Capital projects delayed or put on hold due to pandemic - infrabuddy.com

Capital projects delayed or put on hold due to pandemic


61% of owner-operators of factories, mines, refineries and public, telecommunications and utility infrastructure organizations expect new projects to be delayed or put indefinitely on hold because of the COVID-19 pandemic, Accenture reveals.

capital projects delayed

Pandemic impact: Capital projects delayed

Additionally, 35% of engineering, procurement and construction service providers (EPCs) surveyed indicated that the scope of ongoing projects will likely be adjusted.

The report features a survey of more than 700 senior executives globally and found that the pandemic impacted an industry that was already challenged in using digital solutions to help deliver project results on-time and on-budget.

“Compared to other industrial sectors, many owner-operators and EPCs were already trailing behind in digital transformation when sudden shutdowns and delays challenged their efficiency and competitiveness even further,” said Tracey Countryman, global lead for Digital Manufacturing & Operations, Accenture Industry X.

“To build greater resiliency, mitigate current and future disruption, and drive more value from capital projects execution, companies need to adopt greater data-driven digitization within and across their value chains.”

Companies failing to achieve the desired benefits from their efforts

The report shows that many companies haven’t achieved the desired benefits from their digitization efforts:

  • For example, 79% of the owner-operators use data analytics for predictive project performance forecasting and real-time project decision support. However, only 34% have reduced maintenance and operations cost on recently completed projects; 38% have increased construction productivity.
  • Similarly, 79% of the EPCs deploy logistics control tower for logistics tracking, materials management, warehousing and people logistics; yet just 34% have been able to reduce equipment and material cost.

Other findings paint a similar picture, with 75-89% of the owner-operators and EPCs using data, data-driven insights and digital applications to better mitigate risk and increase project efficiency or execution, but only 32-44% achieving their set goals. The reasons, the report notes, are a strategic failure to build the right operating environment and incentives to create a data-centric culture, and an inability to operationalize data and technology.

“Data-driven insights play an integral role in creating digital solutions like digital twins,” said Andy Webster, global lead for Capital Projects, Accenture Industry X. “Generating, applying and collaborating on these insights are crucial to enabling greater value in productivity, efficiency, workforce safety and material wastage.”

Owner-operators and EPCs boosting productivity and efficiency

The research found that 24% of owner-operators and 14% of EPCs exceeded their industry peers in terms of productivity and efficiency. It then identified four differentiated actions that these outperforming companies have taken and, if adopted by peers, can drive an additional 6.6% return on capital investment for owner-operators and grow EPCs’ operating margin by an additional 5.8%.

  • A data-committed C-suite. Most outperforming owner-operators (57%) and EPCs (60%) make a top senior executive such as the CEO or COO responsible for data-driven digitization of capital projects. They are also more likely to have infused a culture of data-sharing for informed and insightful collaboration within their organizations and across partners and value chains.
  • Data-sharing infrastructure and capabilities. Cloud platforms, data lakes, drones and reality capture are top technologies in which outperforming owner-operators invested in the past five years. EPC outperformers spent heavily on, for example, industrial IoT technologies to make supply chains more intelligent and predictive.
  • Data-centric talent. Owner-operators identified data stewards to use data for addressing schedule management, productivity and regulatory issues. Outperforming EPCs readied an army of digital coaches who work closely with their workforce in the field to help them execute projects and deliver outcomes with more efficiency, safety and certainty.
  • Incentive-based contracts. Over a fifth of all outperformers engage in contracts that incentivize project stakeholders to achieve financial, environmental and social responsibility goals (owner-operators: 22%, EPCs: 27%). These contracts foster collaboration on, and a more rigorous adoption of, data-driven solutions and advanced analytics to drive joint success.



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