Industrial capital projects are risky business ventures. As they increase in size, uncertainty, and complexity, they frequently experience corresponding growth in cost and time to deliver, and they often fail to achieve their desired performance results. According to Merrow, "65% of all industrial projects fail to meet business objectives" (Merrow 2011).
The risk-shedding structure of current project delivery methods not only creates a non-collaborative environment that impedes the performance of industrial projects; risk-shedding can also stifle innovation and create inefficiencies during industrial project delivery processes. For decades, the delivery of industrial capital projects has suffered from stunted productivity growth and little broad industry innovation while seeing an increase in claims and disputes. Traditional project delivery has not proven to be reliable for industrial capital projects. The industry is open to alternatives.
Integrated Project Delivery (IPD) was introduced in the healthcare facilities industry in the United States. Alliance Contracting (or "Alliancing") first appeared on public infrastructure projects in Australia and New Zealand. These two approaches have proven to effectively use enhanced collaboration and integration strategies and methods to bring greater value for investment to the projects where they are employed. If the principles of IPD and Alliancing could be used to deliver industrial projects, perhaps they would allow more active collaboration among participants and create higher levels of integration of project stakeholders. If these principles enjoyed the success they have already realized in healthcare and infrastructure projects, they could reduce the probability of failed industrial projects and create a better environment for innovation and efficiency, leading to the more efficient use of available resources in the capital project delivery industry.
CII challenged RT-341 to evaluate the potential of increasing integration and collaboration by applying the principles of IPD and Alliancing in the industrial capital projects sector. The results of its industry-wide survey, structured data analysis, and case studies indicated to RT-341 that industrial projects can benefit from implementing IPD and Alliancing strategies.
NOTE: This publication's accompanying beta software is a proof of concept and is available for informational purposes only.
By downloading or purchasing this publication, you understand and accept that its accompanying software may stop opening or running properly on future platforms and is not supported or maintained by CII.
Both the publication and its software are protected by applicable copyright restrictions as set forth by CII.
Any party interested in adapting this software is invited to contact CII Associate Director for Deployment to discuss licensing.