The effective execution of organisational strategies carries the business from a current âalphaâ status to a more desirable, more competitive âbetaâ status. Thus, it brings to organisations the challenges of translating such strategies into project-like initiatives and of relying on proper and effective Project Management to successfully deliver such projects â and poor implementation has been the nemesis of many brilliant strategies.
A global mining company operating in South Africa noted in their 2013 Annual Report: âThe Company captures value across the value chain through its commercial and logistics strategies and by executing its growth projects efficiently, while continuing to deliver on its organisational responsibilities, capabilities and societal obligationsâ.
Companies must be aware that until their âgrowth projectsâ are satisfactorily delivered, both operations and value creation (i.e., their long-term viability) will be compromised.
At a governmental level, it is estimated that the world will need more infrastructure than any nation can deliver. Long-term projections call for an estimated US$ 57 trillion globally to build new and refurbish existing infrastructure between 2013 and 2030.[58] It is hoped that such infrastructure investments will create jobs and, when completed, those projects will help society increase its wealth and its citizensâ standard of living.
Unfortunately, chronic project failures will affect companies and governments in terms of both strategy realisation and financial performance (e.g., adverse impacts on their income statements and balance sheets), as well as the âoverall competitivenessâ of either entities â poor project performance erodes long-term sustainability. The Independent Project Analysts (IPA) gives a stern warning to companies delivering Large Infrastructure Projects (LIPs), âAs we look back over the past 23 years at IPA customers that have disappeared, all but one of them grossly overspent for their capital assets [i.e., LIPs]â.[41] It is therefore crucial that projects, large ones in particular, are effectively completed.
Completing any system on time, on budget, and to specifications is necessary but not sufficient to assure sustained improvements in the intended operational environment. A successfully completed system that fails to add value to its operational environment is basically a âwhite elephantâ, only good for the beholding â it is a âsuccessful failureâ, with operational expectations not met, and business promises not being delivered.[8]
Newly developed systems should not be deemed successful unless and until they are successfully deployed in their intended operational environment (having transitioned from the project realm to operations, where acquired âcapabilitiesâ are exploited) to derive the benefits for the owner-organisation. This looks further than commissioning.
Therefore, âThe successful transition of systems to operations and support, which includes maintenance and improvements, depends on clear transition criteria that the stakeholders agreed onâ, according to the NASA Handbook of Systems Engineering (2007).[53] Moreover,
the purpose of the Transition Process is to establish a capability to provide services specified by stakeholder requirements in the operational environment. This process installs [or else deploys] a verified system, together with relevant enabling systems, e.g., operating system, support system, operator training system, user training system, as defined in agreements.[26]
This applies to all projects, be they power plants, mines, road or railway networks, hospitals, factories, or aircraft.
The transition from the project environment (i.e., where the system is delivered) to the operational environment (i.e., where its capabilities are exploited through ongoing processes focused on sustaining the organisation[27]) generally brings the challenges of âreadinessâ of the operational functions. Such functions include to manage, operate, maintain, support, and dispose of the deployed system; indeed, âOrganizational units cooperate to ⌠deploy, operate, maintain and dispose of the systemâofâinterestâ.[23]
Readiness as a concept originated from the military. It is defined as âThe capability of a unit or formation, ship, weapon system, or equipment to perform the missions or functions for which it is organized or designedâ.[13] It applies to all âsystemsâ.[23,51]
The term readiness is used in a general sense or to express a level or degree of readiness to transition to operations; hence, its recent application in capital projects.
Operational Readiness (OR) as a Project Management tool is used to prepare the âoperational environmentâ of the owner-organisation to effectively accommodate the product or solution, and accept changes resulting from a particular (set of) project(s). This OR could prove a decisive factor for project success because, as Al-Ahmad argues, âFew organizations are armed with the necessary infrastructure, education, training, or management discipline to bring project initiatives to successful completionâ.[2]
(Chapter 9 refers to such organisational items as part of âorganisational energyâ.[6])
The Large Infrastructure Projects industry is strewn with âcorpsesâ of projects that failed due to an inadequate or lack of Operational Readiness. For example, the colossal 2,350-store New South China Mall (Dongguan) was âabandonedâ soon after its 2005 grand opening â because the remote, inaccessible mall was only 20% occupied. At that point, having successfully completed a facility âahead of scheduleâ proves vain.
Particularly when it comes to large infrastructure, it might not make much difference whether the âsystemâ is failing to reach its design capacity or that it has delivered capacity or capabilities in excess of what is required at a certain point in time â either scenario will still negatively impact on both operations and financial viability. Indeed, the installed capabilities (whether they be in surplus or in deficit, it might not matter) will not be fully exploited through steady operations to generate sufficient returns to recoup the initial investments (capital outlay) and ensuing maintenance expenditures.
When a certain municipality elected to âbuild that damn thing once and for allâ, they ended up delivering a 40 giga-litres water treatment plant, despite indications that the demand would probably remain at around 8.5 giga-litres for the next seven years or so. They deliberately discarded the initial (phased approach) option of installing the plant in four incremental modules of 10 giga-litres to align production throughput to actual demand. But soon after a grand launch, they turned and accused âtechnical consultantsâ of misleading the municipality into building the massively oversized facilities; it is now proving costly to operate and maintain âall four 10 giga-litres unitsâ, while a single unit would have sufficed given the current demand â a failed âcustomer demandâ readiness.
At the other extreme, the City of Port Elizabeth (South Africa) approved a Bus Rapid Transit (BRT) project in response to increasing pressure on public transport. The BRT was devised to offer a more efficient means of moving passengers and reduce travel time, delay time, and number of stops; it was adopted as an improvement on regular bus services through the combination of features like infrastructure changes in order to provide better operation speeds and reliability. However, the City Press newspaper reported on 26 April 2015 that, six years on, the 60 buses acquired by the Nelson Mandela Bay Metropolitan Municipality in 2009 for R100 million (to kick-start the BRT system) as part of its âintegrated public transport systemâ were still gathering dust outside a fresh produce market. The same newspaper also wrote that the BRT project, although piloted in 2010, has been plagued by problems and allegations of corruption.
Besides its poor intermodal coordination/network, the BRT system is making use of a median lane configuration (i.e., BRT lane located in the middle of the roadway in a two-way direction), despite a mixed flow traffic lane being problematic. There is no proper shelter for commuters and some pedestrian crossways are not controlled by traffic lights. All these problems have led to the demise of the BRT. âNow this project will never take off and the buses and infrastructure will continue to deteriorateâ, a local politician said. Even so, later attempts succeeded in reviving the âLibhongolethuâ (our pride) BRT system and got it to operate along seven routes despite technical challenges and taxi opposition.
Still, not only were âbenefitsâ delayed for years, but they also proved to be quite inadequate.
The Information and Communications Technology (ICT) as a sector is equally guilty of littering disbenefits to the business community by failing to meet operational targets.
More often, IT projects fail to achieve most of their intended purpose of increasing productivity, lowering operating costs, improving the quality of work product, and shrinking the time to market ⌠Billions of dollars have been wasted on failed projects [rather than in reducing carbon-footprint1], and many highly expensive projects had to be shelved after a short time due to massive resistance from end-users.[2]
1 The world is preparing to spend trillions of dollars on infrastructure over the next 20 years; but not everyone realises that failure to integrate climate change into the planning of this infrastructure could lead to major adverse and negative development impacts, e.g., crop losses, traffic disruption, reduced power production and higher energy costs.
Again, the blame for such failures could be placed on a failed or lack of Operational Readiness.
Al-Ahmad proposes a definition of project failure that aligns to Operational Readiness.
Project failure is defined as any project that is set to support the operations of an organization by exploiting the resources ⌠[but] fails to deliver the intended output ⌠as well as the project comfortably satisfying the stakeholders and being accepted [as non-detrimental to society] and largely used by the end users after deployment.[2]
This stems from the community of end users not being made ready to efficiently operate a âsystemâ or the latter not being safely accommodated in the intended environment.
Operational Readiness is about accommodating both the system and its impacts on the environment.
Capabilities are exploite...
