Author: Tim Cummins
If it costs over 500 million Euros, it's a Megaproject. An awful lot of them - some 65% - go wrong, substantially overshooting on budget or experiencing major delay. And since governments worldwide are expected to spend around 100 trillion euros on such projects over the next 15 years, their performance really matters.
Yesterday I attended a Megaproject conference where delegates – mostly academics – were pooling research aimed at understanding how success rates can be improved. The trouble is, we don't really seem to know. And to the extent we do know, it appears better commercial management lies at the core.
Until now, the problems affecting megaproject performance have been perceived largely as issues for project management. However, the evidence – thin though it is – appears to point more towards weaknesses in stakeholder analysis, relationship definition, coordination and management. These are capabilities that should be provided through commercial skills and addressed through effective contracting structures and management.
Specifically, the major findings from research have been:
Professor Naomi Brookes provided valuable insight when she observed that the ideas being applied in the structuring and management of megaprojects are mostly decades old and never truly tested or validated; they were mostly developed for smaller projects; and they tend to be driven by the buyer or funding agency. In other words, without effective research, contract and commercial management will remain an area of guesswork and far too many projects will continue to under-deliver. That is why IACCM is so determined in pushing the research agenda and raising the skills and competencies within member organizations. It is time for the practitioner community to awaken to the scale of need and opportunity that this represents and to become far more active in support and advocacy of improved commercial and contracting standards.