Delivering Value for Money (VFM) in infrastructure and major projects is crucial for achieving the best outcomes at optimal costs.
This encompasses financial efficiency, but also the quality, timeliness and the overall impact of the project. In Australia, infrastructure projects play a pivotal role in the national economy and face distinct challenges. But how can you deliver VFM to your clients in a complex and dynamic environment? From experience across many sectors with construction and service businesses, there are a number of interesting themes that may assist in answering these questions.
Plan and scope your projects effectively
Planning and scoping are fundamental to VFM. Poor planning can lead to delays and cost overruns, which are significant issues in Australian infrastructure projects. According to the Australian National Audit Office (ANAO), approximately 40% of infrastructure projects experience cost overruns due to inadequate planning and scope management. To mitigate risks teams should:
- Engage early: Understand your client’s vision and objectives from the outset. A client may not be after the gold plated solution. They may want the Ikea catalogue approach, ask the question!
- Align scope and budget: Ensure project scope and budget align with client expectations, securing their approval before proceeding. With tight budgets, value engineering is becoming common place
- Consider market conditions: Factor in resource availability and market conditions, securing necessary resources in advance.
- Anticipate risks: Manage potential risks such as regulatory approvals and environmental impacts.
- Maintain a realistic timeline: Provide and communicate a clear project timeline, and regularly update it following project meetings and stakeholder discussions.
Optimise resources and be innovative
Efficient resource use and innovation significantly impacts VFM with the 2023 Global Construction Survey identifying new technologies as the key drivers of productivity growth, efficiency and quality improvement. Opportunities to optimise projects can be found through:
- Leveraging capabilities: Utilise team core strengths and deliver as much of the project by leveraging your immediate team where feasible.
- Adopting innovation: Implement innovative solutions and technologies to enhance project outcomes.
- Minimising waste: Focus on resource efficiency and sustainability – cost savings from using recycled alternatives in infrastructure range from 2% to 83% depending on geography, availability and time.
- Apply best practices: Adhere to safety, quality and sustainability standards.
Foster collaboration and communication
Effective collaboration and communication are crucial for VFM. To support a collaborative project environment teams should:
- Build trust: Establish transparent relationships with clients and stakeholders.
- Engage stakeholders: Manage expectations and collaborate with all parties involved.
- Resolve issues: Address challenges promptly through collaborative efforts.
Measure and evaluate project performance
Evaluating project performance helps demonstrate tangible VFM to stakeholders. To measure effectively teams should:
- Define metrics: Agree on metrics for assessing VFM, including cost, quality and user satisfaction.
- Collect data: Analyse outcomes and benefits such as safety and environmental impact.
- Report results: Present performance data to clients and stakeholders, highlighting achieved value.
What can we learn from recent projects? Delivering VFM in infrastructure requires thorough planning, efficient resource use, innovation and effective and frequent stakeholder engagement. By adhering to these best practices and leveraging industry insights, teams can enhance project outcomes, manage risks and contribute positively to the national economy. For ongoing success, be sure to continually measure and evaluate project performance, manage costs and integrate the lessons learned to improve your and your clients’ bottom line.
