Agile Project Management in Construction

Is it possible for project management teams involved in mega projects to be agile? This is a question recently posed by project professionals at IOCs, NOCs, and EPCs around the world. Major capital projects are characterized by high levels of risk, specifically cost, schedule, and regulatory risk. Some successful operators are responding to these challenges by adapting agile management strategies and rethinking conventional wisdom on how projects should be planned, how contracts should be designed, and how construction programs should be executed.

Recently, I attended a technical program on agile project management. Project executives from oil companies, facilities contractors, and service providers travelled from far and wide to describe how they are using agile strategies to improve their project results. Although each had their own unique perspective, three key points on how agility helped their project execution kept coming up:

  1. Real time information for real time decision-making
  2. Communication and collaboration
  3. Integration and alignment of project milestones and goals

Dick Westney, Founder and CEO at Westney Consulting Group described agility as the “ability to change tactics or direction quickly.”  Dick explained that in order to truly mitigate risk, today’s capital projects need to find a balance between yesterday’s best practices and complete flexibility. He polled the group and 50% of the crowd agreed that overly centralized, slow or complex decision making and approval processes were the primary barriers to agility on projects.

A-G-I-L-I-T-Y

Often companies (large and small) end up with overly complex decision making processes because they don’t have access to real-time information. Without accurate, up-to-date cost and schedule data, frontline project managers simply cannot react quickly. Instead, they’re forced to work through a collection of outdated reports to try to find some version of “the truth.” Erik Namtvedt, President at FloaTEC, refers to this idea of real-time decision making in his Agility acrostic. Y stands for “include the young generation.” He explained that the Millennial Generation (Generation Y) is used to working with real-time information in their personal and professional lives. This group of professionals has sought out (and developed) tools to make work more efficient, including sophisticated project control systems providing real-time data now, not data from a week or a month ago.

Mega capital projects face a massive burden from managing many program environments – drilling, infrastructure, multiple contractors, and competing stakeholder interests. To remain agile, companies need to ensure the following are in place and effective:

  • Governance and compliance processes
  • Key performance metrics around risk
  • Internal and external stakeholder communication

When it comes to agile project management, access to real-time data is important, but of little value unless a system to communicate that information exists. With numerous project assets and participants in mind, projects of this magnitude need an effective way to communicate documented information with both internal and external stakeholders. The results of this communication will impact project cost, schedule, and quality. Sandeep Khurana, Manager of Noble Energy’s Major Project Development Group, refers to project agility as a “balance between people and process.”  The reality is, project work gets done by people, but technology exists to enable timely information exchange for project teams and contractors. More and more, owners and their contractors are turning to automated, streamlined workflows and document control functions to meet regulatory, contractual, and legal requirements.

Last, but not least, project agility cannot fully exist without an integrated approach where project milestones and goals are aligned. When there is integration between project parties, both contracts and interfaces are reduced, communication is simplified, and Non-Productive Time (NPT) decreases significantly – in turn, generating time and cost savings. Dennys de Campos of Schlumberger explained that contractors and service companies tend to focus on their own goals and therefore, “the traditional relationship between an operator and multiple service companies results in fragmented services interfaces, inefficiencies, and non-optimal service quality.” In order to minimize technical and delivery risk, the contracting strategy used on many mega projects results in multiple scope packages being awarded to multiple contractors.  Reducing the risk associated with this fragmentation can be done by ensuring that Interface Management is at the core of the overall project management philosophy, and not viewed as a subject on the periphery. By improving collaboration and opening up lines of communication, Interface Management will result in making projects more agile. Documented interfaces and strong communications help to align contracting parties and to establish clear lines of responsibility, leading to improved project performance and a reduction in the likelihood of poor outcomes.

By opening a dialog on agile project management in construction, I hope that great ideas will be shared, and better projects will be delivered.