. Discuss the reasons for those priorities, and the parameters by which you come to those conclusions, with your integrator. The more you get on the same page about what matters and why, the better conversations you are going to have and the more informed both parties will be going forward. This will also lead to more productive outcomes. If cost savings or safety enhancements are the most important factors for you, or if improvements in production capacity or quality are your main drivers for these projects then be sure to communicate that. Share as much as you're comfortable with to your partners so that that context can help them make the best recommendations, and choices.

Be Specific

Specificity in work scopes, including the language that is used and the measures that are called for are critical. Vague or loose language, even changing the way terms and words get used can sow the seeds of problems down the road. Avoid generalizations, and focus on specific dates, assumptions, brands, technologies, locations etc. The more specific you can be in defining the parameters for success the more likely you are to see them realized. It is not uncommon for projects to go off the rails owing to ambiguity in direction, or people taking liberties with some vague language in a contract. Review everything together and be clear on meanings and expectations.

Define Risks and Responsibilities

Clarify between the two parties where the risk resides. Some clients will hire contractors with certain expertise specifically to transfer the risk in attacking a problem to an outside SME. There's value in that to a large degree; both parties should agree to that and they should agree as to how that gets calculated, mitigated, and the downsides are to be avoided. A third-party integrator is not a bank or an insurance company. When selected properly this partner should be capable of executing the project to the terms stated in the contract, delivering the expected outcome. Recognizing that there are risks and that some of them are going to be known, and others unknown, from the beginning and then having a process in place to handle those going forward will put both parties in a good position to exit successfully at the end. If there are open issues at the beginning, call them out and put together an action plan with timetables and personal responsibilities for people to resolve them or stop the work until that is done.

Plan for and Manage Scope Change

Lastly and to many people's reluctance, change notices and project control mechanisms are critical to discuss early and often. Whenever a work scope element of quality, budget, or schedule is either at risk of varying from the original plan or in the process of being changed, it must be documented and agreed to by both parties. Consequences have to be spelled out explicitly. Having professional conversations about these, and the responsibility for their decisions and funding, are critical. They are virtually inevitable, especially in large capital expense projects as time and a variety of other factors can introduce new opportunities s and threats to the project. Be sure to have a well-defined and agreed-upon process in place to deal with these.  Embrace them for the opportunities they are, and have the discussions clearing the air and being specific about who owns what. Whether the changes occur or not, they should be agreed to by both parties and documented for future reference. This can be a very healthy and natural part of the project; see topic number one -- alignment.

Expert third-party integrators offer a wide variety of benefits to clients who choose to use them properly, and for the right reasons. Collaborate with the right people in the right setting, and you can have tremendous success at a very reasonable cost, with little to no risk to the outcome. Contact us for more information on our experiences in this regard, or look to the Control Systems Integrators Association for more information and to locate potential partners.

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The goal of this blog is to be helpful to readers by providing useful information about applications in industrial engineering, design and skilled trades, as well as industry knowledge. We're passionate about manufacturing in the United States. We have a little fun with it too.  

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