How Will Capital Program Owners Successfully Deliver New Projects?

Significant investments in capital programs are expected in the coming years. An estimated $130 trillion will be spent on capital construction programs by 2027. 

The prospects are exciting for capital program owners and those who will help them bring these projects to fruition. However, the success of these programs isn’t a foregone conclusion. The overwhelming reality is that large capital projects are notorious for taking longer to deliver and costing more than planned. This has many questioning how owners will rise to the challenge. 

While the road to successful project delivery is paved with uncertainty, there are some concrete steps that owners can take to deliver their projects successfully. This starts with understanding what’s standing in their way today. 

3 Avoidable Missteps that Hurt Capital Program Schedules and Budgets

Given the sheer scope and complexity of large capital projects, it’s practically a guarantee that there will be challenges to overcome. An owner’s ability to address these challenges quickly and confidently is what makes all of the difference. To do that, though, they must be willing to consider that the ways they’ve traditionally worked could be working against them.

1. Not Improving Collaboration Among Teams

Capital program management is a multifaceted discipline, requiring specialized teams, each with unique roles and responsibilities. While each team has an important role to play, these teams must also be working together effectively to ensure the overall success of the program. 

The need for everyone involved to be working toward the same goal seems obvious. Yet, too often these teams are working independently and not collaborating. It’s common for operations to refer to construction as a different department, and for design to be isolated from construction. 

This type of compartmentalization breeds inefficiency. If it remains unchecked, it also subtly promotes turf protection and a “throw it over the fence” mentality. The issues may become some other team’s problem to solve, but they ultimately must be paid for by owners.

Capital program owners can no longer afford to ignore that this lack of collaboration is a significant reason why projects cost more and take longer than planned. To shift this, they must take steps to break down departmental divides and create the conditions for teams to communicate and work together effectively.

2. Not Standardizing Processes & Protocols

To collaborate effectively, teams need to be operating from the same playbook. Expectations about how work is done must be clearly defined and consistently enforced. However, many capital program owners are still operating without formalized processes or standardized requirements—and their projects aren’t as successful because of it. 

When there aren’t clear protocols around scheduling, for example, projects will suffer from delays as teams struggle to synchronize activities and meet unrealistic deadlines.

Similarly, when there aren’t standardized requirements for estimating, initial budgets are often overly optimistic or based on incomplete data. If cost control and change management measures are also loosely defined, costs can quickly and quietly grow out of control.
When owners don’t require the consistent use of BIM or BIM standards, these issues are further exacerbated. The ability to identify and resolve problems before construction begins is lost, as are the opportunities to explore and implement sustainability improvements and other cost-saving measures.

By formalizing and enforcing processes for scheduling, estimating, cost control, and BIM, capital program owners create the conditions for teams to collaborate effectively while also gaining greater predictability—both of which are essential to on-time and on-budget delivery.

3. Not Requiring Data Interoperability  

Being able to identify and respond to issues early is key to controlling costs. If capital program owners don’t have visibility of success factors like schedules, RFIs, and change orders, they don’t know what’s happening until the damage is done. 

This problem stems from the traditionally disjointed nature of the teams involved in capital programs. When teams are working in isolation, each using their own systems to manage their work, project data becomes siloed and buried. 

When teams aren’t able to share data, they can’t collaborate effectively. Similarly, without access to project data, capital program managers can’t make the timely decisions needed to keep projects on schedule and on budget.

A capital program manager can’t be expected to contact dozens of different general contractors to find out what’s happening on their projects. They also can’t expect the teams involved to do this type of legwork either. 

To manage risks effectively, capital program managers need to require data interoperability to ensure that data is accessible to them and shareable across the teams involved.

Using a Design-Bid-Build Approach to Capital Projects Isn’t Helping Either

Design-bid-build (DBB) has maintained popularity because it gives owners greater control over design. It can be rationalized that by keeping design and construction separate, DBB also minimizes conflicts of interest and encourages more competitive pricing. 

However, the risks of still using DBB today outweigh the benefits. The sequential nature of DBB typically results in longer project timelines. Furthermore, while initial costs may be lower, the separation of design and construction can also create constructability issues and lead to design errors or omissions that ultimately increase the cost of construction. 

When considering the problems that contribute to capital programs going over schedule and budget, the continued use of DBB can’t be overlooked. By discouraging collaboration, DBB perpetuates the disjointedness and fragmentation of people, processes, and data that work against the successful delivery of capital programs. 

Given the advantages of bridging these divides, and the availability of technologies to support this, there’s no reason for capital program managers not to explore alternate delivery methods. 

Regain Control of Capital Program Budgets & Schedules

It’s almost expected that large capital projects will come in over budget and take longer than planned. But it doesn’t need to be this way. Capital program owners have the opportunity to modernize how they approach large-scale projects. More importantly, they have an imperative to do so.

To learn how capital program managers can regain control of budgets and schedules through modernization, watch the 9 Strategies to Modernize Capital Programs webinar.