Efficiently Capturing Effort & Cost in Mega Projects Involving Mutiple Partners

By Ghaith Al-Hiyari posted 30 days ago

  

Integrated ERP Systems that companies use to capture spent hours and cost, beginning from time sheets all the way to employee payroll and project invoicing are great. And they provide fantastic visibility into how an organization is performing  on a certain project.

However, once you have a joint venture with multiple partners forming a special purpose vehicle to undertake a project,getting that data visibility across all partners, to obtain project wide performance visibility; things get complicated.

Some of the challenges that I have either experienced or could think of are:

- Each partner of a joint venture use their own ERP System (i.e. Oracle, SAP, JD Edwards….etc) to capture effort and cost and is, again completely integrated with how they pay their employees and bill their projects across the whole organization.

-Many partners in joint ventures are usually concerned about confidentiality issues when it comes to sharing data with other partners in a joint venture.  There is a trend to share the least possible amount  of data, which in-turn requires constant manual data manipulation and creates waves of extra work across all partners.

On one joint venture led project that I worked on in the past. We tried to work around this issue by engaging an additional stand alone cloud-based project timesheet booking management system that all project staff - regardless of which company/ partner they belong to - had to put in their effort / hours detail. This seemed to have resolved that challenge in theory. However in reality, project staff had No strong motivation to record their hours in the additional project based time booking system, simply because there were No consequences to not recording your effort and time in it. Contrary to corporate based effort booking system, where not recording your effort is linked to your payroll, there is no link between the project-based time booking software and payrolls. It becomes more of an honor system, which unfortunately turned using this application into a white elephant.

I am sure many of you experienced a similar challenge on a multi - partner consortium or joint venture. I am curious and interested to learn how you worked around it. I cant help but think that there must be an efficient solution that is either out there or that could be developed in the near future. Something similar to a project based plug-in to the different commercial ERP software that can extract normalized data from these different sources to have an efficient harmonized project-wide data visibility, with minimal manual input.

Your thoughts?

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27 days ago

Good topic Ghaith.

A joint venture is like any close personal relationship. In this case, between two companies, it’s like a marriage,  a monogamy. Between many partners, it’s polygamy. There has to be a comprehensive prenupt between parties to put certain boundaries and expectations. I see these boundaries as absolute necessities that will provide control, or sad to say, in the end, a semblance of control on what can be a chaotic relationship. The syllogism is undeniable.

From your experience, you’ve mentioned a few instances that rose up to the surface. Those are true and hard facts. I could imagine that many of us who worked under a JV have similar experiences. Transparency is a challenging  word, as you’ve mentioned. Majority, will probably agree. I have to agree because self-interest is the greatest interest of all! It’s logical and fundamental!

The typical and prudent approach for parties contemplating a joint venture is to go through a JV checklist. Once all identified potential issues are satisfied, including accountabilities, responsibilities, inclusions, exclusions, legalese, expectations, reporting requirements, etc., the contract with all aforementioned covered, either on the main body, or addendum, can be signed. Without these things being addressed, in my opinion, the JV is doomed to failure.

Rufran (012418)