Everyone Plays a Role: Ensuring Accountability in Delivering Project Excellence

Shoshanna Fraizinger:

Well, hi, everyone. As you are making your way into today’s webinar, I would just like to thank you for joining us and go over a couple of housekeeping rules for today’s event. My name is Shoshanna Fraizinger, and I’ll be today’s host. The presenters will be taking questions live. If you have a question, please put it into the Q&A box, not the chat, that’s located at the bottom of your screen. Please note that you’ll have an opportunity to upvote those questions and comments, and those will come up to the top, and those will get priority for being answered by our folks. So please, if you don’t get your question answered, don’t worry, the presenters have agreed to attempt to answer them with a follow-up email after the webinar session. Just in case you’ve forgotten, today’s session is Everyone Plays a Role: Ensuring Accountability in Delivering Project Excellence.

It’s sponsored by InEight, and it’s a topic near and dear to my heart as well. We have a really great line of speakers today. So let’s start. From the bottom of the list up we’ve got Ryan Kerschen. Ryan serves as a Vice President in InEight. He’s focusing on customer health, global support, and training. In his time with the company, Ryan has helped build both document and project controls products to identify risk, resolve conflict, and ensure customers are realizing the value of their InEight products. He brings with him over 20 years of experience across engineering, industrial operations, construction, and procurement, he’s pretty much done it all. Previously to InEight, he served in a variety of leadership roles with Hewitt, Empire District Electric Company, Black & Veatch. Again, I told you he’s done it all. He holds a Bachelor Of Science In Engineering, a Master’s In Industrial Engineering, both from Kansas State.

Now, I really don’t need to introduce the next person hosting here, but I will anyways. Steve Cabano, President of Pathfinder. He’s a project consultant… project management consulting firm, right? We all know that, actually, specializing in planning, development, execution of domestic and international capital plant construction projects. Again, this man has done it all with 30 plus years of project engineering and project management. He’s done it in industrial, commercial facility industry. He’s provided costs, scheduling, procurement, and similar project-related services for owners and government clients in petrochemical, chemical, petroleum, environmental, pharmaceutical, industrial, commercial. Again, he’s done it all. And in his spare time, he’s also a lead instructor for Pathfinder’s training division, designing, developing, and presenting project-related training sessions, and he’s internationally recognized as a training instructor. He’s authored several articles for chemical processing, chemical engineering, refinery today, PMI, and of course, AACE. And not to be outdone, he also has a Bachelor’s Of Science And Mechanical Engineering from Villanova.

Last but not least, we have Aidhean Camson. He’s Vice President of Program Controls at AECOM. Again, another man with a very long resume. He is currently responsible for program control systems processes and tools for AECOM’s way of program management. He plays a pivotal role in managing and integrating the program controls programs to ensure successful program outcomes. So he’s really emphasizing not just meeting cost and schedule targets, but also delivering social impact through holistic program management. Aidhean has worked on, again, some very complex projects around the globe large scale in water, power, rail, IT, health, urban, program sectors. Most of them have been in that 100 billion USD infrastructure programs, and he’s overseen and directed teams on continuing programs of a similar financial magnitude. Some career highlights, the UK’s Thames Tideway, Singapore’s Tuas Water Reclamation, USA’s Recharge Fresno, the London 2012 Olympics, a great Olympics, by the way, and Germany’s Suedlink.

So he’s focusing on an approach that builds and manages an integrated baseline to manage our change in risk, integrating data and actionable intelligence. So all of this for decision-making and accountability, which is we’re going to talk about as we get into. He’s an advocate for the deployment of scalable controls approaches, continual development of the best technologies to support this. And without any further delay, I’m going to turn it back over to today’s presenters.

Ryan Kerschen:

Excellent, thank you, Shoshanna. So final bit of housekeeping, I do believe we’re going to throw up a poll question here very shortly. We’d just like to know a little bit more about your point of view and perspective on today’s presentation, in case we need to tweak it a little bit as we go. And finally, I do certainly want to thank AACE for giving us at InEight the opportunity to sponsor this webinar. Today is really about learning from Steve and Aidhean’s significant experience in the capital project world, and then just with InEight sponsoring, that did get me thinking about how I, at least, would like to introduce InEight to an audience interested in that topic. And we often talk about our platform as an industry leader in controlling scope, cost, schedule, but I thought it was more important to mention what we believe were some of the key problems we solve.

The first two are about keeping up with that ever-growing demand for capital construction with limited resources available, and doing that in an industry while trying to really enable digital transformation. The third challenge that we often help companies address though is the move towards more collaborative project models. That one in particular resonated with me, and I think you’ll hear maybe a lot about that today in what I believe will be a great conversation. So what are some key takeaways that we think you’ll get from today? We believe that you will hear about where accountability starts in capital projects, and how you can make sure that it continues to exist throughout the life of that process. I also think you’ll find a few tips and best practices to take us away with you as well. So let’s just get going. So Steve, let’s start with you. When you look at a new capital project or program, what are your initial thoughts on accountability?

Steve Cabano:

Yeah, no, thanks. First of all, thank you very much for having me or inviting me to participate. When you think of a project, a project has its genesis or its initiation from an owner. So the owner has to have a business reason for spending money to execute work, to produce some value, and in most cases, at least, historically, that’s been to generate additional income. No matter what industry you’re in, if you’re in… a big part of our business is in the oil and gas or petrochemical, so we’re producing whether it’s oil-related projects, or hydrocarbon-related projects and so on. So it’s gasoline, it’s diesel, it could be a plastic, or so on, if it’s the petrochemical side. So ultimately, there’s got to be a market for that, the market needs to be able to generate income based on the products you’re producing.

But that works in any other industry. If you’re producing… or your projects, or infrastructure type projects, rail projects, whatever they happen to be, there needs to be a value contribution to the owner. So they start off with the justification for that. If you go to the next slide, that could be that they’ve got a market that they need to hit, so it’s timing. There’s an opportunity to either beat your competitor to the market or there’s a need within the industry. It could be investment costs. I can execute this project, but it has to be within a certain amount of money to justify whether it has the return that the company’s looking for. It could be operability or operating costs. I want to build efficiency to produce that product for less cost and still obviously maximize my profitability. And it could be, especially in today’s world, new technology that we need to implement, things like reduce carbon, or recycle plastic is a huge opportunity within the industry today.

So ultimately, the owner has to have this reason for doing the project, and then they strategize on what’s the best way to execute… or the solution for that project. Is there a different concept that they can come up with? Do they buy versus build? Those types of things. But ultimately, the contractors of the world, they don’t have business unless the owner is going to spend some money to build something within the industries that we serve. So ultimately, when you look at the responsibility from an owner’s standpoint, we’ve got to define what that means, and a lot of times, that is a business. So when you look at some of the attributes here, it’s how long are we going to run this facility for? Is the opportunity for two years or for the next 20 years? How much maintenance are we going to put into the facility?

Do I want to have it a very robust? Do I only have to do a shut-down or a big maintenance effort every two years, or are we going to shut the facility down more often? That needs to be communicated to the people that are going to design and build the project, because if not, and we let engineers… and I am an engineer, if we let engineers come up with a solution, we end up being pretty robust and prove how smart we are, if you want, and that becomes very expensive, maybe even takes a long period of time. So as an owner, we’ve got to define what those guardrails are so that we can communicate to the contractors of the world what we want to work within to solve the problem that meets the business case.

And just one other thing on the business case, it’s changing dramatically in the industry today. It used to be primarily financially focused, return on investment, rate of return, all that kind of stuff, but because of the whole ESG focus today, we want to be a good custodian of the world, we want to make sure we treat our people well, we want low carbon everything, or zero carbon everything, and again, recycling, the circular economy, and things like that, those projects that support the ESG approach and this whole zero carbon don’t necessarily align with the highest money making projects that are in the industry. So that’s the struggle that a lot of owners are dealing with today, is how to meet the ESG goals that our management have put out there but still provide a return for our shareholders. So that’s from a high level standpoint on the owner’s side, where we think that responsibility lies, is in defining what the opportunity is, and then working within those boundaries that we define.

Ryan Kerschen:

So Aidhean, you’ve got that justified business case, and maybe it’s not the best moneymaker, but maybe it meets environmental goals and balances out your need for some level problem, whatever that justification is, like Steve was talking about, when you kick off some of those major projects, and obviously, you’ve had a lot of experience there, is there a consistent or common first task, first step that you take when starting one?

Aidhean Camson:

Yeah, for sure. Yeah. Hello, everybody. Also, hello to you across the world and thank you for having me. Nice to speak to you this morning, for me. Yeah, for sure, and I think just to complement what Steve had said, there’s the space we tend to work in, a lot of it a lot of the time is public infrastructure, be that rail, or highways, or airports that live in their private, but hospitals and schools, and I think there’s increasingly, to some degree with the US for legislation that was set, but certainly, in the UK, and Australia, here in New Zealand, there’s a push from government to provide a pipeline of those programs and projects and a realization that actually government, be it national or state, has some responsibility for making those decisions Steven’s talking about. So there’s an interest in move there where governments are trying to make a 30-year strategic plan on that horizon. So it informs where they’re going to go and where they’re going to invest.

So exactly the same principle that Steve was just describing, you’ve got to make those trade-offs on what you’re going to do in our space there. That’s the balance between the… hey, particularly here in little old New Zealand, there’s all sorts of stuff we’d love to do, simply can’t afford it all. So what are you going to do? And then once you move into that… now, I think there’s a slide in between here actually, so I might skip past the next slide and go to the following one. We can come back to this one, but if you go to the next slide, please, Christina. When we look at those mega projects, there’s a piece of work done by Professor Denicol and his colleagues at University College London, he surveyed… I think it was over 9,000 pieces of research from across the globe and went through a whole process, you can find the paper, to look at, “Well, okay, what does actually cause these mega projects or programs to fail? Why don’t they work?”

And as you look left or right here, you will notice that lack of high quality engineering is not one. I am not an engineer, but I do have an engineering degree, I just never ended up getting used in anger. So I would not claim to be an engineer. But you can see the items here, and if you were to think about the ones that are most important when you’re starting up a mega program, in essence, is number four and number two, are the ones that you’re trying to hit on first, which is invariably, you are in essence building a new organization. You’ve been hired on by a client to help support them in their owner role, that’s what you’re doing as a program manager. And so you have to take those… aid them in their responsibilities of being a sensible owner. And this will have been agreed at the board level, and everyone will have had big hugs and given each other high-fives. Well, now, it’s down to the people who actually really have to do it.

And so you have to take a very structured approach to agree in those governance steps. So we do a real simple thing when we have workshops. First off, to talk about governance, we’ll do our first governance workshop between, whatever. There’s different models here, we’ll talk about that a little later. We’ll get to the end of the workshop and we’ll say, “Okay, well, the first thing that we’re going to agree is the process for signing off minutes and the actions from this meeting.” Everybody says, “Yeah, great, excellent.” We go off and we do whatever that precise process has been agreed to be. How many times do you think everyone agrees to exactly the steps in that process first off? No prices for saying not very often. So it’s important that you spend time and focus on agreeing how you’re going to make decisions, because as you come to these large scale infrastructure programs, it’s all about the decisions. And so having a good and commonly well understood way of how you’re going to do that is critical.

Steve Cabano:

And if we go back to that previous slide, maybe I can add to that. So once the owner figures out, “Okay, yeah, this is an opportunity.” And what I was talking about, every owner organization out there, whether they be privately held, publicly held, governments, whatever, there are more opportunities than there is capital. So we, as the owner, we got to figure out where’s the best place to spend our money. And if you’re in the private sector, you probably have shareholders, and we’ve got to make sure that they’re okay with the capital plan, and so on. So we’re evaluating projects based on what value it’s going to bring to the company, what it’s going to cost, how long it’s going to take, what kind of resources we need, and so on. So as part of choosing the technology that we’re going to use, let’s say it’s a recycled plastic type project, I can use… maybe I’ve developed my own technology, I can go out and license technology. There’s lots of options.

But then once I’ve decided on that, usually, as an owner organization in today’s world, I don’t have the resources to plan and execute the work. We don’t. We were just talking earlier, estimating in today’s world, many owners just do not have that capability anymore, so they need to rely on others. And then we’ve got to validate that I feel comfortable that that estimate is accurate. But to provide that, the estimate, it’s not just, “Okay, give me an estimate of what it’s going to take to build a recycled plastic plant,” there’s all these execution planning features that I, as the owner, I need to figure out. So who is going to do the engineering? Am I going to do some of it? Do I have some resources? Do I have to contract that out? Am I going to buy materials and equipment, or am I planning on somebody else doing that?

We’ll talk about later, these are all contracting options, but there’s still some responsibilities from an owner standpoint that I’ve got to figure out as well. What’s my operating philosophy? I mentioned before, what’s the maintenance philosophy? How often are we going to do big maintenance work on the project? Because then, I can give that to the engineering organizations and they can propose what’s the best way to accomplish that. So the owner sets the tone as far as, as what we were talking about before, what the opportunity is, and there’s usually a business case or a project charter, there’s a lot of different terms for that, but we’re not just executing as an owner, we’re not executing a project because we like to do projects, we’re executing a project because there’s business value at the end of the day. And the whole issue, and one of the things that’s being studied in the industry today, is how do we get this goal congruence between the owner organizations and contractors? Because owners do not make money on projects.

If you look at a balance sheet, it’s a negative on your overall financial. Contractors, they make money on projects, that’s their space. So how do we make sure that the owner gets a good quality project on time, safely at the level of quality that they want for a reasonable price? And on the contractor side, that reasonable price gives them, obviously, pay for all their services, and materials, and equipment, and all that kind of stuff, but also makes them a bit of money to be able to reinvest into the organization, and so on and so forth. And more often than not, those become less congruent and more combative, we’re always battling each other. And from a roles and responsibility standpoint, we’ve got to try to figure out how to make that more cohesive from a owner, contractor, supplier environment, because we, as owners, we can’t execute the projects ourselves anymore, and we haven’t been able to do that for probably close to 50 years.

The contractors of the world, they need to be able to make some money and survive in a very competitive industry to be able to move all these capital programs forward. So the roles and responsibilities, this happens to be a chart on execution planning, but you can see, depending on your project planning phases, this becomes more and more mature. Just like your scope of work gets more mature in the planning process, so does your execution plan. And I mentioned estimating before, I can’t estimate a project just based on a scope of work, I have to also understand the execution environment. Who’s going to do what? What kind of resources do I need? What specialists need to be engaged? How are we going to turn the project back over to the owner to run it and maintain it, and so on?

All these things add to the complexity, or reduce the complexity, of projects. And there’s innovative ways that we also have to think about. I can have a certain technology that I want to implement, am I going to build that completely on site, or am I going to go more modular? And things like that. But that’s what this execution planning is all about, is this is typically driven at a high level by the owner, and then the details that support that high level planning process need to come from the people that are being hired to do the engineering, to do the construction, and so on.

Ryan Kerschen:

I think that’s a good transition, Steve. You guys talked both about a lot of key decisions that need to be made, and you’re transitioning that owner accountability to an entity that wants to build a project but has a different motivation for building the project. So as those mature and approach that contractor selection, what key decisions need to be made?

Steve Cabano:

Yeah. If you’d like me to kind of kick that off, and then I’m sure Aidhean will have some input as well. So the first thing is what capability do I have as an owner? I mentioned before, many owners have decimated their project planning and execution capability, for whatever reason. Maybe it was a business decision that we don’t do projects, big projects all that frequently, so maybe we can outsource it all. And that’s fine as long as you can get close to that gold congruence as possible. So when we’re selecting the contracting organizations, it can’t just be based on cost, “I’m going to go with the lowest cost provider.” You’re going to be paying for that for years, because if you’re getting low cost, you’re probably getting less experienced resources, maybe a lower level of quality, whatever it happens to be. So you got to understand what value you need and then look at cost. And value can be defined as whatever you define it to be.

So if I’m looking for a skill set, and I’ll continue with that new technology area of recycled plastic, there’s not a lot of those that have been around. So it’s a newer technology and we’re refining that, and so on. So I need some really smart folks to figure out how to optimize that, and that’s not going to come cheap from an hour cost basis, but ultimately, it’s pretty inexpensive. You think about the value chain across a project, roughly about 40 to 50% of the cost is in construction, about 40 to 50% or 40-ish percent or so on average is in procurement, it’s the materials, it’s the equipment, that type of thing that you’re actually installing, so what’s left, it’s roughly 10, maybe 15% is engineering. So I want to get the best engineering effort to optimize the other two aspects, I want to optimize the most expensive parts, which happens to be procurement and construction.

So I want to get the best knowledge, and experience, and thinking in that front end engineering aspect. So I don’t want to skimp on money there. And I don’t want to try to get the lowest cost engineer, I want to get the highest quality engineer that can focus on my deliverables or my business case and get me the right deliverables that make the next couple of phases of work efficient. So this whole idea of how we engage… and we’ll talk a little bit later about the different options as far as contracting strategy, but how we engage with people that are actually going to do the work has to be driven by the owner to make good decisions, not based on just… and I apologize for… I see there’s roughly 225 people on the call here, I apologize for any procurement people that might be on, but we can’t just toss this over to procurement and say, “Okay, buy me the least expensive stuff out there that meets this need right now.”

There’s a place for that, but it should not be in the engineering side of things, because that’s where most of your value is created, is in the solution and the concept that you create. So from an owner’s standpoint, I want to maximize the value proposition from the engineering side, which hopefully gives me an opportunity to be as efficient as possible in that procurement and construction aspect. So again, a lot of that is just driven by the owner making a good overall strategic decision on strategy, is number one, what’s the best way to break the project up into pieces, and so on, or do it as a whole, and then on the selection of the actual resource that we’re bringing on, the engineering contractors, and so on. So we see that as still a very owner driven, and then once the contractors are handed the opportunity, they’ve got to work within themselves to maximize their opportunity to make money within the boundaries that have been set.

Ryan Kerschen:

So Aidhean, along with these key decisions, there’s something to be said too for how you’re sharing risks throughout the process, but also, how your project’s being funded, right?

Aidhean Camson:

Yeah, absolutely. So we can skip to the next slide. And there’s two when we come in from a program management point of view, and no one gets any prizes for spotting that this is a AI generated graphic, by the way, that is deliberate. So we actually tend to have all of what Steve just said, just imagine that that is taken to almost the nth degree. So let’s say that tideway program that Shoshanna mentioned in the introduction, that in essence was in the planning stage for the point at which we were involved with it, five or six years of getting through that initial defined piece of work. And so there’s two… we get involved quite early is what I’m trying to say here, and there’s actually two different flavors of contract model here. And this list is by no means absolute, it’s just a selection of different models.

Clients have a couple… First up, when they’ve decided to go program management route, what contracting model do they want to use with their program manager? So there’s anywhere from simple staff augmentation, which we see sometimes through at the other end, which was full program management at risk. So the London 2012 Olympics was a program management at risk program. Most of what we see is in the middle, is an integrated program team. And the slide and scale there, this is true of the program management engagement, but also then true of subsequent contracts that the client will let, particularly when it comes to building, exactly as Steve was saying, it depends how involved and what level of risk do you want to take. So if you really want to be involved, that’s okay, that means you are going to assume some of the risk, and you need to be responsible for that risk going forward. If you go into a true at risk, and so something around a traditional model, or time materials type model might sit down that end, but you’ve got to be accountable for actually doing that work.

Now, the flip side is… and I think the industry as a whole lean towards pushing risk down the supply chain, and then realize that actually they’ve gone a bit too hard on that. Because the risk never goes away. Just because you’ve given it to somebody else, it doesn’t mean it doesn’t exist anymore, it just means that if you put too large risk in a contract, you’re just going to pay for it. So you’ve got to… and that’s part of that planning and early design stage, which Steve was talking about, it’s part of what we try and bring when we create an integrated baseline. It’s not just, yes, you need a written down scope, and a schedule, and a cost, and you need to thought about your risk, but you need all those other delivery elements as well, which is, how are we actually going to manage this job? How are we going to contract it? How is it going to be packaged? How is it going to be executed? Because all of those things have an impact on how you’re going to deliver.

And so for example, Suedlink in Germany. There was a high voltage DC job, massive civil job, 720 kilometers of high voltage DC cable, it’s heavy, it’s hard work, it’s all about construction, logistics, hadn’t been done at that scale before, limited resources or we’ve going to max out the resources available in the country to do that civil work. So you want some collaborative model around that construction, you want to define the scope as best you can, and you’re going to be best off coming up with some… you don’t want to push all the risk down the supply chain there because you’ll just end up paying more for it than you should. On either end of that cable are two converter stations, DC to AC converter stations, there are a couple of large vendors in the market who are really good at them, and you don’t want to mess with them.

You want to have a properly engineered spec, you want to have a clear timeline, and you want to give it to them and say, “Hey, guys and girls, can you please do this?” And so that piece of work, you might not go total fixed price, but you’re happy to… it’s appropriate to have less oversight and control in something there, because it’s a relatively well-defined piece of scope that someone has a proven track record for executing. So by all means, give it to them and let them do it, and trust them to do it. Whereas when you’re thinking about other pieces of work, as an owner, you got to consider, well, okay, what are those risks and how do we want to manage them and approach them and embed that into your contracted strategy. I know that back to what Steve said, you need to spend some time thinking about that at the beginning.

Steve Cabano:

Yeah. And just the embellish off of that, so risk is a huge part of this when you talk about contracting, and a lot of people say, “Well, that’s a risk transfer device.” Well, really, what you’re doing is, as an owner, you’re assessing who is better to handle the risk, who’s better than manage it, who has the right resources? You’re not eliminating the risk, as I said, that the risk is still going to be there, but who has the resources to be able to deal with it effectively? Sometimes, that might be an owner. I think I had a great example of the two ends of the transmission line, those scopes of work would probably be very complex for somebody who’s not in that business on a day-to-day basis, but there are contractors that that’s what they do. They know that type of scope of work, they know how to deal with the unknowns and the risks. So carve it out in a way that they manage the risk much more effectively than we can.

So that’s the whole idea behind this contracting strategy, is it’s not one size that fits all, it depends on what you’re trying to implement, what kind of scope of work you have, where you’re doing it in the world, because again, logistics and other issues have a huge impact on strategy. And then the biggest issue in today’s world is resources. Who has the resources to be able to deal with it? And that’s a big part of the risk strategy, which then supports or is an input into the contracting strategy, which is part of that project execution plan that we showed before.

Ryan Kerschen:

Yeah. And on those contracting methods, I saw there was a question on the Q&A, and apologies, we’ll try to get as many of those we can at the end, there’s as many variations on those as your imagination allows. Those are building blocks, but depending on what the contract needs are, this can go lots of different places.

Steve Cabano:

Oh, yeah, no, and you want to be creative. This is where there’s an opportunity to be creative, but creative based on what’s important to you from an owner’s standpoint, what’s important to you from a business standpoint. I can carve out the whole thing to one EPC lump some environment and I’m basically saying, “You manage the whole getting caboodle for us.” Okay. That’s good, but first of all, you’re going to pay for it, because now, they’re taking on the responsibility to handle all of that. Second of all, you’ve lost a little bit of the managerial side of things, but maybe that’s good because I just don’t have the resources to do it. Or the other approach could be, “I want specialists in every single area of the project. I want specialists in the engineering side. I want specialists in what I procure, and I want specialists in the different aspects of the construction,” and so on.

Okay. Again, very almost like micromanagement, but maybe there’s an opportunity to do that. But just realize now that as an owner, I got to handle all those interfaces. I got to handle the handoff from one specialist to the next specialist. I got to handle the handoff from engineering to procurement to make sure… we were talking earlier about this whole initiative, advanced work packaging. Basically, what that is is trying to bring construction knowledge into the front end. So I build or I design things that I can build efficiently, and I can hand over to operations efficiently. I want to stop trying to prove how smart we are as engineers and say, “Okay, I can engineer a solution, but I also need to engineer a solution that is efficient to build, because that’s where the big costs are.” So how do I do that? How do I get that construction knowledge if I don’t have that, let’s say, from an owner’s standpoint?

Well, what do we do? We contract out. We contract out organizations like Aidhean’s group and others to say, “Hey, help us in understanding what it’s going to take to solve this problem in the field, and let me build that back into my engineering effort.” The other big approach is the whole issue we’re dealing with supply chain right now. And this is not just because of the pandemic, it was happening before the pandemic, that supply and demand are not lining up, so it’s taking longer to get materials and equipment, it’s costing more, and so on and so forth. Part of that is, again, I’ll go back to engineering, sometimes, we are over-engineering a solution and everything becomes a bespoke thing that we have to buy. Do we have to be that way? Why can’t I get with procurement and say, “Okay, what’s readily available? What’s on the shelf, basically? And then provide that to engineering and say, “Let’s design around that, because I know I can get it quickly, I know I can get it inexpensively, or for less cost.”

It may not be the 100% perfect engineered solution, but if it solves the problem, and I can solve the problem more efficiently, isn’t that a good thing? So again, there’s different… and that all gets carved up into these contracting approaches, and design methodologies, and so on and so forth.

Ryan Kerschen:

So you both talked about the partners in this process very early on, whether it’s funding partners, or engineers, procurement, things that are going to have impact on different stages of the project, is this a time already this early on to be talking about the project management, the collaboration tools?

Aidhean Camson:

I might tell that one, I’m going to go little step back first, which is to say… and I saw someone put in the chat talking about design build as a progressive design build. I think the really important thing there is… and maybe I should apologize to any lawyers on the call, maybe I shouldn’t-

Steve Cabano:

Well, I beat up the procurement people. You can beat up-

Aidhean Camson:

There you go. If you get to the point of really heavily relying upon your contract, you’ve gotten to a bad place, the contract is there to embody an approach. And I think the most important thing, you don’t need to go back to those six drivers, but if you look across them, culture is a huge deal. You’re trying to build a team of people who are going to do a thing, and particularly in the space that we work, quite often, it’s a thing maybe no one’s ever done before, or they’ve never done it at this scale before, or whatever it might be. And so agreeing the approach that you’re going to take and then living it is actually the important part. So it’s like, yes, you need to come up with all those contracting methods. Everyone should be clear. They should understand how this is going to work, they should understand what the responsibilities are, all of those things are absolutely important, but on a day-to-day basis, you need to then execute against that.

And so I think that’s where the tools come in. And so today’s reality is that we live in a digital world, and it’s only going to become more so. And so when we look at pursuits, when we’re looking at really early-scale stage pursuits in the program management space, we are already having a conversation about what do we know about the client’s systems? Do they have a standard? Do we need to bring something? And this is true of many parts of our methodology and approach to program management, which is you want to get people focusing as quickly as possible on the things that are truly unique and the things that do need brain power, you don’t want to reinvent the wheel.

So thinking about Steve’s project execution plan that he showed earlier, we have a similar approach to executing program management plans. And there’s been an evolution in those things as well, which was it became, “Oh, who can write the longest program management plan exercise probably about 10 years ago and who can do it most quickly?” “I can write a 500 paid program management plan in 90 days.” “I can do it in 60 days.” Well, guess what? What ended up happening was it was a copy paste exercise, and someone put it on the shelf and no one ever read it, and then everyone run around with their head on fire not knowing what to do. So the approach we take is a focus one, which brings the bones of that together. Which is great, let’s call it an 80% solution, you can argue with me about the statistics later, but that means that that 20% that’s left requires brain power.

And I think, that to me is where the collaboration tools you need to bring a solution. I don’t want to be having a conversation about, “Oh, how are we going to integrate our costs and schedule?” Well, actually, I do want to have a conversation about that because I’m a bit of a geek in that territory, but that’s not the most valuable thing we could be doing for our client. The most valuable thing we could be doing for our client is, “Oh, what are your particular funding sources on this program? What is it that they really cared about from a reporting point of view? What frequency do we need to report those things on? Is it standard measures that we already do, or is it something different?” And the reality is all of that is going to come from data. There’s going to be data that you need to create to manage your program, and then there’s going to be data that you need to hand over to the client at the end.

And spending as much time thinking about what that data is and then making sure that we have quality around that data and executing our work is far more important than having extended discussions around what tools you’re going to bring. So I think having a clear lay of that land and then working out what it’s going to be is very important, even at these early stages of-

Steve Cabano:

If you look at that project execution planning chart that we had up there before, a part of that are the tools that are going to be used to support the strategy that you’ve developed. So if you want to have a digital twin, you want to go full bore and advanced work packaging, if you want to have digitized everything, well, that needs to be a strategy, and the owner needs to be prepared. There’s a cost to that, both in software and things like that, but also resources, ultimately for the benefit of that execution phase. If we can make that respect if you want, that if we do all the right things from an electronic standpoint and a data standpoint upfront, we’re going to be much more streamlined in the execution side of things. But. I’ll also put in a plug for, again, that business case, that if I’m schedule-driven, that’s probably not a place to try something new for the first time.

We just know that there’s going to be some learning curve, but if I’ve got that well-established, whatever that electronic system happens to be, and then I can integrate that into either my portfolio, or projects, or a given opportunity, the earlier, the better, so everybody understands what the data requirements are, and so on. If I’ve got a large capital project and I got some flexibility on time, then maybe that is an opportunity to try something new and bring in the InEights of the world and so on to say, “What are some of the innovative solutions out there from a data communication alignment?” All that kind of standpoint. But ultimately, I look at tools as just an augmentation of what we do as humans, whether that’s the 20% that I was talking about or so on.

But there’s the thought process, how are we going to execute this work? If I can apply the correct tools to make that more efficient, awesome. And until we get AI being much more of a project-focused type of an environment, we still need to make those decisions. AI in the future may be making some of those for us. I don’t think we’re there yet, but as we feed those systems more and more data, yeah, I think they will become part of the overall solution.

Ryan Kerschen:

Yeah. You both discussed the quality of the data, and really, you’re going to have a significant amount of data coming, and I think a lot of that will rely on the contractor some. So let’s, at least, spend a little bit on, you’ve got a contractor or a set of contractors, you may have a large project, what are some of these areas that the contractor is going to be accountable for in this process?

Steve Cabano:

You want me to go first on that one?

Ryan Kerschen:

That would be great, Steve. Yeah.

Steve Cabano:

So this goes back to contracting and how you’ve kind of carved up the work. So if I’ve got major tranches of work that are more apt to be executed by individual contractors, I might have a multitude of contractors. If I can organize it all as one, then maybe I do one high level EPC or overall kind of a contract. So that’s the first part, is what’s the contracting strategy. Then within that, the contractor needs… or the contract, that is it is a two-way street, a contract is an agreement between owners and contractors, the owner is expecting from the contractors, there’s a certain level of accountability, responsibility to deliver what we’ve agreed to contractually, but on the owner’s side, there’s also agreements that we’re going to give answers back, on RFI’s, request for information, within a certain time period.

We can’t be overseeing and interfering with the contractor, if we’ve carved out a scope of work, that’s their responsibility. So there’s… and we got to pay on time, and all that kind of stuff. So there’s two way… or two sides to these contractors… or to these contracts. But from an ultimate accountability standpoint, once we’ve agreed to that scope of work, the level of quality, and that’s also driven by the owner, the owner has to define what quality means, or certain deliverables, whether it’s engineering, construction, whatever, the contractor can’t make the assumption or get into the owner’s mind if it’s not documented within that agreement, so once those things are defined, the responsibility then is that the contractor executes to that agreement. And it’s not okay to be short on it or to be more robust, it’s not okay to be a little bit late, or those types of things. There’s a commitment that these contracts establish.

And to be honest with you, what we’ve seen, and we get to see over a hundred projects a year in different industries that we do reviews on, we’re not as diligent as we used to be to accepting that their commitments and to achieving those commitments. We don’t go that extra mile. And it could be a lot of different things. It could be an owner issue, not defining the scope of work well enough, a contractor issue, just not taking it to heart that there are schedule requirements there, and so on. And then we miss those targets, and it’s not okay. You think about a project when it overruns in cost. If I got $100 million project that overruns by 20%, the owner doesn’t go and just produce 20% more money, they’ve got to steal from other projects, because the portfolio is typically agreed to in a given year. So I’m stealing from other opportunities. I don’t execute another handful of projects to be able to pay for that overrun.

But equally as important is schedule. Because the idea is is I made a commitment to management that I’m going to be done this project by a certain date, and so they’re going to start to generate revenue at that date. If I miss that date, or if it’s tied into other support things, like a shutdown of a facility, or whatever it happens to be, there’s a whole ripple effect of meeting or missing schedule that we very often misjustify, we don’t understand the impact. So going back to the responsibility from a contractor standpoint, they’re accountable to deliver on what they contractually agreed to. So that contract is important. I agree 100% with what Aidhean was talking about, is if you’re constantly bringing out the contract, you got a problem. But the essence of what those commitments were when that contract was signed, that has to be maintained on both sides. So hopefully… I could go on for days on the accountability side of this.

Shoshanna Fraizinger:

Steve, you raised a question for me in what you just said going back to the discussion about data and tools, and we acknowledge we’ve got a lot of players, a lot of information. So how important is data transparency for maintaining accountability in projects, and what’s the role of real-time data integration? We want to be able to make sure that we’ve got our pulse on these things. How do we see that coming into play for this?

Steve Cabano:

Right. So when we look at data, data could be on the engineering side, it could be contracts, have data and so on, or project controls. And since we’re talking AACE here, I’ll focus on the project control side of it. Number one… I’ll go back 50 years when we were primarily still doing things in paper and spreadsheets, and so on, data integrity, data accuracy is critically important. I don’t care how fast you produce the data, if it’s incorrect, it’s not timely, it’s useless. So that’s the first part. It’s to make sure that we got a framework that gets the correct data that we can then look at whatever we want to in our project control world. Do we want to look at trends? Do we want to look at forecasts? And so on. I’ve got to have accurate and timely data. To do that, this whole digitization is awesome because it speeds the process up immensely. So now, how are we capturing the data, and whose responsibility is it to capture the data?

In most cases, the owners today, they have very little responsibility in day-to-day project controls, because the data is coming from the people that are doing the work, whether it’s in hours, whether it’s in procured items, schedule updates, actual performance in the field. But there still is a role from the owner standpoint to say, “Okay, I’m going to look at the contractor data, and hopefully, the contractor’s providing me their first assessment of status and forecasts, and so on.” And then I’ve got to be able to collaborate to say, “Okay, if we’re ahead of schedule, awesome, and I’ll validate that by doing some spot checks and things like that, if I’m behind, where am I behind?” It’s usually not the whole project, it’s usually an aspect of the project. So let’s focus and zero in on that aspect so that we can correct it and get to the root cause of it as efficiently as possible, so that the systems that we select have to be able to support that philosophy.

And it’s not just that we can produce pretty pictures, and we can get reports out faster, and all that kind of stuff, but all those other things that I just talked about have to be the foundation for whatever tools out there, and then we can expedite and streamline the data communication.

Shoshanna Fraizinger:

Thank you.

Ryan Kerschen:

So Aidhean, we’ve had a lot of good discussion, and I don’t think we’re going to get to much Q&A, but I think we have the option to follow up with some Q&A through email, and we can certainly try to do that, but I do have one more for Aidhean real quick as we talk about accountability. Kind of taking it full circle, if we look at accountability from a turnover point of view, you’ve got to the end of the project, think of it from that lens, what are just a couple of things you should have thought about at the beginning, what are some decisions you should have made to make sure you get to that point with some level of success?

Aidhean Camson:

Well, fortunately, maybe by design, maybe by luck, who knows, I would double down on what Steve just said, which is, I think our ability to collate that data is now massive, so much bigger than it was. And so starting with the end in mind, thinking about, “Okay, what data is going to be truly useful for this client to manage whatever asset it is that we’ve created, and what is the best way that they can use it?” Thinking about that at the beginning… excuse me, yes, thinking about that at the beginning, and then Steve touched on this, making sure the contracts are important. So if there’s data you need, that needs to be in the contract in the control space as well. If there’s allegations for people to provide information, it needs to be contractually specified, and they need to be on the hook to provide it, and then they need to provide it.

But I think through all of that tooling, the current AI revolution, where I think it’s driving us is, and it’s not exclusively true, but it comes back to that culture and collaboration thing, I think, which is, ultimately, most people don’t get up in the morning trying to make bad decisions and do the wrong thing. So you need to build a project delivery infrastructure that allows people to do that quickly, and do the right thing, and to Steve’s point, make good, informed decisions based on the data that we’ve collected, that’s been processed in a meaningful and connected way. Other than pure production statistics, I still struggle a little bit with the idea of truly real-time data. If you are bored in a tunnel, sure, tell me how much tunnel I bored yesterday. But if you’re trying to look at your true contract status and program and project status, you need to line up a whole set of data points and be convinced that they’re aligned before you report, otherwise, you end up going in weird directions and wasting time.

So yeah, making sure that you know what data you want to end up with at the end, and we could have a whole other session on BIM models and their applicability, which we could cut down to. I know we can do that, but should we do that? And making sure you have the information that you need along the way, and then building a culture around doing both of those things. That’s our challenge, I think, as an industry, to catch up with other industries that do that better already.

Ryan Kerschen:

Thank you. A quick thank you for me for Joanna and Shoshanna for helping us through today. Just from previous conversations, I know Steve and Aidhean had a lot more to share, and we squeezed a lot into an hour, and I apologize, I didn’t get to any Q&A, but I hope you guys enjoyed it as much as I did. I do believe there was a survey posted, as well as the QR code on the screen. If you get an opportunity, please click that link and give us a little more feedback.

Shoshanna Fraizinger:

Yeah. The link is included in the chat, and you’re right, I could listen and speak on this topic all day, and I want to thank all of you for a really enjoyable and enlightening presentation. I think that the response that I’m seeing flood through the chat is everybody was also very happy with the content. So thank you all for joining us and our speakers. I’d also like to thank InEight and the presenters today for the webinar. Just a reminder, this is a CEU event, so you’ll receive an attendance certificate post-event. And as well, we did promise that all questions that didn’t get answered during the session, which there were a number of them, they will get answered post-session by email. And with that, thank you all and have a wonderful day.

Aidhean Camson:

Thanks, everybody.