Wednesday Apr 27, 2016

Shared Insight: Utilities Power Up with Lifecycle Approach to Capital Projects

By: Mike Sicilia, senior vice president and general manager, Oracle Primavera


Today’s utility executives, along with their colleagues in other asset-intensive industries, face formidable challenges. Growing business and regulatory complexity are constants. Layer on continued economic vulnerability along with an aging infrastructure and workforce retirements, the latter of which utility execs cite as their top two challenges – and enterprises are left at a significant disadvantage when managing capital projects.
In this precarious environment, utilities must ensure that their investments drive enterprise value, while reducing costs and improving operational efficiency. Mismanagement of capital projects can result in high cost overruns, delayed initiatives, and regulatory compliance issues ‒ further compounding present-day business hurdles. The stakes and hurdles are high – but far from impossible to surmount. Utilities that cultivate effective enterprise project portfolio management methodology and consistently embrace proactive strategies that address all stages of an initiative’s lifecycle are well positioned for success. Many of these same strategies apply and can be replicated across a wide spectrum of asset-intensive industries, such as communications, oil and gas, and engineering and construction.

A Challenging Outlook

Utility executives face a perilous balancing act when planning, building, and operating assets. While it’s vital for projects to continuously deliver results, many face an upward battle from the start, well before they become operational. For example, an Accenture report found that only 39 percent of utilities capital projects were completed on budget, and less than half on schedule.

Several factors are at work – each of which underscores the compelling need for careful management and precise execution at every turn:

  • Limited Capital: Limited availability, through either the markets or internal funding, means that capital for major projects is not only scarce, but also costly and requires close management to ensure an acceptable return-on-investment (ROI)
  • Aging Infrastructure: In the United States, the power delivery system – like many other types of national infrastructure ‒ is based on technology developed and installed decades years ago – resulting in an increasing number of power disruptions and heightened vulnerability to cyber attack
  • Regulatory Uncertainty: The regulatory environment continues to grow more complex, causing some utilities to err on the side of caution by stifling potentially innovative capital projects
  • Constrained Workforce: Thirty-two percent of the utility workforce will retire in the next 10 to 15 years, according to the 2014 Aging Utility Workforce report by Interactive Intelligence Group Inc., and many utilities are struggling to recruit new talent to replace these valued resources. The oil and gas as well as communications industries face similar realities. The highly skilled workers exiting the workforce will take 30 to 40 years of institutional and subject matter knowledge and expertise with them. Most of this knowledge has not been captured and operationalized in modern systems ‒ leaving enterprises at risk
  • Costly Raw Materials: As economic, regulatory, and environmental factors exert upward price pressures on many raw materials, utilities find it harder to acquire them at reasonable costs

Embracing All Aspects of the Project Lifecycle to Drive Success

So, how can a utility, and other asset-intensive organizations, overcome these challenges and ensure capital project success?

First, it’s important to consider the complete project lifecycle at the start of an initiative – from planning and execution to operation and maintenance, and ultimately, decommissioning ‒ and involve all key internal and external stakeholders throughout the process. Securing early input from employees, who will be responsible for infrastructure maintenance and ultimately have ownership of the asset, is crucial. Their insight and knowledge can reduce the long-term costs of operating the asset as well as the risk of decommissioning the project down the line.

There is no question that adopting a complete lifecycle approach to capital projects is a complex undertaking. It requires real-time enterprise-wide insight, sophisticated “what-if” modeling, and knowledge capture that traditional spreadsheet-based project management models cannot deliver.

That’s where enterprise project portfolio management (EPPM) methodologies and solutions enter the picture. In addition to automating and operationalizing processes, EPPM solutions equip utility executives to evaluate and prioritize projects across the enterprise. They also provide full visibility into the project lifecycle, enabling organizations to track performance and costs, model and mitigate risks, and manage people and resources across the organization to streamline processes and optimize available assets.

As utilities executives continue to face a vast array of challenges and scenarios, EPPM solutions have a distinct and essential role to contribute at each stage of the project management lifecycle:

  • Planning: Effective planning is particularly important when choosing the capital projects that will deliver the greatest value. A solid portfolio solution uses repeatable governance processes and consistent evaluation metrics – helping to ensure an enterprise is equipped to choose investment proposals, fund strong business cases, perform “what-if” scenarios, and analyze performance progress
  • Execution: EPPM solutions enable staff to review construction progress in various regions and on multiple projects, improving communication between all parties involved on a project, while helping project directors manage incoming demand and prioritize projects and activities based on the organization’s overall objectives. By providing these capabilities, an EPPM solution can successfully link people, teams, and projects – offering complete control of a capital project’s lifecycle
  • Operation and Maintenance: The tools a utility uses in the planning and building stages are just as essential during the project’s ongoing maintenance. A project’s profitability depends largely on scheduling and deploying resources in the most efficient manner across all maintenance activities. When an asset is offline for maintenance, it’s not generating revenue – but an EPPM solution can help a utility to plan, schedule, and manage maintenance to optimize resources, asset value, and uptime
  • Decommissioning: The decommissioning phase of an asset lifecycle is the last thing that a utility project manager wants to consider during the planning, execution, and even early operational stages. This mindset, however, can create additional expense and risk in the future. EPPM solutions can play a vital role in capturing and operationalizing information that is vital to the distant decommissioning phase. When it’s time for decommissioning, EPPM methodologies and tools are essential to a managing on-time and on-budget initiatives, just as they are when bringing a new asset online.

Set the Stage for Success

While EPPM solutions can drive success across the end-to-end project lifecycle, they can also have significant impact on asset optimization during individual phases.

For instance, a large utility in Canada uses EPPM methodology and solutions to manage its resources. In the past, the company filled service orders for construction and maintenance work via multiple manual processes and a series of highly customized and poorly integrated software systems for workforce management. The company, which deployed Oracle’s Primavera solutions, has improved its ability to plot work activities and determine what resources will be required to supplement existing resources. It can now also easily consolidate requirements for the peak project season by specific geographies. The utility has increased efficiency by shifting dispatching of resources to schedules in local offices and has gained the ability to effectively coordinate and manage resources based on local conditions and constraints – yielding greater efficiency and value from assets.
Utilities – as well as other types of asset-intensive enterprises ‒ have witnessed dynamics business transformation in recent years to a much more volatile and competitive marketplace. Now, more than ever, these organizations depend on EPPM solutions to propel capital projects forward through a gauntlet of challenges by improving collaboration and communication, better managing resources to ensure the right people are on the job at the right time, and mitigating and managing project risk.

Friday Mar 18, 2016

Five Competitive Killers in the Manufacturing “Engineer to Order” Process

Call it a streetcar not desired. In September 2015, Seattle, Washington’s Department of Transportation issued penalties of nearly $800,000 against Czech company Inekon for failing to meet deadlines in delivering new, customized street cars to the city after a series of software glitches, propulsion problems, water damage in six out of seven inverters, and unfinished items like way-finding graphics and the customer information system. As of year’s end, the first street car was scheduled to arrive two years late -- not a glittering endorsement for the company.

#1 Making the customer wait – not to mention the penalties that come with those delays -- is just one of several competitive killers that manufacturers face in the Engineer-to-Order business.

ETO projects, those highly customized, small volume designs that require unique materials and sometimes last months or years, are perhaps the most vulnerable to competitive killers due to their very nature. Designs change, delivery of specialized materials could be delayed, technology updates, things could go wrong. Manufacturers that venture into ETO projects must be ready to slay these competitive killers.

#2 Rework and failures

Changes in design are inevitable in ETO projects, but lapses in transparency and communication between customers, partners and the manufacturer are not. The need for unnecessary rework hits the bottom line.

Boeing knows this all too well. In July 2015, the aerospace manufacturer took yet another charge against its USAF aerial refueling tanker program, the KC-46A. This time the price tag was $536 million after taxes, bringing the total charges to date to more than $800 million, according to one report. The KC-46 tanker is being designed, developed and tested under a fixed-price Engineering, Manufacturing and Development contract.  

The additional charges, according to Boeing’s president and CEO, reflect higher estimated engineering and manufacturing costs to complete development, certification and initial production of the tanker aircraft, while holding to the program schedule for initial production deliveries in 2017. While Boeing had improved its processes after producing similar tankers for Italian and Japanese air forces, the fueling system is new to the USAF and different from the previous tankers.

#3 Overproduction

Even when an ETO project appears to be running smoothly, there are other aspect of ETO projects that can go south. Companies that manage more than one ETO project at a time can face overproduction due to a lack of oversight and coordination across projects. For instance, project managers arbitrarily set a pre-define margin of safety, but smaller ETO projects can tolerate a smaller margin of safety. Another pitfall to avoid -- if production starts too early, designs can change and require further production – adding to the waste.

#4 Too much inventory

Multiple ETO projects can also lead to unnecessary inventory. Procurement specialists sometimes buy larger quantities than they need to meet minimum order quantities, or they want to take advantage of quantity discounts, but in reality the true carrying or holding costs can often be greater than what was originally saved.

#5 Not automating the entire ETO project management process

Manufacturers need visibility across their entire project portfolio to determine optimal bid prices, better estimate delivery dates, reduce lead times, and be better able to accommodate change orders without compromising margins or delivery schedules. Updates should also be communicated regularly with the client and suppliers to keep inventory and production on track.

Oracle Primavera’s enterprise solution addresses the challenges of the ETO process. It can help ETO businesses make changes quickly, collaborate with stakeholders easily, understand where they are in the process, manage resources so they’re ready when needed, and ultimately deliver the product on time and on budget.

In highly specialized manufacturing, customer satisfaction is key. Oracle Primavera allows manufacturers to build tighter relationships through open transparency and repeatable success. Check out our White Paper, “Building a Profitable Engineer-to-Order Business,” to learn more.

For more information on Primavera’s Engineer-to-Order Solution visit www.oracle.com/goto/eto

Monday Mar 07, 2016

Two Worlds Colliding

By: Krista Lambert, Director, Engineering & Construction Strategy, Oracle Primavera

Bringing together the best of both worlds

Site foremen are formidable people. You don’t want to feel the force of their frustration. When someone else’s mistake plays havoc with their plans or makes them miss deadlines, it can create unbearable situations.

But you can avoid frustrating your foremen with short interval planning. It’s a technique used in Lean Construction, designed to flush inefficiency out of the system. The technique relies on frequent and open collaboration on the job. The idea is that short-term plans are created daily to adapt to changing circumstances, ensuring employees are not left scratching their heads with nothing to do.

But it has its shortcomings.

It could miss important dependencies in the project which, if ignored, could delay completion. Since the 1940s the critical path method has been developed to seek out these dependencies, showing project managers where to focus their energies if they want to avoid being late.

And yet the critical path method is often set against short interval planning as if project managers and planners must pick one method or the other to succeed. But this doesn’t have to be the case.

The tools and technologies to bring the two approaches together – and get the best from both – are available today. The reality is that an open approach can help you stay in touch with the project whatever is thrown at you at any stage of the project giving you greater control.

To discover more, read our latest business brief.

Thursday Mar 03, 2016

How can I deliver better projects in my Smart City?

By: Werner Maritz, Public Sector and Infrastructure Industry Strategy

The world is watching - 10 Game Changing Characteristics

Globally city managers are faced with an ever-increasing city population and a decrease in financial and human resources to deliver adequate services across the city region. The challenge of ensuring the city’s sustainability must be seen against a backdrop of increased environmental and social awareness, economic pressure and competition for public and private investment in and around the city. City managers are often faced with challenges related to ensuring basic human rights, dignity, safety and security for the poorest of residents while delivering on the life style demands and expectations from the richest of residents. Often these diverse groups are living in close proximity of each other and resources must be allocated and shared. Given this familiar situation, city management need to prioritize capital and social investment to deliver on the strategic objectives of the city, a fine balancing act indeed.

City managers need to take a holistic approach in planning the future growth and improvements across the city to ensure not only cost-effective services delivery of and new infrastructure but also ensure synergy across the city responsibilities related to Built Environment, Economic and Social Infrastructure to ensure the economic, environmental and social sustainability of the city. From breaking down the traditional silo approach of the City departments to having real-time insight of the transversal infrastructure demand and backlog across these departments is critical to effective investment planning in the city. Eliminating duplication of effort between departments and leveraging synergy to achieve common objectives is key to a successful Smart City Transformation Roadmap.

Leveraging continuous technology advances and improving cost-benefits ratio of technology to improve the productivity of the city’s infrastructure, city managers face an ever-increasing portfolio of new projects to be delivered across the city. Often these are complex, long term programs consisting of multiple sub-projects to plan, co-ordinate, and implement with due regard to operational effectiveness improvements in the process. Monitoring performance and taking timely corrective action is critical in delivering these long-range programs on time and within budget in a complex delivery environment with multiple stakeholders.

Effectively transitioning the city’s new assets into the operations and maintenance phase is critical to ensure early value generation from these investments, and to manage and maintain these assets at their design capacity and capability over many years to come.

 

Oracle Primavera Smart City Projects Solution

A significant challenge in the implementation of Smart City Transformation Roadmaps across the world is related to securing adequate funding for the projects on the roadmap. Development Financing Institutions (DFI) and potential Public Private Partnerships (PPP) indicate that adequate funding is available to realize the Smart City Transformation goals but they have two main investment decision considerations:

  • The availability of investment grade project opportunities, and
  • The assurance that adequate financial control and governance processes are in place during the project implementation phase.

The Oracle Primavera Smart City Projects Solution delivers 10 characteristics, which will significantly contribute to meeting these requirements:

1. Implement a detailed project portfolio management process to show the alignment of the investment opportunity with the overall strategic objectives of the city. Track the development and approval of deliverables across project development phases. Show how the business case for the project supports the longer term vision of the Smart City transformation roadmap and how benefits realization will be tracked once in operation;

2. Establish a standard platform for program and project set-up, project management and project close-out processes. Ensuring predicable and repeatable project processes and structures facilitate effective project administration;

3. Set a standard for project performance monitoring and reporting. Standard performance reporting across all projects enables decision makers to take early corrective action based on real-time metrics indicating deviation from planned cost and schedule objectives. Poor performance from contractors and suppliers is a leading cause of project failure

4. Enforce project and financial governance processes through configurable workflow for change requests and financial approvals. Ensure the auditability of actions taken by project team members and tracking of contractual deliverables;

5. Implement a formal project scope and contract change management processes. Align the interim contract payments with a formal schedule of values under the contract terms and conditions. Only make payments for work actually completed and certified;

6. Enable electronic correspondence management, document tracking, document control and electronic document handover across all project team members, city operating divisions and external stakeholders. Create a full electronic record of the project to ensure proper project hand-over, close-out and dispute resolution support;

7. Leverage transactional control data in the City’s ERP to enable informed cost and cash-flow management and forecasting. Integrating the Oracle Primavera Smart City Project Solution with the City’s ERP solution will promote operational efficiency and financial data integrity.

8. Implement a formal program and project risk management platform, integrated with the cost and schedule management of the project. Effective program and project risk management is one of the most under-estimated forward looking management tools within the overall project governance framework;

9. Establish a collaborative environment between the city project owner’s team, engineers, consultants, main contractors and sub-contractors. Clear and timely communication between team members reduce project schedule delays due to delayed decisions caused by slow communications;

10. Implement a formal post contract award management environment in support of the chosen contract format. This will facilitate contracts administration, contract change management, interim payment certification, partial and full contract deliverables handover and acceptance. Ensuring compliance with the conditions of the contracts between the city and the contractor will reduce the project cost growth due to uncontrolled contract changes. Preventing litigation related to contested contract changes is an effective manner to contain cost growth and wasteful expenditure on a project

 

Easy to deploy

In todays fast passed city environment the deployment of integrated management systems need to provide the agility the Smart City Transformation Roadmap demands. Unfortunately city IT managers often face challenges to deploy any form of integrated management systems to stakeholders outside of the city administration. In part, this may be due to cost consideration, the city’s procurement policies or data security considerations.

The Oracle Primavera Smart City Projects Solution is a fully web based solution which can be deployed as a Software-as-a-Services (SaaS) solution from Oracle or as an on-premise solution in the city’s own IT environment. The Oracle Primavera solution is designed for the extended enterprise. Cost effective licencing models put the solution within reach of all project stakeholders. The user access and security model is designed to enable deployment outside of only the city administration, allowing the operational efficiencies of a truly integrated project delivery platform across the city and its stakeholders.

The Oracle Primavera solution supports the use of mobile devises to facilitate a productive workforce across the city. Leveraging the city’s communication networks allow project team members and stakeholders to access project planning and contract information, status activities and contracts, and access reports and dashboards while on the go from their mobile devices.

 

1PPM for Intermodal Transportation & Infrastructure Organizations: Select, Manage and Maintain Transformative Projects. Aberdeen Group, March 2015

 

Monday Feb 29, 2016

Solve the Decommissioning Dilemma

By: Guy Barlow, director, industry strategy, Oracle Primavera

Decommissioning might be a rather dry phase of the asset lifecycle, but it is essential. And, at the same time, it is becoming increasingly costly and risk-laden – in 2014, total decommissioning spending came to between $1.6 and $1.8 billion.[1] For decades, it has been relegated to afterthought status in many industries, including the oil and gas (O&G) sector. Businesses instead have focused the bulk of their attention on bringing new projects online as rapidly and cost-effectively as possible to optimize production volumes and maximize revenue.

Times are changing, however. According to Decomworld’s Offshore Decommissioning Report, the drop in crude oil prices has shifted perceptions on decommissioning activity, and with this, the number of decommissioning projects is expected to rise as high as 250 in 2015 and 2016, from 210 in 2014. Federal regulations and declining shelf production have caused decommissioning projects, specifically in the Gulf of Mexico, to see record levels of activity, generating roughly $9 billion in spending and, as of January 2015, the market is valued at $26 billion.

As a result, O&G companies, as well as their counterparts in other asset-intensive industries, are rapidly realizing the need to better plan for and manage the final mile of their assets as carefully as they do their initial construction.

Roadblocks on the Path to Success

Aberdeen Group reported that less than 25 percent of asset-intensive organizations have a plan in place for decommissioning assets. Several factors are driving this surprising statistic:

  • Increased Focus on New Assets. New assets and infrastructure are vital to ensuring the scale and reliability needed to achieve agility in the volatile O&G industry. As such, enterprises are very focused on completing these new projects on time and on budget.
  • Asset Lifecycle is Stretched Thin. O&G companies, for example, are looking to squeeze every last drop of productivity out of their assets, especially as markets tighten and prices decline. This often involves extending lifecycles well beyond the original targets.
  • Resources are Limited. Enterprises today must frequently choose between applying skilled resources on new projects as opposed to using them to plan for or proceed with decommissioning. And, as decommissioning activity is expected to surge in the next year, there will be more pressure on offshore equipment resources causing industry experts to take a more collaborative approach to maximize resources with minimal costs.1

Focusing solely on these shorter-term considerations can create formidable challenges in the future—essentially, enterprises are overlooking the considerable opportunity costs, potential operational risks, and financial repercussions associated with a mismanaged decommissioning project.

Last, but Certainly Not Least

Although it’s the last step in the asset lifecycle, decommissioning should be approached with the same deliberation as the design, build, and operate phases as it carries significant risk. And, as the drop in crude oil prices causes the number of structure removals to rise, it is now even more important for O&G organizations to ensure they have an effective approach in place to carry out the decommissioning process.1

So what can O&G companies and other asset-intensive enterprises do? Here are six strategies that our customers have used to ensure successful decommissioning initiatives:

  1. Collaborate Early and Often. Involve all key stakeholders throughout the lifecycle planning process to define and validate project scope and approach. This includes facility managers, line-of-business leaders, risk officers, as well as executive management—and encompasses multiple external stakeholders—contractors, partners, as well as local, state, and Federal regulators who have jurisdiction over the project. It is also important to seek early input from individuals who manage and decommission the asset, as they can provide important insight into design features that can reduce the cost and risk of decommissioning decades later.

  2. Create a Centralized Plan Repository With the Ability to Embed Risk Assessment Into the Plan. These repositories are often the core of enterprise project portfolio management (EPPM) solutions. Organizations can embed risk information into these repositories and the resulting plans, enabling them to prepare and react to unforeseen issues, perform “what if” scenarios, and monitor the status of a project to approve, continue, and optimize decommissioning projects. Having this information repository in place is vital so that organizations have the institutional knowledge to effectively decommission an asset when it has reached end of life.

  3. Optimize Resources. As resources become increasingly scarce and expensive, stakeholders need complete and real-time visibility into the skill sets at their disposal, as well as where and how resources are deployed throughout the organization. It is also critical to standardize procedures for selecting resources and predefine exception processes. Working within this framework, leaders can accurately identify required skills and resources and effectively map them to project requirements, enabling them to avoid delays, mistakes, and cost overruns.

  4. Ensure Real-time Visibility Into Projects and Performance. Leaders require real-time visibility into project performance, including progress and budget adherence, and must be able to share this information with internal and external stakeholders. Clear insight into milestones achieved and missed, status updates, budget versus actual spend, and work breakdown structure updates are essential. With this approach, businesses can better determine and plan effectively for end of life to optimize return on investment.

  5. Equip Managers With Tools Needed to Plan and Execute. Automating the asset lifecycle management process is increasingly essential—the days of spreadsheets and paper-based processes are long gone. Leaders should look for tools like EPPM that can automate processes such as scheduling, costing, project management, reporting, and collaboration. At a strategic level, these changes could open doors to improved strategy execution, operational excellence, and financial performance across the entire enterprise, to ultimately ensure that projects are not only completed within budget and on time, but also to drive long-term value that aligns with business objectives.

  6. Focus on Continuous Improvement. Always take time to assess progress and capture knowledge for future initiatives. Leading enterprises bake continuous improvement into their standard operating procedures for project management and benefit greatly from continued evolution of best practices.

O&G companies, along with other types of asset-intensive enterprises, can set a solid foundation to support current and future customer demands by embracing a holistic approach to asset lifecycle management. With project management best practices, careful planning, and proven methodologies and technology solutions, these organizations can finally put an end to decommissioning distress.


[1] Upstream Intelligence, “Spike in GoM Decommissioning Quickens Need for Deepwater Expertise,” October 5, 2015 http://analysis.upstreamintel.com/deepwater/spike-gom-decommissioning-quickens-need-deepwater-expertise

Sunday Feb 28, 2016

New Report and Benchmark Assessment: The Secret to Reducing Shutdown Risks

New Report and Benchmark Assessment: The Secret to Reducing Shutdown Risks

A new study by the Aberdeen Group reports that leaders in asset-intensive industries such as the oil and gas, utilities, and chemicals sectors can gain an advantage when they have formalized processes in place to assess, quantify, and prioritize risks associated with shutdowns, turnarounds, and outages (STOs). Find out how enterprise project portfolio management can play a role in reducing the risks associated with STOs.[Read More]

Wednesday Feb 24, 2016

Oracle Delivers a New Contract Management Solution Customized for Engineering and Construction

Oracle Delivers a New Contract Management Solution Customized for Engineering and Construction

The new Oracle Contract Management cloud accelerator gives engineering and construction project teams a range of new tools for more closely controlling contract management and keeping costs in line with project expectations. Find out what the solution's key benefits are and where to learn more. [Read More]

Friday Feb 19, 2016

Five Reasons to Move to Cloud-Based Enterprise Project Portfolio Management

Five Reasons to Move to Cloud-Based Enterprise Project Portfolio Management

Industry studies show that 20 percent of projects may fail as organizations take on more risk in search of higher rewards. To mitigate risk, organizations are turning to modern project management solutions such as Oracle's Primavera P6 Enterprise Project Portfolio Management Cloud Service. Learn about five critical benefits of moving project management to the cloud.

[Read More]

Friday Feb 05, 2016

The Fourth Dimension Has Arrived

By: Garrett Harley, Director, Engineering & Construction Strategy, Oracle Primavera

Making sense of the BIG picture

It’s a construction manager’s nightmare. Once work starts on site, it’s blatantly obvious the plans are flawed. Calls to architects and engineers might be able to resolve the issue, but what does this mean for materials, building products, subcontractors and specialists? Implications for all of these resources need to be considered in the light of the new redesign and even, throughout the project.

The arrival and popularity of building information modelling (BIM) is helping to make light of this situation. Redesigns can be considered on screen rather than onsite, on paper. What’s more, the consequences for materials and products can also be calculated.

BIM has been around for a few years, but now it’s entering the new dimension. This means that as well as three spatial orientations, the software also maps out how construction will progress through time – and it while accounting for the financial dimension too – it really delivers the BIG picture.

But BIM isn’t everything

To manage a whole project from start to finish, and through to operator handover and ongoing maintenance, BIM needs to be extended and integrated.

Construction and engineering managers need to map and display the embedded construction schedule on to the 3D model. They need to verify personnel clearances and spot any design incompatibilities. Another challenge is that construction contractors are investing in standalone BIM systems which need to be integrated with other enterprise systems, including ERP, supply chain and financial management.

Oracle makes all these systems, as well as producing project management software which can keep huge organizational projects on track. Bringing BIM into this environment can put construction managers in a better place when planning and executing building projects. And with the data managed in the Master Data Management platform it means that as changes are made throughout the project and at speed – it means you can visualize all the interconnected outcomes.

To discover more, read our latest business brief.

Thursday Jan 14, 2016

When The Unexpected Strikes

By: Krista Lambert, Director, Engineering & Construction Strategy, Oracle Primavera

Tales of the Unexpected

Expect the unexpected. That’s a mantra every construction manager could do with heeding. But it’s easier said than done. The one thing we don’t want is the unexpected.

The bigger the project the harder it seems to keep it on track. In the US, the Big Dig, which involved rerouting and tunnelling Boston’s Central Artery to the heart of the city centre, was set to be finished by 1998. In December 2007 the project was finally finished, with a cost overrun of 190 percent at $14.6 billion, much of which was attributed to unexpected changes.

Such is the complexity of these mega-projects it’s tempting to think that overruns and cost inflation are inevitable. Certainly change is unavoidable in a project of this scale and length. But how you manage change, can make a big difference.

Preparing for change

In a recent Economist Intelligence Unit survey of 300 executives in asset-intensive industries like construction, more than 60 percent blamed unexpected change for at least half of all project overruns. More than half of respondents rank their organizations as average or below average at anticipating change (55 percent), measuring the impact of change after its implemented (55 percent) and making contingency plans to accommodate potential change (51 percent).

There is clearly room for improvement. The question is, what can be done about it? Enterprise project portfolio management software can now track and aggregate all sorts of data vital to complex projects. This helps project managers map out “what if” scenarios to assess the impact of possible changes before they happen, and figure out how much to invest in mitigating these risks. Data can be shared with all internal and external stakeholders. It can also be extracted and integrated from ERP, finance and other enterprise systems.

Managing change has always been tough, but now there are tools to help. Ignoring them could simply lead to digging a bigger hole.

To discover more, read our latest business brief.

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