Projects in the construction industry are among the most complex of their kind. Office complex, airport, private home or road construction. What makes these major projects so special and why do they fail so often? Learn more about one of the oldest trades in the world here.
From Laying the Foundation to Completion: The Basics and Challenges of Project Management in ConstructionAnnalena Simonis, Thursday 14 January 2021 | Reading time: 6 min.
Construction project management is considered one of the original forms of today's project management. Hardly surprising, as the Egyptians already had grand plans. With the construction of their pyramids, which were over a hundred meters high, they literally laid the foundation for the possibilities of construction as we know it today. Nowadays, the construction of a new object requires a complex interaction of different competencies and fields of expertise. Technical expertise as well as knowledge of tools and software must be skillfully combined. This blog post will give you an insight into projects in the construction industry. What makes them different from other projects and why are they often doomed to fail right from the start?
What is construction project management?
Let's start with the basics. What actually counts as a construction project? Project management in construction describes the planning and work process in order to produce or modify a construction object. This includes all work on facilities, buildings, properties and the construction infrastructure. Construction project management therefore takes place whenever a new house is being built next door, the public school is being renovated or the railway network is being expanded. The project manager is responsible for construction project management. Unlike in the past, when architects usually took on this role, the now highly complex nature of these projects demands not only subject matter expertise but also strong project management skills. In larger projects, the project manager's tasks are often divided among several people. The project manager is not to be mistaken for the building owner. This is the project client, a legally, financially and economically responsible person, business entity or official institution. Finally, the completion of a building requires many specialist planners and workers whose activities must be carefully coordinated.
What makes construction projects special?
Construction projects are associated with many risks simply based on their sheer size. The larger and more complex a project is, the more participants and interrelationships are involved and the more complicated the organization and planning of the process becomes. Even one problem, like a delay or misstep, can have severe repercussions elsewhere.
This leads to another interesting point. Construction project management is a very result-oriented discipline. The success of the project is measured only by the outcome. This result is recognizable to everyone around the construction object. Every day we come into contact with projects of this kind, which is why construction project management is such scrutiny and pressure from the public. The success of a construction project is sometimes recognizable even to amateurs and influences the lives of everybody. This is why construction projects are highly regulated by laws, standards and rules and have to survive in a particularly rigid and inflexible project environment.
New challenges for the construction industry
The construction industry is not immune to megatrends. Thus, projects in construction are under the pressure of the constantly advancing digitalization. Technical requirements are becoming increasingly complex, not only regarding the planning and implementation, but also in the buildings themselves. Sustainability is also playing an increasingly important role. Here, everything revolves around the topic of saving resources. The construction process and the operation of buildings leave a considerable ecological footprint. So for the industry to be more environmentally sustainable, it is not enough to create long-lasting structures, but also to make the construction process more sustainable. Fortunately, the two factors of digitization and sustainability complement each other in a way that enables new opportunities for the construction industry. Through a digitally supported planning process, better and more sustainable alternatives for construction planning can be more easily calculated and accessed, unlike in the past. Sustainable construction with increased digital support is therefore not just a trend, but a real evolution of construction.
Why do construction projects fail?
BER, Elbe Philharmonic and Stuttgart 21 - these are just a few of the major construction projects that have come under heavy public criticism in Germany and have gained international notice. Yet these are not isolated cases. A study from Oxford in 2015 fundamentally addressed the question of why major projects fail. The scientists examined more than 2,000 mega projects worldwide and came to a shocking conclusion: less 25 percent of the projects went according to plan. In 78 percent of the cases, problems occurred at some point. The study clearly filtered out the main reasons for this: costs are systematically underestimated, while economic benefits are significantly overestimated. In some cases the difference between actual and estimated numbers was up to 40 percent. As a result, a large proportion of privately financed projects went bankrupt after the study. But who is to blame? Here, too, the scientists' findings are clear. The decisive mistake lies at the beginning. Planners often think too optimistically in terms of costs and time. Especially in the case of government-financed large-scale projects, the pressure from outside is enormous. As a result, project managers are often tempted to make promises or false estimates that are not realistic. In conclusion, the experts advise that the optimism that arises at the beginning of such major construction projects should be curbed by means of a realistic examination in order to avoid having to explain the situation later on. Sometimes less is more, even with large-scale projects.