Delivering Success in Public Infrastructure Projects

PIP

The world is watching

Every government today faces the same problems when it comes to making critical improvements to its country’s infrastructure: where to start, and how to pay for it? From the many pressing calls upon resources and finance – from transport to water and utilities to the extraction of natural resources to the provision of basic services for the underprivileged and far-flung – which projects take priority?

In Chile, for example, 35 per cent of infrastructure projects are rejected upon scrutiny by the National Public Investment System. Get it right and the result can not only improve citizens’ lives but can often make a significant financial contribution to the national coffers – Stockholm’s congestion-charging scheme has an overall net present value of $1.2 billion. The upside can be huge. The downside can be catastrophic.

When infrastructure needs are inadequately or inefficiently met the problem doesn’t simply get absorbed in an uncomfortable reporting meeting or result in the demotion or firing of those responsible. The problem magnifies and knocks on through the economy, through the culture and into the quality of life of constituents. In some countries the government gets voted out; in others, the people riot. Decisions are critical. MGI analysis suggests that an increase in infrastructure investment equivalent to 1 percent of GDP could create 3.4 million direct and indirect jobs in India, 1.5 million in the US, 1.3 million in Brazil, and 700,000 in Indonesia.

The mandatory performance level

The skill of those who identify, design and implement transformative projects is in meeting extremely demanding and high level goals of performance and achievement. They’re charged with keeping projects on track, on budget and in line with the needs of the country’s constituents. Only the most rigorous, comprehensive, integrated and easily understood management information, monitoring and control systems can help project teams deliver on the expectations of their stakeholders and the needs and expectations of the future.

When embarking upon public infrastructure projects of any size and purpose, public and state-sponsor accountability and public scrutiny create constant, and justified, pressure. Robust and diligent governance is mandatory in areas such as budget control, transparency (tales of corruption can sometimes haunt the world of public construction) accountability to constituents, and demonstrable best efforts to drive productivity efficiencies and improvements.

Problems in infrastructure improvements create nationwide discontent

Research from the Project Management Institute (PMI)3 suggests that performance in meeting project goals, timelines and budgets creates a financial impact of staggering proportions. Organisations with high performance in these three measures risk only US$20 million per US$1 billion spent, while their less successful peers jeopardise US$280 million for the same US$1 billion spent. The opportunity costs of inefficient management can send shockwaves through a government – one less hospital that can be built for example, or one less township served with fresh water; one less problem solved. Problems give birth to nationwide discontent, and weaken government positions… solutions do the opposite.

Predicting success

The effective management and monitoring of public infrastructure projects is challenging on a vast scale. Even the most rigorous of plans, where it seems that every detailed aspect has been explored, every risk has been assessed, and every reasonable expectation of change has been taken into account – with safeguards instigated to minimise its likelihood of occurring or its ability to disrupt or delay the project – can be affected by unforeseen factors.

Whilst nobody prepares for failure, the most successful projects are those where the possibility of failure is always recognised and guides best practice to mitigate the possibility. The world’s media pays little heed to robust contingency plans that are never needed. When projects go off-track, however, they hit the headlines.

No-one can guarantee success in a project environment either, but organisations can increase the predictability of achieving it, by making sure that they have full visibility into every part of every project. Holistic visibility makes control easier and supports the strong management discipline of leaving nothing to chance.

Managing capital and mitigating risk are the top two drivers in managing a project successfully through unanticipated changes; the biggest threat to project success. When these two areas are given the highest level of strategic focus and become the guiding principles of every project action, they improve operational excellence. They improve the likelihood of success.

Enterprise Project Portfolio Management (EPPM) solutions drive better portfolio management decisions by providing end-to-end, real-time visibility into all relevant information. EPPM solutions also help organisations evaluate the risks and rewards associated with projects and programmes by providing project management, collaboration, and control capabilities necessary to manage change and successfully deliver projects on time, within budget.

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