There was a recent article which noted that another potential 2022 Olympic host (Oslo) has withdrawn from consideration after the Norwegian government advised against hosting the event. To be honest I am not surprised by Oslo’s withdrawal as the Sochi Olympics was a huge Olympic asset management failure. But I do question the reasoning behind it.
Why Do Huge Construction Projects Become Embarrassments
The article, The Bidding For The 2022 Olympics Is A Disaster Because Everyone Figured Out That Hosting Is A Total Waste makes mention of several negative aspects cities face including public support, financing and knowledge that costs are always higher than expected with lower than expected or almost absent long-term economic growth.
On one hand it is good to see that people and their governments are finally understanding the unmitigated financial and asset disasters left behind as a result of not thinking through their ideas. But it is not just the Olympics that have a negative legacy.
In another graphic titled Monumental Budget Busters some of the most notable construction projects of all time have been over budget and completed well behind schedule.
So although it is good that governments and cities are questioning why some projects are not just worth it; a better question may be why despite architectural and scientific genius is it so difficult to plan and manage big ticket construction projects?
Most Issues are Controllable
My first thought was the usual suspects of corruption, design flaws, construction failures, delays, setbacks from accidents and strikes. But then there are also the factors that cost underestimates and a lack of asset management can play a significant role.
In reality, underestimating costs can probably be labeled under corruption or sheer stupidity when you consider that decision makers should know through due diligence when a company makes a ridiculous low-ball bid just to get the business.
Similarly, asset management is also controllable. A lack of asset management is simply a lack of planning and a lack of the tools needed to keep costs under control.
All or part of the above has played a part in the misfortune of Olympic bids and major construction projects. It doesn’t take a genius to realize there has to be a better way.
Finding a Better Way with Professionals and Asset Management
That better way comes from investing in experienced professionals and the asset management needed to create a system of checks and balances that minimizes outside influences, can keep plans on schedule and assets in optimal working order.
Unlike many of my other articles, I am not talking about maintenance here. Maintenance is a given if any asset is expected to be operate throughout its expected useful lifecycle.
I am referring to managing a project from the beginning planning stages until the asset’s retirement. The technology to do this is available in the form of an EAM system, IWMS and/or several other financial and construction software tools that enable tight controls for oversight if used properly.
These tools offer a better chance of bringing a project in or around the estimated costs because they can:
- Empower project managers to demand accountability for assets management and work performed. It is based upon the principle that no one wants to see their company, employees or their own name and reputation tarnished by crappy work.
- Help keep labor costs under control by automating work processes and reducing paper flow.
- Provide better document management for contacts, contactors, blueprints, schematics, photos and so on. It is based on the premise that lost or misfiled documents are a major cause of inactivity and inefficiency.
- Create a database for all assets that includes description, cost, location, work history, progress and condition.
- Lower the likelihood of accidents and other setbacks by helping to establish SOPs and best practices that must be adhered to.
- Provide for capital expenditure reporting and forecasting based upon the condition of assets, their work history and condition.
- Help plan maintenance and ongoing costs as it is pointless to spend billions on assets if you have not planned for all their operating costs.
If a project has been bid correctly and planned properly then EAM and other tools should definitely be part of the project manager’s arsenal as they can help manage costs and assign accountability.
Total Project and Asset Management is a Complex Problem
Unfortunately, tools such as an EAM cannot do everything needed to avoid the growing number of embarrassing, abandoned or useless construction projects.
Some issues are beyond the control of software systems. For example, an issue like corruption is a political and cultural problem that can only be stopped with proper law enforcement and exposure.
Other issues such as design flaws and construction failures can be avoided but need specialized oversight. It is best to turn to professional experts for these.
What can be said is that pulling off a major construction project takes planning, tools for asset and maintenance management, patience to work within a strict framework and enough checks and balances to minimize corruption and delays.
In my opinion, I think that many major cities could pull off the Olympics if they can change the way they do business and think through the project. Cost overruns and delays do not have to occur, they are the result of poor management at every level.
So what will happen to the Olympics if no one wants to pay for it? My guess is that the Olympics will eventually be held in just one location, constructed and built by the international community. How much will it cost? That depends on who is in charge.