OHL Case Study.
Posted 30 November 2017 by Charlotte Mellor | 0 Comments
OHL is an international concessions and construction group. Headquartered in Madrid, it operates across 30 countries with a focus on eight home markets -USA, Canada, Mexico, Spain, Colombia, Peru, Chile and Central Europe.
As a strategic promoter of public-private projects, the OHL Group is the 37th largest international contractor, 10th in USA and 4th in Latin America, with a strong presence in the construction of hospitals and railways (Ranking Engineering News Record ENR 2017).
A strategic approach to risk management
Risk management had been identified as one of the fundamental pillars to deliver OHL’s 2020 Strategic Plan: financial sustainability, profitability and cash generation. Alfonso Martinez, Risk Manager, OHL Industrial, explains, “With profitability and risk management prioritised over growth, we needed a detailed analysis of existing risk management processes. The process resulted in developing and redefining our risk management model, methodology and management, so we saw that a robust platform to help our new, independent risk management department was key to success.”
OHL selected Predict! to support its restructured risk management model. Flexibility, customisability, its project risk management focus and the Monte Carlo simulation of both cost and schedule were key draws for the OHL risk team.
The Risk Decisions team met with OHL to discuss the team’s specific needs around risk. Project focus, qualitative and quantitative risk assessment, reporting capabilities and the capability to foster collaborative teamwork were all highlighted as core features.
Susheel Chumber from Risk Decisions comments, “Alfonso and his team had a really clear understanding of the way risk management can drive their business strategy. We took the time to understand the future roadmap for risk management at OHL and ensure this information was used to inform the future roadmap for our Predict! Software. Engagement is so vital to an organisation’s risk success so an effective, integrated solution that focused on user experience was our goal. The platform was implemented to provide that full view of OHL’s risk exposure to help make those impactful, strategic decisions.”
Alfonso explains, “Risk Decisions really understood our requests to enhance Predict. They were able to ensure our approach was genuinely effective, advising us how to manage, classify and report large risk related data. This means we can meet our complex organisation’s specific needs. The team provided a fast response and enabled continuous improvement.”
Predict!’s single platform delivers consistency across OHL’s numerous and complex projects. Working with Risk Decisions increased risk awareness within the company, raised risk management levels across all projects and placed risk at centre of project management.
“Centralising both risk management and analysis of our bid and project risks helps us to understand our strengths and weakness as a company. It means we can now take strategic decisions to tackle priority risks at a corporate level rather than on a smaller, disjointed project level,” explains Alfonso.
“By integrating all risk related processes in a unique and adaptable tool, it’s easier to monitor the risk and follow-up actions. We now focus on value-add strategic activities.”
The platform also drives business goals as OHL’s risk team can quantify project risks by region and business line as well as organisational criteria such as with/without partners and public/private client. The team can then use available contingency to assess how the risk will impact the forecasted project result.
Prioritising risks affecting bids means the commercial team can drive efforts towards mitigating main risks. Reporting has played a huge role in transforming OHL’s risk approach, with both project and management teams using risk reports to drive strategic decision making.
Shaping risk management
OHL Industrial attribute organisational transformation to the new risk management methodology with improved practices – quantitative risk assessment now a standard in all bids and projects together with scheduled risk analysis.
Alfonso says, “Predict!’s flexible, easy to use tool can adapt to our risk maturity. The Risk Decisions team really transformed not just our risk management approach, but culture too. Their market leading experience and responsive support team provides an additional layer of guidance.”
With a user-friendly, rigorous and engaging risk management strategy changing how OHL’s industrial division works, the OHL Group is now planning a large-scale implementation of Predict! in other divisions. Key to this is avoiding Office software for risk management purposes. “We very much see Risk Decisions accompanying us on our path, as we prioritise profitability and risk management over growth.”