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Breaking the status quo

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LNG Industry,


Guy Barlow, Aconex, USA, outlines three quick ways to improve capital project delivery focusing on people, processes and technology.

Move over siloed systems, hello modern project controls

With megaprojects increasing to 77% of total project value1 in the next decade or so, existing siloed project control tools are flawed, risky and wrought with political and economic fallout. In fact, according to research, 98% of megaprojects suffer cost overruns of more than 30%, and 77% are at least 40% late.1 Fortunately, the industry has grown significantly in its use of technology and improvement of process management. However, one of the most crucial components – project controls – has failed to mature due to a stubborn reliance on spreadsheets, cobbled together systems and legacy products.


Figure 1. Aconex conducted a recent TechValidate survey exploring how organisations are using project control solutions. Out of 174 responders 57% agreed that the inability to support collaboration between internal and external teams was what frustrated them the most about their current project control solutions.

Three wins for project delivery

To move forward, it is necessary to look to the past and to look at things in their entirety – people, process, and technology – across three critical requirements:

  • Ensuring a single source of truth.
  • Effectively managing project change.
  • Insightful decision-making.

If these three guidelines are applied to cost management, the likelihood of cost overruns and schedule delays can be reduced. These are relatively simple solutions that can ensure capital is spent wisely by modernising the industry’s approach to project controls.

Single source of the truth

Technology is key to replacing existing home-grown/legacy systems and unifying disparate information. It is important that individuals abandon their ‘pet’ systems in favour of standardised database formats. While multiple unique data storage systems are maintained, inefficiency and confusion will continue to plague the administration of a project. For example, if an individual utilised their own unique system when managing data entrusted to them, there would likely be confusion and valuable time wasted in the event of someone else needing to access the data. This could be avoided through the implementation of standardised systems across the project administration.

Effective change management

It is well known that the best run projects plan for change – from initiation to resolution – and effective change management also requires the integration of cost and schedule. During a period of change, there are a lot of moving parts which necessitate process rigour and standardisation to achieve success.

Technology is undoubtedly the enabler in relation to configurable workflows and automation of certain processes. Furthermore, processes become more efficient, the human element of a project becomes easier to manage. In order to achieve this, early on in the initiation of a project, inefficient processes must be identified and adapted.

A few simple questions to ask include:

  • Do people adhere to current processes or have they found ways to work around them? (A sure sign that they’re not working).
  • Are current processes achieving their intended result or have they been adapted to suit rigid systems? (Concessions may have been made that have exposed the project to risk).
  • Can current processes be adapted to the unique requirements of each unique project while still maintaining an overall standard? (Local flexibility balanced with a global mandate).

These are relatively quick, easy and present solutions that can be quickly implemented to enhance overall process improvement.

Informed decision making

There are several biases that can affect the judgement and decision making of individuals and consequently negatively impact the outcome of a project.

For example, individuals with ‘overconfidence bias’ might believe that a two-month delay and a US$100 000 project scope change will merely take two weeks and cost US$10 000. This bias is based off too much faith in one’s own knowledge rather than seeking objective data from outside resources. Likewise, individuals with a ‘confirmation bias’ seek information that supports their beliefs, meaning that they do not seek external input to actively challenge their decisions. Both unhealthy biases can lead to disastrous results for megaprojects.

Acknowledging these biases is an important step towards individuals not relying entirely on ‘gut’ reactions. Given the short cycle times involved in decision-making it is nearly impossible to make informed decisions without having technology that provides the accurate and timely information needed. With technology helping to manage ‘nuts and bolts’ of change (e.g. the trail of drawings, meetings, RFIs, submittals, quotes, and negotiations along with other correspondence) people can be freed up to invest extra time into making the right decisions and avoid some of the biases which plague the industry.

Unifying people, processes and technology with modernised project controls

LNG projects have grown in complexity and risk yet solutions are at hand to help minimise and mitigate cost overruns and schedule delays. A holistic view across people, process, and technology is essential to ensure that growth in technology adoption continues, processes are frequently being evaluated and challenged, and people are being provided with the training and confidence to wield these new capabilities.

How modern project controls challenges the status quo
When scouring businesses for potential efficiency gains, no area can be off limits. In an industry where even small changes translate into big savings, no stone can be left unturned.
Complexity is growing across all areas of construction — aligning field and office, depending on external teams, interpreting vast amounts of data, and making rapid decisions — and all require innovation, to be successful. The legacy systems and spreadsheets used throughout the years to manage projects will not allow businesses to grow and adapt quickly in today’s market.
Project controls are mission critical. It is this criticality that also makes them difficult to change. It requires a pivot: from systems and practices that place emphasis on individual organisations, to solutions that focus on projects being the unifying force that brings teams together.
While technology and new methods, like BIM and lean construction, are advancing physical efficiency, some of the tools and systems used to execute the project have not kept pace. The level of effort needed to interpret and report the data increases significantly. Project teams are burdened with the never-ending task of collecting, feeding, and maintaining cost data in outdated systems that do not support the extensive requirements for team collaboration. The level of effort increases significantly to interpret and report the data. It takes a team to successfully deliver a project, and collaboration is the foundation.

References

  1. www.mckinsey.com/industries/capital-projects-and-infrastructure/our-insights/the-construction-productivity-imperative

Read the article online at: https://www.lngindustry.com/special-reports/04012018/breaking-the-status-quo/

 

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