Amid data center boom, capital program management takes center stage
July 28, 2021 | 4 minute readOver 3.8 billion people globally depend on data center availability and reliability. If you have a smart phone or use the internet, you rely on data centers. Data centers are critical to your operations for any business that’s online or has an online component.
All business must make choices and tradeoffs about their operations and capital expenditures. How an organization manages their capital budgets can make or break them. Data center owners are no exception.
Gartner projects spending on global data center infrastructure to climb to US $200 billion in 2021, up 6% from 2020.
In 2019, 33% of that data center infrastructure spend is on building and equipping hyperscale data centers. These data centers hit record heights in 2019, with spending in the third quarter alone reaching $31 billion.
The largest global cloud and internet service providers are investing billions each quarter constructing hyperscale facilities that house tens of thousands of servers and hardware alongside millions of virtual machines.
Compass Data Centers: propelling the industry forward
Nancy Novak, chief innovation officer with Compass Data Centers, has a strong drive to propel the industry forward. She has 30+ years of experience, including executive level roles with Hensel Phelps and Balfour Beatty, contributing to over $3.5 billion of project value in the construction industry.
In her current role, she is focused on using cutting edge technology, Lean practices, and innovative culture to disrupt the industry and improve returns on investment.
Novak and I spoke about capital program management, data centers, and how to make informed decisions and tradeoffs that are critical to the data center infrastructure industry. Novak understands that consistent processes and proven tools are critical when deciding what to build, where to build, and how to build projects.
What to build and where to build
There are multiple financial approaches to project selection. The first steps in effective capital budget management are understanding how projected costs, resources, and cashflow are vital to properly prioritizing and selecting projects.
Selecting a method to align to your organizational goals, developing additional selection criteria to support those goals, and implementing that method and process consistently across your entire organization are key steps to success.
Toward project predictability
There is a great deal of variability in project delivery, resulting in a lack of predictability and assurance. Novak is a strong supporter of offsite manufacturing. This practice yields proven results in speed, quality, predictability, and safety.
“Predictability is everything,” says Novak. Compass cut crew size in half, speeding installation from six weeks to just one week, by using pre-fabricated power and HVAC system components. .
Don’t be fooled by thinking that crew reduction from offsite manufacturing is negatively impacting job numbers. The industry is becoming more inclusive, enabling individuals with differing levels of physical strength and abilities to work in a controlled manufacturing environment instead of at a construction site.
Customer success: Primavera Unifier and Primavera P6 Enterprise Project Portfolio Management (EPPM)
A top hyperscale data center owner selected and implemented Oracle’s Primavera Unifier and Primavera P6 Enterprise Portfolio Planning Management (EPPM) to support their data center group and ensure high system performance.
The team realized impressive results, including improved turnaround on portfolio baseline updates through cross platform integration to site teams by 80%, from two weeks to just two days. Thanks to this improvement, site teams responded more quickly and accurately to schedule changes by optimizing resource utilization and mitigating cost impacts.
The organization accommodated a three-month schedule compression to reach production delivery dates by using what-if scenario modeling and resource-leveling to make informed decisions and take appropriate action.
The data center owner also improved the accuracy, integrity, and predictability of their capital planning and sourcing processes by applying cost and productivity performance data.
Novak’s top productivity tips
- Leverage your schedule. Modern scheduling solutions are sophisticated. Advanced professional schedulers can use these solutions to create look aheads, reports, and communicate insights that can become a project manager’s most valuable tool. “The schedule is the glue that holds the whole job together,” says Novak. “I have an amazing scheduler.”
- When possible, structure the job site to have a single trade per area. Each trade moves from area to area and knows exactly what needs to be accomplished and how long they have to complete an activity. Trades can make up the time over the weekend to avoid one trade causing a bottleneck if they are running behind schedule.
- Implement advanced work packaging to unite preliminary planning/design, detailed engineering, and construction.
- Ensure consistency through processes and technology across your entire project portfolio.
- Gain a holistic view across cost, schedule, data, and risk throughout your entire project portfolio.
Join Nancy Novak along with Mike Moss, president, Society for College and University Planning, and E.N. Sanborn, director of product strategy, Oracle for an upcoming webinar, “Strategic capital program management: Balance today's needs and tomorrow's opportunities.”
Learn about our new capital program management solution, Primavera Unifier Essentials, which delivers proven processes and fast time to value. Get up and running on world-class capital program management in just two weeks.
Oracle Construction and Engineering, the global leader in construction management software and project portfolio management solutions, helps you connect your teams, processes, and data across the project and asset lifecycle. Drive efficiency and control in project delivery with proven solutions for project controls, construction scheduling, portfolio management, BIM/CDE, construction payment management, and more.
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