What is your construction project really going to cost you?

On the 8th May 2019 I was lucky enough to find myself at the “Future of Construction Forum” in Sydney.

The panel displayed a great knowledge of the challenges facing the construction industry and their need to adopt modern technology to overcome existing problems. Great to see how companies like Hansen Yuncken have embraced change in order to not just survive, but also thrive in a challenging marketplace.

The technologies that are being embraced are set to revolutionise the construction industry in a manner similar to that which impacted the manufacturing industry when it through its evolution with supply chain management and automation.

The focus within construction however remains on the delivery of the project. “The Build”. Getting the job done, all be it faster, cheaper, more efficiently.

What is not getting the coverage (but was mentioned by a number of the speakers) is that at the end of the day, it is the customer that is set to benefit from these changes – but only if they themselves up-the-ante and join this revolution.

Why join the change? Money. Huge quantities of it. Whilst your construction project is costing a lot of money, it is the cost of that asset through its whole life that is likely going to represent the biggest amount. Some figures suggest that the cost of operating and maintaining an asset could be as high as 80-95% of the total asset life-cycle costs. So an initial $100 million project could cost you the customer over $500 million over its whole life.

The scary thing is that whilst these number are in themselves huge, a 2018 report by PwC indicated that using BIM Level 2 could contribute to between 5.5%-6.5% savings on the maintenance costs alone! Add this onto the whole percentage points that this same process is set to shave off of your initial construction costs and you are set for some significant savings.

But that assumes that you actually have joined with your supplier to ensure that all that information which they have created during the design and construction of your asset is actually handed over to you – and in a way that allows it to be used and operated by yourself.

The other stumbling block that seems to exist is the whole way in which projects are managed and controlled by the customers. Being a project manager myself, I am fully aware that we are frequently tasked with completion of the task at hand and its hand-over to operations and maintenance without being heavily engaged in what is really going to happen in the future. It is seen as not our area of responsibility, and that provided we “tick-the-boxes” we can hand the asset over and not have to worry about what happens afterwards.

Again, as mentioned in today’s session, maybe its part of the “Hero” mentality that a number of project managers and directors have. After all it may be more egotistically satisfying to “save” a project than worry about future operational savings which you wont even be around to receive the kudos for.

It seems that there needs to be a blurring of the old lines between project delivery and “operations and maintenance” to ensure we can deliver what should be significant savings. That and some serious commitment at the most senior levels of an organisation.

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