When we buy things in everyday life we expect to pay the agreed price, to have it when we were promised, and for the performance to conform to our expectations. Hardly unreasonable.
With services that rely on expert delivery, perhaps you’d expect even more. For experts to offer proactive advice and provide a solution that’s more effective than the one originally envisaged.
How close are civil engineering customers to seeing this in practice? Not very, according to statistics quoted recently by the ICE.
The Saïd Business School analysed 3,022 construction projects and found that only 0.2% were on budget, on time, and delivered the benefits promised.
Similarly, a McKinsey and Co. study of 500 global projects found that only 5% were completed within their original budget and schedule.
The ICE stresses that these issues are not unique to the UK – these were global studies. But perhaps the global experience has created an expectation of poor delivery everywhere.
Why the Gap?
Looking at specific causes of late or over-budget delivery a recent ICE green paper identified five issues:
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- Funding decisions being too short-term and restrictive, leading to stop-start pipelines.
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- Insufficient flexibility to reallocate funding to expedite delivery.
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- Knock-on impacts from cost and time overruns of megaprojects.
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- Excessive optimism in the initial cost and time estimates.
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- Projects being initiated before they are ready, with costs and timings ‘locked in’ before the scope and benefits are defined.
We’d argue that three of these are within the control of civil engineering contractors – at least to some extent.
Funding inflexibility, for example, could be a product of fragmented delivery and transactional supply chain relationships. Suttle Projects’ record of on-time, on-budget performance is built on simplifying projects, reinforced by self-delivery capabilities and collaborative supply chain partnerships.
Grounded in Reality
Optimism bias and premature project initiation seem to be linked. A classic example here is scoping a civils project without fully understanding the ground conditions or the presence of sub-surface obstructions.
Typically, our in-house design team will review the design proposals when we’re awarded a new contract. This will identify any design errors or conflicts in the specified information and will recommend improvement opportunities.
Handling the Unexpected
The other part contractors can control is how they react to the unexpected. This can always happen with complex projects owing to factors such as storms on coastal projects. Are these events a reason to ask for more time/money, or an issue that has to be resolved creatively and adaptably to keep things on track? Clients obviously want the latter, but too often have to settle for the former.
And this is all before we get to the true essence of value: delivering more than was expected. If our engineers can see an opportunity to create a solution that is more resilient and facilitates cost-savings later in the project, we always grasp it.
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