Implementing capital project management best practices is critical for success for all project sizes and types. Utilizing proven approaches and work processes that are scalable to accommodate any project can ensure no steps get missed and drive capital project success. Far too often, capital projects experience excessive change orders, delayed timelines, and cost overruns. Failed capital projects are often the result of insufficient planning, poor scope development, and poor communication.
Let’s take a look into a brief overview of capital project management best practices contractors should employ when executing capital projects.
Top 10 Capital Project Management Best Practices
Superior capital project management begins with a strong scope definition, early development of execution plans, an integrated project schedule, excellent communication, and total quality management. Below we detail the top 10 capital project management best practices to help ensure capital project success in terms of safety, schedule, budget, and quality.
- Enforce safety risk management: Identifying critical and high-risk activities early on is important, as these activities may require additional planning as well as the development of specific workflows and processes. Senior management involvement and commitment to the highest level of safety are essential for ensuring each risk is taken seriously and is mitigated effectively. Contractors should place a heavy focus on continuous safety improvement and education for all employees.
- Establish a strong definition of scope: Fully developed and highly detailed project scopes can reduce the number of changes to a project’s design and thus reduce the volume of change orders during project execution and potential scope growth. The result of front-end planning for most capital projects entering the execution phase should at a minimum include the scope of the facility and supply, a detailed schedule, project P&IDs, equipment drawings, preliminary equipment layout, and infrastructure, power, and utility surveys.
- Develop early Project Execution Plans (PEPs): Developing PEPs early helps pave the critical path for projects, reducing financial and schedule risk. PEPs are the governing documents that lay out the means to execute, monitor, and control capital projects and help develop well-defined roles and responsibilities to establish accountability.
- Implement an integrated project schedule: Contractors should develop and implement an integrated project schedule. An integrated project schedule encompasses the entire project scope and all associated activities required for project execution. Integrated project schedules should contain elements from all phases of the project, including detail engineering and design, procurement, and construction.
- Maintain excellent communication: Maintaining consistent communication between all teams and disciplines as well as between contractors and project owners can greatly reduce the likelihood of errors and miscommunications that may lead to schedule delays and added costs. When utilizing an integrated engineering, procurement, and construction (EPC) approach, this includes frequent communication between all teams to ensure the project is designed for constructability and no errors or omissions in drawings are present.
- Employ Total Quality Management (TQM): Contractors should employ the concept of TQM from pre-contracts through project completion. TQM is a process-oriented method used to cultivate effective collaboration, improve the quality of work, and reduce cost. The term “total” refers to the entire contracting organization, meaning all teams, departments, and functions are involved in quality management. Contractors should also implement quality assurance processes and quality control programs.
- Apply change management procedures: Change management is the process of integrating a balanced procedure for identifying, planning, and evaluating project changes in an effective manner. Poor change management practices can hinder project success and lead to significant timeline delays and consequently, cost overruns. Thus, contractors should use well-structured, proven work processes for handling change orders. Change management best practices include notification at the time of change identification, alignment amongst all parties, strong communication, and change documentation and tracking.
- Utilize project controls: Project controls are the processes that include all resources, procedures, and tools required to plan, monitor, and control each phase of capital project lifecycles. This process includes estimations, risk management, schedule and cost management, change management, forecasting, and earned value progressing. Project controls are critical for effective project execution and when properly implemented can reduce project overruns. Key elements of project control include the development of a Work Breakdown Structure, Schedule of Values, contractor rate sheets, PEPs, project reporting schedules, among others.
- Schedule kickoff and alignment meetings: Kickoff and alignment meetings should be used to ensure the scope and project requirements are clear and each role and responsibility is well-defined. Incorporate quality planning into kickoff meetings to communicate and align on inspection and test plan requirements as well as the methodology for quality execution across the entire project team.
- Ensure stakeholder alignment: Having a lack of stakeholder alignment is a common failure for capital projects. Before project kickoff, all stakeholders should be involved and aligned regarding the project scope.
H+M Industrial: Your Partner in Capital Project Management
At H+M Industrial EPC, we implement our highly established work processes and proven project delivery systems, along with the capital project management best practices detailed above, to promote project success. Our work processes and robust quality management system are managed by our entire organization and are scalable for all project sizes and types. Our focus on continuous safety and quality improvement, as well as communication, allows us to deliver superior capital project services.