Why Do So Many Projects Fail to Meet Expected Budgets and Deadlines?
According to KPMG’s 2015 Global Construction Survey, over the past three years a majority of projects failed to come within 10% of their expected budget (69%) and schedule deadline (75%). It’s even more amazing that many industry executives we’ve surveyed don’t find this statistic surprising. When we recently showed these statistics to a senior executive at a leading EPC firm, he responded, “Is that all?” So why do so many projects fail to meet projected budgets and deadlines?
Several circumstantial factors contribute to these shortfalls, including a poor estimate, unrealistic contingency budgets, poor up front planning or ineffective project management. Every project is unique which means it must overcome a different set of challenges and maintain a distinct risk profile. However – there is always a however – when project managers were asked what keeps them up at night, the results were quite interesting:
35% replied “no central source of project information”
45% replied “unreliable project data”
62% replied “ineffective change management”
These responses can be interpreted in several ways and likely deserve an even deeper dive, but they nevertheless reveal a major concern – project managers aren’t confident that they have reliable information to properly manage and mitigate constantly evolving project changes that often arise in highly complex projects.
Few if any project managers would argue that timely and reliable information isn’t critical to effective project management decision-making. And yet nearly 55% of organizations still manage complex projects out of spreadsheets, battle data integrity issues and face challenges associated with producing countless ad-hoc reports.
But there is some good news. As projects have become increasingly complex and traditional project tracking and reporting mechanisms have failed to keep pace with evolving demands, a substantial Engineering & Construction technology market has developed to satisfy these demands. For example, consider the following emerging technology markets:
Building Information Modeling (BIM)
Project Management Information Systems (PIMS)
Augmented Reality Systems
Drone Project Monitoring
Wearables for HSE improvement
Companies that don’t adequately explore and invest in these technologies will struggle to compete against those that do. The growth of construction technology is just beginning and should be followed closely by all organizations that want to remain viable in an industry that will be increasingly driven by new data-driven technologies.
To learn more about how Cloud EPC can help your organization meet expected deadlines and budgets, please contact us at 800.909.5181 or schedule a live demo to see our project management software in action.