There’s a revolution going on, and it’s going on in the EPC industry: Engineering, Procurement and Construction. These are the companies that work on the “megaprojects,” the projects that run into the hundreds of millions, and yes, billions of dollars. Think, The Chunnel, the Big Dig, and bullet train systems in China and Japan as examples of such large, complex, and extremely costly projects.
For many years EPC companies did project management their own way. In fact, they thought they invented project management (engineers and constructors have been long time users of the Critical Path Method.) These folks believed they knew it all and no one could possibly teach them anything new.
But the EPC world has changed. Don’t take my word for it. Pick up an excellent book entitled Industrial Megaprojects: Concepts, Strategies and Practices for Success, by Edward Merrow, a guy who’s been in that business for more than 30 years. Mr. Merrow writes about Project Owners (the people that pay for these gargantuan projects) that have lost many of their in-house engineers and other professionals who they relied on for critical expertise in a wave of outsourcing, cost-cutting, and down-sizing.
The impact? Owners now have contractors managing contractors managing subcontractors without oversight from the owner himself. As honest as some folks are, others aren’t, and are taking advantage of the situation. And, you might have thought that was just a “Government” problem! Not so.
Many of these megaprojects have run into serious problems and enlightened industry executives in the EPC industry recognize this and realize they need to fix it. They know they have become too insular through the years and have relied on themselves for their own project advice and project management professional development. In many respects, it’s like the lawyer who represents himself in court. Do you know what he has? A fool for a client.
ESI’s EPC clients have remarked that they have opened the doors to the outside. They’re bringing in organizations such as ESI to help with their professional development, to teach their staffs global best practices in their industry. They have abandoned having their own engineers and project managers teach their own people. Why? Because they have learned that simply because someone is a competent engineer or project manager does not make them the best PM instructor. Additionally, EPC firms struggle to maintain the type of up-to-date content that provides a fresh perspective on such complex engagements.
This more enlightened development approach, characterized by highly customized programs with serious and in-depth internal case studies, will yield improved project outcomes over the long run. The old guard is changing, and there’s a new way of doing things. And, to many of these executives, it’s about time.
The above post is an expanded version of one of ESI’s Top Ten Trends for 2014. See all the PM Top TrendsÂ here.
The views expressed in this post are the author’s. They have neither been reviewed or approved byÂ ESI International.