In the architecture, engineering, and construction (AEC) world, project delays and cost overruns seem to be the norm instead of the exception. We have all heard of diverse, high-profile projects that have failed spectacularly with massive budget overruns and delays. But any high-profile examples you can think of are only indicative of an industry that wastes more than $120 billion annually in the United States alone because of out-of-control delays, cost overruns, and other inefficiencies, according to author Barry B. LePatner in his book, “Broken Buildings, Busted Budgets.” But these same inefficiencies permeate construction projects of all sizes.

LePatner placed some of the blame for these gross disparities on the lack of technology in the industry. Construction ranks the lowest among U.S. industries in the amount of money invested annually in technology, he wrote. This is shocking when you consider that technology could create a collaborative environment that provides transparency between all the stakeholders in a project and improve efficiencies at all levels.

Making matters worse, today’s construction and engineering industry faces new challenges. Capital spending is down, regulatory requirements are up, and all stakeholders involved in projects are looking for better ways to improve efficiencies and save money. The industry must optimize the use of limited capital to meet increasingly rigorous stakeholder demands.

At the same time, the one constant in construction is change. At any moment, a smooth-running project can be slowed by differing site conditions, design conflicts, supply chain problems, or inspection delays. It’s simply impossible to sit back and assume that you will have the data that’s needed to meet regulatory reporting requirements on time. It requires a forward-thinking view to anticipate and react quickly to these unexpected changes.

Virtual visibility
Enterprise project portfolio management (EPPM) solutions can help solve these issues. By providing a standardized approach for creating visibility and transparency into all projects, they enable groups of people representing different disciplines — from project managers, contract managers, and division managers to subcontractors, architects, engineers, suppliers, and owners — to collaborate on many issues and changes in a virtual environment. This in turn enables teams to juggle multiple documents and contracts, allowing greater agility for managing project changes while facilitating better strategic planning, management, efficiencies, and cost savings.

Without that kind of technology, it is difficult to get all of the stakeholders who are involved in the delivery on the same page, especially when they are often based in different locations. Each construction project involves an intricate web of relationships between owners, contractors, designers, engineers, and subcontractors — each with their own relationships, methods, and technologies. Yet, many best practices, best resources, cost-saving efficiencies, and information for regulatory reporting are not shared because the information is contained in “silos.” Each new project starts again from scratch.

That disconnect costs all stakeholders time and money. The lack of transparency and visibility prevents stakeholders from making factual, metrics-based project decisions.

For example, status updates and regulatory reporting requirements, whether health and safety related, Sarbanes-Oxley (or equivalent) mandated, public funding required, or simply owner-required reporting, traditionally involve a lot of paperwork and scrounging for data. Often, those in charge of producing these reports cobble together spreadsheets from many sources in various formats.

At the project level, managers often lack a system of accountability and team coordination. What’s more, they don’t have the ability to manage changes to the project proactively and plan for changes in resources.

AEC firm executives want to maximize project and program profitability, but often they can’t get a clear view across all projects when it comes to resource allocation, cross-project efficiency gains, or looming project problems.

Owners and executives also face stringent time-to-market requirements and must make progress payments, but they lack one clear version of the truth from all contractors, designers, engineers, and other stakeholders about the progress of the project. At the end of the day, these stakeholders want to know what a project will cost, when a project will be done, and have that information summed up for all of their projects.

If they were able to create a virtual environment that could bring all of the constituents in a project together, they would be able to create a clear view of project performance from the project level to the executive suite. That kind of transparency and visibility is critical for better business management and strategic planning within an organization, as well as across project stakeholders where appropriate.

With EPPM in place, project managers can quickly capture and disseminate project information — such as cost to date, projected cost at completion, and project delivery dates — and easily maintain full accountability with individuals and subcontractors across the project team through easy status updates.

Managers have real-time access to all relevant project information and statuses, including requests for information (RFIs), submittals, change order requests, and schedule updates. They can focus on managing projects rather than chasing down paperwork.

For owners and executives, EPPM provides one version of the truth with real-time data across all projects and rolled up to divisions or groups, with clean and relevant reports. It enables them to maintain accountability across all stakeholders to mitigate and avoid claims. By providing a framework to standardize and codify business processes and project best practices, EPPM enables owners to reduce overhead and drive productivity.

Stakeholders know exactly where projects stand and can assess proactive measures quickly to ensure capital projects meet time-to-market requirements. What’s more, EPPM gives easy visibility into real-time contractor performance across time and projects to optimize long-term supply chain relationships.

Project benefits
With such clear benefits, many firms in the AEC world now are leveraging EPPM technologies to help prevent project delays and cost overruns. One example is Cannon Design, an international architectural, engineering, and planning firm. The firm used EPPM tools to manage the architectural and engineering work for the Richmond Olympic Oval, the site for the 2010 Olympic and Paralympic Winter Games and centerpiece of a major new urban waterfront development in Richmond, British Columbia.

To manage a project of that scale and complexity within a restricted timeframe, Cannon Design took advantage of its “single-firm, multi-office” structure to share best practices and streamline processes across the many offices involved with the project. Additionally, to complete the project within a restricted timeframe, Cannon Design needed to ensure timely responses to thousands of RFIs and submittals, the process by which a contractor seeks architect approval for specific products.

Leveraging its EPPM system, Cannon Design enabled a large team of architects, engineers, and construction managers in multiple offices across North America to coordinate with owners and contractors around RFIs, submittals, change orders, project finances, and more — regardless of their physical location — in a collaborative, virtual work environment.

The enhanced collaboration has helped Cannon Design successfully manage hundreds of projects and coordinate thousands of documents, avoiding delays and liabilities and resulting in an average 20- to 35-percent reduction in turn-around time for RFIs and submittals.

The EPPM system also ensured that the project was compliant with internal best practices and industry standards by providing analytical data that the Cannon Design team leveraged continually to refine and improve the review process and performance during the entire project lifecycle.

As the centerpiece of a major new urban waterfront neighborhood and an international destination and meeting place for diverse indoor and outdoor recreational activities, shopping, and services, it was imperative that the Richmond Olympic Oval incorporated cutting-edge sustainable design.

According to Gustavo Lima, principal and director of construction administration at Cannon Design, there are many components in the construction of a sustainable structure of this magnitude, each of which needs to be analyzed against strict parameters established by the Green Building Council.

By allowing Cannon Design to maximize productivity and reduce risk throughout a 20-month construction phase of the Richmond Olympic Oval, its EPPM system ensured that a cutting-edge sustainable design was completed on schedule and within budget. By using an EPPM solution, Cannon Design also was able to meet the rigid demands of the LEED Silver certification. The Richmond Oval is a multi-international award-winning facility and a model for sports and wellness facilities worldwide.

As examples like this show, having a clear view ahead — through transparency and visibility —no longer is just an option for navigating the changing dynamics of project delivery in the engineering and construction industry. While the industry cannot predict every mishap, supply chain delay, or economic downturn that may affect a project, it can adopt the tools that enable it to look forward into projects, proactively plan for potential problems, and have scenarios in place that let it react quickly to setbacks.

An EPPM solution does this and more, enabling engineering/construction organizations to gain efficiency by standardizing operations in an automated format while providing a collaborative, virtual environment that delivers visibility and accountability across projects, programs, and the enterprise.

Garrett Harley is engineering and construction industry strategist for Oracle’s Primavera Project Portfolio Management group. He can be contacted at garrett.harley@oracle.com.