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Leading and Managing Professional
Services Firms in the Infrastructure
Sector

Professional services firms play a vital role in the social, environmental and
economic well-being of any economy. This book considers the key skills and
elements required to successfully lead and manage a professional services firm
operating in the infrastructure sector. Public- and private-sector clients recog-
nise the role that infrastructure plays in the functionality of our cities and that
most urban conurbations have a backlog of infrastructure to deliver to meet the
needs of increasing populations, greater urbanisation and emerging economies.
Just keeping pace with projected global GDP growth will require an enormous
investment in infrastructure and skilful leadership to deliver it.
In response to this challenge, professional services firms will need to be well-led
and well-managed to be successful and sustainable in the long-term. Such organ-
isations must provide high-value advice, design, knowledge and innovations to
get more out of the existing assets and to plan and design new assets with greater
integrity and construct them more productively, efficiently and effectively. This
book provides practical frameworks for emerging operational managers and future
project leaders to prepare them to successfully manage these firms and deliver
such projects in the face of new and often disruptive technologies and shifting
corporate landscapes.
The book is essential reading for aspiring leaders operating in all infrastructure
market sectors including energy, water, sewerage, road, rail, ports, airports, edu-
cation, health, justice, retail, entertainment, property and development sectors.

Tim Ellis has over thirty-five years’ experience in the engineering consulting
industry having worked in operational management and project leadership roles
across Australia, the Middle East, South East Asia and the UK. He has tran-
sitioned from technical specialisation, project management, operational man-
agement, project leadership and more recently to risk management. Over that
time, Tim has successfully developed a diverse range of professional services firms
through organic growth, outsourcing and acquisition. Major infrastructure proj-
ects have been a key platform for the growth of these firms. He is a Fellow and
Engineering Executive of the Institution of Engineers, Australia.
Leading and Managing
Professional Services Firms
in the Infrastructure Sector

Tim Ellis
First published 2018
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
711 Third Avenue, New York, NY 10017
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2018 Tim Ellis
The right of Tim Ellis to be identified as author of this work has been
asserted by him in accordance with sections 77 and 78 of the Copyright,
Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
or utilised in any form or by any electronic, mechanical, or other means,
now known or hereafter invented, including photocopying and recording,
or in any information storage or retrieval system, without permission in
writing from the publishers.
Trademark notice: Product or corporate names may be trademarks or
registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Ellis, Tim, 1962- author.
Title: Leading and managing professional services firms in the infrastruc-
ture sector / Tim Ellis.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2018. |
Includes bibliographical references.
Identifiers: LCCN 2017043742 | ISBN 9780815379171
(hardback : alk. paper) | ISBN 9780815379188 (pbk. : alk. paper) |
ISBN 9781351216623 (ebook)
Subjects: LCSH: Consulting firms. | Engineering firms. | Public works. |
Public contracts.
Classification: LCC TA216 .E525 2018 | DDC 363.6068--dc23
LC record available at https://lccn.loc.gov/2017043742
ISBN: 978-0-8153-7917-1 (hbk)
ISBN: 978-0-8153-7918-8 (pbk)
ISBN: 978-1-351-21662-3 (ebk)

Typeset in Goudy
by Sunrise Setting Ltd, Brixham, UK
Contents

List of figures and tables vii

Foreword ix
Acknowledgements xi
List of acronyms and glossary xii

1 Introduction 1

2 Strategy 4

3 The nature of the firm 17

4 Marketing and communications 23

5 Business development 26

6 Winning proposals 40

7 Growth through mergers and acquisitions 49

8 Project management 56

9 Operational management 77

10 Commercials 85

11 Contracts 96

12 Risks and opportunities 109

13 Knowledge management 120

vi Contents 
14 People and culture 125

15 Business systems and processes 142

16 How to increase the chance of project success 144

References 161
Index 165
Figures and tables

Figures
8.1 Indicative progress assessment 69
9.1 Partnership versus business centricity 82
16.1 Performance behaviours matrix 150

Tables
2.1 Indicative strategic planning map 11
2.2 Indicative organisational strategy map 15
5.1 Indicative portfolio of projects by fee scale 26
5.2 Indicative CRM issues 27
5.3 Indicative relationship behaviours 34
5.4 Indicative client engagement methodology 35
5.5 Indicative performance spectrum 36
5.6 Suggested steps for instilling cultural change 39
6.1 Indicative proposal process 41
6.2 Indicative proposal review process 43
7.1 Indicative M&A process 55
8.1 Elements of trust-based relationships 63
8.2 Indicative elements of a PMO by service type 65
8.3 Indicative elements of a claim for additional services 71
8.4 Design development versus design change 73
10.1 Indicative P&L statement 86
10.2 Indicative multiplier breakdown 87
10.3 Indicative commercial metrics for an operating business unit 88
10.4 Indicative commercial metrics of a listed firm 88
10.5 Indicative performance-based commercial regime 94
11.1 Indicative terms sheet 97
11.2 Indicative liability regime 99
11.3 Key DJV principles 100
11.4 Indicative contract management issues 103
12.1 Indicative organisational risk matrix 112
viii Figures and tables
12.2 Typical heat map for a professional services firm 113
12.3 Typical qualitative heat map for a professional services firm 113
12.4 Indicative agenda for independent peer review 115
12.5 Indicative top sheet for a D&C tender 117
13.1 Indicative summary of lessons learned 121
14.1 Indicative governance attributes 128
14.2 Cognitive or unconscious biases 131
14.3 Instinctive versus learned behaviours 134
14.4 Steps for transforming our recruitment mindset 141
Foreword

There is widespread acceptance of the importance of infrastructure and the need

for more of it to support economic growth, social well-being and environmental
sustainability. Global growth is driving an increasing need for vital infrastructure.
The World Bank estimates that US$60–70 trillion of investment is needed and
only US$45 trillion is available from traditional sources. That means the remain-
ing US$14–25 trillion has to come from collaboration with the private sector.
Complexity is now the byword for major infrastructure project delivery.
Infrastructure: a single word that unites all the things that make our modern
lives possible. It is a word that connects our cities and towns with all the cities
and towns in the world. Roads, railways, cycle paths, airports, wires, pipes, elec-
tricity, gas, water, telephone, internet, hospitals, schools, prisons, courts, com-
munity centres, sporting facilities, scout halls and the list goes on. These things
are all around us – and yet we often barely notice them, unless they impact our
daily lifestyles, let alone think about how they got there and who pays for them.
Our communities have an insatiable demand for infrastructure. At the same time
projects are getting bigger and ever more complex to deliver.
Large megaprojects would appear to pose special problems. Considerable time
delays and cost overruns seem to be commonplace. Poor forecasts of the demand
for the infrastructure services, leading to severe revenue shortfalls on infrastruc-
ture investments have led to descriptions such as ‘appraisal optimism’ and ‘opti-
mism bias’ often known as ‘deal fever’ that are now embedded into our business
processes.
If success in megaproject planning and management is identified as projects
being delivered on budget, on time and with expected benefits, then the evidence
is that approximately one out of ten megaprojects is on budget, one out of ten is
on schedule, and one out of ten is delivering on the benefits.
By far the most significant reason for failure is the inadequacy of the business
case. Following this aspect, the next most important contributors are environ-
mental impacts, inter-participant disputes, economic conditions, interaction of
design with construction and operations and the human factors in our project
teams and our organisations. Solutions to these problems are better risk man-
agement and greater diligence at the project-definition stage, with the aim of
reviewing the project objectives, scope, specifications and definitions detailed in
x Foreword 
the business case to ensure they are fully comprehensive and address all of the
project requirements in the short, medium and long term. Disputes and claims
can also be as a result of inadequate specification giving rise to variations and
consequently claims, there is clearly a need to put considerable effort up front
into ensuring that the business case represents the interests of all project constit-
uents, in terms of the scope of the project and its objectives.
There is much to manage if projects are to be delivered on time, inside budget
and deliver the quality and functionality needed to support economic growth
and social well-being, while minimising the negative impacts on the environ-
ment. To do this effectively requires people, and lots of them. But not just anyone
can deliver complex infrastructure projects. It requires deep skills and multidis-
ciplinary teams: engineers; project managers; architects; quantity surveyors; law-
yers; accountants; financial and commercial specialists. Successful projects are
those where these professionals from very different technical backgrounds come
together and effectively collaborate. A high-performance culture needed for suc-
cess doesn’t just magically happen when professionals come together on a project.
It needs to be created, nurtured and managed through effective communications,
mutual respect and a disciplined approach to the task. It all starts in the profes-
sional services firm.
This book can be more accurately described as an operating manual on how
to successfully manage these professional services firms that hire, manage and
develop the people needed to successfully deliver complex infrastructure projects.
Professionals are highly trained and technically proficient individuals, but they
are most successful when nurtured and developed; in other words, well-led and
well-managed. This book is a welcome addition to the literature that all profes-
sionals set on a career in infrastructure would do well to have close at hand.
Darrin Grimsey
Lead Client Service Partner
Transaction and Advisory Services, Government & Public Sector
Infrastructure Advisory
Ernst & Young
Acknowledgements

The author would like to acknowledge the peers and colleagues whom he has
collaborated with over thirty-five years in a number of professional services firms
and on a number of major projects in developing these insights and perspectives.
Also the colleagues who have reviewed this book and provided key insights as to
what constitutes successfully leading and managing a professional services firm in
the infrastructure sector.
Acronyms and glossary

ABC Anti-bribery and Corruption or activator-behaviour-consequence

analysis
AC Actual Costs
Alliance Collaborating form of project delivery, usually with the Owner,
Designer, Contractor and Operator
BIM Building Information Management, an information management
system not just for buildings
BMS Business Management System, housing the organisational business
processes
Certificate A statement of conformance that the design complies with the
OPR
CD Certified Design (aka Stage 2, design for approval with the
reviewers for compliance with the OPR), broadly 85% design
completion
CJV Construction Joint Venture, between allied construction
organisations
CPI Cost Performance Index, part of an earned value measurement
CPS Construction Phase Services, to support a D&C Contractor
during the construction phase
CRM Client Relationship Management, a business process for managing
relationships with preferred clients
D&C Design & Construct, form of project delivery
DCN Design Change Notice, pursuant to the contract
DCR Design Change Register, summarising the DCNs
DJV Design Joint Venture, between allied design partners
DMP Design Management Plan (aka Design & Engineering Manage-
ment Plan, Project Execution Plan)
DoA Delegation of Authority, from the project governors to the PMT
DPR Design Package Register, of design packages based on the WBS
with target dates at each design stage
DSA Design Services Agreement (aka Consultant or Professional Ser-
vices Agreement)
DSO Days of Sales Outstanding
 List of acronyms and glossary xiii
EAC Estimate at Completion, part of an earned value assessment
EBIT Earnings Before Interest and Tax
ECI Early Contractor Involvement, form of project delivery
EOI Expression of Interest
EOT Extension of Time, pursuant to the contract
EPC Engineering, Procure & Construct, form of project delivery
EPCM Engineering, Procurement and Construction Management
EQ Emotional Qualities or Quotient
ETC Estimate to Complete, part of an earned value assessment
EV Earned Value
EVM Earned Value Measurement
FM Facilities Management, form of delivery for the O&M phase
GFC Global Financial Crisis
GNG Go No Go, to proceed with pursuing or submitting a proposal
HVHR High Value, High Risk tenders or projects
IA Independent Assurance, of a tender or project, incorporating
people, process and quality assurance
IFC Issued For Construction (aka For Construction Documentation),
100% design completion
JVA Joint Venture Agreement, between allied design partners
KBI Key Behavioural Indicator, measure of the behaviours that create
the desired culture
KPI Key Performance Indicator, measure of performance
KRA Key Result Areas, describing the project objectives
KSEA Knowledge, Skills, Experience & Attributes of personnel
Milestone A contractual date that triggers an EOT or delay costs
NPS Net Promoter Score, used for soliciting client feedback
NTA Net Tangible Assets
O&M Operations & Maintenance phase of the project
OPR Owner’s Project Requirements (aka Principal’s Project Require-
ments, Project Scope & Technical Requirements)
Owner Project Owner (aka Principal, End Client, Asset Owner)
PD Preliminary Design (aka Stage 1, schematic design), broadly 35%
design completion
PM Project Manager
PMC Project Management Consultant, responsible for managing the
client’s project
PMO Project Management Office, including template management
plans, project controls, procedures and tools
PMT Project Management Team (aka Design Management Team)
PPP Public Private Partnerships, or P3, form of project delivery
PRP Peer Review Panel, an independent panel of highly experienced
practitioners
PV Planned Value
xiv List of acronyms and glossary
RACI Responsibility, Accountability, Consulted and Informed matrix
for project interactions
Reviewers Third-party reviewers including Owner’s Engineer or Techni-
cal Advisor, Independent Reviewer, Verifier or Certifier, Proof
Engineer, Building Certifier, Approving Authorities, Utility/Asset
Owners
RFI Request for Information, form a construction contractor fills in for
further information or technical query
RFP Request for Proposal
R&O Risks and Opportunities
ROI Return on Investment on non-project time activities
SFAIRP So Far As Is Reasonably Practical, a risk-based approach to design
solutions
SID Safety in Design, a process to design out construction and opera-
tional risks
SPI Schedule Performance Index, part of an earned value
measurement
SQ Spiritual or Social Qualities or Quotient
STEM Science, Technology, Engineering and Mathematics
Target date A target date in the DPR that is not a contractual Milestone
TAN Tender Advice Notice, deliverable of a tender design for a D&C
contractor
T&E Time and Expense (aka Time and Materials) for a cost reimburse-
ment contract
TSA Tender Services Agreement
TSMP Tender Services Management Plan
TQ Technical Qualities or Quotient
VE Value Engineering (aka Value Management, options analysis)
VfM Value for Money
VN Variation Notice, pursuant to the contract
WBS Work Breakdown Structure
WHS Workplace Health and Safety, legislation in each jurisdiction
WIP Work in Progress
WPT Wider Project Team
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