Large construction and infrastructure projects (so called megaprojects) are complex and carry great risks. They carry the burden of huge amounts of requirements, descriptions, frameworks, designs, objects, interests, stakeholders, and legal preconditions. Plus their mutual relationships, interdependencies, external deadlines and financial interests. All these turn such projects into high-risk ventures for the clients as well as for the contractors. Good insights into all information available – including their mutual relationships – reduces the possibility of failure costs, delays and increased legal liability and conflicts.
No surprise therefore that, almost as a rule, megaprojects run over budget, over time and into costly litigation. But why is this? And can it be avoided?
Why Megaprojects Fail
In February 2020, three scientists published a study entitled ‘What Are the Causes and Cures of Poor Megaproject Performance?’ This paper identifies a number of causes of poor megaproject performance and suggest how they can be avoided. The study found a number of interrelated factors contributing equally to poor performance, in various areas. Under the label ‘Risk and uncertainty’, two important causes were noted:
- Flexibility lack: the lacking ability to be adaptive and responsive to changing and uncertain circumstances;
- Overall complexity: megaprojects are characterized by a large number of elements and the relationships between them and with the external environment.
They concluded that in order to obtain a maximum design flexibility, it is essential to develop organizations adaptive to change and to establish a project management approach, that balances flexibility and control. They also advised to invest in adjustment strategies, recognizing that megaprojects cannot be fully specified from the outset.
The general lack of flexibility and the inability to properly cope with complexity has everything to do with the limited IT support in the construction sector. All over the world most of the key project processes and information flows are still based on documents. Spreadsheets are still the number one information carrier. As a result, the lack of understanding of the project as a whole inhibits the ability to respond at all, which makes project failure a serious possibility.