Most construction and engineering projects are unsuccessful

27 May 2020 3 min. read
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Two thirds of large construction and engineering projects in are unsuccessful, according to a new global survey of 1,000 project owners and managers by LogiKal.

The study, which surveyed client organisations, project owners, contractors and project management consultants, found that 66% of projects delivered in the past period failed to deliver “all or most” time, cost and quality objectives. 

The success rate of large construction and engineering projects is highest in Africa and North America, where over 40% of the projects were met expectations. In Asia and Oceania, the success rate is 30%, while Europe and the Middle East enjoy a slightly higher success rate. 

Succes Rate by Location

From an industry perspective, projects in the mining sector enjoy the best delivery track record, at 48% success, moving up from 4th place in the previous edition of the study. Similarly, on the back of a 42% success rate, the government and public sector moved from 7th to 2nd place. 

Projects in the aviation industry and rail transport sector are most likely to under deliver on expectations. 

Turning projects into a success

According to LogiKal’s study, there are a number of key success factors for capital-intensive projects. Not surprisingly, people and processes have been found to be “key to project success”. When projects have a team of highly skilled people, they are 1.8x more likely to succeed whilst projects with a high level of process compliance are 2x more successful.

Success Rate by Sector

In addition, projects were more successful when project controls were engaged at the earliest opportunity. Those projects where controls were instigated early in the project lifecycle, at business case/concept stage and bid stage, were 52% more successful. 

Commenting on the finding, Manon Bradley, Development Director at Major Projects Association, said: “Effective performance management and controls plays a big part in improving project management and helping to reduce costs and deliver more effective outcomes. The use of skilled teams and project tools will provide the insight and rigour to deliver projects that meet objectives across cost, time and quality measures.”

Furthermore, the researchers identified strong between the effective use of emerging digital technologies and project success. For example, projects that use Building Information Modeling (BIM), an intelligent 3D model-based process that gives architecture, engineering, and construction professionals the insight and tools to more efficiently plan, design, construct, and manage buildings and infrastructure, perform better. 

Artificial Intelligence – Projects using AI

Those organisations achieving a BIM maturity level 3, were 30% more likely to achieve project success. Similarly, organisations and contractors who use 4D planning on a regular basis are seeing over 50% higher success rates. 

Meanwhile, while artificial intelligence still is in its infancy in the construction and engineering project management sector, those that are apply it are reaping the benefits. Projects using artificial intelligence to automate processes showed significant improvements in meeting quality (79%) and time (61%) objectives. These projects are also 2.4x more likely to perform better in the area of integrated working and project controls. 

Bryn Lockett, the chief executive of project management consultancy LogiKal, said: “Emerging technologies have a large role to play in the future of major projects and it is promising to see that on a global scale those organisations embracing emerging technologies are seeing returns through improved project success.”