one of us would consider going right through life without occasionally checking in with the doctor to make sure that our bodies are running as they should. If we do come up against a problem, we consult the experts to find out what is wrong and they take the medicine or have the operation to put things right.
It’s the same in business. Even when things are running smoothly, it is a good idea to keep a close eye on things to make sure that nothing untoward creeps up unexpectedly. It’s the same whether you are working on a project using internal resources or are sub-contracting all or part of the work to an external source. Especially when working with external people, as you may not be able to retain quite such a firm control over what is happening if you fail to keep tabs on the project’s overall ‘state of health.’
Establishing an effective, uniform approach to managing sub-contractor work packages is an essential part of the quantity surveyor role and critical to the commercial success of any business or project. The main contractor and customer need to be confident that the work packages in question are being managed efficiently with respect to sub-contractor Early Warning notices (SCEWN), variations, change, risk, audit trail compliance and final accounts.
Commercial Key Performance Indicators normally identify the current position and associated areas of concern within a project. The commercial health check offers a deeper mechanism to really drill down into the finer details to unearth any low-lying problems and to really make sure the project is on track?
What is a commercial health check?
A commercial health check is an audit process that is split into key headings across the whole life cycle of a subcontractor project from a commercial management perspective. Here are these stages listed below:
- A ward of sub-contractor order
- Sub-contractor file structure
- Notices under the sub-contract
- Sub-contractor design
- Recording works in progress
- Sub-contractor defaults
- Final accounts and completion
The commercial health check can be tailored to suit the needs of the individual business, focusing on specific areas that may already have raised concerns internally or with the customer. Alternatively, the audit can focus on the key headings outlined above. The approach and extent of the audit should always be agreed with the senior commercial management team prior to anything being put into action.
Health checks should always be kept calm and friendly in tone, focusing on the process and not any individual people or sub teams.
It’s important to remain open, transparent and honest with everyone directly involved in the audit process. Often, individuals who need the most support will not come forward and ask for it proactively. Employee buy-in is another key factor to a successful health check outcome; it should not be about blame, rather the process should focus on any strategies that are not working as they should be and encourage a standardised ‘right first time’ approach to commercial subcontractor work package management.
Commercial health checks can be a brilliant tool for identifying the current position of sub-contractor work packages from a commercial perspective. Data captured can can really help highlight trends across the business or project:
- What’s working well?
- What areas do we need to improve upon?
- What are our key risks and concerns?
- What lessons can we learn?
- What support can we offer individuals and/or teams?
- How can we ensure a collaborative approach to continuous improvement?
The process works with all contract types, NEC inclusive, and can be aligned with relevant software to manage commercial accounts; C Force is one well-recognised example.