Insights into the ideas and innovations that are transforming project planning and delivery

  • March 30, 2018

How to define innovation metrics leveraging technology

Throughout our GIC report series, we’ve focused on how digital transformation can powerfully shift the engineering and construction (E&C) industry.

The Boston Consulting Group (BCG) notes that E&C can expect annual savings— up to US$700 billion to $1.2 trillion— by embracing digital transformation.

The E&C industry must heavily invest in technology for project delivery to achieve these numbers.

As we’ve heard from many clients, one of the biggest challenges is defining innovation metrics to assess project performance. So, how can E&C develop a solid ROI to capitalize on this massive potential savings at an organizational or project level?

Organizations can follow the traditional construction project measures, such as:

  • Financial return
  • Breakeven points
  • Planned value = planned % of tasks left to complete x project budget
  • Actual cost of work performed = the amount of money spent on a project to a certain date
  • Cost variance = planned budget against the actual budget
Unfortunately, measuring construction productivity is often thwarted by moving variables, including: change orders/variations, numerous stakeholders, daunting amounts of information stored in various systems, and data-intensive metrics that aren’t easily quantifiable. Because every project is different, defining a set of consistent, quantifiable metrics can be tough.

What else constitutes a positive return for your projects?

The age-old principle—Keep It Simple Stupid (KISS)— still rings true today. You’ll benefit from simple, easy to understand measurements that resonate across the business— despite the fact calculating certain performance measures may still require complex metrics.

We’ve discovered some great approaches to measuring project success without delving into complex calculations— thanks to our 20 years of experience working with global organizations. Our suggestions:

  • Fluor shared a very simple measurement of success called “The 1:10” in our Fives Keys to Unlocking Digital Transformation in E&C report in partnership with BCG. Fluor wanted to see every innovation implemented in their business rolled out to at least 10 projects to be considered successful. This simple metric removes time restraints and focuses on implementing change in a straightforward way.
  • AECOM chose to standardize their innovations or solutions across every project. Simply having a new solution on one project wasn’t enough to warrant success. The processes and standards must be the same across the board— no matter where they happen in the world.

At Oracle's Aconex, we help clients measure basic savings— such as the reduction of printed documents— leading to savings in the millions of dollars. For example, one client reduced their printing by 83% using Aconex and saved an astounding $14m.

Dialing in on process management

Our Connect Awards winners have also achieved considerable savings by focusing on process management instead of fixating on the daunting goal of  saving $XX million(s) across the organization. Here are some examples of how they’ve measured success:

  • Balfour Beatty saves an estimated £1.3m in reduced errors and rework through improved document version control— or 1% of the project value— on the Burbo Bank offshore wind farm.
  • The Qatar Rail Program, valued at US$36b— and one of the largest infrastructure developments in the Middle East— reduced review cycles by automating workflows, and completing complex reviews in less than 10 days.
  • Burns & McDonnell adopted Aconex for project-wide collaboration across multiple global practices. They’ve decreased their average response time by 64% (from 14 days to 5 days) for 50,000 workflow requests using our platform.
  • We’ve also used time and motion studies for new clients who’ve adopted our Field product resulting in direct cost savings (a definitive measurable result). The study is based on comparing how things were done before and after embracing digital transformation (i.e., progressing from the traditional ways of working to adopting digital technology).

Leading the way with predictive analytics

Digital transformation— or, the power of big data— is unfolding greater opportunities for companies to predict and communicate market trends, spending, customer behavior, and supply chain/project needs. Predictive analytics can change the way business decisions are made by identifying when to switch suppliers or brands for all types of spending, including: building supplies, fuel, equipment, etc.

By gathering data, having clear objectives and goals, and activating evidenced-based decisions, companies can streamline their project processes and make smarter business decisions that adhere to the age-old KISS principle. As Albert Einstein once said, “If you can’t explain it, you don’t understand it well enough.” Keep it simple.

Read the complete Global Industry Council (GIC) report, "Five Keys to Unlocking Digital Transformation in Engineering and Construction".

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