This transcript has been lightly edited for clarity.
What keeps capital project leaders awake?
Ishaan Nangia: What we hear consistently from capital project leaders is that there is a huge amount of value attached to their capital management system. Between 2022 and 2027, about $130 trillion of capital will be spent, and that’s almost a 70 percent increase compared with the previous five years. Our research suggests that most large capital projects end up overrunning either cost or schedule by around 30 percent to 45 percent. These huge capital projects are very complex. They involve assembling teams of a multidisciplinary nature and collaborating across the whole ecosystem.
Jae Hoon Jung: I met a lot of the capex leaders in Asia. They have three questions. Question number one, how can they deliver the projects on time and with the cost that they promised? And then question two is, how can you get better people, how can you train them and then build the capabilities? And lastly, we also get questions about how we can deliver carbon-free projects.
How can capital project leaders win in the new era through tech enablement?
Ishaan Nangia: Technology actually has the real ability to reduce that uncertainty and to ensure that capital projects are operating on the efficient frontier. There are three applications in particular that we think are making a huge difference. The first is using digital twins to optimize design and scope, creating an emulation and a simulation of the physical built asset as a way of making trade-offs and decisions. The second is generative scheduling, which is a way of using machine learning and advanced analytics as a way of simulating the build sequence and process and identifying potential errors or clashes in advance, as well as how to re-sequence and re-resource work. And third is the use of digital control towers, which can stitch together data and insights both backward looking and predictive, in a way that gives project leaders real-time insight into the performance and progress of a project and allows them to problem solve and correct the trajectory of a project before it gets out of control.
Jae Hoon Jung: For example, we recently applied generative AI scheduling to petrochemical and mining projects. In the old days, project managers only have a few scenarios, and then it takes a lot of time to generate even those few scenarios. But now with this gen-AI-based scheduling, they can generate thousands of scenarios within a few minutes and then can compare these scenarios to come up with better resource planning and a better work sequence. It is important that the project leaders understand the impact of these new tools and then find a way to deploy faster and [add more tools] to their portfolios.
Ishaan Nangia: A consistent practice that we see the leaders in capital projects adopt is, for every dollar they spend on tech enablement, they spend an equivalent amount on change management and capability building. We also see a lot of the leading organizations in capital delivery acknowledging and recognizing that capital project development and delivery is a competency in its own right and [therefore] creating tailored academies and internal skill-building journeys that train the next generation of their capital project leaders.
