5 tips for minimizing deadline and cost risks in construction projects

BER Airport: Opening 8 years later

Events such as the construction of Berlin airport have attracted widespread media attention. And this is by no means the only case where the complexity of the project has put those involved in a tug-of-war and a race against time. Due to their size and complexity, construction projects in the commercial/industrial sector often have a tendency to become confusing for the individual responsible parties. This generates a risk in terms of costs and deadlines.

Tip 1: The correct sequence of events in the project process

The company wants to invest. It has a vision; possibly a plot of land and possibly also an initial business plan. The management board appoints a project manager responsible for the budget and a target date. The project management recognizes that it cannot be done alone.

Everyone knows that a building project involves an architect. The thought: the architect will surely define the process structure. The consequence: An architectural firm is soon commissioned. But their scope of services usually begins with service phase 1 in accordance with HOAI, i.e. determining the basic structure. The team of architects begins to work according to the task and asks specific questions. Precisely these questions whose answers then become the basis for further planning.

But the answers are a long time coming. Why? Because the company has not dealt with its own project at all or has dealt with it far too superficially. They start now, when the architectural office or the TGA planner asks. We have thus identified one - if not the main cause - of escalating project costs and deadlines: The skipped project preparation phase. If this verification step is only initiated by the planners' questions, it is quite clear that this leads to an interruption of the planning process and thus to the first deadline delay. That costs money. But it can get even worse. Namely, if the internal verification is not carried out properly due to a lack of time. The results then do not reflect the final, well thought-out requirements. However, the planning is based precisely on this.

Conclusion:

There is a project phase before the planning phase. In this phase, the course is set for the success of the project and thus for adherence to the cost and schedule framework.

Tip 2: The right task assignment

As described above, the call for an architect's office is announced very quickly in the process. The client hopes that this will quickly relieve him of a seemingly endless package of project management tasks and would like to hand them over. His idea is based on the false assumption that the planning team, in particular the leading architect, is also responsible for project management on the client side. However, this is not the case when commissioning the normal scope of planning in accordance with HOAI. The tasks of an architect with planning and planning coordination are completely different from those of the client-side project management.

Of course, the client can delegate the tasks that he cannot perform himself due to professional or capacity bottlenecks. The discipline of project coordination was created for this purpose. Its areas of activity are designed for the task of project leading. Client-side project management and external project coordination work on the same area of responsibility. Together they form the project management of the project by definition of the association.

Conclusion:

Mixing the tasks of the planning team with the tasks of project management does not correspond to a clean project structure and often leads to the extensive tasks of client-side project management not being adequately performed.  

Tip 3: Complete knowledge of project management tasks

An inexperienced project manager may not have full knowledge of all the tasks involved in the project management of an industrial construction project. However, this can quickly become a critical factor for the planning and scheduling objectives of the project. It should therefore be ensured before the start of construction that the internal project management/client knows which topics need to be dealt with at all and with what depth or approach they can be brought to a conclusion. Topics that fall under project management in construction are, for example

• checking the value chain for future-proofing
• operational safety regulations/hazard analyses
• space-generating functions
• facility-utility matrix/room books
• IT structure analysis
• employee concept
• communication matrix
• etc.

Conclusion:

It is advisable for the inexperienced client to delegate the unfeasible tasks to a project coordinator in order to minimize the planning and cost risk. The project coordinator then also assumes responsibility for ensuring that all necessary issues are dealt with and brought to a successful conclusion.

Tip 4: Comprehensive project controlling

The task of project management - and in particular the task of project control - includes overall project controlling. Many projects only become more expensive because the budget was incompletely formed. In other words, it would always have been so expensive. It was only compared with an incomplete budget plan.

Admittedly, it is not that easy to get everything right. Everyone immediately has the land, planning and construction costs on their radar. The architects and specialist planners provide the first rough cost estimates. The ancillary construction costs are often estimated as a percentage and are usually far too low and incomplete. But that is only one side of the coin. There are many costs, especially in the KG 600, that need to be discussed and decided on a case-by-case basis whether to include them in the construction budget. Such typical costs are, for example

• furnishings
• supporting process equipment such as shelving, automatic shelving systems, conveyor systems, storage systems
• kitchen equipment
• active components IT
• security systems
• multi-media components
• access control systems
• etc.

There are many issues that need to be dealt with and decided. This requires an additional time factor that is often underestimated. If a project coordinator is on board, he will manoeuvre through these cost issues according to a checklist in order to establish complete project controlling.

Conclusion:

A complete project budget is a prerequisite for client decisions on the project itself and on project content. If the budget is formed incorrectly, you are inevitably comparing apples with pears.

Tip 5: Avoid wrong expectations

“The Chinese can do it faster.” - this is often an impulsive reaction to the project management's first framework schedule based on experience.

The scheduling ideas of many clients are often very unrealistic (due to inexperience). It is up to the project coordinator to transparently demonstrate the interrelationships and the necessity of sequential processes. In particular, the project preparation phase, which is decisive for a low-disruption planning and execution phase, is completely underestimated. And the tasks to be carried out by the client himself are often regarded as a sideline and therefore not very time-consuming. We would certainly estimate the project preparation phase for a complex project at one year. This statement alone often triggers abrupt horror.

Now you could say to the client, okay, let's try to do it faster. But the project phases take time. This can only be marginally compensated for with increased capacities. The sobering effect is often that the necessary capacities are lacking in the company's own ranks to put the project on the right track. In this respect, it would not be serious to deceive the client. False deadline expectations jeopardize the client's business plan.

It is quite clear that a framework schedule that is too short and does not properly reflect the phases must consequently lead to a project delay.

Conclusion

After the initial analysis of the project, a framework schedule must be drawn up that takes all the necessary phases into account appropriately. Otherwise, the project risk of “schedule slippage” is pre-programmed.