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The Gigaprogram Challenge

FEATURED PAPER  

By Bob Prieto

Princeton, NJ, USA
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This issue of PM World Journal challenges writers and readers to consider the planning and management differences between megaprojects and more conventionally sized projects. In this paper I will focus on a subset of these megaprojects which I will refer to as gigaprojects, or more appropriately as “gigaprograms”, and encompassing projects with constructed values in excess of $10 billion. I have chosen this subset of projects since I believe that many of the particular challenges we see at this scale and level of complexity exist more broadly in megaprojects but are perhaps not as easily seen.

Readers of PM World Journal and its predecessor publication will recognize that this is a subject that I have written extensively on including several books on this subject area. This paper will focus on a few of the planning and management differences that experience suggests are most significant in influencing project outcomes at this scale.

Gigaprograms vs. Traditional Projects 

There is a tendency to think of the essential difference between megaprojects and more traditional sized projects as one of scale. If only it was that simple. A better analogy, and something that we see more clearly in the world of gigaprograms, is that this scaling up in size has the concomitant effect of “unfolding” unseen dimensions that were likely always there but whose effects were not readily noticeable.

These unseen dimensions:

  • create new regions of “white space”, that if not aggressively managed, serve as nesting and breeding grounds for new, more systemic type risks
  • expose a subtle “coupling” across the gigaprogram that at smaller scales was not as significant; this “coupling” is not only direct coupling but importantly indirect coupling realized through “coupled constraints” or “white space” couplings that previously were not significant
  • drive us to a level of complexity where the scaling of activities is dramatically outweighed by the scaling of the possible network combinations and effects that are created.
  • expose the fragility of many of our assumptions, as longer project development and execution periods that are inherent characteristics of commitment of growing levels of capital, demonstrate that they are far from static and instead experience “assumption migration”
  • highlight management dimensions that are less significant on smaller scale projects such as those associated with:

o   increased strategic importance (achievement of strategic business objectives or SBOs with their outcomes focus) vs. the output focus of delivering more traditional projects and the emergence of a changed governance regime

o   owner, not just project, readiness given the increased level of owner organizational involvement and oversight that gigaprograms attract

o   increased importance of multi-party contractual relationships both in the various execution teams and potentially even in the project ownership structure

  • expose the need to think about “capital efficiency” in a fuller way than is traditionally experienced on smaller projects where CAPEX or construction schedule usually suffice as project optimization points.

Essential Differences 

Let me turn now to some of the essential differences I see and why they are important and why as owners and deliverers of the large scale projects we have much to do… 

More…

To read entire paper, with footnotes and references (click here)

About the Author

bob prietoBob Prietoflag-usa

Senior Vice President

Fluor

Princeton, NJ, USA

Bob Prieto is a senior vice president of Fluor, one of the largest, publicly traded engineering and construction companies in the world. He focuses on the development and delivery of large, complex projects worldwide. Bob consults with owners of large engineering & construction capital construction programs across all market sectors in the development of programmatic delivery strategies encompassing planning, engineering, procurement, construction and financing. He is author of “Strategic Program Management”, “The Giga Factor: Program Management in the Engineering and Construction Industry” and “Application of Life Cycle Analysis in the Capital Assets Industry” published by the Construction Management Association of America (CMAA) and “Topics in Strategic Program Management” as well as over 500 other papers and presentations.

Bob is a member of the ASCE Industry Leaders Council, National Academy of Construction and a Fellow of the Construction Management Association of America. Bob served until 2006 as one of three U.S. presidential appointees to the Asia Pacific Economic Cooperation (APEC) Business Advisory Council (ABAC), working with U.S. and Asia-Pacific business leaders to shape the framework for trade and economic growth and had previously served as both as Chairman of the Engineering and Construction Governors of the World Economic Forum and co-chair of the infrastructure task force formed after September 11th by the New York City Chamber of Commerce.  Previously, he served as Chairman at Parsons Brinckerhoff (PB), one of the world’s leading engineering companies.  Bob Prieto can be contacted at [email protected].