Breakthrough Project Management is about money and business. It is a route to lower costs, lower risk, and higher profits, for organisations at any stage in the project process. Lower costs come from more efficient use of resources and shorter project durations.
- Clients and developers can get shorter timescales and higher completion date certainty, with reduced costs coming from the shorter duration. Time and cost work together to markedly improve return on investment. The following graph shows a simulation we discuss in the book, where a developer’s project pays back in half the time of a typical project.
- One-stop-shop providers, such as main/prime contractors and project managers, can develop a methodology and supply-chain that delvers faster and less expensive projects. They can win tenders on price against traditional competitors, safe in the knowledge that they can profitably deliver at a lower cost and with less risk. They can offer financial guarantees that their traditional competitors would never consider. In addition, the shorter duration means that organisations can do more work with the same resource and overhead. These two effects can improve bottom-line profit by 200-800% in a typical contractor. It will also remove the constraint to growth in many companies – the limited number of reliable project/contract managers they have. The same people can do more projects without becoming overloaded. Profitable Projects also makes it easier to develop new staff, and so helping remove the main constraint to growth. In the book we simulate a contractor’s business to show the impact on profitability of implementing Breakthrough Project Management – 2-3x the profit.
- Specialist sub-contractors can work together to form an Integrated Project Team, founded on the Breakthrough Project Management methodology, and offer clients a viable and attractive alternative to the main contractors/project manager procurement model. This would operate like a Joint Venture, but without the complexity and overhead of forming a legal entity. There will be none of the costs for control, policing, man-marking, and the issue of ‘mark-up on mark-up’ usually necessary in major project supply chains, offering a route to lower price for the client and higher profit for the supply chain. As with the one-stop-shop companies they get the same benefits from being able to do more business with the same resource.
The two pillars of the methodology are well established independently – Critical Chain Project Management and Collaborative Contracting. However they are not easy bed-fellows in capex projects. Not because they can’t work in construction, but that they represent major changes to the ways project team members have been trained and managed in the past.