Thursday Mar 06, 2014

Specialization in the Capital Asset Lifecycle

Taken from the 4th edition of Construction Connection’s digital magazine

Asset-intensive projects, regardless of scope and scale, are under constant pressure to control costs, meet demanding schedules and manage risk. For E&C contractors, one large problematic project could wipe out a year’s worth of profit. The risks to owners and operators are equally bad—ranging from discontented stakeholders to lost revenues.

Yet according to the Building in change: project construction in asset-intensive industries special report[1] prepared by the Economist Intelligence Unit (EIU), over one-third of asset-intensive companies miss their budget (39%) and schedule targets (34%) on major projects at least one-quarter of the time; and more than 60% of respondents blame unexpected change for at least one-half of all project overruns.

No doubt, the lifecycle of a capital asset project is fraught with challenges.

Craig Larson, director of E&C Industry at Oracle, explains, “Owners and project teams need effective ways to manage projects from concept to completion and react with agility to unplanned changes to deliver multiyear projects on budget and schedule.”

Read the full article to learn more about the common platforms and standards that support the lifecycle of a project and the long-term operational efficiency of an organization.



[1] oil and gas, utilities, infrastructure (excluding utilities), chemicals, mining and metals

Friday Feb 07, 2014

University of Utah Uses Oracle’s Primavera Unifier to Save US$11.5 Million in Budgeted Construction Project Costs

Maintaining and constructing new facilities to support a modern education and research institution requires a commitment to continuous improvements and tight management of complex project portfolios. So to improve project visibility and implement better financial controls for capital projects totaling US$900 million, the University of Utah in Salt Lake City replaced its in-house database for tracking construction projects with the cloud-based Oracle’s Primavera Unifier project management system. The result: the university recently completed two large-scale projects on or before their deadlines at a total of US$11.5 million under budget. Paul Bender, Oracle’s director of public administration strategy, explains how the university achieved these impressive outcomes. University of Utah Uses Oracle's Prrimavera Unifier

Q: One of the projects was the 156,000 square foot Huntsman Cancer Center Phase IIB expansion. What was the impact on that project of having improved financial controls and better collaboration?
A: That project came in two months early and US$9 million under budget. The university attributes a good portion of the savings in time and cost to the project management system. The solution helped school officials reduce the number of electronic RFIs required. It also shortened workflow response times among project team members from a previous maximum of eight weeks to a few hours. In addition, officials benefitted from the elimination of a significant volume of paperwork. The system also helped external partners, including more than 90 consultants and contractors, collaborate more effectively through access to the system for day-to-day project management.

Read the full Q&A here and discover how organizations using Primavera Unifier have the tools necessary to maintain fiscal discipline in day-to-day activities.

Read a complete case study of the University of Utah in Salt Lake City on page six of Construction Connection and download an in-depth white paper about Oracle’s Primavera Unifier.

Tuesday Dec 10, 2013

A Look Ahead at Global Construction Through 2025

The recently released Global Construction 2025 report, the third in a series of major global studies of the construction and engineering industry published by Global Construction Perspectives and Oxford Economics, provides accurate and reliable forecasts to 2025 for the global construction and engineering industry as well as for key regional and country markets.

Sponsored in part by Oracle, the report estimates the global value of construction output will increase by 75% between 2012 and 2025, with the U.S. among the top three largest construction markets, despite depressed numbers in the last seven years.

Garrett E. Harley, director of Engineering & Construction Strategy for Oracle Primavera, says, “From a global perspective, the long-term investment volume and potential release of capital should make any construction company smile. However, the challenges and lessons exposed in the recent downturn still weigh heavily on the minds of public and private leaders and will continue to shape business strategies for both owners and contractors. It’s imperative that owners, their consultants and their contractors transform their business operations and delivery capabilities to maximize value and reduce risk.”

While the long-term forecast is optimistic, the short term

U.S. economy is expected to expand at a slow, but steady pace of 2.7% over the forecast period, which should reduce the unemployment rate to around 5%, but probably increase the rate of consumer price inflation to around 2.2%. Looking at specific markets, the report estimates that housing and non-housing sectors will grow at about 5%, while infrastructure—which includes transportation, highways, water and waste—will grow at half that rate over the next 12 years. Demand for public sector construction (schools, hospitals, etc.) is likely to increase, due to both the expected increase in the U.S.’s population and the higher proportion of elderly people. The high level of U.S. debt will likely make financing needed public construction work difficult.

Read the complete article here.

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Tuesday Nov 26, 2013

Enabling Public Sector Efficiency, Transparency

Written by: Paul Bender – Director, Public Administration Strategy, Oracle Primavera

Whether focused on infrastructure, public safety, healthcare or education, public sector organizations face some common and complex challenges in today’s environment, most related to limited funding, oversight and transparency and the increasing and immediate demand to construct new or upgrade existing systems and services.

Public sector entities—and their engineering and construction consultants— must find ways to operate within the given budgets while still meeting the growing needs of constituents.

These entities must answer pointed questions: Given the present budget environment, how does a public works agency determine which program(s) to terminate or downsize to avoid minimal disruption to citizen services? How can an airport authority develop better program oversight and transparency? Is a university system able to model program and portfolio risk so it can create contingency plans? Are there ways that every public entity can reduce waste and inefficiency through better contractor/vendor management? project management best practices in the public sector

No doubt, technology tools can help. Today’s program management solutions, in particular, can help any organization determine where to invest capital that drives greater constituent or agency value, captures inventory for projects and programs, provides oversight for mission objectives…or all of the above.

Program management technology is an enabler designed to improve strategic investment decisions around resource allocation and maintenance. It’s the foundation for facilitating the three strategic drivers—financial discipline, operational efficiency and risk management—that characterize the success of any business regardless of size, scope or market segment. Using technology to enable these three strategic drivers will drive better coordination, compliance and control so that public sector entities and their E&C teams can meet the demands of constituents, stakeholders and regulators in a timely, affordable manner.

Already airport authorities, transportation agencies, universities, healthcare systems and public works organizations have applied program management solutions to make the most of limited funding, meet oversight and transparency metrics and reduce waste and inefficiency.

Read the complete online magazine here.

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Thursday Oct 03, 2013

Wrap-Up: Construction and Engineering Summit @ Oracle OpenWorld 2013

By Garrett Harley, Director of Engineering & Construction Strategy, Oracle Primavera Best practices for global construction and engineering projects

It's hard to dispute that this year's Oracle OpenWorld was anything short of spectacular. Oracle Team USA staged an unprecedented comeback to defend the America's Cup, and the first Construction and Engineering Summit at Leaders Circle @ OpenWorld was attended by more than 80 C-level attendees from many of the industry's leading global owners, contractors, and engineering, procurement, and construction firms.

Mike Sicilia, Oracle Primavera's GM and SVP, kicked things off with a compelling review of how Oracle technologies continue to strengthen and service engineering and construction (E&C) work across the globe. Mike was followed by Graham Robinson from Global Construction Perspectives, who shared his findings from their recently released Global Construction Perspectives Forecast through 2025.

Leaders Circle sponsor Wipro discussed a well-received E&C integrated solution platform built with Oracle technology that helps companies continue to transform their operations and streamline execution. Oracle customers Chiyoda, COSEA/VINCI, Lend Lease, and the Los Angeles Department of Power and Water then shared their stories of how they've leveraged Oracle technology, the challenges they faced, the solutions they implemented, and the benefits they've received from their partnership with Oracle. 

What struck me about this year's event can be summarized in one word: specialization. Atul Gawande (a general surgeon and author of numerous magazine articles and several books, including The CheckList Manifesto) positions the following hypothesis: As information increases, the need to specialize is required.

What does this have to do with E&C? Think of it this way. The age of the Master Builder is no more. There is simply too much information for any one individual to intimately know. Projects, like today's aircraft, are too much plane for one person to fly.

As customers shared their stories of how they approached resolving their business issues, it was their focus on integration of these specialties and how Oracle has continued to invest in supporting these areas that made me realize not only how far technology in our industry has come, but how much more we still have left to do. And how critical adjustments can lead to extreme performance.

That's something Oracle Team USA did in the face of what appeared to be insurmountable odds. And given the forecast for E&C work through 2025, a focus on extreme performance will be required for the monuments to come. 

Thursday Aug 29, 2013

Top Strategic Drivers to Success in an Unpredictable, Changing World

Whether they are in the power or process industry, owners, operators, and their E&C partners face extraordinary demands in the next 20 years. The International Energy Agency (IEA) 2012 World Market Report estimates that a cumulative investment of US$37 trillion is needed in the world’s energy supply system by 2035.1 Of that investment, US$19 trillion will need to go to oil and gas facilities and infrastructure and US$17 trillion to meet generation, transmission, and distribution needs with the remaining targeted at other energy solutions.

The $19 trillion in oil and gas investments is expected to span the globe from U.S. shale and Canadian oil sands to Iraq’s new oil fields and Brazil’s deepwater drilling. IEA also points out that the current energy renaissance in the U.S. will have significant implications for energy markets and trade. By 2030, the U.S. should be self-sufficient in net energy needs and a net oil exporter because of its increased production of oil, shale gas, and bioenergy as well as improved fuel transport efficiency. As a consequence of the U.S. shift, international oil owners will place more emphasis on Asian markets and strategic links to the Middle East. Utilities face unprecedented pressures, as well, given IEA’s estimating $17 trillion investment in power infrastructure. Global electricity demand is expected to increase over 70% by 2035, according to IEA, with over half that demand from China and India. As well, electric utilities in the U.S. are expected to invest at least $51.1 billion in transmission projects through 2023.2 The Edison Electric Institute (EEI) estimates that more than three-quarters of the $51.1 billion will be used to support the integration of renewable resources in an effort to meet growing demand, relieve congestion, improve reliability, and support new generation sources to power grids.

Whether owner, developer, utility, or E&C company, success in the current and emerging environment will most certainly depend on an organization’s cost control, operational efficiency, and risk mitigation—read the full article in Engineering News Record’s (ENR) 2nd edition of the Construction Connection digital magazine to discover why.

Visit the microsite to read highlight articles from the digital magazine.