Providing an Information Perspective on Capital Projects #YII2014
We heard from Edward Merrow, with Independent Project Analysis and author of Industrial Megaprojects, in London today at Bentley’s Year in Infrastructure event. The project perspective that was provided mentioned that projects that fail, usually fail early on. We’re in a struggle in the engineering and construction industry where the economic value added per employee (the measure of productivity) is decreasing. We’re struggling as an industry to be productive.
The demographics of engineering and construction are part of the problem. Construction is a young person’s game, and engineers are not being replaced as fast as engineers are retiring. This is showing up on big complex problems.
Information flow is essential to successful projects. Every error that we make up front in projects makes the project harder to manage. Most projects fail when nothing physical has been done.
“Project management is the Science of planning Combined with the art of reacting to surprise.”
The process of the project looks linear, but we all know that it is not. We run a staged process with three big streams — big data development, core team formed, and shaping the process.
- Basic data are simply all the parameters that govern the design, expressing the science of the objectives. The reason that we have so many failures in project execution goes right back to a lack of good and timely data. In a perfect world, we’d have all the basic data available for scope development. Risk areas that we see repeatedly are the handover of data, the use of new technology, and when the development of the basic data should have happened years ago.
- Core team development
- Shaping the process is the business side of the project. Projects serve either a business or social purpose. Money spent in shaping is not capital investment, it’s gathering information so that all stakeholders are sufficiently satisfied. The point of shaping is to calm the waters, and are settled enough to actually do the project successfully.
Projects fail with major changes and delays. You get fighting among the partners and community relations issues. Slow decision making is what often craters a project, with decisions coming too slow to execute.
It’s not possible to have a successful project if part of the information set has holes or errors. The shaping stream is the weakest link that often breaks the project. If you’re a contractor you are jumping aboard a moving train.
It’s critical to develop a methodology and technology to quickly assess the business case and the quality of the basic data, or you will fail.