Managing capital projects involves controlling for risks that can affect performance and outcomes. It all comes down to having the right information at the right time; in other words, the right data. Without such data, the risk of compromising the schedule, outrunning the budget and making less-than-optimal decisions becomes uncomfortably high. Yet, too much data, particularly without context, can introduce its own confusion over interpretation and which data to pay attention to — the proverbial too much of a good thing.
This is why how it’s organized and made sense of is paramount. And that means overcoming the limitations of multiple point solutions which, while effective in collecting and processing data unique to their specific functions, are often unable to share it among each other.
The most effective way to manage and mitigate risk? Through an integrated project control platform. Let’s look at some highlights of its risk-mitigation capabilities.
Converting the constant flow of data into a standardized structure
Once in a common, understandable format, all that data can be integrated into the calculations that deliver a project’s performance metrics. These metrics, when monitored through software dashboards and reports, provide real-time insights into how efficiently costs and schedules are being managed.
But these numbers also can be the first indicators of a developing risk. How? Each of them are responsive to the influence of internal and external risk factors, rising and falling in reaction to everything from lagging jobsite productivity to severe weather events to fluctuating materials pricing. Any time a respective numeric value swings beyond its acceptable operating range, it’s marked as a risk. It’s an opportunity for the appropriate project team members to analyze what’s really going on behind the numbers so they can make data-informed decisions on next steps before a developing risk worsens. That next step could involve either implementing a contingency plan already developed for that risk or collectively devising a new one to mitigate any potential negative impact on budget or timelines.
Providing a single source of truth for all project data
A single source of truth (SSOT) is understood to be the sole repository where everyone knows to go for all documentation and data from a project’s life cycle. The obvious benefit is it removes the threat of losing precious hours searching for the latest information that could be stored in any of several common yet disconnected sources: an email, a computer, an iPad, a USB drive, or a file hosting service.
But an SSOT is actually more than that. Far from being a static virtual filing cabinet, it acts as a hub where you can interact with the data to mitigate some of the documentation-related risks. The SSOT is where you can assign permissions in order to control access to documentation. And along with that, you can track distribution history as well as who accessed what and when — all of which can serve as a verification trail should a dispute arise. For example, let’s say there’s a case where a subcontractor claims they didn’t have the right information for a job that was done incorrectly, leading to costly, time-consuming rework. The distribution and access trail will show proof of liability, avoiding litigation over who’s responsible for paying for the rework.
This is what makes an SSOT such a valuable source for data-informed decision-making and navigating through or around the factors that can impact cost and schedule performance.
Using real-world data from your current projects
This data informs project decisions by gauging reality against expectations. Those performance metrics mentioned above? They actually provide value beyond their original project, delivering data-informed learnings that can help create better risk-adjusted cost and schedule estimates and forecasts for your current build. They can help you answer questions about your current project:
- What risks occurred before?
- How did they impact cost and schedule?
- What did performance metrics indicate?
- Did they point to developing risks that were able to be addressed?
- How did the metrics respond after contingencies were put in place?
- How would you adjust plans if that risk occurred again?
- Are those past risk factors even likely to occur in this project?
- How do your current performance metrics compare to those for that prior project?
Exchanging optimism bias for data-supported optimism
When combined, all the above capabilities — format restructuring, access and control and reality-based data insight — help prevent optimism bias, an unrealistic outlook that underestimates risks and results in ambitious completion dates and cost estimates that are wide of the mark. While bias is based on belief, its natural counter is realism based on data.
Data becomes the basis for building on what has already been learned from the past to improve decision making and risk mitigation. The more you can anticipate from the past based on what data shows, the better you can manage risks going forward. Think of it like this: rather than optimism bias leading to risk, there’s more of a data-supported optimism leading to project certainty.
Using an integrated platform approach can ultimately deliver more project certainty, the result of mitigating risk. InEight integrated project control collects and processes data to provide real-time insights and therefore improved outcomes. Request a demo to see how it can help you risk-adjust the way you manage your projects.
