Construction Contractor: Shifting a contract from loss to profit
A performance-based contract was consistently loss-making
Similar projects were profitable, but this could not be replicated
Opportunities to increase the scope of work had been seized
They needed immediate and continuous efficiency improvement
A leading engineering and construction company was awarded a prominent infrastructure contract framework. Even though it was already running similar projects and attempted to manage overheads, the contract was still loss-making. The organisation needed to find a way to delight its clients while also maximising framework revenue opportunities and minimising costs. In order to do this, they needed a new operating model to improve efficiency.
The contract became profitable within one year
Increased scope of work won, doubling revenues
A rapid assessment identified short- and longer-term improvements
A way-of-work was adopted to be used across other projects
Additional profitable revenue within one year
Starting with a 6-week rapid work assessment, Arca Blanca created an organisational action plan to give a clear, unified view of the client’s pipeline and the competencies needed for projects. In less than a year, the contract was profitable. Revenues doubled as the client was able to increase its scope of work. Standardised ways-of-working were adopted and applied to other projects. The client continued to improve performance, building on Arca Blanca’s initial work.
A major framework contract was unprofitable and the contractor had not seized revenue opportunities. Within one year, the contract had become profitable and the client had doubled revenues by securing a greater scope of work. Improvements were in-place and a roadmap of continuous improvement continued long after Arca Blanca’s initial work ended.
Marco Mormone, Partner, Arca Blanca