The rise of the “gigaproject”

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Featured Project:

Marina Bay Sands Casino Resort, Singapore

Connecting teams project-wide

The rise of the “gigaproject”from mega to giga and why it matters

Guy Barlow

Global Commercial Director

Aconex

16 November 2017

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Talking Points

The Goal

Rise of Complexity

Obvious & Hidden Challenges

Moving Forward

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Unlocking GrowthAre we there yet?

Innovation

• What kind of projects have the most risk?

• What drives change? How good are we at managing it?

• What delivery methods work best? Do they differ regionally? By industry?

• Do we have meaningful and actionable business insights? Or just lots of data?

• Who are the best clients to work for? Where do we place our bets?

Execution

• Can project leaders focus on project delivery rather than data gathering?

• Can information flow freely between team members, both internal and external?

• Can we have financial line-of-sight visibility across our projects and portfolio?

• Can we integrate mission critical systems to reduce duplication and risk of error?

Scale

• Do you feel like you start over for every new project?

• Can you leverage best practices based on performance?

• Is training/supporting new internal and external teams draining your resources?

• Can your systems adapt to new business challenges?

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Emergence of gigaprojectsSpend is substantial & project size is increasing

McKinsey

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Emergence of gigaprojectsThe list keeps growing…

1. International Space Station – $150B2. Al Maktoum International Airport (Dubai) – $82B3. South-to-North Water Transfer Project (China) – $78B4. California High-Speed Rail – $70B5. Dubailand – $64B6. London Crossrail Project – $23B7. Beijing Daxing International Airport – $13B8. Jubail II (Saudi Arabia) – $11B9. Hong Kong-Zhuhai-Macao Bridge – $10.6B

“…ultralargeprojects represent an exponentially tougher challenge than a typical megaproject…”

McKinsey

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Infrastructure projects are complex and create a lot information

Deep relationships are formed between organisations across projects

Complex systems are inherently challenging – unstable?

Ever-increasing complexityExponential growth in data & information

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The ResultsCurrent approaches are flawed, wasteful & not sustainable

“A 1% reduction in costs would save the construction industry approximately $100 billion annually”

•Average project cost overrun is 70%•Prices of construction projects have risen faster than the consumer price index

+70%

Increasing Overruns & Costs

•Share price drop of 12% after a significant negative project event •Infrastructure projects are more exposed to political & economic risks

-12%

Growing Risks

•Only 1% in productivity gains over 20 years

•Reasonable productivity growth could add $1.6T to the industry

+1%

StagnantProductivity

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Connecting 3 Critical ElementsDriving Innovation, Opportunity & Growth

Technology

”Research found that the construction sector lagged

behind most other parts of the US economy in the intensity of

digital assets, usage, and labor."

Process

"The differing skill sets and working styles of architects and engineers affect the way they work with contractors and can

prevent the right degree of cooperation and overlap

needed for optimizing the design-build process."

People

"The skill level of supervisors and project managers is critical for good on-site productivity, but it can vary greatly among employees across the same

firm."

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RFIs Change Orders & Variations

Payment ApplicationsTransmittals & Doc Distribution

Checklists & Punch ListsBid & Tender Management

Inefficient & Broken Processes

Technology & ProcessDisconnected, substandard project controls leave you uncertain and exposed

InformationSilos

Poor/FailingPerformance

CAN’T make informed decisions or take action

➕ =Estimates

Budgets

Actuals

Commit-ments

Schedule

Contracts

Technology Process

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Technology & Process…and people

Disconnected, substandard project controls leave you uncertain and exposed

InformationSilos



➕ =Estimates

Budgets

Actuals

Commit-ments

Schedule

Contracts

Technology Process

People

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A different view of “People”

What was found…

• findings challenge the assumption of human rationality

• established a cognitive basis for common human errors

Why this matters…

US$1T wasted in infrastructure projects

Bias in Decision-making

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1. Confirmation Bias – looking for information that supports your beliefs

2. Anchoring – base your final decision from information gained earlier

3. Overconfidence Bias – too much faith in your own knowledge

4. Gambler's Fallacy – the expectation that past events influence the future

5. Fundamental Attribution Error – the tendency to blame others when things go wrong

It’s in our DNAYou’re only human

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Connecting Technology, Process and PeopleToo much “gut” decision-making



➕ =

InformationSilos

Estimate

Budgets

Actuals

Commit-ments

Schedule

Contract

Technology





Process

Confirmation Bias

Anchoring

Overconfidence Bias

Gambler's Fallacy

Fundamental Attribution

Error

Too little time to correct for biasesScrambling to get the info needed

People

➕

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14

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Recognizing BiasesAdmitting you have a problem

Confirmation Bias

Challenge what you think

Anchoring

Don't rush to judgement

Overconfidence Bias

Find objective data

Gambler's Fallacy

Adopt a different perspective

Fundamental Attribution Error

Avoid judgement

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Technology, Process & PeopleThe complete picture to optimize decision-making

➕ =

InformationSilos

Estimate

Budgets

Actuals

Commit-ments

Schedule

Contract

Technology





Process

Confirmation Bias

Challenge what you think

Anchoring

Don't rush to judgement

Overconfidence Bias

Find objective data

Gambler's Fallacy

Adopt a different

perspectiveFundamental Attribution

Error

Avoid judgement

People

➕

More time to correct for biasesEasy to get the info needed

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USD$5B Facility

Objectives

• Easy way to deliver real time & accurate forecast to management

• Track budget and cost at any level of detail - granular level (WBS) & actuals

• Reporting - create customised reports

• Track progress & performance for each section (project) & overall single view

• P6 integration (5-8K schedule activities)

Value

• Financial Discipline – heightened visibility to how they are performing against budgets

• Risk Mitigation – easily track, validate, and audit incoming information

• Operational Excellence – efficiently documenting change & invoices along with work completed

Solution

• Implemented in 4 weeks

• Multiple projects set-up for each section of the factory (6 “projects”)

• Reduced 10,000 cost code Items to 1,000

• Up to 50 subcontractors and suppliers -submit payment and changes

• P6 schedule integration

Challenges

• Multiple Cost Tools - Spreadsheets, P6, In-house Contract Admin, ERP

• Unclear what money they had to spend or how it was being spent

• Project reporting was manual and unacceptable

• Senior management only receiving reports from Finance - lack of detail

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1. Single source of the truth – reality sets in when it’s time to report out

2. Connect schedule and cost – without it, the true effect of change is impossible

3. Flexible and scalable systems – your projects and business will change over time

4. Effective change management – manage change, from initiation to resolution

5. Informed decision making – get the facts, real-time & take the time

5 Ways to Minimize Complexity

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Featured Project:

Marina Bay Sands Casino Resort, Singapore

Connecting teams project-wide

Thank you.

Join us for a cocktail reception at the Royal Oak Suite, box 30