Nobody in the world will argue this point: The single biggest opportunity for productivity and schedule improvements in large CAPEX (capital expenditure) projects for the process, power, and marine industries is in the construction arena. Nobody!
– 25% of all CAPEX projects experience cost growth over initial estimates by 30% or more.
– 25% of all CAPEX projects slip from initial budget schedule by 20% or more.
– 35% of all CAPEX projects have major design requirements changes during construction.
This sort of performance is almost unbelievable in a modern world, but it’s a fact. Back in 2007, we at Intergraph Process, Power & Marine began to look at this problem and to evaluate how technology could be used to improve this situation. Then, in September 2009 (yes – perhaps the worst economic situation for a new product launch since the great depression), we launched SmartPlant® Construction v1.
While the timing of that launch was not ideal since it was during a significant recession, the product was perfectly targeted toward the problem. We realized through hundreds of discussions with key clients that the problem wasn’t exactly in construction. Rather, the problem was more of an enterprise execution issue, which required improved integration and work processes both at the home office and in field construction. We focused all of our investment on this specific problem in partnership with our Early Adopter Program clients. It wasn’t about blaming the construction group, nor the home office. The key was streamlined enterprise execution based on the principles of work package planning, as identified several years ago by the Construction Owners Association of America (COAA) – and probably others, as good ideas tend to start from more than one place.
Just last month at Hexagon 2012, our annual Hexagon International Conference, in Las Vegas, I had the pleasure to present to our clients what we’ve accomplished since that humble start in 2009. I’ve had one of the most satisfying experiences of my life as a result. Here are just a few examples of what I heard:
– “Wow, you guys have come a long way in the last few years.”
– “This is exactly what we need.”
– “That [Primavera] integration is perfect for comparing estimates to reality.”
– “We can really start to quantify the construction costs of late changes.”
– “When can we have the iPad prototype application ready for construction foremen?”
As a result of all the work that’s been done over the last three years by our SmartPlant Construction development teams, it’s fair to say that the conference was quite exciting. If you’d like to learn a little more about what those clients saw, please take a few moments to watch our keynote presentation, “Unlock the Full Potential of Your Enterprise” from Hexagon 2012:
After hearing the responses from our customers, I know that with good client partnerships and leading-edge technology like SmartPlant Construction, we can work together to make meaningful improvements in CAPEX construction execution.