In my view a successful project is on time and within budget. Profitability and ROI match or exceed the estimates upon delivery. Getting to this point is never easy, but with the right people, experience, communication, and tools, it can be and is accomplished.
In April of 2021, a survey was conducted by IDC, commissioned by Procore, (Referenced HERE) and the purpose of this study was to provide insight into what it takes to execute highly successful construction projects in order to be “best in class” in project execution and delivery. The survey revealed that 75% of construction projects were over their planned budgets and 77% were late. On average projects were 70 days late compared to their original estimates and 15% over budget. There were over 500 projects included in the survey in the US and Canada and included government, healthcare, educational and commercial projects.
The discussion this raises is how project owners hire the right people and provide their teams with the resources and tools to produce sustainable and reproducible results in executing highly complex, time and budget constrained, projects successfully. The current challenges facing the construction industry, as I see it, are:
- A lack of project controls and project management professionals who can plan, forecast, and produce the reporting required to enable leadership to make ongoing informed and correct decisions in order to execute a successful project.
- A lack of tools within the client’s environment that collect data from various internal systems and bring it together to inform leadership, again enabling good decisions.
This statement is a simple analysis of a highly complex problem so let’s further break this down into the components required from a high-quality project controls and management team.
The staffing of the project is critical. Today the demand for high quality, experienced personnel is at an all-time high. Salaries have failed to keep up with inflation and project owners continue to ignore “best in class” people and opt to hire less-than-qualified people at a lower salary in order to meet budgetary restrictions set at the time of estimate. This is completely understandable, but the impacts of this are almost immediately apparent. Success in the long run depends greatly on experienced people actively working early to review the estimate and establish execution budgets. They will be able to set up key project indicators that would serve as early detection of a project deviating from plan. The project execution team must be involved in the earliest development of the project and the establishment of the project execution plan. The plan will detail the strategies of execution from a baseline of the budget and schedule to commissioning the project. This will include all project reporting, risk assessments, and change management. The team will remain in place for the duration of the project, conducting weekly meetings, communicating key project trends and issues to the project owner and the project team. Communication is essential to mitigate or avoid negative impacts. No bad news gets better with time. Establishing a high-quality project team should be the highest priority of a project owner and the cost of experienced and qualified personnel will only help you stay on budget.
Once a high-quality team is established, they need to be provided with the tools and access to required data and information in order to be successful. I have found over the last several years that some project owners will hire great teams with the expectation that their level of experience would replace all the tools required for the successful execution of the project. I would suggest that this line of thinking is equivalent to hiring a master carpenter to build your dream home with nothing but his experience to build the home, no saws, no hammer, no tape measure, just their vast experience. They are resistant to purchasing the basics, such as a scheduling tool that can be scaled to the complexity and demands of the project, and a cost reporting tool that provides consolidation of financial data which enables analysis and accurate forecasting. This could be as simple as an excel workbook or incorporate a whole world of different products available on the market. The use and establishment of the reporting tools is also a function of the execution strategy of the project. The “how’s”, “who’s”, “when’s” should be covered in the project execution plan. The tools should also be referenced and tied to established processes and procedures.
These strategies are the building blocks to the successful execution of projects and, though no project is guaranteed to be successful, the establishment of a high-quality team and providing them with tools that are appropriate for the scale and complexity of the project, will give them the best chance to meet the project requirements as well as the expectations of the project owner.