WHAT ARE YOUR CAPITAL PROJECT CHALLENGES? A ‘megaprojects’ study by EY found: 64% Untracked scope changes following new instructions from contract buyer 56% Lack of effective change control 38% Inadequate governance in managing contracts TOP THREE REASONS FOR OVERRUNS FACED COST OVERRUNS WERE BEHIND SCHEDULE 73% 63% Completion costs were, on average, 59% higher than initial cost estimates – an increase in total cost of US$500bn, over the 205 projects where cost data was available. Unfortunately, some costs and time delays are unavoidable. But what about the ones that are avoidable? These can be mitigated through better management of the contract. OVERRUNS ARE THE MOST FREQUENTLY CITED PROJECT CHALLENGE AVEVA surveyed members of the International Association for Contract & Commercial Management (IACCM) to get better insight into this. CHALLENGES FOR CAPITAL PROJECT CONTRACTS 53% Inadequately prepared contract documents leave too much room for misinterpretation and avoidable, costly disputes 54% Escalating contract issues that are not addressed early on HALLMARK OF EXCELLENT PROJECTS 83% Clearly defined scope 56% Good working relationships with contractors 47% Managed contract change FIVE TRAPS TO AVOID IN YOUR PROJECTS Trap 1 Scope and goals not clearly defined Trap 2 Poor stakeholder communication Trap 3 Underutilisation of technology solutions Trap 4 Poor post-award contract management and governance Trap 5 Weakly drafted contracts www.aveva.com @avevagroup linkedin.com/company/aveva About AVEVA AVEVA offers engineering, contract and information management solutions for the asset intensive industries. AVEVA software has powered some of the most complex projects, helping customers create and maintain a digital replica of the physical asset to ensure operational excellence. Listed on the London Stock Exchange (LSE: AVV), AVEVA has built a loyal base of over 4000 customers globally. Notes and references EY, 2015 Oil and gas capital projects series: Spotlight on oil and gas megaprojects Survey conducted by the International Association for Contract & Commercial Management (IACCM) commissioned by AVEVA, data compiled from 176 responses IACCM Commercial Excellence: Ten Pitfalls to Avoid in Contracting CONCLUSION Capital projects are challenged with cost overruns and time delays. Many of the reasons can be attributed to people and processes, particularly in the management of the project contract. Weak contractor relationships and poor communication are often issues in the set-up and management of capex project contracts. In the white paper: ‘We need to talk: Why contractor relationships hold the key to managing very large projects’, Geoff Lill discusses the importance of communication and relationships in contract management and sets out a supporting framework. DOWNLOAD THE WHITE PAPER

AVEVA ProCon Infographic - 201117 BEE/AVEVA Beyond...WH˜T ˜RE YOUR C˜PIT˜L PROJECT CH˜LLENGES? ˚ A ‘megaprojects’ study by EY found: 64% Untracked scope changes following

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WHAT ARE YOUR CAPITAL PROJECT CHALLENGES?�

A ‘megaprojects’ study by EY found:

64%Untracked scope changes following new instructions from contract buyer

56%Lack of effective change control

38%Inadequate

governance in managing contracts

TOP THREE REASONS FOR OVERRUNS

FACED COST OVERRUNS

WERE BEHIND SCHEDULE

73%

63%

Completion costs were, on average, 59% higher than initial cost estimates – an increase in total cost of US$500bn, over the 205 projects where cost data was available.

Unfortunately, some costs and time delays are unavoidable. But what about the ones that are avoidable? These can be mitigated through better management of the contract.

OVERRUNS ARE THE MOST FREQUENTLY CITED PROJECT CHALLENGE

AVEVA surveyed members of the International Association for Contract & Commercial Management (IACCM) to get

better insight into this.

CHALLENGES FOR CAPITAL PROJECT CONTRACTS

53%Inadequately prepared contract documents leave too much room for misinterpretation and avoidable, costly disputes

54%Escalating contract issues that are not

addressed early on

HALLMARK OF EXCELLENT PROJECTS

83%Clearly

defined scope

56%Good working

relationships with contractors

47% Managed

contract change

FIVE TRAPS TO AVOID IN YOUR PROJECTS

Trap 1Scope and goals not clearly defined

Trap 2 Poor stakeholder communication

Trap 3 Underutilisation of technology solutions

Trap 4 Poor post-award contract

management and governance

Trap 5 Weakly drafted contracts

www.aveva.com @avevagrouplinkedin.com/company/aveva

About AVEVAAVEVA offers engineering, contract and information management solutions for the asset intensive industries. AVEVA software has powered some of the most complex projects, helping customers create and maintain a digital replica of the physical asset to ensure operational excellence. Listed on the London Stock Exchange (LSE: AVV), AVEVA has built a loyal base of over 4000 customers globally.

Notes and referencesEY, 2015 Oil and gas capital projects series: Spotlight on oil and gas megaprojects

Survey conducted by the International Association for Contract & Commercial Management (IACCM) commissioned by AVEVA, data compiled from 176 responses

IACCM Commercial Excellence: Ten Pitfalls to Avoid in Contracting

CONCLUSION

Capital projects are challenged with cost overruns and time delays. Many of the reasons can be attributed to people and processes, particularly in the management of the project contract. Weak contractor relationships and poor communication are often issues in the set-up and management of capex project contracts.

In the white paper: ‘We need to talk: Why contractor relationships hold the key to managing very large projects’, Geoff Lill discusses the importance of communication and relationships in contract management and sets out a supporting framework.

DOWNLOAD THE WHITE PAPER

http://discover.aveva.com/hub/aveva-beyond-engineering-excellence-procon/the-effective-contractor-relationships-whitepaper?hs_preview=DHjGcBoZ-5452978793http://www.aveva.comhttps://www.linkedin.com/company/avevahttps://twitter.com/avevagrouphttps://sw.aveva.com/campaigns/aveva-beyond-engineering-excellence-procon/the-effective-contractor-relationships-whitepaper