When thinking back over the things I have learnt during my last ten years in consulting and construction in the infrastructure sector, I realise that the ability to understand how to price, design, manage and deliver a project from the bid to close out is a critical skill for a consultant. But why are there so many technical consultants that struggle to achieve this on such significant, high profile large projects?
The commercial aspect of projects and within organisations is something that has been delegated over the years to the commercial team, project administrators, and others within organisations. Technically orientated consultants have moved on to alliances, collaborative contracts and other procurement models that supposedly do not require them to have commercial skills in their particular roles to deliver a design, technical specifications or other elements of the project.
When things go wrong and commercial challenges present themselves on a infrastructure project or design engagement, we then default to the blame game… blaming other parties, other team members or even blaming the client. For me, commercial acumen for a technical consultant is a critical skill, it’s right up there with bid writing, consulting 101, team work, and communication. It’s absolutely essential for an organisation to manage their commercial risks!
To effectively deliver on your part of a project, you have to understand the commercial risks and the impact on other areas of work. You must have the ability to identify variations from scope, key risks and you need an understanding of the overall budget which includes ensuring the appropriate qualifiers and assumptions that form part of your work are transparent and clearly understood by your team and the client.
As projects continue to be delivered by multi organisation consortiums, there is an increasing reliance on trusting other parties to deliver on parts of a project that may impact on your success and commercial arrangements given the sharing of risk collectively. Knowing the commercial acumen of your partners, sub-alliances as well as your team is critical to ensure you can deliver the project on time but also on budget. How well do you know this? Will this cause challenges that your organisation and project will inherit?
Getting back to commercial fundamentals is the key to addressing this. Small project experience and commercial acumen training is an important prerequisite for all technical staff going on to a larger project for the simple fact that you have nowhere to hide commercially when you are in charge of an overall project. We need to embrace the small project thinking to deliver on larger projects. This includes being able to ask any technical consultant the following questions and be confident with the answers that are presented.
Key questions include:
Are you clear on how the budget was arrived at for your area of the project?
Are you clear on the key risks, assumptions and qualifiers that form part of the commercial scope?
Who are the critical stakeholders and other parts of the project to being able to deliver successfully on this budget?
How do you plan to monitor progress through reporting against the budget?
What are you doing to ensure all people that work on your part of the project understand the commercial scope of your package of work?
Who is doing work on your part of the project and how do you plan to manage this?
If you aren’t able to confidently have these conversations with technical members of the team, it should provide some concerns commercially around your project. The bigger question to ask is how do you embed the small project commercial practices in to your large projects to ensure you can deliver successfully? An enormous challenge but one worthy of further discussion in any infrastructure organisation.