It’s a difficult time to plan capital construction investment programmes. UK political and economic uncertainty due to Brexit, combined with political upheaval in many parts of the world, makes for a complex construction landscape. We are starting to see some shakiness reflected in the market. For instance, the UK has seen only 0.3% growth between April and June 2017, compared with only 0.2% in the previous three months, with the ONS referring to a "notable slowdown" from last year. Meanwhile, US growth slowed to its lowest level in three years in Q1 2017.
At this time of increased uncertainty, many construction clients have the dilemma of how to prepare for the unknown – maintaining a state of strategic readiness in their capital programme and portfolio planning. While it’s rarely possible to accurately anticipate the effect of external events, it’s possible to build agility in to the portfolio. This results in greater resilience, while at the same time mitigating against substantial cost overruns.
While it’s rarely possible to accurately anticipate the effect of external events, it’s possible to build agility in to the portfolio.
Readers may be familiar with the principles of dynamic capability, an element of organisational theory describing a firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments (see Fig 1). Many organisations will base their core business strategy on this model, and it works well as a theoretical model for a construction portfolio’s response to future threats. Let’s take a look at how this applies in practice to private sector construction.
Putting Theory Into Practice
In a shifting market, rigorous project management processes and systems underpin increased agility and efficiency, and improved governance. For built asset owners and procurers, these processes and systems will ideally be integrated in a data-rich environment that supports decision-making through the whole asset life cycle. This approach forms the basis of practical solutions that increase the likelihood of successful programme and portfolio planning (see stage 3 of Fig 1).
Clients typically need a more informed overview of their programme and its components. Prioritisation of projects is important, and the appropriate data will reinforce a flexible, reviewable approach, allowing schedule agility in the portfolio. It will also in turn provide a framework for assessing projects within the context of organisational value, allowing organisations to question the strategic basis of each initiative.
Faithful+Gould PPMC Delivery Solutions
Faithful+Gould leads client business transformation through a range of project and programme management consulting (PPMC) solutions. Our services provide the link between the capital programme or masterplan and project delivery. Our experience in business case development and strategic investment strategy provides us with an in-depth understanding of business drivers. Our solutions relating to process standardisation/ optimisation in capital projects and assets, along with our ability to drive value and reduce risk, mitigate the threat of misalignment between strategy and delivery.
Our approach is to assess current issues and design a solution tailored to the organisation’s individual needs. This typically involves project management organisational assessment, process refinement and implementation of new technology solutions - focusing on people, process and tools, as shown in fig 2.
Using advanced analytics, all project details can be interrogated for risk, value, impact on resources and overall programme timeline.
For instance, one solution we can provide is a mechanism that tests ‘what if’ scenarios, without damaging the baseline plan. Using advanced analytics, all project details can be interrogated for risk, value, impact on resources and overall programme timeline. This methodology goes way beyond the high-level view offered via spreadsheet capability, instead providing a more informed view that harnesses the power of data and uses it to support better decisions.
The resulting portfolio management system brings numerous benefits: improved governance, transparency of data, ability to test potential changes to the programme, and visibility that enables executives to manage the capital programme at its highest level. The solution can be configured to simultaneously provide the ability to drill down into project level data, providing managers with reassurance that their project teams are focused on maintaining control of all aspects of their projects.
Innovative new technologies have much to offer in the pursuit of data-driven asset management. Here at Faithful+Gould, we’re leading the field with development of a suite of tools and processes that enable us to offer clients expert advice across the whole asset lifecycle. We have saved our clients a considerable percentage of their capital spend per annum through implementing solutions that save time and consequently costs.
The solution can be configured to simultaneously provide the ability to drill down into project level data...
Equally, the governance we introduce mitigates against the risk of cost overrun which could be as much as 20% of the programme value.
We are therefore confident that we can save you significant time and cost on your programme, and we can demonstrate how savings will exceed your investment into this service. As an independent industry leader, we are positioned to develop processes and tools to meet your individual needs. Our collaboration with strategic technology partners enables us to create industry-leading solutions that gives our clients’ portfolios a competitive edge.
Contact us to discuss how your organisation can formulate a robust response to an uncertain future.