The Strategic twist to large infrastructure projects
How a European energy provider boosted the performance of a large infrastructure project with a top-down strategy and strategic project management set-up
Infrastructure projects need strategic optimization
After taking the decision to implement long-term infrastructure projects, companies tend to look at them mainly from technical and financial points of view.
Even though technical challenges are typically solved before projects are initiated, still 54% of all infrastructure projects in the energy industry experience cost escalations. At the core of the problem is often a poor project strategy and poor project management set-up.
Infrastructure project strategy is key to success
An energy provider in central Europe, aware of this issue, approached Arthur D. Little seeking support for its >1 billion Euro infrastructure project. Together with the client, we defined a top-down project strategy.
The 100-page strategy document described external and internal framework conditions, as well as challenges to similar projects, in detail, and derived a clear strategy and overall implementation milestones.
Strategic elements included the definition of technology selection, HR and contracting strategy, as well as regulatory strategy.
In addition, the report outlined the key activities and milestones for the planning and implementation period, thus generating the required top-down view and manageability of deadlines.
Strategic project management set-up
To ensure an immediate launch of the project, Arthur D. Little supported the client in the set-up of the project management, including the overall roadmap, the work-breakdown structure, the organizational structure, and detailed descriptions of >50 work packages, as well as the project schedule and the PMO framework.
In-budget and in-time project with short lead time
The strategic approach to large infrastructure project management allowed the client to set up and operationalize the project within a few months after the decision point. So far all milestones within the project have been reached without delay and below initial cost estimates.