The Capital Program Management Survival Guide

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Why Should I Read the Capital Program Management Survival Guide? Do you know what a 10% productivity gain in your capital- improvement program would generate? According to results from a recent capital-project symposium and many on-site interviews with capital-project executives, the answer to this question is: "I don't know." In a recent study conducted by Dodge Data & Analytics, together with the Construction Owners Association of America and Lean Construction Institute, 85% of leading project owners (those who own the physical asset once a project is completed) report they have projects that exceed their baseline budgets. In addition, 92% of owner's report that they have projects that were finished later than planned, and 63% said they found quality deficiencies after the project was complete. If you fit into the "I don't know" category, you will have trouble predicting project success from one project to the next. You're also likely to have difficulty securing the adequate staffing budget to support the aggressive design and construction projects your organization is planning. In fact, you'll likely find yourself having to answer the question: "How can I do more with less?" Executive Summary The bottom line for any capital-project department within an organization is the top line: enabling the mission of the organization and producing revenue and faster growth. Let's jump in! You can't expect your organization to place value on something you cannot quantify. This guide will help you do just that. We will help you answer key questions, such as: • What are the top challenges facing owners of capital programs today? • What are the six traits of best-in-class owners that I can apply to my organization? • How are great design and construction departments organizationally designed? • What technology will help me improve productivity by more than 10%? • How can I financially measure success? Project Performance Percentage of respondants with projects that exceeded budget or schedule, or experienced quality deficiencies over the last three years. No projects that exceeded budget Projects that exceeded budget No projects that exceeded schedule Projects that exceeded schedule No projects that had quality deficiencies Projects that had quality deficiencies According to a recent study of nearly 200 capital-project owners, conducted by Dodge Data & Analytics, capital-project performance continues to miss expectations by exceeding original budget, schedule, and quality objectives. However, the impact is felt far beyond any single project. The impact on strategic goals also can be extremely distracting, and damage can continue for years, through higher debt expenses, missed revenue targets, added FTEs, and the need to reduce or alter strategic initiatives. By now, we are accustomed to hearing of the immediate effects of overruns, schedule delays, design errors and omissions, and poor quality. Most often noted are the immediate financial impacts on available capital and, of course, lost margin. What is not regularly discussed are the long-term effects that these problems leave on future strategic initiatives and financial planning. This is why board members, CEOs, CFOs, and COOs should pay attention to their organizations' ability to properly plan and execute capital projects. Capital projects must, above all else, align an organization's facilities with its strategic directions and organizational strategy. Problems often occur in the early planning stages, when good principles of due diligence and documentation aren't followed. Planning-stage problems aren't limited to cost, schedule, or quality. They open the door to misinterpreted scope, misaligned design expectations, and lack of a correlation to strategically important financial measures. A planning-stage problem can lead to inappropriate or unplanned allocation of funds, pulling dollars away from real strategic needs. In one case, a hospital vice president continually asked his project team to "tell me again how that idea helps us deliver better health care or adds to our bottom line." A project can be successful in budget, schedule, and quality, yet fail to align with an organization's strategic plans. A project that piles up budget overruns AND fails to support strategic plans is a failure with a lasting impact. e-Builder.net 800.580.9322 info@e-Builder.net 92% 8% 63% 37% 85% 15% Part 1 Top Challenges Facing Capital Projects Today Challenges

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