STOs are dynamic and complex environments
STOs are completely different to any capital, normal or maintenance project. Change is rapid and unpredictable in both nature and extent; the present is unclear and the future is uncertain; many different, interconnected factors come into play, with the potential to cause chaos and confusion; and there is a general lack of clarity or awareness about situations in real-time. Add to this the influx of hundreds and even thousands of contractors brought onboard for predefined periods of time to perform predetermined and specialized tasks, and we are in a dynamic and complex environment.
Working with contractors in STOs is challenging
Almost by definition, the motivation and drivers of contractors are very different to those of the organizations utilizing their services in execution of an STO. Insufficiently familiar and often lacking the big picture of the facility where the STO is being performed, contractor productivity can be low. As new discoveries lead to additional, unplanned work, schedules and timetables for both contractors and resources are directly impacted. Furthermore, the support of contractors in the execution of work can raise a range of other challenges and conflicts of interest, from liability and risks to safety and availability.
Can we get more value out of contractor relationships?
To get more value out of contractor relationships, a McKinsey & Company article sites the following as keys to stop wasting money in contractor management: job definition and scoping; understanding what is actually involved in the work to be performed; transparent invoicing; checking invoices against negotiated rates; allowing contractors to get to work; auditing of even small spends; and recording and monitoring of deviations from agreements. Interestingly, the article headline reads “To get more value out of contractor relationships, companies should start by looking in the mirror at their own management practices.”
From my experience, this is very true. As companies look in the mirror at their management practices and observe market trends and practices, many are adopting digital transformation as the solution for better management, particularly in STO settings. And digitalization offers the opportunity to improve contractor relationships.
Digital transformation improves management capabilities
All the issues related to the challenges of working with contractors in STOs can be improved by better management. Digitalization is the key, because it:
Delivers optimal visibility of the STO status through the real-time, online connection of all personnel – workers, contractors, managers and stakeholders - involved.
Enables the aggregation of STO data for analysis, evaluation and prediction purposes.
Improves communication with contractors, raising their motivation, productivity and performance.
Reduces human inefficiencies and risks in the workplace.
Empowers the sharing of knowledge, knowhow and experience to generate more efficient and quicker solutions.
Supports decision-making based on actual facts and insights from the field.
Digitalization is a gamechanger for contractor management in STOs
Every STO involves the extensive involvement of contractors. But do you have the tools to monitor and manage your contractors? To ensure that they deliver on the hard-fought contract terms agreed during the sourcing process and provide their best performance?
Read our latest eBook, Contractor Management in STOs: How to Up Your Game, and learn how digitalization can transform contractor management, performance, motivation and productivity in STOs. It’s a win-win for all concerned.