Companies that have significant capital project portfolios may have hundreds of projects, ranging in cost from thousands to billions of dollars. Managing these capital project portfolios comes with serious, inherent risks and uncertainties. Companies that fail to effectively deal with these risks may end up facing problems ranging from delays and cost overruns to poor-quality work and even complete shutdown of a project. These woes can also badly hurt a company’s share price.
To boost the odds that the capital projects in a company’s portfolio deliver the intended outcomes, organizations must:
“With megaprojects, there’s so much at stake. These projects are simply massive and complex and without a robust project delivery framework, the slightest issue—over existing site conditions, engineering design or working methods for example—can quickly turn into a multimillion dollar issue.”
While every company travels a unique path to excellence, there are common, interrelated components that all companies should master to ensure successful project delivery.
Managing a portfolio of capital projects can be fraught with risk and uncertainty. The following are some of the most common execution challenges and known consequences we see in our practice.