Thought Leadership

How to prevent project failure with an integrated project planning (IPP) approach

As businesses look to meet their digital transformation goals, the importance of an integrated approach to planning cannot be emphasized enough.

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Capital projects are infamously prone to being late and going over budget. Pre-pandemic, Proudfoot’s research showed that the average budget of a capital project typically overran by 65% and 50% of projects reported completion delays.

Budget overruns significantly impact the project’s net present value (NPV), a measure of the company’s free cash flow, the cost of capital, and ultimately the company’s share price performance.

How can leaders optimize the chances of a successful capital project — one that maximizes return on investment and meets strategic objectives?

Enter integrated project planning (IPP)

IPP is a collection of processes that ensure various project elements are coordinated and aligned to one plan. Too often, project management knowledge is siloed in different departments, making it difficult to get a single view of project performance.

IPP provides visibility of system capacity giving a clear line of sight and understanding of priorities. IPP offers a macro view by consolidating data from diverse sources and allowing the project manager to act on the information to achieve a common end—project completion on schedule and budget.

Start with mapping an IPP solution

Mapping an IPP solution means maintaining a set of a horizontally integrated hierarchy of plans — this brings together resources (people) and materials at the right time and place safely and seamlessly. When done well, the mapping identifies gaps or constraints in planned project performance to remove obstructions and create transparency between planning and operation teams.

How can you accomplish this? By putting in place the right organizational elements to facilitate the flow of information throughout the value chain. Defining the proper corporate structure allows information to cascade easily, which in turn enables effective decision-making.

With a solid and clear IPP framework in place, here are five ways you can maximize the value of your projects and prevent failure in the future:

1. Align organizational processes

At the start, you must thoroughly understand all the project requirements, identify key stakeholders, and assign responsibilities. Once this is done, you can move on to defining the projects goals, objectives and timelines. The next step is to evaluate your organization’s processes and choose those that align with the project’s limited scope and objectives.

Misaligned and unsynchronized business processes carry tremendous risk. For example, misalignment could lead to a weak information flow between units and fewer monitoring controls over those units. As we’ve said before, the devil is in the details.

2. Promote organizational engagement

Create a culture that promotes a clear understanding of a common goal and definitions of team roles. Executing advanced technologies is not just about getting the technology right — at the heart of it all, all businesses center around people, and the successful rollout of any system or process relies on employee engagement. It is critical to have the buy-in from employees as the energy to drive the project to completion must last several years.

3. Continuously drive results by integrating Management Operating Systems (MOS) with IPP

A MOS is often called the heartbeat of the organization—with good reason. An aggregate set of tools and processes helps an organization align itself to its goals and objectives.

So, what is the connection between MOS and IPP? An important one, as it turns out. IPP is also a set of tools and processes that ensures adherence to a single plan for flawless project execution. Without a MOS, an integrated project plan would not have the details—all the nuts and bolts—in place. Different departments could have different methodologies for tracking or creating KPIs. A MOS gives the organization a unified language to work with.

Here is a use case to illustrate. At the Oyu Tolgoi (OT) copper mine project in Mongolia, Proudfoot created and implemented a bespoke state-ofthe-art MOS to work in conjunction with an IPP. The US$5.5 billion project is massive: it is the biggest financial undertaking in Mongolia’s history and is one of the largest underground mines in the world.

The MOS became a common language for employees — a necessary one, given that at the time, the workforce was 90% Mongolian, and the remaining 10% was from all over the globe. Cultural differences and varying approaches to work were a potential problem that was neatly addressed with the introduction of the MOS. Furthermore, we designed the MOS to work across silos/teams, changing thinking to “what’s best for the business”.

4. Manage all key stakeholders

After you define key stakeholders that you need to get the buy-in from, get the stakeholders excited about the project’s objectives. One way to do that is to communicate the tangible results expected from the project to all stakeholders.

We touched on the importance of employee engagement for success earlier, but you need to engage external stakeholders too. Some of the tools and tips that help manage to engage might be useful — for instance, fostering connectivity, community, and collaboration among all stakeholders and across teams will raise engagement and help advance the project towards the end goal. Clear communication and transparency are key to this.

5. Monitor and adjust ruthlessly

Monitor schedules and time by teams and stakeholders, ensuring that you encourage and constantly remind team members to use the reporting function in your project management software. It is important to make sure that your project management software ties in with third-party software within the organization. This means that the information is updated in real-time, reports can be created as required, but most importantly, commincates any changes in scheduling or engineering to all stakeholders, ensuring that all micro-plans are also adjusted for the changes that have taken place. By doing so, you minimize the chances of creating constraints of time, resources and space that could cause the project to be delayed and overbudget.

Preventing failure

In these tumultuous times, when organizations across various verticals are trying to hit their transformation goals, the importance of IPP cannot be undermined. Managers must take on a synchronized approach throughout the project lifecycle. Collaboration between teams and stakeholders can quickly turn into a chaotic affair, and structured coordination makes decisions clearer and therefore amenable to all stakeholders. This is important to build both trust and efficiency.

Proudfoot’s Ramp Up approach to any new development safeguards your project against risk, delay or failure. A better understanding and integration of the entire ecosystem—from suppliers to customers—should be at the core of an agile and resilient planning and operations system, empowered to deliver at scale and against complexity. And remember, people are the backbone of a business – nothing moves until people move!

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Posted on November 11, 2021

By David Warren

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