According to Make it, or break it – Global Construction Survey 2017 from KPMG International more than 80 percent of respondents report confidence in their organization’s ability to deliver projects on time and within budget. Yet half admit adverse project performance in the past 3 years.
Although performance targets are an important tool for ensuring strong contractor efficiency, not all the respondents set such goals. Only 30 percent claim to incorporate performance targets into all of their contracts, with a further 52 percent including targets on “some” of their contracts. Schedule is ranked as the number one performance measure, followed by cost/cost sharing. Contract performance measures for output/ production, safety, subcontracting and schedule ranked considerably lower.
Meetings with project management on the regular basis, where additional changes and interventions in project plans are made are applied by three fifths of respondents. The executives taking part in this year’s global survey had a variety of responses to the question why do projects continue to underperform, pointing to factors like “Wrong estimations and forecasts in planning and scheduling processes”, “bad contract management and acceptance of too much risk” and “incomplete scope definition, scope creep and quantity growth, along with insufficient change management rigor”.
An overwhelming 93 percent of respondents think technology/innovation will significantly change their business, but a mere five percent view their organizations as ‘cutting edge’ in terms of their technological maturity. Europe (excluding the UK) has assumed the lead in digital labor and robotics. Owners and contractors from the UK, meanwhile, are the most likely to be employing drones and virtual reality. The vast majority of respondents (83 percent) say their organization has not yet implemented such technologies, with most expecting a wait of 5 years or more before they become more common.
86 percent of respondents say that the “human element” significantly influences project delivery. 28 percent admits they do not have their employee promotion process standardized at all. And only half of the executives participating in our survey say their business routinely offers performance-based project bonuses, variable compensation or incentive mechanisms. Indeed, 24 percent offer no incentives at all.
According to the professionals participating in our global survey, just 23 percent of their workforces are comprised of Baby Boomers (born 1945–1964), 40 percent of Generation X (born 1965–1979) and 37 percent of Millennials (born 1980–1994). When it comes to understanding the fundamentals of project delivery, more than four in ten respondents are concerned that Millennials are not fully up to speed with skills like scheduling, cost control, risk management, procurement strategies and earned value management.
„In the construction sector, staff representing different generation often collude. The representatives of the older generation tend to respect rules and procedures, but sometimes they resist new technologies and processes. The Millennium generation, on the other hand, has no problem with new technologies, but with strict rules and regulations. Companies should therefore tailor communication to both generations to ensure smooth project collaboration‘‘, recommends Zuzana Blažejová, Executive Director in charge of the real estate sector at KPMG in Slovakia.
Make it or break it – Global Construction Survey 2017 highlights the views of 201 senior executives from major project owners and engineering and construction companies. The report looks at how the industry is approaching governance, people and technology. The survey, now in its 11th year, includes both private companies and government agencies, with project owners from many industries including energy and natural resources, technology and healthcare.
KPMG Slovensko spol. s r.o.
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