As passionate as we are to transform continuous risk management in the construction sector, on October 25th, we invited Oriol Ribas, Country Manager at Ferrovial Construction and former ITER Deputy Project Director, to participate in the first Digital Transformation webinar organized by Beawre. Oriol has more than 20 years of experience managing construction projects in Spain, UK and France. They started using Beawre Control in 2019. We asked him to share his view on the main challenges around project management in megaprojects. In this post, we are happy to share the main insights Oriol shared with us through this webinar.
The recording of the full webinar used to inspire, inform and produce this post can be found here.
In this post you will learn:
How your need to respect the schedule in a construction project is linked to continuous risk management on workflows.
The project management challenges faced when trying to avoid delays and budget overruns in large construction projects.
ROI of using continuous risk management digital tools to better control your workflows.
Criteria to choose your (risk management) digital solutions in the Construction Sector.
Nothing is finished until it is not started
While every project is different, most major infrastructure projects share similar challenges from a project management perspective. Most of these challenges are connected to respecting the schedule. Any delays in the schedule cascade down into project delays and budget overruns. If there is one unquestionable truth, it is that extra time in a construction project is very expensive. Controlling risks related to scheduling violations and delays is then essential in these types of projects.
According to Oriol Ribas, three main areas need to be managed from a risk-driven perspective to avoid scheduling issues in any large and complex project:
Prework: as Oriol often says to his teams: "nothing is finished until it is not started". In order to finish on time, you have to start on time. In the case of complex projects, there is always a lot of documentation to clear before starting to pour concrete on site.
Managing Changes: clients and other stakeholders involved in the execution of projects continuously produce major or minor changes. These usually unexpected changes need to be managed and addressed diligently.
Works' complexity: especially in large megaprojects, you need to execute complex works and it is quite common to underperform.
In this post, we are going to focus on the need to control risks in prework.
We are not in the era of information anymore, we are in the era of attention
Big amounts of data management produce a lot of "noise" in communication within and across teams. Continuous and repetitive tasks end up producing a lot of communications which translate into a very large number of e-mails per day (many of them generated automatically by your digital tools, e.g., your Electronic Document Management System (EDMS)). Therefore, setting your attention on the right challenges is essential in order to address the most important topics and not to get lost in too much information. Very often, your daily works make you lose focus on the actual priorities defined in the contract.
The medicine for complexity: anticipation
As Oriol Ribas highlights, more and more, autonomy in a construction project becomes a memory of past times. As complexity increases in large projects and the number of stakeholders in a project grows, we observe an also growing lack of autonomy. Inevitably, this translates into a longer time to make decisions. This trend does not seem to be changing any time soon.
As a consequence, digital tools offering an accurate description of the present or even some analytics capacity of the past may not suffice. Prospective information becomes key in order to anticipate what is going to happen in your workflows and center the attention on the right challenges at any point.
Data challenges in the construction sector
No matter the digital maturity level of an organization in the construction sector, there are two constant challenges they may face:
Data is perpetually fragmented because of the use of multiple digital tools to manage information (e.g. EDMS, program management system, ERPs (Enterprise Resources Planning), Microsoft Excel spreadsheets, etc).
These tools are not interoperable and they cannot easily exchange data, typically because they are provided by different competing vendors. Even when your organization tries to adopt an all-in-one platform, then they still need to face common situations such as participation in joint ventures where other partners impose their own tools or when your client imposes digital tools. In one way or another, a lack of interoperability will always result in pain which jeopardizes performance through your digital ecosystem.
A third challenge may be added to this list, which is related to the lack of agility of organizations in the construction sector to make decisions related to changes in their IT systems. Very often the combination of these three aspects ends up resulting in the excessive use of spreadsheets to fill the gaps left by all those features not provided by current digital tools. For instance, we end up managing the documentation schedule or the design review comments in a massive Microsoft Excel spreadsheet. However, the alternative, which may involve replacing tools with more modern options is not feasible in practice due to many cultural and organizational roadblocks.
Probably, the fact that spreadsheets are not the best way to manage data would not be argued. Basically, the use of spreadsheets attempts against all the previous aspects we mention in this post: they limit your capacity to analyze data and drive your attention, understand the level of risk, and anticipate what is going to happen in your workflows.
So, as a direct recommendation, Oriol suggests identifying repetitive workflows that generate pain to your organization and finding mechanisms to support risk management more effectively, related to those workflows.
ROI-fueled Transformation
The construction sector is not an exception and, as in any other sector, transformation needs to be fueled by a clear business motivation. So, a legitimate question is what should motivate construction companies to control risks in real time over fragmented data sources generated through non-interoperable digital tools.
For Oriol the answer to this question is quite straightforward:
First, it prevents your staff from spending thousands of hours feeding and updating Microsoft Excel spreadsheets and manually crossing and analyzing information, as long as new dashboards are accessible and user-friendly. Tools that are able to aggregate information from different sources are key to solving this issue.
While measuring the exact amount of savings produced by the use of digital tools to continuously manage risks still remains a challenge, based on his experience, he feels comfortable stating that savings in megaprojects can be massive, in the range of millions. Oriol believes this is especially true in projects with clients who are not eager to understand these delays may not be due to your performance.
A third relevant aspect is that any solution that brings better visibility and understanding of your data may also bring quick wins that you did not anticipate when you applied a solution to monitor workflows and control risks. For instance, realizing that a significant part of the documentation was never approved actually. The ROI produced by better data visibility is not negligible.
Harnessing Limitless Star Power
Oriol's opinions expressed in this post are supported by his experience in different projects and in particular in the ITER project. ITER ("The Way" in Latin) is one of the most ambitious energy projects in the world today. In southern France, 35 countries collaborate to build the world's largest tokamak, a magnetic fusion device that has been designed to prove the feasibility of fusion as a large-scale and carbon-free source of energy.
Ferrovial, Vinci, and other companies created a joint venture to build the main buildings of the nuclear reactor. This was a 7 million hours contract including civil works and some finishing works. The contract, signed in 2012, has lived long enough to see the ongoing digital transformation the construction sector is going through. It is a massive project involving many processes, and stakeholders, making traceability essential.
Broadly, Oriol led 200 people on the staff and 800 workers on site. Among the many challenges they had to face, they wanted to improve their awareness and control of the 1200 documents they exchanged every month.
Criteria to choose your (risk management) digital solutions in the Construction Sector
When Ferrovial, Vinci, and the other partners in the ITER's joint venture chose Beawre Control, they had a clear idea of the criteria they were using to select the tool, based on the items discussed above.
Oriol summarizes the most important criteria they use to select new digital tools to help them improve performance and manage risk in real-time:
Non-intrusiveness: they detected the need to control workflows and predict the evolution of documentation approval when the project was already ongoing. They wanted to control the capacity of subcontractors to deliver on time and their ability to meet deadlines with their clients. However, they could not afford to change the digital tools that were already being used. New digital tools should seamlessly integrate into the existing digital ecosystem to cover the bridge among all the stakeholders involved in the process, who may be using different tools. New solutions should not force them to change their workflows either. Finally, they should not introduce unnecessary communication noise and provide only simple and clear dashboards, when required.
Contribution towards cohesiveness: because we already have many tools including program management systems, EDMS, ERPs, etc, any new solution should contribute to making the digital ecosystem of the company more solid and cohesive rather than contributing to further fragmentation and lack of interoperability. The fact that different pieces of information such as the program or schedule and the documentation or the permissions are managed by different tools disallows crossing and analyzing these data together, preventing companies from a much deeper and richer analysis to help them understand projects' status better. New tools should contribute to solving this issue instead of aggravating it.
Competitive and predictable pricing: project margins are typically short in most construction projects. Digital solutions need to prove ROI. As pay-per-use approaches become a standard for SaaS solutions, they still represent an obstacle in the construction sector, where there is usually a lack of control over the number of times workflows are executed and, therefore, it becomes tricky to estimate the actual cost of those digital tools.
Go beyond Monte Carlo's simulation, use AI: financial risks have been deeply analyzed and well-defined models that explain project financial behavior exist. Because the model is well-known, it is possible to run simulations over the model (e.g., using Monter Carlo's simulation as an example). The problem is that when you want to generalize the concept of risk to apply it to general workflows and operations, these models are not defined anymore, and therefore simulation without a model becomes useless. This is your opportunity to find practical ways towards the smart use of AI. You need to find solutions that use AI to learn new models, which explain the actual behavior of these workflows in your project, and then predict based on them, to perform a live assessment of what happens on a daily basis, so that you can react in advance. There is no model from the start but instead AI learning and modeling actively.
Partner rather than provider: digital transformation in construction is an ongoing process. Remember you do not need a simple provider for your next digital tool, you need a partner committed to supporting your organization's digital transformation journey and eager to solve any issue you may encounter.
To learn more about this discussion watch the webinar recording here.