The latest Artificial Intelligence (AI) developments in recent years and its impressive results have created new expectations across various disciplines. In particular, a significant increase in productivity is expected in many areas of engineering and construction. In our new White Paper 2024-10 ‘How to exploit the benefits of Artificial Intelligence (AI) in the context of large complex industrial projects’, we analyse the role AI plays in the fields of project management and control for large, complex industrial projects. It will be updated with the future development of the technology. A separate White Paper will deal specifically with project control aspect.

As we have mentioned in the PVD handbooks, megaprojects are at the end of the day, human adventures, and the project management team is at the core of it. For this reason, and despite the level of sophistication, technology is and will remain a support for teams developing projects. In this sense, AI tools can certainly add value and improve project performance; the key, however, is to identify where these applications can generate the most benefits at a reasonable level of risk.

In PVD’s experience, nowadays the most significant impact of AI applications is achieved through indirect applications that aim to improve productivity and efficiency of the project team, such as automation and chatbot-like applications. Also, AI applications in project-related disciplines as engineering or in support disciplines such as HR can have significant positive impact on project performance.

Direct AI applications in the fields of project management and project controls even though having interesting potential, are not the most effective implementations yet, and significant risks exist if not implemented carefully and with a comprehensive project vision. However, this is a field that needs to be watched because of the disruptive potential of such tools in the future.

Read our new White Paper 2024-10 ‘How to exploit the benefits of Artificial Intelligence (AI) in the context of large complex industrial projects’ to understand better how to make AI work for your projects.

If you can\’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2024-10_AI_in_large_complex_industrial_projects_v1.pdf

Artificial Intelligence (AI) is a trendy technology and there are many proposed uses in the field of project control. Some are quite relevant, while others may require additional validation before being adopted. In this White Paper 2024-11 ‘Reflections on Artificial Intelligence and Project Control’ we specifically review the current uses of AI in the field of project control.

A number of project control areas are now becoming supported by AI tools, in particular when relatively substantial portfolios of similar projects are available to provide a comparison point. The availability of AI tools depends a lot on the confidentiality and availability of data: it is more widely available for contract management and scheduling than for cost estimating.

AI will often provide early warnings in a more systematic manner than human monitoring. That will enable project control professionals to concentrate their efforts in analysis and action taking. Still, final judgment by the project control professional remains required, even if the AI tools do provide a useful insight into benchmarks and comparison points from past projects.

Leveraging AI requires the availability of comprehensive and clean past data. Proper coding and records management becomes even more essential if AI is expected to be used to further improve insight and productivity of the project control teams.

Read our new White Paper 2024-11 ‘Reflections on Artificial Intelligence and Project Control’ to understand better the areas where AI can now really support your project control setup.

If you can\’t access the link to the white paper, copy and paste the following link in your browser:https://www.projectvaluedelivery.com/_library/2024-11_observations_AI_Project_Control_v1.pdf

Industrial projects with a long execution phase (typically in excess of 4-5 years) are not very frequent but require specific approaches in terms of project management and project control (refer to our updated White Paper 2022-10 ‘How to Prepare for Very Long Industrial Projects’). In this new White Paper 2024-09 ‘How to Implement Project Management and Control on Very Long Industrial Projects Through Rolling Wave Operational Planning and Control’ we expose what needs to be specifically done in terms of project control.

Long duration projects in execution phase present specific challenges that need to be taken seriously, and the longer the project, the more acute they will become. Managing and controlling those projects requires a specific approach, and, while maintaining a sufficient overview of the entire project delivery, we recommend a rolling wave project control approach with sufficiently long and stable phases during which delivery can reach its peak productivity, separated by transition phases where the project can be re-baselined and the intricacies of the next phases considered.

Still, irrespective of the way it is managed and controlled by phases, whatever its duration, an industrial project must reach a sufficient maturity at Final Investment Decision to be successful, and thus a sufficient clarity and understanding of what needs to be built and how it will be built

In our view, the key to success and effectiveness of controlling long duration projects is to effectively divide the project duration in a series of meaningful phases providing a stable planning and project control framework for durations in the order of 2 to 3 years. Those stable phases allow to achieve a full efficiency of delivery for their driving activities. In anticipation of the end of each phase, a re-baseline of the project can be developed, including detailed planning of subsequent phase and of its management and control framework. While this inter-phase transition will require some time and resources, thus diminishing temporarily the delivery efficiency, it will conversely make sure the following phase will reach optimal productivity again. The transition between phases can be used to reshape the project organisation, upgrade information systems etc.

We strongly believe that this phased approach is much preferable to continuous adjustments of the project because it provides all contributors with significant periods of stable delivery environment and concentrates the adaptations to designated moments of the project.

The White Paper also provides an example of how a nuclear project could be phased.

Read our new White Paper 2024-09 ‘How to Implement Project Management and Control on Very Long Industrial Projects Through Rolling Wave Operational Planning and Control’ to understand better how to control those projects.

If you can\’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2024-09_PC_long_projects_v0.pdf

Some industrial projects or programmes can span over very long periods of time for their development phase or even for their execution phase, much more than the typical 3-4 years cycle. Typical examples include nuclear power plants, or very large energy or infrastructure developments. Extreme examples of projects spanning over several decades include nuclear decommissioning or waste disposal facilities. Such long projects generally show a lower success ratio. Specific measures must be contemplated when setting up those projects to address the challenge of their expected duration. Our updated White Paper 2022-10 ‘How to Prepare for Very Long Industrial Projects’ exposes some of those challenges and how to prepare for them.

Specific caution should be exercised when contemplating projects which development or execution phases exceeds 3 to 4 years because of the additional complexity involved. Measures must be planned and included in the estimate to cater for the major impacts in terms of human resources, governance, preservation and maintenance, and information systems, that can be sometimes significant both in terms of project resources and budget. In addition, the challenges will easily span across the entire supply chain requiring extensive coordination of all contributors. Because of the importance and reach of the actions needed we believe that a specific executive position should be designated within the project organisation with sufficient overview and authority to address such challenges in a proactive manner.

Read our updated White Paper 2022-10 ‘How to Prepare for Very Long Industrial Projects’ to understand better what needs to be anticipated when your project exceeds 3-4 years in execution.

If you can\’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2022-10_Special_XXLong_duration_projects_UPDATEDv2.pdf

Complex industrial projects increasingly require the contribution of a number of contractors, coordinated by the owner. Due to the imbrication of those contributions, strictly and solely focusing on the application of bilateral owner-contractor contractual terms is not generally conducive to successful delivery and can generate substantial disputes and delays. A number of models have been tested globally to address this issue. Our new White Paper 2024-08 ‘Effectively Delivering Complex Industrial Projects: Advantages and Drawbacks of Various Approaches for Owner – Contractors Collaboration, and Key Success Factors’ exposes what are those models and their advantages and drawbacks.

Large complex industrial projects increasingly require collaboration between owner and contractors to be successful by managing interfaces successfully. A number of contractual setups have been used over time, some being more adapted to certain situations. However they have had various success.

In the White Paper, the following setups are discussed in detail in terms of advantages and drawbacks:

• One-to-one contractual setups with incentivisation on project overall result
• Owner fostering the creation of a JV of contractors with the task of coordination delegated to the JV
• Forms of contract requiring the availability of a dispute board with independent assessors
• Collaboration agreement between all parties involved in the project, focused and including incentives based on collective project success, on top of more conventional one-to-one contracts focusing on individual performance
• Alliances (in particular in UK and Australia) whereby the owner and the contractors work together as a single integrated entity

In reality, success will depend more on softer aspects related to personal emotional engagement of contributors to the project. An early engagement at the right levels of all organisations involved, through structured integrated team and governance approaches, as well as a longer term view on the benefits of collaboration, are key success factors to be investing in from the onset of the project.

Read our new White Paper 2024-08 ‘Effectively Delivering Complex Industrial Projects: Advantages and Drawbacks of Various Approaches for Owner – Contractors Collaboration, and Key Success Factors’ to understand better which setup is more suited to your project, and how to implement it in the most effective manner.

If you can’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2024-08_effective_owner_contractor_collab_v1.pdf

Setting up and adequate owner organisation for large, complex capital projects can be a challenge for organisations that do not execute such projects regularly or are faced with projects of an unprecedented magnitude and complexity. It is a transformation journey that needs to be conducted in a time-bound manner, in a context of very significant business impact. Based on our experience supporting owners through this journey, our new White Paper 2024-07 ‘How to Setup a Proper Project Management Capability within an Owner Organisation’ provides a structured approach to this challenge.

Establishing a competent and adequate owner team for capital projects is a journey that must start early during project definition. It will involve substantial investment for the organisation, hiring of experienced project professionals, and investment in specific infrastructure. A successful setup also requires sufficient awareness by senior executives to ensure the necessary steps are taken in a timely manner. It must be led like a transformation project around a roadmap agreed with all relevant stakeholders and provided with the adequate budget and governance. It is an investment, and this has a high return on investment on the actual success of the project: it should be considered as such, and anticipated as needed.

As a rule of thumb, the owner team expenditure should represent about 2-3% of the overall Capex for project execution (for the core team only, not counting on-site quality control technicians or similar expenditures directly linked with execution). As an example of the application of this ratio, for a 1 B$ Capex project executed over 3 years, this thus represents typically about 20-30M$ or 7-10M$/year or about 60-90 professionals. For the project development phase, the percentage will higher, with the team building up progressively to the execution size. Organisations with limited experience in large capital projects are often astonished by the team size required by this rule of thumb, but we see it as necessary.

Read our new White Paper 2024-07 ‘How to Setup a Proper Project Management Capability within an Owner Organisation’ to understand better the challenges involved and how to overcome them.

If you can’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2024-07_journey_setup_PM_orga_owner_v0.pdf

During a project development phase, estimating uncertainty will typically decrease as project maturity increases. At the same time, the estimates will include some contingency. What are the expected levels of uncertainty and contingency, and how to evaluate them in a mutually exclusive manner? Why is the approach different from the project execution phase? Our new White Paper 2024-06 ‘Managing Contingency and Uncertainty During Early Project Estimates: How Contingency Calculation Is Different Before and After the Final Investment Decision’ delves into more detail on the issue of contingency and uncertainty evolution during project development, and the differences with project execution.

During the project development phase, the uncertainties need to be considered carefully, based on experience, to ensure that expectations are managed as to the final estimate at Final Investment Decision. The contingency element included in the base estimate must be focused on identified risks, and the uncertainty element estimated separately based on project development stage and benchmarks.

At this stage, it is important that the elements included in both uncertainties and contingency are mutually exclusive, to avoid double dipping.

When in execution phase, contingency generally includes both elements of discrete risks and more systemic risks and uncertainties, therefore the basis of calculation will change. This is not always fully understood and needs to be carefully communicated to the decision-maker to make sure the project remains well protected against unexpected events.

Read our new White Paper 2024-06 ‘Managing Contingency and Uncertainty During Early Project Estimates: How Contingency Calculation Is Different Before and After the Final Investment Decision’ to better understand the definitions and usage of uncertainties and contingency at various stages of the project.

If you can’t access the link to the white paper, copy and paste the following link in your browser: https://www.projectvaluedelivery.com/_library/2024-06_contingency_vs_uncertainty_v0.pdf