2008 NEWS
What are the underlying cost drivers of Capital Project Delivery?
This is a complex question that we believe every jurisdiction should periodically take the time to consider. The drivers associated with successful project delivery are "time and visibility".
Consider "time"… where as any delay in the performance of a project may significantly impact the overall costs associated with that project. As an example, a delay in approving the start of the project could have the following ramifications:
- Increased material costs due to market demand and price, in particular oil-based materials such as asphalt etc.
- Unavailability of resources including skilled personnel, equipment, and material.
Delays experienced during the implementation of the project could adversely impact the project itself, as well as other future projects that may require the availability of resources currently assigned but expected to transition from the one project to the other.
In considering visibility as a driver, one simply needs to apply a very simple thought… you can't fix something if you don't know what is broken. A lack of visibility into the ongoing performance of a project will inhibit any proactive or rapid responsive action that needs to be taken to ensure that the project will be delivered on time and within budget. Having this visibility will not only enable positive actions to be taken with respect to the subject project, but in turn will establish a documented understanding of the issues and problems confronted during that project which in turn would enable better "planning" going forward.
The McKinsey article offers a number of other considerations. While the article is aimed at the private sector, we believe it contains lessons applicable to our government agency readers.
