Project office costs are rising, whether the work is completed in-house or contracted out at home or overseas. In this short article, get six strategic ideas for improving productivity around project services and engineering.
1 | Re-evaluate productivity improvement budget
For each segment of the capital project organization, compare the breakdown of your annual productivity improvement budget and spending to the value that segment contributes to the bottom line. The two should be aligned. Otherwise, you’re wasting capital.
2 | Cultivate leadership skills for your business and project sponsors
Select and groom project business sponsors from within your project organization, and give them the tools they need to improve communication and cooperation between the business and project departments. Business sponsors are well-positioned to make trade-off decisions because they are knowledgeable about both the project-level mandate and the portfolio-level goals and objectives.
3 | Use in-house assurance teams to leverage and integrate work done by Engineering Value Centers
Owner and EPC companies who expand global alliances through engineering value centers (EVCs) should do so consciously, without neglecting the need for in-house investment. Using EVCs is a plus, but to make the best out of that opportunity, companies need to build local, in-house assurance teams to work alongside overseas engineers.
When using EVCs on a major scope part, consider relocating your engineering manager and/or project manager to work with the EVC team for as long as possible. There is nothing that can replace quality time and daily feedback. Be sure to ask for the rate of staff turnover when pre-qualifying EVCs, as th e turnover rate is a good indicator of issues you will face throughout your project.
4 | Put procurement at the heart of project initiation and development
Think about ways to strengthen the capital project supply chain. Procurement is typically perceived as a subsidiary function, but in a competitive global economy with ever-fewer resources, it should be at the heart of the project schedule development and discussion. Consider including procurement leads in early business opportunity discussions. More importantly, make deals that secure your access to equipment, high-quality engineers and other key goods.
5 | Establish a technology infrastructure that can support global teams
Adopting a global procurement and contracting strategy without the proper infrastructure is a recipe for trouble. Assurance is expensive, given the cost of traveling, relocation, rework, legal fees and consultants. A good cloud-based platform can help by establishing accountability, providing traceability and giving real-time feedback and assurance. This helps to maintain a strong relationship between the office and the field, whatever time zone they may be in.
6 | Measure office productivity by combining multi-source data
Three sources of data should be incorporated into key performance indicators (KPIs) for engineering and project services:
Project Controls Data: Productivity measurement should focus on overall capabilities, not on one set of costs.
ERP Data: Integrating accounting information with project controls should be done at a high level.
Real-time productivity monitoring on Work Packages, Process Steps and non-engineering activities.
Combined, these make for a robust and fair productivity measurement system. In-house data analysis improves, without intruding on or negatively affecting the behavior of the office workforce. You’ll have the ability to pinpoint office inefficiencies and to detect when project delivery is slowing down. With this information in hand, executives and project leaders can make the right decision, before it’s too late.
This kind of internal office productivity measurement system can also be used to engage team members in discussions around improving organizational performance. This is impossible with an outside audit, which invariably puts the team on the defensive.
Today, the first two pieces of data are readily available to managers, but not the third.