business excellence & roi enhancement strategies by dr punit sethi

8/2/2019 Business Excellence & ROI Enhancement Strategies by Dr Punit Sethi

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Business Excellence-Enhancing

Project Returns : Financial andProject Management

Strategies

By Dr Punit Sethi, PhD


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Excellence in Strategies/PM(continuous stream of successfully managed)

Time

Cost/ROI

Performance

Customer Relation

Internal

Internal Metrics

Culture

Work Flow


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5Ms

Men

Material

Machine

Money

Minutes


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Value Engineering

Reduce Cost

Improving Function (improving

functionalities & performance)


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Joint Ventures as Financial & PM

Strategies


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Joint ventures (JV)

to carry out a specific project or simply to

assist with the growth and continuation of

a business.For success and enlarging Business.

To meet Technical and Financial

Qualification.


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JV

Business Agreement for finite time, a new

entity & new asset-contributing equity.

Good JV- Comprehensive Map of duties &

obligations; minimizes complications.


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Consideration for JV

What is being achieved

Exclusive Negotiation

Confidentiality (Undertaking) ?

Limitations of Territory

What consents, approvals, licenses and permits are

necessary for JV to operate?

If cross border whos jurisdiction?

Laws of foreign ownership and investment.

Exchange controls, Relevant Taxes and Duties


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Funding

Own Resources

External Resources

Parties payment in cash or payment in kind such as expertiseand resources

Must agree to percentage (%) of benefit for JV.

Working Capital requirement.

Any losses.

Expansion Costs.


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Advantages : JV

For new products and latest technology enteringinto market, R & D of others

joint venture allows two competitors to join forces,

increase their market exposure, and compete at ahigher level against other, more powerful

companies in the same industry.

It also allows two connected businesses to

cooperate on a joint project in a certain market.


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Advantages : JV

In India, going for JV has become essential for most of the

Indian Companies as per Government norms/rule position

even for Pre-Qualification for qualifying to go to next stage of

bidding. Desires technical experience forces IndianCompanies to go for JV e.g Technical Capacity for purpose of

evaluation (Project experience /Construction Experience on

Eligible Projects in Highways Sector (Highways, Expressways,

Bridges, Tunnels and Airfields) or Core Sector (Power,

Telecom, Ports, Airports, Railways, Metro Rail, Industrial

Parks/estates, logistics parks, pipelines, irrigation, water

supply, sewerage and real estate development).


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Disadvantages : JV

Negotiating a joint venture can be complex and time

consuming. It involves thorough research of the

market and territory in which the products will besold or the project will be organized.

Joint ventures can be expensive to set up initially.


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Action Checklist

Study any joint venture you might set up carefully.

Obtain as much information from as many sources as you can

before committing to an expensive joint-venture agreement.

Plan it carefully and set up a realistic business plan with your

business partner.

Know your market and make sure that you have analyzed the

consequences for your own business of entering into a joint-

venture agreement.

Economize by negotiating a reasonable rate with your legal

advisers, but remember that it is better to incur costs by

obtaining legal advice than to enter into a joint venture under

terms that you do not understand.


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Dos and Donts

Do

Choose your partner in the joint venture carefully, as

you will be legally bound for a set period of time,

under obligations that will prove costly if they are not

successfully performed.

* Involve your solicitors in the evaluation of both

the risks and potential benefits of entering into a joint

venture.

* Negotiate your rates and make a contingency

plan for any cost over-run. Plan carefully how

the joint-venture will operate, how the profits will bedistributed and who will take res onsibilit for what.


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Dos and Donts

Do

* Remember to have appropriate stake in JV to getyour experience considered on your own for next

Project. (like NHAI says minimum equity of 26% for

any earlier projects to be in eligible category to claim

experience).


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Dont

Dont make the mistake of being attracted by

the idea of a joint venture that has not been

thoroughly planned and thought through.

* Dont overlook the importance ofsetting

up a contingency plan in case the jointventure will not work and the relationship

breaks down.


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FIDIC for Financial& PM Strategies


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Knowledge of FIDIC

(e.g especially International Bidding; Model Concessionaire

Agreement)Knowledge of FIDIC. The acronym FIDIC stands for

Fdration Internationale Des Ingnieurs-Conseils, French for

the International Federation of Consulting Engineers.

The founding member countries of the FIDIC were Belgium,

France and Switzerland Located at the World Trade Center in

Geneva, Switzerland, FIDIC aims to represent globally the

consulting engineering industry by promoting the business

interests of firms supplying technology-based intellectualservices for the built and natural environment. FIDIC is well

known in the consulting engineering industry for its work in

defining Conditions of Contract for the Construction Industry

worldwide; code of ethics-fair, unbiased, impartial.


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FIDIC

* Companies and organizations belonging toFIDIC national member associations are

encouraged to announce themselves as FIDIC

members and use the FIDIC logo. The use of thelogo is strictly controlled, and all FIDIC products

and services are protected by the FIDIC

trademark.


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The backbone of the body of FIDIC's publications is FIDIC's selection of contracts andagreements.

FIDIC publishes conditions of contract for:

EPC/Turnkey Projects

Plant and Design Build Contract (updates Yellow Book and Orange Book)

The Short Form

Construction Contract (updates the Red Book)

Works of Civil Engineering Construction (The Red Book)

Electrical & Mechanical Works (The Yellow Book)

Design-Build and Turnkey (The Orange Book)

In 1999, a suite of three new conditions of contract was published by FIDIC, followingthe basic structure and wording harmonised and updated around the previous FIDICDesign-Build and Turnkey Contract (the 1992 Orange Book).

These conditions, known as the FIDIC rainbow, were the Conditions of Con- tract for:

l Construction, the so-called Red Book, for works designed by the Employer lPlant and Design-Build, the so-called Yellow Book, for works designed by the

Contractor l EPC/Turnkey Projects, the so-called Silver Book, for worksdesigned by the

Contractor


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Red Construction Civil Engr EmployerYellow Plant D & B E & M Contractor

(Orange)

Silver EPC T/K ------- EmployerGreen Short ------- Employer

Gold DBO/Long ------- Contactor

White E & C ------- EmployerBlue Dredging & recla ------ Employer


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business excellence & roi enhancement strategies by dr punit sethi

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