By Andrew Le Grice and Paul Newman, Deloitte
The infrastructure challenges faced by New Zealand have been clearly spelt out in the Rautaki Hanganga o Aotearoa New Zealand Infrastructure Strategy (The Strategy) from Te Waihanga / The New Zealand Infrastructure Commission. A significant infrastructure deficit exists which would take spending of approximately $31 billion per year to address, or double what is currently spent[1].
The Strategy highlights delivery efficiency as one of the challenges in addressing the infrastructure deficit and proposes streamlining delivery as one response.
So, what can we do to improve delivery efficiency and effectiveness?
The Strategy touches on several opportunities including improving our capability to plan, design and deliver projects. We further explore this last point in greater detail below.
Programmes can be thought about as having three parallel lifecycles: funding and financing, capital programme, and organisational (focusing on capability). The organisational lifecycle is often not given the same attention in the delivery of major programmes. This can create significant challenges down the track. As the sector looks to identify and address the capability improvements discussed in The Strategy, a deliberate approach is needed to put in place the capabilities required to deliver these programmes and transition them into operations – whether that be as part of an existing agency, or through special purpose delivery entities. Without a deliberate approach there is a risk that capabilities are implemented in an ad-hoc manner, resulting in critical gaps.
What learnings can we take forward to enhance New Zealand’s delivery efficiency and effectiveness?
The NZ$37 billion mega-project Crossrail, or the Elizabeth Line, has recently opened in London with much fanfare following several rounds of cost increases and delays. Large programmes here in New Zealand have also seen high-profile examples of delays and cost overruns. A recent report by the Institution of Civil Engineers[2], combined with Deloitte’s experience working with the Crossrail leadership team, gives insight into relevant lessons for our increasingly large and complex projects and programmes[3].
Agility – Establishing a flexible architecture from the outset will allow leaders to respond to changing conditions whether they be internal or external to the programme. For Crossrail, a lack of central control across more than 30 major contractors, each with their own degree of latitude to make changes, meant that Crossrail leadership did not have the capability to assess, manage and respond in an agile way to alterations being undertaken. Having clarity around all internal and external interfaces and how these will be designed for and managed is critical3.
Evolution over time – It is important to transition programme leadership such that people with the right skills are leading at the right time. Understanding key programme transition points and the changes in required capability that come with them is essential for successful delivery. For Crossrail, insufficient planning around these transition points meant that significant effort was required to establish an entirely new function to manage the pivotal handover from delivery teams to operations teams late in the programme’s life when delays and cost increases had already occurred.
Keeping the end in mind – For a programme to be successful, the final desired outcome needs to be considered throughout its life. From a capability perspective, this means making sure that the necessary capabilities are sufficiently developed and represented at all points in time. One Crossrail manager observed, that in the case of Crossrail, thinking of civils and systems activities as two parallel projects that needed to be integrated at all times could have helped to facilitate the appropriate rise and fall in prominence of the respective capabilities across the life of the programme, while ensuring all were represented throughout3.
As New Zealand looks to tackle its infrastructure deficit and streamline delivery it will be important for the sector to:
- Take a structured approach to determining and building capability so that the right level of capability exists at the right points in time, including investing in the capability of people delivering the projects.
- Ensure that organisational capability and delivery models are designed in a way that permits agility in response to changing conditions.
- Develop an early understanding of the key inflection points in programme lifecycles by keeping the end goal in mind and recognising the steps that need to be taken successfully to achieve this ultimate goal.
[1] Rautaki Hanganga o Aotearoa | New Zealand Infrastructure Strategy, Te Waihanga | New Zealand Infrastructure Commission
[2] A Systems Approach to Infrastructure Delivery, Part 2: Putting the principles into practice