Interface Management: A solution to handle large and complex construction projects
The majority of large, complex construction projects fail to meet their initial cost and deadline objectives. Bigger projects mean more complexity, and that means more susceptibility to break the budget. A 2014 paper by Bent Flyvbjerg of Oxford University explored construction mega-projects - a loosely defined term that typically refers to projects with a 1-billion-plus dollar budget - and found that nine out of ten face cost overruns. “Overruns of up to 50% in real terms are common, more than 50% are not uncommon,” Flyvbjerg stated.
Costs aren’t the only problem. A 2015 paper by Robert Prieto opened with startling statistics from previous research:
- 65% of global construction mega-projects have a 65% failure rate
- 64% of oil and gas mega-projects suffer cost overruns and delays
- Two-thirds of projects fail to meet their goals, and 17% fail outright
As projects get bigger, project managers need to adopt new techniques to avoid such dizzying wastage. Clearly defined, agreed upon, and well-communicated projects are not immune that are commonly overlooked. Prieto lists some common pitfalls:
- Poorly Articulated Strategic Business Objectives (SBOs). The owner’s uncertainty in project outcomes will create uncertainty that pervades the entire project.
- Optimism Bias. Engineers often fail to use reference class forecasting or mobilize real data forecasting to keep this bias in check.
- Poor Estimate/Risk Modelling. Risk models based on simple risk baselines, even with great average starting data, may not be accurate.
- Assumption Migration. Confidence in your ability to manage a 1-2 year project may carry over directly in your ability to manage a project that takes 5, 7, or 10+ years just as easily.
- Failure to Grasp Complexity. As projects grow in complexity, project managers may simply lack the proper tools to accurately measure the relative complexity of “Approach A” vs. “Approach B”.
Interface Management is a strategy for tackling many of these issues in large construction projects. Interface Management consists of a set of methodologies implemented on projects that utilize multiple contractors, subcontractors, and clients. Within a project, Interface Management requires the identification, communication, and monitoring of critical interfaces, or the points in the project where the work of multiple parties will come together.
While Interface Management has existed implicitly for construction project managers, as the complexity of projects increases, the amount of time and dedication required follows, until it can graduate into a specialized role. The use of modern techniques and software in Interface Management in the construction industry is still uncommon, partly because the benefits have not been widely studied.
An Interface Management guide published in 2014 by the Construction Industry Institute analyzed over 45 construction mega-projects. They found that projects implementing modern Interface Management suffered 4% average cost overruns, where projects without suffered 18% average cost overruns.
Depending on the size of your next project, consider the cost-benefit analysis of including an Interface Manager. The expansion or creation of such a role, along with modern tools and software, does come with costs. Those costs must then be weighed against an average 14% in cost savings (from above) for the entire project may be well worth it.
Knowledge Base: Interface Management