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PROJECT DELAYS AND COST OVERRUNS? TAKE A MANAGED APPROACH.

We were interested to read an opinion article in the UK Defence Journal recently. Written by Matthew Powell, Teaching Fellow in Strategic and Air Power Studies at the University of Portsmouth, it looked at why large, long-term defence projects often overrun on both budget and timescale.

Of course, these issues are not limited to defence projects – you only need to look at HS2, for example, to see how all large infrastructure projects can fall behind. In our experience, this is a function of the complexity of the project and the number of disciplines or contractors involved – something that is always going to be in the nature of these types of programmes.

What’s the best approach?

Any business managing or contracting to a long-term project is likely to understand that there may be delays. It’s impossible to say, at the start of the project, where those delays may occur or why, but experience can be used to identify where they may be likely. Any complex project plan should build in contingency planning to help mitigate any potential delays or cost overruns, and we have found that working on programmes that prioritise a collaborative approach often minimises the impacts when they occur.

Getting this right at the beginning of a project, and having a clear way to onboard new contractors who join the project once it has started, will help disparate teams to work together collectively, actively look for ways to improve processes or approaches and help each other to achieve milestones and project goals.

Long-term planning and strategy

No-one wants to assume that their part of the project will overrun or cost more than their original proposal, but this is likely for complex projects, as change is more likely, other players may not provide inputs when needed or the technical solution may prove more problematic than anyone would have thought – the reasons are endless and often impossible to anticipate.

When being brought into a project, the initial bids and project planning are developed by the contractors based on the overall project requirements.

For complex projects, the direct customer is often not the overall OEM or end customer – instead, they are only responsible for a particular section of the overall programme. So as a specialist contractor, we have conversations with them, research the project, understand how our work would fit into the overall programme and then demonstrate how we can add value as well as expertise.

Part of that value is in being mindful of the potential for delay, and having a positive, proactive attitude towards supporting the programme if this should occur. However, it’s important not to be complacent about this at any point of the project. You simply can’t go in with a ‘it’s all going to slip anyway, so it doesn’t matter if we’re behind’ attitude.

Instead, a good contractor will have planned for the anticipated outcomes and have a clear plan to mitigate any occurrences. More importantly, it is the contractor’s ability to react to changes driven by unexpected issues, that will determine whether any impacts are minimised and the project a success. Once change occurs, it is vital that the plan is continually managed and assessed as the programme progresses, so that there is genuine problem solving and support at every point. Where needed, you re-plan, adjust approach, and work out a way to get back on track that is acceptable to everyone.

“In my opinion,” says Cascade Engineering MD, Ben Barrass, “one reason for complex project overrun is the incorporation of change at a high level. Often, in a misguided attempt to save money, new features or mission creep are allowed – the goal posts are moved. The project would have delivered on time and to budget, if the aims had remained those at the outset, but the shoehorning in of improvements often derails a previously well progressing project.

“It is usually far more efficient to let the project run to fruition and then introduce an upgrade after delivery.”

Teamwork and flexibility

In the end, all contractors are aware – particularly with regard to defence projects or large public infrastructure – that we are spending taxpayers’ money (mine and yours) and should be delivering the best value we can for it. We also want to deliver the highest quality engineering, so that the end ‘product’ has a long and valuable lifespan.

So for us, while it’s clear that complex projects do often take more time and budget than originally planned, the important point is to build collaborative, respectful and genuine relationships so that if problems arise, they can be spotted quickly, dealt with effectively and lessons learned, so that they can be put into practice as the programme moves forward – and also applied to similar programmes in the future.

Photo by Octavian Dan on Unsplash

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