Over half of capital intensive projects globally underperform
Over half of capital intensive projects globally underperform, with those in rail, defence and infrastructure in particular having poor track records. European projects have the joint lowest rate of reaching objectives, on 42% alongside Africa.
The 'Global 2019 Project Controls Survey' by LogiKal has researched nearly 700 project professionals from around the world to find out the state of the project profession, and in particular the state of project controls. According to the cross-industry survey, internationally 60% of projects have not fully met their objectives, with 18% failing to meet any objectives.
The survey identified that organisations with highly effective teams and fully integrated processes and systems achieved a 91% project success rate, achieving all or most of their time, cost and quality objectives. Those organisations that placed high importance on project controls were 3.5x more likely to achieve success.
Logikal found that just 5.8% of all projects met every single one of their objectives. 40.1% hit most of their objectives, but this stands in stark contrast to the 17.8% which did not meet their objectives, or the huge 32.8% that underperformed against their objectives.
This varies from region to region, it should be noted. North America and Asia were the homes of the highest level of objective completion in the world, at 59% each. The two high performance economies stood in stark contrast to the world’s worst performers, found in the developing economies of Africa, and the stagnating markets of Europe, both seeing 42% meet most or all of their project objectives.
It is also clear from the analysis that some sectors are better at bringing success to capital intensive projects. The aviation sector features the highest number of successful projects, at 65%, some distance in front of the nearest equivalents of the IT sector (56%) and oil and gas (55%). Rail and underground meanwhile saw the poorest level of performance at 40%, narrowly being outperformed by the defence sector at 43%.
Critical success factors
Based on analysis of the data, the researchers crafted a list of critical success factors. The survey identified that organisations with fully integrated processes and systems achieved a 91% project success rate, achieving all or most of their time, cost and quality objectives.
Meanwhile, technology advancements such as 4D planning and Building Information Modelling (BIM) techniques are also adding value and increasing levels of project success to those investing in emerging technology.
Organisations using 4D planning on a regular basis are achieving three times more success on projects. This is reflected by the industries which have already deployed the solution. 56% of respondents from the aviation industry already use 4D, while rail and underground (37.5%) and defence (18.2%) have seen a much slower uptakes.
Speaking of the success factor, Bryn Lockett, LogiKal Projects CEO said, “It is clear that project leaders could be doing a lot more to ensure project success. When dealing with highly complex, high cost infrastructure programmes it is even more important that performance management and project controls are properly utilised and the benefits it brings is fully understood."
People and culture
The researchers also found that as with any mode of business, people and culture are key to a firm’s success. There is an on-going skills crisis with only 17% of respondents believing that their teams have the necessary skills to perform their functions successfully.
Lokett explained, "Project management involves much more than just a new set of processes or systems, but also a change in organisational culture, improvements in the skills of the people and the processes that underpin them."
The analysis further highlighted that companies undertaking capital intensive projects are spending too little attention on up- or re-skilling their employees. Amid a rapidly changing environment, with technology disrupting the way programmes are run, "there is an ongoing skills crisis with only 17% of respondents believing that their teams have the necessary skills to perform their functions successfully."
Hiring differently might well help overcome the gaps in skills, and respondents whose organisations had a 40-50% female workplace said that 52% of their projects achieved most or all of their project outcomes, as opposed to only 41% of projects achieving most of their outcomes in organisations with a 10-20% female workplace.
Commenting on the need for diversity, Manon Bradley, Development Director, Major Projects Association (MPA) said, “There is a wealth of evidence which demonstrates that general management teams that are gender balanced and diverse are more effective. The evidence produced by this LogiKal study shows, for the first time, that diversity and balance deliver better projects too.”
