As construction projects themselves become more complex, completing them on time and on budget has become more difficult as well. But the root cause of this may not lay in their execution. More likely, it’s that the project expectations are unrealistic and overly optimistic as they are being laid out during project planning. Added to this are the differing points of view and motivations of owners and contractors.
The “Us and Them” Mindset
All project stakeholders want to do a good job and realize a positive project outcome, but it’s the definition of that positive outcome that perhaps needs more thought. While projects can be very complex in scope, the fundamentals can be viewed in very simple terms: the owner engages a contractor to build something on their behalf. The owner doesn’t perform the work directly but pays the contractor to convert the owner’s capital into an asset. Conversely, the contractor is engaged by the owner to do the actual building and is rewarded in the form of payment.
Of course, there are different contract types that adjust the risk balance between the owner and contractor (e.g., firm-fixed price versus time and materials), but even across the spectrum of these contract types, there is still an inherent mentality of “them and us” between the two groups. The owner is intent on getting the project finished while the contractor seeks to maximize gains from the work they are executing. The point is, the underlying motivations of these stakeholders are fueled by different drivers.
What if we could change this so that both the owner and contractor were driven by one motivation – being on time and on budget – to deliver the asset? For years, organizations have defined themselves and their path forward through a mission statement. Why shouldn’t projects operate in the same way?
Integrated Project Delivery Alliance
Integrated Project Delivery (IPD) is both an emerging contract type as well as an emerging philosophy behind how to make projects more successful. I want to focus here on the philosophy aspect.
The basic premise of IPD is this: instead of considering the owner and contractor as two separate parties, IPD considers these two stakeholders as a single unified alliance. This alliance aligns both parties’ interests through teaming, and the alliance is 100 percent focused on final value – that is, the delivery of the project. The project is treated like a business rather than a temporary endeavor.
The concept of alliance is key here. The alliance of the owner and the contractor means that all information is 100 percent transparent. Gone are the days of the contractor refusing to share detailed schedules and cost estimates with the owner, for example. Everyone is part of the same team, and so gets to see all aspects of the project.
Project Digitization is the Key
For integrated project delivery to be effective, two ingredients are necessary. First, a change of mindset on the part of both owner and contractor is needed. The owner needs to inherently trust the contractor and the contractor must value this trust by offering project transparency. In this way, there will be a true partnership instead of simply a forced relationship.
Second, the project management tools must support collaboration. Information generated by the contractor needs to be accessible to the owner, making performance reporting and analytics even more critical.
Traditional project management tools have been largely “point solutions” from multiple vendors. This does not contribute to a collaborative consensus-based project management style. IPD-friendly software needs to provide a continuum across every single project phase, exposing information along the way that can help keep the project on track.
By turning the traditional owner/contractor relationship around and adopting a partnership based on mutual respect and interests, our projects will have a much higher chance of success.
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