The trick with delivering major projects ($100million- $10billion) is managing the interfaces
I was lucky to have spent some time this week with the Director of Engineering and Production of an oil company. An American who has had 40 years working in every corner of the planet managing the major construction projects – mostly oil platforms, but he has also built a railway and a couple of bridges.
We were discussing the book that he has in his head, but has not found the time to write. He has the Chapter headings already written and it is all about how you run the vast army of staff and contractors required to assemble an enormous drilling rig, or build an oil pipeline across a desert.
He has a unique view of the problem which he described as “the risks are all in the interfaces”. What an earth does that mean?
Let me try and paint a picture of life within the programme…..
A major programme will have a client (quite often the government) who appoints a prime contractor to build something (a railway, a bridge, ship, an drilling rig). Normally the prime contractor will take the risk on the delivery of the programme. They will appoint a number of sub-contractors who will in turn appoint their own sub-contractors to deliver elements of the work. Each is trying the pass the risk down onto their sub-contractors (called back-to-back contracts).
To give you some idea of scale. For a major construction project the prime contractor can easily have over 100 staff (procurement, legal, design authority, reporting, accounting), and there could be up to 5000 companies who are sub-contracting, each with their own staff.
It is difficult enough getting a large organisation to work consistently when 100% of their time is devoted to one company. But in the programme the sub-contractors are working for a number of companies on different contracts, and the programme is only one part of their business, and the organisations may be spread across the globe.
Added to this, the mechanism for communicating what is required is a legal contract supported by specification documents, and each organisation is forced to compete (normally on price) for the work.
Back to the statement “the risks are all in the interfaces”. With some many people, companies, conflicting priorities and motivations across the programme it is critical that a consistent message is communicated down the structure. The risk is at every interface between contractors, or between departments in the prime or sub-contractors. This is the point at which the priority, the understanding of the design specification, the consistency of reporting can breakdown.
There is huge value for the prime contractor to communicate the common aim down the organisation (sub-contractors and their subcontractors). This is then reinforced by mandate common process, procedures, documentation standards, reporting and measures. This starts to make the programme operate as a single organisation working off a single set of information (single source of truth), rather than islands of information landlocked within each sub-contractor.
Clearly this is only one of the techniques for getting a programme to deliver. There are others, but we’ll have to wait for his book to be written.
We were discussing the book that he has in his head, but has not found the time to write. He has the Chapter headings already written and it is all about how you run the vast army of staff and contractors required to assemble an enormous drilling rig, or build an oil pipeline across a desert.
He has a unique view of the problem which he described as “the risks are all in the interfaces”. What an earth does that mean?
Let me try and paint a picture of life within the programme…..
A major programme will have a client (quite often the government) who appoints a prime contractor to build something (a railway, a bridge, ship, an drilling rig). Normally the prime contractor will take the risk on the delivery of the programme. They will appoint a number of sub-contractors who will in turn appoint their own sub-contractors to deliver elements of the work. Each is trying the pass the risk down onto their sub-contractors (called back-to-back contracts).
To give you some idea of scale. For a major construction project the prime contractor can easily have over 100 staff (procurement, legal, design authority, reporting, accounting), and there could be up to 5000 companies who are sub-contracting, each with their own staff.
It is difficult enough getting a large organisation to work consistently when 100% of their time is devoted to one company. But in the programme the sub-contractors are working for a number of companies on different contracts, and the programme is only one part of their business, and the organisations may be spread across the globe.
Added to this, the mechanism for communicating what is required is a legal contract supported by specification documents, and each organisation is forced to compete (normally on price) for the work.
Back to the statement “the risks are all in the interfaces”. With some many people, companies, conflicting priorities and motivations across the programme it is critical that a consistent message is communicated down the structure. The risk is at every interface between contractors, or between departments in the prime or sub-contractors. This is the point at which the priority, the understanding of the design specification, the consistency of reporting can breakdown.
There is huge value for the prime contractor to communicate the common aim down the organisation (sub-contractors and their subcontractors). This is then reinforced by mandate common process, procedures, documentation standards, reporting and measures. This starts to make the programme operate as a single organisation working off a single set of information (single source of truth), rather than islands of information landlocked within each sub-contractor.
Clearly this is only one of the techniques for getting a programme to deliver. There are others, but we’ll have to wait for his book to be written.
posted by Ian Gotts at 9:58 AM
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