Jay Armstrong's presentation takes a look at the 3 critical success factors in the delivery of major programmes. Using case studies from LogiKal's experience, Jay explores why projects are failing and how we can address this.
5. What is the current situation?
Percentage of Projects Reported as Achieving Most or All Cost / Time /
Scope Objectives
6. Why are projects failing?
Statistics
A National Audit
Office Report showed:
A history of "unrealistic expectations
and over-optimism”.
35% of projects due to be completed in
the next 5 years are “unachievable” or
“in-doubt” by government bodies.
7. “I think the enormity and complexity of Crossrail in all
manners: the stations; the trains; the signaling systems;
the software integration; the control systems; the
interface with Network Rail; the truth is that the
complexity was not fully understood,”
Why are projects failing?
Crossrail
Mark Wild, Crossrail Chief Executive
New Civil Engineer – February 2019 edition
9. Project Complexity
Major Projects are inherently complex
Often multidisciplinary
Numerous stakeholders
Mostly brownfield construction
Multiple interfaces
Complex logistics
Technological advances
Increasing number of requirements
10. HS2 is Europe’s largest
infrastructure project
Project Complexity
HS2
12. Project Complexity
Hinkley Point C - EDF
Image source: EDF Energy – Hinkley Point C website
Two new nuclear
reactors at Hinkley
Point C in Somerset
Electricity for around
six million homes.
13. Complexity compounds the likelihood
and impact of risk
• Increased interfaces often not
appreciated
• Scope and integration requirements
often not well understood
How does complexity impact construction?
14. • Increases the likelihood of change over the lifecycle of the project
• Increased programme risk
• Increased commercial and cost risk
• Project benefits may be watered down or impacted
• cost engineering exercises reducing value/benefits
• Future investments may be delayed
How does complexity impact construction?
16. 1. Organisational Complexity
Organisational Complexity
Way we deliver projects & programmes creates complexity
Capital
Programmes
Alliancing
models
SPVs
Programme/
Delivery
Partner
PPPs / PFIs EPC
Traditional
Design &
Build
Joint
Ventures
Delivery
Structures
Project 13 –
Integrator
17. Organisational Complexity
The Challenges
oConfrontational client vs contractor approach
oNon-integrated teams
oUnclear roles and responsibilities
oDuplication of effort
oMisalignment between collaboration intent and the conditions of
contract
oBehavioural and cultural alignment
19. 2. Risk Transfer & Incentivisation
Risk transfer & Incentivisation
20. Risk Transfer & Incentivisation
The Challenges
oVariety of contract forms
oExpectation of risk transfer
oContract used as a weapon
oTraditional risk mitigation techniques increase complexity
oMisalignment between incentivisation model and ‘best for project’
oDifficult to identify, quantify, model and manage effectively
21. Critical Success Factor
Risk transfer & Incentivisation
Proper Incentivisation
o Use Contract as a tool not a weapon
o Need to change the embedded industry culture
25. Timely, reliable and
transparent data can
increase trust and
empower your decision
making.
Performance Management
Per for mance Management: The Solution