Why are capex projects so difficult?

Hi, if you have arrived at this page, I’m guessing that you have just read my article in the Winter issue of “PROJECT”, the APM journal. You can download a pdf copy of the article here.

Magazine articles, quite rightly, force you to be concise in your communication. But some topics just can’t be squeezed into a single page article - at least I haven’t quite found out how to do this.

So on this page, I’ve put some additional information and links to some of the things that I mentioned in the article.

And if something is missing, please drop me an email and get in touch.

And if you have any comments, questions or arguments, please share them below.

Ian Heptinstall

The key messages in the article

  • Process change is a great way for many project organisations to improve.
  • In particular the way in which projects are procured, planned and controlled.
  • A collaborative team delivers better performance than one where the members work in isolation.
  • The way that most capex and construction projects form their project teams are far from collaborative in nature.
  • In particular this is due to the nature of the contracts and the procurement and selection processes used.
  • Forming a Project Alliance (or IPD as it is known in the USA and the Lean Construction community), is one of the best ways to form a collaborative project team.
  • A project alliance by itself is likely to deliver better results - a lower cost, shorter programme, and lower overruns.
  • However a collaborative team doesn't guarantee success.
  • CCPM is a planning and execution management method that allows collaborative project teams to ...
    • Reduce project durations (and resources needed) typically by 20-40%
    • Complete on-time much more reliably
    • Improve quality, and
    • Reduce the stress levels amongst the project team members.

Cases and Examples mentioned in the article

Back in the mid 2000's Mazda had a big problem.

Legislation meant they had to develop drive trains with much lower emissions and fuel consumption, but they had a smaller team that other car manufacturers, and a much lower budget - being loss making at the time.

They started using CCPM in 2008 for drive train developments and by 2012 were using it for all new product projects, delivering projects in half the traditional duration,and improving productivity by 32-38%.

Amdocs, is a $4B turnover B2B software company that focuses on back-office and billing systems for telephony providers.

Amdocs put large numbers of their project managers through PMI qualification programmes but it made no difference to the productivity or quality in design, nor to project delivery.

In less than one year after implementing CCPM, they were delivering 14% more projects with the same resources, and completing projects in 20% less time.

In 2003 a small construction contractor in Japan piloted the use of CCPM on a flood-defence project.

Within 4 years, over 4000 projects across Japan were using CCPM, as part of the ministry's "Win-Win-Win" initiative, which is still going strong.

Projects run using CCPM were delivered significantly faster, and with a more reliable delivery date than non-CCPM projects.  MLIT even changed the public procurement regulations, so that a contractor not using CCPM had a multiplier added to their bid price because experience showed they were much more likely to go over budget!

There are hundreds of similar cases, from all kind of projects, that demonstrate the power of CCPM.

BPM - Breakthrough Project Management

The ideas outlined in this article,

  • Plan and manage your project using CCPM
  • Select and contract with the most important members of the project team using a Project Alliance (or IPD) to align the interests of all the team members.

Form the basis of what I have called "Breakthrough Project Management".

On the surface the ideas seem simple.  They are not difficult to use - the whole idea is that they simplify the process of project management.

But for many organisations, they do represent a change from the status-quo, and the embedded ways of working.  But for the people and organisations that are willing to change, the benefits are significant.

What are the benefits of BPM?

To the client

Using BPM on your project could halve the payback time, as shown in this graph from a simulation study.

To the supply chain

A main contractor could increase their projects by 250% by delivering the more projects with the same team.

To find out more

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Related Articles you might find interesting

Earned Value Management (EVM) despite its popularity has a significant flaw - it can hide major problems until it is too late.

A story that introduces the idea of CCPM, and why it is better to aggregate uncertainty rather than insist on task-level deadlines.

Why pushing "risk" down the supply chain or project WBS, can increase total cost, and ultimately increases project risk.

Introduction to CCPM (video)

How CCPM works, and description of the three core rules: risk aggregation, focused work, and buffer management.

Webinar on Project Alliances/IPD

Watch the recording of a webinar I ran in November 2017 on project alliances

About the author

By qualification I am a mechanical engineer, with a degree in Mechanical Engineering & Management Studies from Imperial College London, way back in 1985. Since then my working life has encompassed project management, procurement and consulting.

After 25 years of being an employee, I moved into consulting in 2010, and was a director/consultant with the niche procurement consultancy PMMS/ArcBlue for 7 years.

Today, my main focus is on helping the capex and construction project industries to increasing return-on-investment for project clients, whilst at the same time increasing profitability for the supply chain. This involves changing how projects are procured and managed, and reassessing the suitability of perceived 'best-practice'.