Joint Ventures
– Construction

The Challenge

The proliferation of joint ventures is greater than ever. At one time these were the domain of large organisations where the shared risk of a major project was absorbed by the shared resources and expertise of two or more main contractors. In later years, the joint venture has become common place driven by market forces enabling smaller operators to combine and bid on projects that were formally out of scope due to their risk profile.

The sensitivity around cost management, the likelihood of a successful bid and the limitation of risk is at an all time high. The cost of construction materials rose every month during 2021. In October 2021, prices for all building work were up 24.5% in comparison to October 2020. And it seems likely that the upward trend will continue in 2022. As a result the close scrutiny of a joint venture’s proposed return and being on the front foot is critical. (source ONS).

In principle the joint venture seems self explanatory with each partner bringing to the table either specific expertise, financial credibility and/or influence. A number of large public sector projects have seen a number of successful joint venture contract awards including Crossrail and HS2, multi-million pound developments across ten or more years.

Alongside the standard challenges of installing telecommunications infrastructure at any new project, the conundrum here is far wider, more complex and requires a closer look.

Politics and Competition

It is not unknown for a joint venture or consortia to bring together operators who were previously competitors and/or organisations that will most likely compete again at some point. As a result, there can be a tussle to determine which of the partners will take the overall technical lead on a project and moreover whether the new project will be an extension of the existing Wide Area Network of either partner. Understandably there are security considerations and questions around network and data sovereignty.

Many construction companies and telecommunications have looked Furthermore for the duration of the project the combined workforce from both joint venture partners (Company A and Company B) will take on a new identity, e.g. Staff Member, A.Smith – Foreman, normally from Company A will be with Company AB. For access to the platform relating to the joint venture this member of staff will require his or her AB credentials. However, arguably they may continue to require access back to their parent company. Whilst simple in principle, this requires consideration in the overall solution design to afford secure access to both platforms and maintaining the distinction.

Unified Communications

Many joint ventures also require an identity aside from their parent brand, this is reflected in branding, signage and online presence, both internal and external. Work needs to be done to create a unified communications platform specific to the joint venture including domain/web hosting, Microsoft licensing (Office 365 and Sharepoint) and telephony. Outside of this, the parent companies need clear and defined communication channels for collaboration and avoid any potential pitfalls.

The sensitive nature of some public sector projects demands the highest level of security clearance and compliance, within clearly defined standards, operational practices and accreditations.

The final consideration is the outcome of the data store at the conclusion of the project. The established legal entity of the combined partners may not continue in perpetuity which prompts the question where the resulting data should be hosted long term and where or to whom access rights should be granted. The establishment of a chain of custody for all related joint venture data is a prerequisite.

The Solution

SCG Together provides the complete approach to joint venture infrastructure, combining;