Infrastructure innovation to reduce fragmentation

Stephen Chadwick
31 May 2017

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Innovation

Project management

While businesses look at how to prevent future fragmentation, Stephen Chadwick, managing director of EuroNorth, looks at how innovation can be harnessed to prevent this and overcome other industry challenges.

This is a very exciting time for UK infrastructure developments. Europe's largest construction project, Crossrail, will see its first trains run through central London by 2018 with completion planned for the following year. And there many more major projects nationwide such as the A1 road improvements, or the installation of new hi-tech cabling that delivers offshore wind energy from Wales, the north west and north east. Projects like these drive national productivity growth and help build the skills to deliver and maintain our world-class infrastructure.

However, "Modern infrastructure projects commonly experience 50% overruns" says Bent Flyvbjerg, professor and inaugural chair of major programme management at Oxford University Saïd Business School. He adds that "Demand and benefit forecasts are often wrong by between 20% and 70% on many projects with public passenger services being the worst performers". In his extensive research into 'megaprojects' of all types he concluded that misplaced optimism about outcomes, often deliberate misinformation in management and policy, and misrepresentation and deception are the main causes of overruns and subsequent cost escalation.

To flourish, our growing populations need more and better infrastructure - the roads, bridges and other public facilities created for government agencies by civil engineers and construction companies. Costly overruns are typical in such projects, but experts agree that many challenges can be overcome through enhanced stakeholder collaboration.

By providing societies' infrastructure, including water, transport, communications, energy and waste systems, civil engineering projects help communities to function, develop and strive. But much of the world's and some of Britain's infrastructure is inadequate and crumbling. And, growing populations will only need more of it.

Massive potential savings

According to McKinsey, a New York-based consulting firm, global investment in infrastructure needs to increase by 60%, to US$57 trillion worldwide, between now and 2030, just to support projected economic growth. But more spending is not the total answer; McKinsey estimates that improved civil engineering productivity could save US$1 trillion annually worldwide, putting pressure on the civil engineering industry to innovate.

When compared with constructing individual buildings or developments, large-scale civil engineering projects that underpin national economies are uniquely complex. And because projects are taxpayer funded, they are often under rigorous public scrutiny.

The Institution of Civil Engineers says, declining public financing for civil engineering projects requires that private money supplement public investment. And private backers are skilled at squeezing waste out of a project. As a result, increased demand for on-time, on-budget projects, coupled with a new focus on profits, is pressuring the civil engineering industry to embrace efficiency and become more productive. The rewards would be substantial national benefits without costing an extra penny.

The British government's National Infrastructure Plan covers more than £460bn of projects. Of these £277bn are under construction. In the past few years, 55 major UK road projects have been completed. £38bn will be spent on Network Rail. 500 coastal defence projects are underway. The transformational 'Northern Hub' and nationwide broadband rollout are gathering pace. And the reason is that for every pound the government spends on infrastructure there is a £2.84 increase in economic activity. In the case of broadband, the economic benefit is £20 for every £1 spent. Superfast Cornwall for example is bringing astonishing benefits to that region with a world-class fibre-optic service now reaching the Scilly Isles.

Unified enterprise platform

The downside is that inefficiency is widespread because outdated and fragmented business structures are the norm. They lead to poor of knowledge sharing among professionals and the public. And that compounds any other problems.

On large scale projects of national importance, with high levels of complexity and risk, contractors and stakeholders need a unified, real time, expert-knowledge platform for design, engineering and operations information.

Such platforms are common in manufacturing but are rarely used in civil engineering. New collaborative commercial models would help reduce waste and rework by integrating and unifying on and off-site project teams and fabricators.

Multi-discipline collaboration platforms can also help civil engineering projects attract much-needed capital. Investors demand openness and transparency and they know that they can reduce risk by ensuring project information is available to all parties in the formats that serve them best.

Investors want to see rapid completion so they can beat competitors to revenue streams. Being armed with this type of information provides that important competitive advantage. Many investors therefore encourage knowledge sharing to achieve collaboration with governments, contractors and the public.

British born infrastructure project knowledge and innovation are in high demand around the world. In Saudi Arabia for example Newtecnic, a UK-based design company, is currently design engineering the Zaha Hadid-designed King Abdulla Financial District's new metro system. On this massive transportation project collaboration drives the need for sophisticated systems.

This multi-billion dollar transport hub at the business heart of Riyadh handles three new railway lines, a 16-kilometre underground metro and links to outlying universities and the King Khalid International Airport. The project uses a shared information system to align objectives among diverse groups. This ensures that all parties are connected to, and can simultaneously collaborate around current designs and associated information in meaningful ways.

The next logical step for the UK's infrastructure projects is to deploy technology that reduces fragmentation. This would unify documentation and speed up design and construction. That can be achieved by introducing concurrent, flexible and collaborative working. Turning data into accessible knowledge by this means would deliver better operational efficiency. Financial returns for civil engineering and infrastructure investors and stakeholders would also improve. But the most important benefit would be seen in the way our country innovates to make better futures for everyone that lives here.

Stephen Chadwick is the managing director of EuroNorth, Dassault Systèmes.