Have you experienced alliance project cost over runs that no one can explain?
How effective are the relationships you share with your alliance partner organisations? Are you all maximising the effectiveness of the unique resources that the Alliance was created to achieve? Are you all equally sharing the risks and benefiting from the rewards of your engagements with each other? Are you all meeting your obligations? Is everyone on the same page? How about innovation – are your teams collaborating clearly and efficiently to successfully navigate inter organizational terrain?
If you are unable to clearly answer every single one of these questions (or perhaps you have more questions of your own) then you should speak with us about our Alliance Auditing services.
ALLIANCE AUDIT SERVICES
An alliance is a commitment to a relationship between two or more organisations for the purpose of achieving specific business objectives by maximising the effectiveness of each party’s strengths and unique resources. These objectives are obtained through a single shared cultural framework without regard to organisational boundaries, whereby the client and participants share the risks and rewards. Under alliances, the organisation is prepared to compensate participants with extraordinary profits, if extraordinary savings are realised.
The key to alliances is that relationships are based on a spirit of openness, trust, dedication, the sharing of common goals, and understanding all participant’s individual and/or proprietary expectations and values. Alliances are different from traditional long-term “partnering” relationships, in that alliances are predominately formed for a limited duration and a well-defined or limited scope objective. Project alliances are based on a set of generic principles for which all participants must be fully committed.
The key principles are:
- Performance obligations are collective not individual
- Risks are shared and managed collectively rather than allocated to individual parties considered best able to manage them
- A commitment to resolve issues within the alliance without recourse to litigation except in the case of “wilful default”
- All transactions by all parties are open book and subject to audit
- Project is governed by a leadership team with representatives from all parties who carry full authority to bind the party they represent, with all decisions by the team unanimous
- Project is managed by an integrated project management team, where members are assigned to the team on a “best for project” basis
- Participants are committed to developing a culture that promotes innovation and a no blame/fault ethos
- Reimbursement to the alliance partners (apart from the owner) is a 3-part compensation model
In order to achieve the most beneficial outcomes for all participants in alliance arrangements, it is imperative that, the various corporate objectives of each of the participants are aligned and understood, and that, the self interest or goals of the individuals/professionals performing tasks on behalf of the alliance are synchronised with the agreed alliance principles and goals.
From a commercial, financial, and accounting perspective, Wolverine.consulting can assist you with the following:
- Preparation of the Form of Agreement
- Outlining alliance principles and objectives
- Defining the role of the Alliance Board
- Determining the manner in which the alliance reports to stakeholders
- Developing alternative gain-share/pain-share methodologies
- Assisting in the selection and evaluation of alliance partners
- Preparing risk based annual audit plans
- Providing alliance auditors as part of a team representing your interests
- Conducting progressive audits during the life of the project, either as the lead auditor or as a participant in the alliance audit team, for the attestation of each participant’s allowable costs, to be applied to the alliance project’s cost pool and thereby ensuring there has been no overcharging
- Attesting gain-share/pain-share calculations for compliance with agreed alliance frameworks
- Proving strategic advice related to the commercial, financial, accounting, and audit provisions of the alliance arrangement
- Process efficiency reviews
To learn more about our Alliance Audit Service capabilities and how we can help you contact us, or to view those Alliance partners we have audited click here.