Project Business appears under different forms and sizes, depending on its industry.
Business Managers speak of 'Complex projects', 'Integration Business', 'Solution Business', 'Turnkey projects', 'Major/Megaprojects. Engineers might say 'Large Engineered projects', 'Infrastructure projects', 'Critical Infrastructures', 'Complex Systems'. Investors may prefer 'Capital projects', 'Development projects', 'Investment projects', 'PFI', 'EPC(M)', 'BOT', etc.
Project Business is generally associated with the following characteristics:
- High Value;
- High Stake;
- Novel and Unique;
- Multiple stakeholders;
- Long life-cycle;
6. Multiple, unknown and changing Requirements;
7. Multi-technical, multidisciplinary;
8. Requires teamwork, partnering, collaboration;
9. Requires a lot of communication;
10. Complex; this complexity is maximum at the start.
The definition we use at IBS Academy for Project Business is:
"The set of business, technical, commercial activities conducted in the development phase of projects involving multiple organizations."
Project Business in Industrial Sectors
Project Business is developed by private or public entities in the industrial sectors, such as:
- Construction & Engineering
- Oil & Gas
- IT/ Telecom
- Power & Utilities
- Defense & Security
- Industrial Manufacturing.
Project Business is unique, complex endeavour
For project owners, suppliers, consultants, financiers, a new project is always complex; it represents major operational, political and financial stakes and challenges; Its uniqueness offers opportunities for innovation but also entails risks. Multiple stakeholders are involved in the financial, business and technical decision-making. They have different perspectives and often diverging objectives.
Development Phase as the most crucial
“Well begun is half done”
The Development phase in project business is the period of undetermined length that runs before the effective contract signature between a client and its selected vendor.
In such a complex endeavor as project business, how it all starts is particularly important: major decisions are made, in multiple areas, shaping the project, and laying the foundation of the next phase.
And whether you are a client, vendor, consultant, etc., this phase mostly determines whether you will succeed in this project... or fail.
- As project owners and clients, your primary objective is mainly to select the right vendor, able to provide the “best value for money” solution.
- As vendors and suppliers, integrators, your objective within a competitive context, is to be selected as the right vendor, with increased turnover, and secured margins.
3 Approaches in Project Business
A range of 3 approaches is applied in project business, by clients and vendors, suppliers, alike:
- Approach with no methods
- Approach with a wrong method: adversarial
- Approach with a proper method: collaborative
As a matter of fact, “No methods” and “Adversarial” approaches are more the norms than the exception, across sectors and project size.
Collaboration is not easy. It requires cultural maturity and know-how. But the collaborative approach is the only possible successful approach to project business.
When Collaboration becomes a conscious strategy. Doing the maths.
The studies in the Construction sector show that Project partnering can reduce costs by 30% and time by 40%, while strategic collaborative working over a series of projects can reduce costs by 50% and time by 80%.
- How much COSTS can we save with collaboration?
- How much more VALUE & INNOVATION can we create with collaboration?
- How much RISKS & UNCERTAINTY can we better manage with collaboration?
- How many DELAYS can we prevent with collaboration?
- How much MISCOMMUNICATION can we avoid with collaboration?
- How much WASTE & REWORKS can we avoid with collaboration?
- How many CONFLICTS can we avoid with collaboration?
- How much more REPUTATION can we get with collaboration?
- How much more WORK SATISFACTION can we get with collaboration?
- How much MARGIN can we protect with collaboration?