IPMA International Project Management Association
14 January 2019 / 9:00

Integrated Project Delivery (IPD) – An Action Guide for Leaders

The construction industry has suffered from a productivity decline during the last two decades: “Globally, construction sector labour-productivity growth averaged 1 percent a year over the past two decades, compared with 2.8 percent for the total world economy and 3.6 percent for manufacturing. In a sample of countries analysed, less than 25 percent of construction firms matched the productivity growth achieved in the overall economies where they work over the past decade. Absent change, global need for infrastructure and housing will be hard to meet. If construction productivity were to catch up with the total economy, the industry’s value added could rise by $1.6 trillion a year. That would meet about half of the world’s annual infrastructure needs or boost global GDP by 2 percent…”

Not a marginal change but a quantum leap is needed to improve productivity. One of the approaches for achieving this quantum leap is Integrated Project Delivery (IPD), which is “a collaborative alliance of people, systems, business structures and practices into a process that harnesses the talents and insights of all participants to optimize project results, increase value to the owner, reduce waste, and maximize efficiency through all phases of design, fabrication, and construction.” The focus in IPD is value created for the owner. Rather than each participant focusing exclusively on their part of construction without considering implications on the whole process, the IPD approach brings all participants together early with collaborative incentives to maximize value for the owner. This collaborative approach allows informed decision making early in the project where the most value can be created.

In 2018, the Integrated Project Delivery Alliance (IPDA) organized to develop “Integrated Project Delivery – An Action Guide for Leaders”, a practical guide for applying IPD. It explains the first steps of the application and answers related questions concerning commencement and execution of IPD projects. The guide is based on the experience of an advisory council with IPD experts, sharing their experiences. The guide is intended to help understanding what needs to be done to have a successful IPD project delivered. The guide starts with a sensible question: “Is IPD right for your project?” IPD can provide superior outcomes over a wide range of project types, but it´s not appropriate for every project or owner… There is no fixed formula for knowing if IPD is the right approach, but f an honest evaluation of the factors of “Ambition”, “Stressors”, “Level of Clarity”, “Probability of Change”, and “Complexity“ are predominantly “low”, then another project delivery approach may be more appropriate to choose.

The guide provides advice how to organize a project along the project phases from the pre- or early project phases to the closeout. It is divided into five sections, each of which answers fundamental questions that may arise during specific periods in a project´s lifecycle. A section on “Path to Contracts” provides a roadmap for creating internal alignment, building up and aligning the project team and reaching commitment for the project. “From Beginning to End” describes the management, financial, and lean considerations that are important throughout the process, and “Early Work” focuses on key tasks in organizing and commencing a project, including but not limited to validation, Target Value Design, co-location, design management, prefabrication, Building Information Modelling (BIM), managing risk and metrics. In IPD, the amount of early work is significantly increased because addressing these issues and creating effective processes leads to the greatest gains. In the section of “Later Work” concepts developed during “Early Work” are further developed and the project is moved forward. A section “What Goes Wrong – and What Can We Do About It” deals with the unfortunate reality that not everything works perfectly out every time. The most common failings on IPD projects are explained together with recommended countermeasures.

The guide highlights Lean Thinking: “Lean thinking is about defining customer value, mapping the chain of value, establishing pull, creating flow, and finding the right problems to solve. Additionally, it focuses on developing people and consistent improvement, with the goal of waste reduction and value creation.” At the end of the document a glossary of important terms is provided together with a set of tools and templates for application. The guide provides links to other sources, unfortunately, it is rather silent on contractual and commercial as well as organisational and cultural aspects.

 

 

 

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Reinhard Wagner

Author of this post

Reinhard Wagner has been active for more than 30 years in the field of project- related leadership, in such diverse sectors as Air Defense, Automotive Engineering, and Machinery, as well as various not-for-profit organizations. As a Certified Projects Director (IPMA Level A), he has proven experience in managing projects, programmes and project portfolios in complex and dynamic contexts. He is also an IPMA Certified Programme and Portfolio Management Consultant, and as such supports senior executives in developing and improving their organizational competence in managing projects. For more than 15 years, he has been actively involved in the development of project, programme and portfolio management standards, for example as Convenor of the ISO 21500 “Guidance on Project Management” and the ISO 21503 “Guidance on Programme Management”. Reinhard Wagner is Past President of IPMA and Chairman of the Council, Honorary Chairman of GPM (the German Project Management Association), as well as Managing Director of Tiba Managementberatung GmbH.

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