Capital projects: Driving value from digital
December 20, 2020
December 20, 2020
Digital capital projects aren't exactly a new concept. But many companies are still struggling with putting it into practice—and that's despite their significant investments in the digitalization of the project value chain.
Almost all the owner-operators and engineering, procurement and construction companies ("EPCs") we surveyed for our research have spent the past years building digital and data capabilities to improve time to completion, project cost and returns on investment.
But only a third of them said they were actually realizing these benefits.
Which begs the question: Why the other 66 percent can't get similar results. And, couldn't they learn some things from their peers in order to drive higher value from digital, too?
9OUT OF10
owner-operators and EPC's use average or good quality data for their recently executed capital projects.
1OUT OF3
of the companies reported success around many of the key KPIs.
You want to drive higher returns from digitalization and data?
read moreWhile few executives would dispute the immense value digital can bring to capital projects, they might differ in how they strategize and execute around them.
In theory, capabilities like the cloud, mobile and data analytics can enable and improve the collaborative decision-making in every company. In practice, however, such enablement can only happen if companies:
Institutionalize ownership for building the right operating environment (structures, people, culture) to collate and deploy useful data and drive true collaboration.
Operationalize technology and data for better decision-making towards "on-time, on-budget" project delivery.
Driving either one of these isn't exactly easy of course—it'll almost always be a journey rather than a sprint. And that journey will require some clear strategy and planning if it is to be successful.
So how can executives ensure both?
Accenture's Andy Webster explains at SupplyChainBrain
The findings from our survey offer an answer to this very question because they point to certain best practices that all the successful "digital" companies in our sample employed.
And we have spent some time improving this answer even further, by compiling these practices into our framework called "CAPSTONE". This framework can grow the operating margin of EPCs by an additional 5.8 percent, and give owner-operators an incremental 6.6 percent return on their capital investments through four building blocks:
C-suites commit to a collaborative culture of data-ownership and sharing, as well as data-driven decision making across all project businesses.
Owner-operators and EPCs align investments and build contextual, mutually beneficial data-stacks for the entire project life cycle.
Owner-operators start using data to help EPCs execute, and EPCs train workers in on-site data-use to improve results.
Contracts are structured to incentivize project contributors to share and use data to improve project outcomes.
Do you want to learn more about the best practices of project digitalization leaders?
read moreOur latest Capital Projects research examines where owner-operators and EPCs are in their journey of data-driven digital transformation, their challenges and the differentiated actions adopted by some of the most progressive companies during 2015-2019.
The insights, derived from around a million data-points, are based on:
About the authors