The Construction Readiness Assessment offers a compelling business case.

Have you been keeping up with the latest advancements in capital project practices but struggle to implement them within your organization?

A common challenge we see project leaders face is gaining the buy-in from leadership and project stakeholders to introduce another practice. The perceived risk being the investment of time and money that could jeopardize their project schedules.

One such game-changing practice is the Construction Readiness Assessment which was introduced at the 2018 Construction Industry Institute (CII) Annual conference. It has been designed to monitor project health, prevent early construction starts and avoid out of sequence work.

This methodology supports project teams who face pressure from either the owner or contractor to begin mobilization of the construction phase before the project is ready. The assessment provides a clear and objective process that will help align an owner and their project leaders based on facts.

The benefits are clear and the payback is staggering!

To assist leaders with moving forward, we’ve put together a business case that illustrates the return on investment (ROI) of implementing the Construction Readiness methodology for projects that are at higher risk of going ‘off the rails’.

The Benefits of a Construction Readiness Review

Research from the Construction Industry Institute (CII) has proven that projects achieving a sufficient level of readiness before mobilization benefit from:benefits of the construction readiness methodology

  • 20% less construction cost growth
  • 22% less construction schedule growth, and
  • 29% construction productivity improvement [1]

A construction readiness review serves to help the project team clearly identify risks that should be addressed to ensure a productive start to construction.

Early in Detailed Design, an assessment primarily serves as a checklist to identify important factors that must be addressed to ensure readiness.

Later in Detailed Design or Pre-construction, the assessment serves as an objective process to align the Owner and their Project leaders. If a decision to “wait” and address key risks is needed, the assessment clearly supports the decision.

The Business Case for Implementing the Construction Readiness Assessment

If we consider the risk of “a premature start of construction”:

construction-readiness-business-case-risk-heat-mapThe cost impact is HIGH, with CII research showing that projects that start construction but are not ready experience a 20% increase in construction costs over “construction ready” projects. [2] Ignoring this risk is how well-planned projects go off the rails.

A proven risk response is to conduct construction readiness assessments.

The premise is that you will significantly reduce the probability of this risk by identifying the gaps early and taking action.

Return on Investment

The return on investment for this risk response is staggering.

As a case in point, for a $50M project with 85% of the costs attributed to construction, the risk mean value, or benefit, of avoiding a premature start of construction is $3.4M.

The cost of conducting two readiness reviews with an external facilitator and internal costs for 15 participants is estimated at $42,000.

That’s an 80-times payback on this risk response.

This payback even tops CII’s PDRI methodology for ensuring you have good scope definition prior to starting Detailed Design.

How to Implement the Construction Readiness Assessment

If you’re interested in implementing the Construction Readiness Methodology within your organization, contact us today!

We’ll share proven strategies  some tips to help you communicate the specific benefits of the assessment for organization.

 

Additional Resources:

How to Implement the Construction Readiness Methodology

What is Construction Readiness

Related Posts:

Construction Readiness – An Essential Process to Boost Construction Performance

Construction Readiness – Importance of Team Alignment & Buy-In When a Project Is Not Ready


Sources:

[1, 2] Research Report FR-DCC-02 – Construction Readiness Assessment for Productivity Improvement, CII, 2018

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Sandra MacGillivray

Managing Director at Valency Inc.
Sandra is the Managing Director for Valency Inc., an implementer of best practices from the Construction Industry Institute (CII) that dramatically improve capital project performance. She is a Certified PDRI Facilitator, Registered Education Provider (REP) with the Construction Industry Institute (CII), a Project Management Professional (PMP), and a PMI Risk Management Professional (PMI-RMP) with over 15 years of project management experience. Sandra is a past research team member with the Construction Industry Institute on front end planning, risk management and portfolio management. She holds a Bachelor of Science from the University of Waterloo and a Master in Business Administration from Wilfrid Laurier University.