Value chain analysis of the Capital Planning and Delivery function for Melbourne Water Corporation

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Melbourne Water Corporation, a bulk water authority in Victoria, engaged Marchment Hill Consulting (MHC) to conduct value chain analysis of its Capital Planning and Delivery function. This function was responsible for delivering $3.5b of capital expenditure over a 5-year period.

Value chain analysis was conducted in the following areas: strategic planning; program planning; business needs investigation; preliminary business case; functional business case; business case approval; capital delivery and project handover.

The main drivers for undertaking value chain analysis were to:
* Provide greater insight on the broader organisational process model
* Enable the organisation to clarify capital delivery roles, responsibilities and accountabilities
* Improve and optimise its capital planning and delivery processes, and
* Improve the governance arrangements and accountabilities.

The engagement needed to be completed within an 8-week period, leveraging the work MHC had completed in Melbourne Water’s Asset Management Information System Process Review project.
MHC reviewed all of Melbourne Water’s existing asset lifecycle, capital planning and capital delivery process documentation (describing current processes, systems, policies, and procedures) to form a basic understanding of the current state.

MHC then held a series of interviews and workshops with key stakeholders across the business to validate adherence to existing processes, document ‘As-Is’ processes where these did not exist and identify process improvement opportunities. Through this stakeholder engagement, MHC clarified the roles, accountabilities and governance structures supporting the capital planning and delivery process, confirmed the alignment of these roles and accountabilities with the broader organisational process model and identified improvement opportunities in process governance and compliance.

A series of ‘As-Is’ Level 1, Level 2, Level 3 and Level 4 process maps were accompanied by detailed task tables that described the purpose, responsible parties, inputs and outputs, and timing for individual process steps.

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Figure 1: Illustrative Example Process Map and Task Table with RACI analysis 

Upon completion of the ‘As-Is’ processes, MHC used the findings obtained from interviews and workshops, and our repository of best practices, to develop a series of ‘To-Be’ capital planning and delivery processes. The ‘To-Be’ processes were efficient, had clear governance and accountabilities, addressed the current issues faced by the organisation and aligned with the broader organisational process model. Responsible-Accountable-Consulted-Informed (RACI) analysis was conducted to identify the responsible and accountable parties for each process step. Like the ‘As-Is’ processes, a series of Level 1, Level 2, Level 3 and Level 4 ‘To-Be’ process maps were developed and accompanied by detailed task tables, and were validated by stakeholders through interviews and a series of workshops.
MHC conducted qualitative analysis, against agreed criteria, to assess the benefits of implementing the ‘To-Be’ processes.

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Figure 2: Criteria adopted for qualitative assessment of ‘As-Is’ and ‘To-Be’ processes (click image to enlarge)

MHC communicated key findings through the delivery of appropriate reports and presentations to key senior stakeholders across the organisation.

Melbourne Water Corporation received a detailed Capital Planning and Delivery Process Guide that was used as the basis of subsequent process improvement. The Guide was user friendly and clearly articulated process owners, roles and responsibilities. In addition, the business received a report identifying other potential (non-process related) opportunities for improvement. The project was pivotal in determining the subsequent contracting models and capital delivery frameworks to be adopted by Melbourne Water.