Seeing the Bigger Picture:
A Special Look Into The Global Capital Projects Outlook Report

Originally aired on 7/5/2023

60 Minute Watch Time

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TRANSCRIPT


Robert Bryant:

Hello and welcome to InEight Live for July. So my name’s Rob Bryant. I’m the executive vice president for InEight Asia-Pacific and it’s my pleasure to lead the team here in region as we work with our client group to help them deliver better outcomes for their projects and challenge how project controls data can be applied to inform better data-driven decisions.

Today we’re going to step up and look at the bigger picture. The third of our Global Capital Projects Outlook reports for InEight went out earlier this year. We went and spoke to 300 principle stakeholders for capital projects, including owners and contractors, consultants across the three geographies we operate in, which is North America, EMEA and Asia-Pacific. And today we are going to be taking a deeper look at those with the help of a panel who I will introduce in just a couple of moments.

Before I do, a few quick housekeeping items for you. Just as we get through today’s session, I encourage all of you to take the opportunity to put questions in and use the chat feature that’s available so that we can take those questions and get people to get some answers for those live for you and really encourage you to interact. Also, as you go through that, do that in the Q&A box. So look out for that Q&A box and please put those in. We’ll take a look at those as we get through.

As I mentioned to you, we’re taking a look at that report that came out just recently and the chance for us there to really take a deeper dive in terms of the key findings that we saw in that report. And I’m going to mention those just as we get into the first of our few questions and start to set the scene for you around some of those key themes that came through in the report and in the responses that have set this up to be a really interesting conversation that we’re about to have with our panel.

So I’d like to introduce that panel to you now. As I do that, we’ve got a question for you, which is to ask you which best describes your organization. This is going to help us understand who we’ve got listening in today, who’s participating in this webinar, and see how we can best suit our responses and conversation to address your interests. So if you could take a moment now to complete that question of which best describes your organization, if it’s a contractor, public owner, private owner, consultant, or if it’s something else.

So now I’d like to introduce our panel and this is something I’ve been looking forward to for a number of weeks. As we look at it, our panel today really represents what I’ve described as the dream team of advocates and thought leaders in respect of capital projects and perspectives that cover all the spheres for major contractors, government owners, and designing and engineering consultancy.

So in alphabetical order, I’ll introduce our panel for today. First is Aidhean Camson. Aidhean is vice president of project program controls for AECOM, a program and project delivery professional with a full career in managing and leading large-scale projects across the world. Aidhean’s worked in six countries in programs and many sectors including water, rail, health, the Olympics and power. And he now leads the evolution of program controls that AECOM, continuing to add to the value proposition they have in assisting clients to successfully deliver projects.

Also joined today by Cameron Mills. Cam is director of project controls for the North East Link Program, something that anyone in Victoria and anyone around Melbourne will be very familiar with as work gets underway. A project controls expert with over 25 years of experience in the delivery of major infrastructure projects globally, leading large multidisciplinary teams in complex environments across diverse sectors including asset management, water, rail, roads, tunnels, oil and gas building, retail, mining, heavy structural and civil. Cam, I don’t think there’s a sector you haven’t worked in looking at your bio, and some brilliant perspectives that you’ll bring to it. A master’s degree in project management, a chartered project professional, a project management professional, and a certified practicing project director. Cam is leading the project controls for Victoria’s largest infrastructure project, and I’ll call it for you, Cam, I think Australia’s largest transport infrastructure project as well, the North East Link Program. Great to have Cam joining us today.

And the third member of our panel is Jon Davies, CEO of the Australian Contractors Association. Now if you’re a stakeholder in the construction industry in Australia, you will undoubtedly have heard Jon providing commentary on the conditions the industry’s operating within and the initiatives that he’s leading for the Australian Contractors Association. Following a 30-year international career in contract and commercial roles, Jon is now passionately driving change in the industry that he loves and brings a shared perspective of the leading contractors that are operating in Australia that make up the membership of the association.

So I mentioned to you that today’s webinar is focused on that Global Capital Project Outlook this year. The results continue to support the value of an advanced connected platform, but really what we want to do today is drill down into what some of those findings were, and the questions that we’re posing to the panel are focused around those key findings as well. So there’s continued optimism in the construction industry. We saw that again today. The Australian Industry Group have just released their industry index that shows an improved sentiment in construction over all other sectors of industry in Australia at the moment. The importance of quality data when making project decisions, and we saw 41% of organizations in the report cite poor project data collection is a risk for growth. So we’re going to explore that as a key finding.

Also the fact that organizations are investing heavily in technology, 78% of those in the report cited higher productivity and better risk management due to that investment in technology. So we want to explore what does that really mean? How is that being realized? And then the final point as a key finding is the greater need for collaboration and a shift in project delivery models. This is a key point, I know it’s one Jon’s very passionate about, and it’s driven by owners and contractors alike as they’re looking for better collaboration, transparency and more of a shared risk model for successful delivery of projects.

So we’re going to dig a bit deeper. We’ve got just shy of 50 minutes to dig in. Please do put those questions across and we’ll see what you all have to say in terms of those. Before we kick things off, just to see if we’ve got our results back on that survey and see who we have joining us today. Public owners, 30%, other 40%. Oh my goodness. Okay, well we might need to drill down and see who those others are. But we’ve obviously got a nice representation across the gamut of participants and stakeholders in the industry. Contractors as well. No private owners, but perhaps we’ll see who else is in that other sector.

Well, let’s get started and start to open things up. And I want to start first with a perspective from you, Jon. The ACA commissioned its own report, Disrupt or Die, a nice provocative and knee-jerking title to get everyone up off their seats and thinking about the future. Disrupt or Die, and that was last year applicating change in the industry that is effectively the commentary around that was it’s stuck in the past and now is the time for change. So if we are looking at that, the fact that you’re saying need to disrupt or die, we’ve still got a lot of optimism, 96% of respondents feeling optimistic about the future, what’s your perspective on this? Why does the industry continue to feel good in a time when there are increasing challenges? It’s a bit of a sort of split point there.

 

Jon Davies:

Yeah, look, thanks, Rob. I think there’s optimism because we can finally see that change is coming. I think also some of our members might even be making some money for a change. And if you’re not going to make money now when there’s so much work around then when are you going to make money? To be quite frank. But as we set out in the Disrupt or Die report, we’ve really got no option but to reform. We as an industry are being relied upon to deliver this very significant pipeline of work, but we are the least productive of all industries and we are really struggling to attract people into the industry to deliver that pipeline of work. The next generation of workers, as I’m sure many people have heard me say, they don’t want to work long inflexible hours in an adversarial industry that still considers spreadsheets, despite all the good work of InEight, to be the height of technology, and that an industry that really doesn’t care too much about the environment. And we tick all those boxes.

But despite the pipeline reviews that people will have read about and heard about, the government can’t slow down substantially on that investment. We’ve got a whole bunch of renewables, new energy as it’s termed, that we have to construct if we are to meet our decarbonization targets. We saw a few weeks back a defense strategic review that says we’ve got to increase our expenditure on defense assets and we’ve got to keep going with the investment in transport infrastructure because we’re bringing in all these new skilled migrants, some of which to deliver this work, which is a bit of a sort of catch-22, I guess. But we need to deliver this infrastructure for the economy as a whole to remain competitive nationally. So the government needs construction — and construction needs government. Productivity now is going to become a national focus and hopefully making money will no longer be a crime.

 

Robert Bryant:

Yeah, absolutely. And I think there’s some good topics around the other use of the word “sustainability” as we get into this discussion too. It’s about the industry being sustainable as much as delivering on environmentally sustainable outcomes. So making money isn’t a bad thing, as you say. Cam and Aidhean, keen to get your perspectives on this too. As Jon’s summed up there, there’s lots of reasons to be confident and to be optimistic, but it all comes at a time when there’s an enormous amount of challenge as well and change going through the industry. So your perspectives on that, perhaps starting Aidhean, from AECOM’s perspective, what are you seeing globally? How are you seeing that play out in this part of the world in terms of the dichotomy between an enormous amount of challenge, but an enormous amount of opportunity at the same time?

 

Aidhean Camson:

Yeah, well yeah, I mean it’s a great question. I think Jon summed it up pretty neatly. And thinking locally, I’m sat here in Auckland, New Zealand, and it’s a microcosm of exactly what Jon just described. Similar challenges, different flavors of climate adaptation issues maybe, but still climate adaptation issues. And I think if we blow that out globally and look at a lot of the work that we’re doing on the program side, which is US, Middle East, UK, there’s different flavors on all those things but it’s the same piece. There’s private money involved in some of those enterprises as well, but certainly I think it is a coalescence. And I know ESG is almost starting to be a little bit of a well-worn phrase already despite being relatively new.

But I think actually people, and I don’t know, maybe I am at a point in my career, an inflection point where you start to think about, “Okay, well…” And this was part of when I came to AECOM and part of why I’ve engaged with InEight is, taking those challenges that Jon has mentioned, the construction industry is critical. The massive climate problems that we face, so well acknowledged that there’s no silver bullet there. There’s many, many, many things that we need to do in order to be able to overcome that. But an awful lot of them rely on changes in infrastructure of some flavor and the construction industry.

And I think there’s a willingness, as is shown by this panel perhaps, that wasn’t necessarily always there to think about how to do things differently in order to meet that challenge. And I think for me anyway, that why, and I see that everywhere, people are like, “Okay, let’s…” You don’t get as much as you used to, “Oh, well I’ve been doing it like this forever, so I’m going to keep doing it like this forever.” You get a lot more of, “Oh, okay, is there another way? Let’s try and do it better.” Yeah, that for me is the [inaudible 00:14:39].

 

Robert Bryant:

You’re seeing a real drive for change and a common theme in that and a willingness between all stakeholders to do things better, to do things differently for different outcomes and better outcomes.

 

Aidhean Camson:

That’s right.

 

Robert Bryant:

That’s encouraging.

 

Aidhean Camson:

Now, whether we’re going to get there or not, different question of course, but that’s the nature of the conversations that we often see globally, which is different. That’s different to conversations that you would’ve had before. You would’ve been having back to, yeah, Jon’s very succinct summary, the more traditional adversarial, “Right, let’s put all the risk on the contractors and beat them into the ground for the lowest price we possibly can and we’ll get it done like that.” Again, that still happens, but [inaudible 00:15:24].

 

Robert Bryant:

That’s good. That’s good. Well switching to Cam, because Cam, you’re in an interesting position. You are right in the middle of, as we said, the largest transport infrastructure project underway in Australia — currently somewhere in the mid-teens in terms of billions of dollars being spent on North East Link over the next five years or so. What’s your take on this? Why do you feel there’s that optimism at the same time as realizing that there’s a lot of need for change? We just lost your audio there, Cam, whether you’re on mute. Give Cam a second to try and fix the mute issue. We’ll come back to you in just a moment, Cam. Yeah, we’ll come back to you in a moment, Cam, I’ll let you unplug back in there.

So just continuing on that theme, whilst we’re waiting for Cam to get plugged back in, thinking about what that means to the delivery of these projects. So one of the key challenges and one of the things that we’ve been talking about there is the ability to do things better and deliver on scope and on time and to see projects delivered in a better way. One of the key things we saw in the research was that organizations are eager to stay on schedule of course, but they do pay the price to do so. So we’ve seen that 80% of those that said that they completed projects on time or ahead of schedule recorded a 28% average overspend. So it was really illustrating the fact that you can’t have both. You either have a budget that meets the timeline or you have a timeline that meets the budget, but you can’t force things to be the best of both worlds in that respect. Keen to explore that one. And Cam, are you back with us? Have we got your audio?

 

Cameron Mills:

Can you hear me?

 

Robert Bryant:

Yes, we can.

 

Cameron Mills:

You can? Excellent.

 

Robert Bryant:

Yeah, perfect. Cam, let’s-

 

Cameron Mills:

I can answer that first question if you like, Rob, really quickly?

 

Robert Bryant:

Let’s do that. Answer the first question then I’ll ask you just to provide some commentary on that second part too. So the first question, Cam.

 

Cameron Mills:

Sure, sure. Look, it’s interesting, the optimism’s been growing for years and despite recent federal reviews and state budget announcements, there’s no reason for it not to continue to be immensely optimistic. If you look at all the data surrounding the amount of the global requirement, increased annual investment in major infrastructure, McKinsey did a study back in 2017 that says they’ve got to go from 2.5 trillion to 3.3 trillion globally. It’s been well and truly supported by Oxford Economics. They’ve been saying for years that to meet demands, keep up with demands, we’ve got to keep spending a heck of a lot of money.

In 2022 Deloitte Access Economics released reports saying the state of Victoria is going to spend somewhere like $174.4 billion in major projects across Victoria. So the volume of spend has been there. And what I see is this recent correction, shall we call it, the federal review and the recent Victorian government budget announcements, what that’s done as it’s actually given the industry a little bit of a relief. So all of the data that we were analyzing and looking what was required from a contractor, labor, plant, material, subcontract, and the constraints on the industry that were looking insurmountable now look achievable. And what it’s done is it’s most likely lengthened the pipeline to a much more sustainable future.

So if I was on any part of the game, whether I was a supplier or a contractor or on the client or the private side, I’d be looking a lot more optimistic now. So we had this massive mountain in front of us and now we’ve got something that’s much more achievable to be able to ascend, shall we say. So I’m very optimistic about what the future holds in our space, and to Jon’s point, being an ex-contractor looking forward for everybody getting the share and the whole industry doing well and growing out of this, which is important, it can’t always be one way.

 

Robert Bryant:

So that’s interesting, Cam. So saying that pause and that review is now extending those timelines, as you say, quite likely on the delivery of projects. So we’re starting to address that second point that I put to you, which was it’s obviously not possible to have both. We either have a timeline that meets the budget or a budget that meets the timeline, but you can’t force them to come together when you’re trying to operate with a tight budget and a tight timeframe. So you’re saying that there’s a more realistic approach starting to emerge in terms of how these projects are going to be delivered, both in terms of time and budget?

 

Cameron Mills:

I think very much, and there’s so much more to evaluate on a project, a successful outcome rather than just time and budget and scope, the old iron triangle. The benefits that these projects deliver, government focused very heavily on what the actual physical benefits are across the board, whether it’s local community benefits, economic benefits, there’s a lot of factors at play. I think my sort of approach is that we’ve got to start to become much more agile and flexible when it comes to this. The amount of time it takes to do feasibility studies, business cases, get funding, get approval to get projects through the government pipeline, things change. And I think an intelligent government identifies that and they’re able to amend and be fluid and a bit more agile where it’s required. So you’re making sure that only those projects that should be delivered are being delivered and the ones that are giving the best bang for the Victorian and Australian people. Yes, but definitely it’s not just about the cost and the time. It’s much more about what are the overall benefits that have been delivered.

 

Robert Bryant:

Yeah. And it is an interesting dilemma potentially that’s being faced at the moment in terms of priorities around this transition to renewable power, the large pipeline that’s there. But then as Jon framed it, the continued requirement for transport infrastructure and all of the other utility projects that we have underway at the same time. So it clearly calls for that improvement in productivity. One of the clear ways that that’s being presented or one of the avenues for that is better collaboration and communication and ultimately a change in the way that projects are delivered. That delivery model providing more transparency and being more open about the challenges that the project faces. I want to take an opportunity now just to put a question to our audience as well around this.

As we look at project delivery models, the integrated project delivery model is something that we continue to hear more about and we’re starting to see more of. I’m keen to understand from our audience just what their experience has been and what type of projects do you see as an audience having the greatest need for that integrated project delivery when we look at how owners and contractors and consultants all work together to deliver a better outcome from the beginning in terms of how they plan, are you seeing that more? Do you feel there’s a greatest need? And it’s a little bit of a trick question because you’re going to say it’s applying to all of them. But I think which one do we feel has the greatest need for it based on complexity and priority in the project pipeline today? We’ll see what the audience come back with.

But I think from a panel point of view, keen to get your take on this because from the research we saw that 63% of large organizations believe that poor communication is negatively impacting outcomes. It’s curious to understand why the balance don’t feel that has a negative impact. But the 60% of those organizations also are stating that non-standard systems and processes negatively impact, and just 44% are already seeing organizations of theirs being involved in integrated project delivery. So we’re seeing it not quite tipping into 50%, it’s climbing. But Jon, I know you’ve been a big supporter of this and an advocate for it and taken this message directly to Canberra recently as well in terms of productivity. What’s your take on this in terms of the partnership for change that ACA is championing and what that means around integrated project delivery, what’s the reality from your perspective?

 

Jon Davies:

I think part of this comes down to productivity again, in terms of one of the key benefits of integrated project delivery is that you have combined teams, that’s a very straightforward one. So rather than this sort of traditional role marking that we see that for every two safety people that the contractor has, the client’s got to stomp up with two of their own to mark them, and this sort of crazy situation. With integrated project teams, you don’t have that, you have the best person for the job in a combined team. And you also see those teams co-locating, so you don’t have the contractors in one set of sheds and the designers way off in another set of sheds and the client back in some nice carpeted office in the city. They’re all there together solving problems.

I mean in terms of which is the best, the poll question there, it really is a trick question I suppose, because you can make the case for all of them. The observation I’ll probably make at the minute is the one I think is probably most in need of this approach, if you look at transport infrastructure, there have been projects that have adopted this approach, same with water, probably less so social infrastructure here in Australia. Although interestingly, in North America, this is probably where it’s most commonly used. But I think the power and renewable space is an area that really there should be a focus on this. And this is an area where currently they’re going in exactly the opposite direction. They’re coming to market with the least collaborative forms of contract, the least collaborative delivery models, which is public private partnerships, generally speaking, I know Cam might have a different view.

But Cam on his project are now trialing a different approach to PPPs with an incentivized target cost model at the heart of it. And after 30 years of contracts and commercial experience, I’ve never seen that before. So there is even possibility with those sort of inherently or historically non-collaborative models to do something differently. And I think that’s an important thing to say here, that for collaboration to take place and for equitable risk transfer to happen, you don’t need necessarily to have an integrated project delivery model. You can do that on other forms of delivery model as well. But certainly for those larger projects, those more complex projects, integrated project delivery from our perspective would deliver the better outcomes.

 

Robert Bryant:

Gotcha. Good insights and nice to get that flip side of it. It’s interesting what you say about renewables. The response from our audience, let’s see what they all felt, if we’ve got the answers coming up. Okay, so power renewables obviously features highly, transport infrastructure. And I wonder if perhaps that’s a reflection of people’s current experience, perhaps rather than that future outlook that you’ve presented there, Jon. Aidhean, what’s your take on that response from our crowd listening in today in terms of where they see it?

 

Aidhean Camson:

Yeah, it’s interesting. I think coming at it from a program management point of view, which is what I’ve spent my career doing, we could present this whole hour on how program management overlays with contract forms, but that’s not what we’re here to talk about. But all versions of it rely on what Jon was just talking about. It’s that collaboration piece. And certainly, the places where I’ve seen that be most successful actually is water projects, actually in my own personal experience, and actually some Olympics, the London Olympics in particular applied that approach ultimately. But that was through the use of NEC contracts and target cost and fair risk sharing. And I can think of actually one particular transport project, which I spent a lot of my career working for CH2M who were bought by Jacobs. Well, CH2M would probably still be CH2M if it weren’t for a couple of particular transportation projects. So maybe that talks to some of the more combative elements in there which is perhaps why people are feeling it.

But I think there’s some great research by Dr. Juliano Denicol over at the UCL where he talks about megaprojects and the reasons for failure of megaprojects. And if you look at those, none of them are really about technical things. They’re all about this sort of collaboration and communication. How do you make decisions? What is your clear governance structure? How do you make sure that you have all of your stakeholders on board? And if you’ve understood all of those stakeholders and then actually to one of Cameron’s points, you’re making those decisions in a wider context of the benefits that these things are going to deliver. Because that’s actually back to a couple of things we were talking about just earlier, where I see perhaps the optimism and the opportunity is there’s a couple of things happening. So we have it in Australia, and I forget the precise name, if it’s the Australian Infrastructure Committee, but there’s the New Zealand Infrastructure Commission here as well and there’s similar in the UK, hasn’t quite made it to the U.S. yet, but that’s such a big market, it’s hard to tell.

But what I’m getting at is there’s government entities who are looking at that investment pipeline and providing a view of that investment pipeline, which gives you that certainty and some reality because you can use some simple metrics and go, as Jon said, actually it was Cameron, the mountain’s too steep to climb, we can’t do it, so let’s flatten it down a little bit to something that is perhaps realistic. And actually we found on a client-by-client basis, that’s certainly part of the conversations we tried to have with clients when they’re earlier in the development phases when they really are just thinking about benefits. And I think that’s something that I’ve seen change over the course of my career. When I first started the budget and the schedule, we used to joke that our first program manager in the door was a sacrificial lamb program manager because they were the one that were going to have to tell the client that neither their budget nor their schedule were realistic.

Now in the past couple of decades, I’m pleased to say that that happens a lot less people becoming more realistic about… Still happens, but people are becoming more realistic about it. And I would argue that you can hit both your budget and scheduled target. But what that relies on is honest conversations at the beginning and solid application risk management and data. So I think there’s this interesting coalescence right now where there’s almost an opportunity, if we want to get really optimistic, that the construction industry could actually leapfrog some other industries because people are starting to see all of those things come together. And maybe I’m a hopeless optimist, but you can put those pieces together and go, actually, there’s a way that we can use the technology and these new approaches and this drive from government level onwards. And if we can piece those things all together in the right way, there’s a real opportunity for us to do something pretty awesome.

 

Robert Bryant:

Absolutely. Yeah, it’s an interesting picture you paint because you’ve got all of these amazing factors that come into this perfect storm of opportunity. And I think the other thing is this necessity. So what I’m hearing is that now is the time when all stakeholders are starting to realize, “Hey, we’ve come this far and we’ve still got a long way to go.” And it’s really that necessity for change that’s being apparent. There’s arguably a crisis point that is forcing change because if it doesn’t happen, it’s evident already that organizations will fail, projects will fail.

So we’re talking then about innovation and what is occurring in terms of the innovations that are helping to see things change and productivity change. So I’d like to talk for a moment about that and just explore it. Jon, if I could start with you, just from your membership base at the ACA, what are some of the key innovations that you’re seeing from a project approach in whatever capacity that might be, what are the innovations that are leading to productivity change and things that you referenced at the beginning where organizations are feeling it for themselves?

 

Jon Davies:

Oh, I’m going to disappoint you, I think, Rob and say, I’m not seeing a great deal. We’re not seeing the focus that we should be on this. We’re not taking this seriously enough. And I think that there is now a real awakening to the fact by everyone that we can’t ignore this any longer. We’ve been, I sort of characterize it as, a bit fat and happy off the back of all our coal and iron ore royalties that we can afford to be lazy. We can afford to be not very productive and the cost just keeps going up and up and up. But we’ve reached a crisis point now and that needs to change.

Literally right now we are just working on a paper around productivity. We, as part of a strategic planning a few weeks back, went and surveyed a number of key client groups as well as our own members. And the top three priorities for the industry that everyone agreed on for the next two years, number one was productivity and two was culture, number three was sustainability. So everyone agrees now that productivity is something that we have to focus on and yeah, there might be some stuff happening in some places, but certainly not to the scale and level that there needs to be.

 

Robert Bryant:

Right. Yeah, a good wake-up call to say that it’s not happening as fast as it needs to. Cam, Jon referenced before some of the innovation that’s come into the approach in your project in terms of what’s being incentivized? Is innovation something that’s being incentivized there? Is that part of the mix that you see being part of the solution?

 

Cameron Mills:

Look, not enough. So some MTIA projects are very heavy on innovation and very much so on incentivizing for innovation, others not so. It just depends on the project office, I should say. But to sum up the comment, just to sort of cap up what Jon was saying as well is also this question we’ve got in a chat about Nicholas Morrell, about what are some of the barriers to meaningful change in construction industry in Australia? Well one of the problems we have is people just got to stop doing what they’ve always done. What I’ve seen for too long is it’s a definition of insanity. We just keep trying to do the same thing over and over again and expecting all of a sudden that productivity’s going to improve, that innovation’s going to improve.

To Jon’s point, he’s right, NELP’s got the first-ever public/private partnership incentivized target cost run model that’s ever been implemented. It’s got a KRA regime, a gain share, pain share regime. So the contractor is suitably incentivized to do really well. And it’s like a PPP with a collaborative feel, right? All of our other packages, alliances and they’ve got based on the shared risk model. So for me, I think that what has to happen is industry’s got to change, but it’s not just delivering, it’s all across industry. Government’s got to change as well. Certain areas of government have got to move away from not trusting contractors and potentially looking on dollar outcomes rather than recognizing that the whole industry needs to benefit from the infrastructure growth that we’re going through. Contractors need to understand what’s driving the client, what the client needs and what the government needs. And we need to adjust the way we operate to be able to satisfy this.

So too often I see the same legal teams, commercial teams come in, reiterate the same contracts and the same stuff goes in the same contracts and we get the same results. So really we need a dramatic change in a way we focus. If we want to improve productivity, if we want greater innovation and all the data, particularly in productivity, it’s there, it can show you for decades we’re getting worse and worse and worse. So now’s the time to blow it all up and to say, “Well you know what? We need to attack this in a different way, in a new way, a refreshed way because what we’ve done previously clearly isn’t working.”

 

Robert Bryant:

Yes. And that historical view is one I’d like to explore a little bit further here because we talk about the role of data clearly in projects and I should say that’s not a new thing. We focus obviously, InEight, we’re all about the digitization of that data. But data on projects has been around since forever. It’s just how easy or hard it’s been to collect it and how easy or hard it’s been to develop trends and understand that the patterns that exist within it. 41% of the organizations in the survey cited poor data collection as a risk to growth. I’d challenge that number and say who could not see it as a risk to growth?

But the question I want to ask of the team here, and perhaps start with you, Cam, off the back of your comment there, how valuable and what role do you see that historical data and benchmarking being able to play? Are we in a position where it can be leveraged? Or if not, what do we need to do as an industry to put ourselves in a position where we can look at the past performance in a meaningful way and say it hasn’t worked, and how do we measure improvement?

 

Cameron Mills:

Sure.

 

Robert Bryant:

Are we there today or have we’ve got work to do before we can really look at that?

 

Cameron Mills:

We’ve got an enormous amount of work to do. There’s pockets of good behaviors and practices all over the place, there’s no doubt about that. But it’s immensely inconsistent globally. There is absolutely no doubt that a project that’s got accurate, reliable, timely information to inform decisions is going to do better than a project that doesn’t. That’s just a given. And some of us can get ourselves in a situation, project I’m on at the moment right now, we’re pretty well-informed, cost, time, project, controls, elements, quality, and we’re able to make informed decisions. It doesn’t always mean there’s going to be a great outcome, but at least you’re making informed decisions. So that’s the starting point for a solid project controls team. Have you got your processes and your data aligned? Are your people trained, your people process technology, all aligned to be able to generate accurate, reliable information?

One of the biggest problems we have with benchmarking and historic data is the way it’s physically established, captured, stored, disseminated through the life cycle of the data. There are a lot of organizations running around claiming to have really good solid benchmarking information. But when you interpret how they’ve actually captured that information, how it’s been generated, how they’ve managed that data, it falls down really quickly. I’m doing a lot of work at the moment across government on trying to improve the way we align our technology and our processes and improve the skill sets of the people to be able to manage data better.

And it’s interesting, there’s another question that’s just come up from someone called Nirav Talati, who’s talking about the gap in project controls maturity and understanding across organizations and lack of formal qualifications at certain levels. And it’s true, look, there’s no global acceptable approach to project control or project management. And that’s why you’ve got such inconsistency all around the world. Some organizations, if they’ve got really solid people and know what they’re doing and they’ve got great alignment with technology and process, there’s good practice in certain areas, but you’ll find typically that’s very isolated. It’s very rarely throughout an organization and very rarely throughout a sector.

So a lot more work needs to be done in coming up with, firstly, a standardized approach in both the theory and the practice of project management and project controls. But certainly, all of that then starts to inform you to be in the position and mature enough to start generating and managing data well. Everybody generates data, everybody uses data, but there’s a lot of junk in, junk out occurring all around the place. So I could actually talk for hours on this particular topic, but it really is around the fact that you need to understand what your maturity level is in a particular organization, what data you’re generating and how you manage that data through that people-process technology lens.

 

Robert Bryant:

Absolutely. I want to explore this, and I’ll get both Aidhean and Jon to comment on it because I want to get all perspectives around it, because the topic of data literacy that we’re really touching on here in terms of understanding what it means to have data that you can actually apply and use and meaningfully informed decisions. Aidhean, you first in this, what have you seen as you’ve engaged around the world with different sectors and different clients on this topic?

 

Aidhean Camson:

Yeah, I mean it’s exactly what Cam just said, right? It’s a patchwork quilt that you encounter and some of it’s great and some of it’s garbage. But as Cameron’s talking it’s kind of… Well, yeah, I could also talk on this topic for hours as well. A number of different things I thought about. But I think two sort of key thoughts from my viewpoint. One is there is a little bit of amassing, particularly from the larger scale programs, globally, we are becoming more global, if that isn’t a ridiculous thing to say, which it kind of is.

 

Robert Bryant:

Makes sense, makes sense.

 

Aidhean Camson:

But countries do look at other countries to see what is successful, and if you look at large-scale infrastructure programs, not that it’s all about project and program controls, but it’s all about project and program controls. Well, unless it’s all about procurement. But anyway. Actually, the creation of that realistic baseline in the first place. And I do think that, as I see your RFPs coming in from all over the globe, program management engagements, that is increasingly a real recognition that actually there’s a… At first it was the 120-day kickoff, then it was a hundred-day kickoff, then it was a 90-day kickoff, then it was a 60-day kickoff. And I think it really became a bit of a race to the bottom with those things. And I’ve actually started to see it go back the other way. Responded to an RFP not so long ago where they were like, “No, we’re going to have a nine-month initiation period.” And that’s not all about the creation of that baseline, but it is about creating an organization that will successfully meet the challenge that that client had.

So I think there is a recognition that it’s worth spending the time at the beginning making sure that everyone’s aligned on what that baseline is, and that baseline includes benefits and outcomes. It’s not just scope, schedule, cost, risk. And then looking at it from the other side of that whole measure, I think the new technology that we have… We can come at this from both angles and I’ve been on some presentations from vendors, so a whole bunch of jargonistic gobbledygook just right here, which I’ll withhold. But our ability to consume unstructured data and past documents and those sort of things presents us with an opportunity to perhaps analyze data in a way that we couldn’t before. And Cameron made a good sort of… There’s a difference between data and information. I like to say it’s about you want to create intelligence and that intelligence is what’s driving the decisions. And as Cam said, might not end up in a good place, but at least you’re making an informed decision based on what you actually know as opposed to a guess.

 

Robert Bryant:

Yes.

 

Aidhean Camson:

So yeah, I think there are some drivers on the one angle to really try and consistently apply some of that good practice that gives you a measuring stick you can measure against. And then I think there are opportunities from a technology point of view to take some of that data that we couldn’t consume in a meaningful way before. And de-garbagify it a little bit perhaps as we go.

 

Robert Bryant:

Clean it up a bit, yeah. No, I think that makes sense. And Jon, your take on this, and there’s a couple other topics I do want to make sure we leave time for. But I’m keen to hear what the association’s perspective is, what’s your membership’s take on how well they’re able to currently structure data and organize themselves? It gets onto that topic of standardization and being able to apply data across projects and across organizations.

 

Jon Davies:

Yeah, look, thanks Rob. And I agree with what both Cam and Aidhean have said. Ultimately, someone at one stage some somewhere way back when said, “What doesn’t get measured doesn’t get done.” And I think this is what is really important with data in terms of using this to drive productivity improvement. It can lead to a whole bunch of things. It can lead to more accurate budgets, for example, which is, as we all know, a major course of strife on just about every project. We were always starting well behind the eight ball and the problems just develop and snowball from there. And if we had this better data, who knows, we might not actually have to tender for projects. This idea that you’ve got to get three or four big teams of people together to tender a project just to give the illusion of value for money, well is it really delivering value for money when that might be costing a total of 5-10% of the total cost of the project? Couldn’t we be using all of that time, money, resources for something else?

But obviously governments need to demonstrate that at least they’re getting, in terms of the actual cost, that it’s a realistic cost. If we get this data and we start using things like should cost models, then we’ll have that information. I just wanted to pick up and tie in a question that Nirav put in there around the portfolio approach. What’s the thoughts on the portfolio approach? This absolutely ties into this question of collection of data and utilization of data. And the best example of which is the level crossing removal program in Victoria where they’ve been collecting data, they’ve been utilizing that data, all of those project teams on that project to get given another level crossing to remove, they’ve got to achieve certain minimum conditions of satisfaction. Those minimum conditions of satisfaction get raised each and every time based on the data that they’re collecting and to try and drive continuous improvement.

So absolutely those program alliances, those programmatic approach, not only does it significantly reduce all of that abortive time and cost that I talked about from a procurement standpoint, because everyone goes through that process once, generally speaking. Another great example of that programmatic approach is another one. Everything good at the minute in that space seems to be happening with you, Cam, down in Victoria, the Major Roads Project Victoria program delivery approach, suburban roads upgrade is another great example of how that can work. And that’s something that particularly we think could be adopted to the new energy space. But I just wanted to give you a little insight and maybe a heads-up into our productivity report. One of the recommendations that we’re thinking specifically on this space is the need to create here in Australia a construction data alliance. And I’m not going to give you too much more information other than that. You’re going to have to read the report when it comes out. But yeah, we are thinking about just this very thing.

 

Aidhean Camson:

Okay, you got me hooked, Jon.

 

Robert Bryant:

That’s encouraging. Yeah, I think there’ll be a few people ready to put their name down for that distribution as soon as it’s available, Jon. That sounds enticing. So look, there’s a good question we can ask our audience again here as we consider technology and the role it plays in organizations. And I’ll spend a couple of minutes just asking the panel for their answer around this too. But what’s the most important key factor that you as an audience see when you’re considering the adoption of technology? We’re talking here about what you need to do effectively to be ready and in a position where you can adopt it with purpose.

So have a look at that, give us your response on what you think is the most important key factor to consider when adopting technology. Is it a change management strategy within your business? Having defined workflows and processes that you can begin to assess and apply technology to? Having clear objectives and outcomes, what is it you want to achieve from that technology that you’re adopting? And finally, how does it fit within your organization’s existing technical and organizational environment? What do you have in place already? What are the things you’re already doing that make it a priority or not? So looking forward to your response on that.

Panel, from your perspective, when we’re talking about that adoption of technology, what’s been your experience and take on any of those points, be it change management processes, objectives, organization? Perhaps Jon, just to continue with yourself for a moment, the association’s experience, what are your members talking about?

 

Jon Davies:

Well, funny enough, I just literally wrote that section of the report in terms of the barriers to adoption of digital technologies. Should be able to answer that one. What we see is the lack of clear, common defined specifications and requirements around some of this technology, especially when we’re talking about digital engineering, it’s a real barrier. But what we also see is that, again, it’s back to these collaborative forms of contract. Ultimately, a lot of these technologies, it’s about open and transparent sharing of information.

But a lot of the contracts that we still are seeing are driving the opposite behaviors. They drive the behaviors holding onto information because that can be used as a claim, that can be used as either a claim against the client or the client can use it to defend a claim from a contractor. So whilst you’ve got all that, pardon my French, crap going on in the background, how can we expect this sort of stuff to take off? So these are two real key fundamental things at a government level, I suppose, that primarily is one of the largest clients in the country that we need to fix. Whereas a lot of the things that you got there are from more a business level.

 

Robert Bryant:

Yeah. Okay. No, that’s a good perspective. Cam, what’s your thoughts on this?

 

Cameron Mills:

Look, if it was me and I walked into an organization and these four were put in front of me, I’d say it would be D. That’s the most important. Ultimately, what problem are you trying to solve? What does an organization require? What’s the existing current landscape? What do you want the future state to be and so on? A, B and C are just basically deliverables of that. So you need a significant change management strategy, you need to find workflow and processes with which to align your technology, and you need to understand your clear objectives and outcomes.

Look, it’s an interesting thing when it comes to technology. Some government clients with certain elements of technology have mandated particular software and products that they want their contractors to do. I took a very different approach here and it was a very clear set of requirements in what we were looking for in the project management, project control space. And contractors come up and say, “Well, what do you want us to use?” I say, “I want you to use whatever works your organization the best. I want you to operate the way you need to operate. And if that means you need to go through a digital transformation in order to meet the requirements that we’re looking for, then that’s on you.”

But I mean luckily enough, a large amount of the industry are doing that anyway. A large amount of them are certainly looking at how they can be much more technology savvy. The conversations these days are much better than they were five, 10 years ago in this space. And the emergence of project controls driving that from both the client and contractor side, it’s really, really wonderful to see the amount of effort going into it.

 

Robert Bryant:

Absolutely. Good. Aidhean, I know we’re pressed for time, we’ve just got a few minutes left, just quickly, which one would you get your vote? A, B, C or D?

 

Aidhean Camson:

Currently A would get my vote actually.

 

Robert Bryant:

A? All right.

 

Aidhean Camson:

Yeah.

 

Robert Bryant:

Let’s see what our crowd said shall we? Let’s see what our poll said. Whoa, look at that. Okay.

 

Cameron Mills:

I’m an outlier.

 

Robert Bryant:

Yeah, well the structured approach that I expected, Cam, in terms of saying yes, the others stem from those clear objectives and outcomes, and of course that does make sense. So perhaps that change management strategy can be interpreted as part of that too. But certainly it seems clear, everyone understands you’ve got to have an idea and a plan of what you want to achieve and perhaps what that overall strategy is before you address the others. So that’s good. All right-

 

Aidhean Camson:

My one line answer, Rob-

 

Robert Bryant:

Go on, mate.

 

Aidhean Camson:

A consistent approach to… It’s not similar to Cameron’s actually, a consistent approach to actually addressing all of those is actually what you really need.

 

Robert Bryant:

Yes.

 

Aidhean Camson:

All of those things are important, but don’t reinvent the wheel every time you do it. You need to be able to [inaudible 00:56:37].

 

Robert Bryant:

Yeah, true too. True too. All right, now we are into the closing minutes and just as I expected, we’re never going to have enough time for you three to talk about these topics, and we could pick any one of them and talk all day. But we only have a couple of minutes left. So I’m going to ask each of you just for a quick summary from each of you and you can keep it to sort of a good 30, 40 seconds, that’d be great, just so we can get everyone in. But I really do want to hear from each of you what you see being the opportunities for Australia to lead the way as it has done in many respects over the next three to five years. What are, let’s say, the top two things that need to happen, and I’ll start with, Aidhean. So top two things that you see needs to happen for Australia to keep leading the way in terms of innovation and change in the construction industry.

 

Aidhean Camson:

I’m going to expand it to Australia and New Zealand.

 

Robert Bryant:

Go for it.

 

Aidhean Camson:

Actually having worked for a couple of organizations both globally and within Australia and New Zealand, you’re right that often the leadership is here. So I think my top two would be by all means look overseas, but don’t forget that actually there’s been a lot of really great innovation come from here and be strong in the belief of that. And the other would be, I think it would just be keep collaborating. Do those things, particularly that Jon I think was talking to, around trying to make it an end to end thing. That’s what it is, right? From every single aspect of the industry, assume good intent because actually generally there is. And if we can good can steady that course, we’ll make it.

 

Robert Bryant:

Excellent. Cam?

 

Cameron Mills:

Encourage, embrace, and celebrate sustainable practicable change. And then it’s not change for change’s sake, it’s got to be a reason behind it. Define the problem you’re trying to solve. Work through a continuous improvement approach to technology change and you’ll find that that’ll hold you in good stead as you’re going through the journey.

 

Robert Bryant:

Fantastic. And Jon, bring us home.

 

Jon Davies:

Procure based on best value, not lowest cost.

 

Aidhean Camson:

Hallelujah.

 

Robert Bryant:

Boom. Excellent. Well look, thank you very much. That was great. I really appreciate the time from each of you. So thank you for all the work you’ve done coming into this session. Really enjoyed talking to you. As I expected, we’ve run out of time, but we’ll see if we can get the three of you back together and have plenty of other topics that I’m sure we can explore in the future. So thank you.

 

Aidhean Camson:

Been a pleasure. Take care, everybody.

 

Cameron Mills:

Thank you. Bye.

 

Robert Bryant:

All right, well that wraps us up. So if you’ve enjoyed this then please do visit ineight.com, look for our future webinars. And if you have only just come in at the tail end or you think someone else will be interested in listening to what’s been said over the last hour, then there will be an opportunity for you to revisit this as a recording. So looking out for those posts. And thank you for all your support and interest and look forward to talking with you again in the near future. So thanks and goodbye.

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