Author: Dirk Volschenk
The industry landscape has changed and will be very different in the near and medium-term future. Large mega projects like in the past are not likely to be implemented in Alberta notwithstanding the growth in the world’s oil and gas market until a drastic change happens in the political landscape, federally and provincially. Alberta still has the third largest oil reserves in the world and it will attract future investments when the time is right. Especially when the total cost of ownership is substantially lowered by effective project delivery, lowered maintenance cost through competitive maintenance and turnaround practices as well as newly developed technologies such as solvent enhanced SAGD’s and cost effective partial upgrading. It is crucial for industry to ensure that we have a highly competent and capable talent pool in project management available when sudden market changes happen again.
Business and work opportunities in the province have already shifted towards sustaining capital and maintenance work in oil and gas, infrastructure and to diversification projects. The mega projects that have been built now need to be effectively de-bottlenecked and maintained.
One thing is for sure – it is going to be a very competitive business arena in the years to come. To be part of this future landscape we need a significant change in basic assumptions as well as better ways to deliver operational excellence through collaboration and integration within all segments of a typical project supply pipeline. This probably will have to be done in a completely new way. Within this very challenging sosio-economic climate we can either become victims to increased tax and regulatory decisions or we can take control and create a compelling future as we did in the past. We should also use this time to build capability and prepare for the next growth phase. We should use efforts to improve small projects as a vehicle for keeping the current project management community engaged or as a training ground for the future
New Brand for our Construction Industry
To grow and attract new investment even in diversification and infrastructure work, we as the construction industry within Alberta will have to build a new market brand. A brand that steps away from the previous image of ‘rich kid, come and make a quick buck’ and throwing money at the problem. As an industry we will be required to continuously work hard to build, market and maintain a brand more along the lines of ‘come to this province to get exceptional value for the investment’. This trait should also be carried into the next growth phase. Alberta should be ready to ride the next boom cost effectively and not let the boom ride Alberta. Texas managed to do this now for years with limited boom and bust cycles. We can probably learn a lot from how they execute projects and how they cater to continuous market swings so characteristic of the commodity oil and gas markets. However, to stay competitive, it is important to be cognizant of the fact that projects always need to be done cost effectively throughout the markets boom and bust cycles. Either it be small projects like in the current trend in Alberta or large projects characteristic of a growth phase to be expected in future.
How to get ready for the future?
To be victors and not victims of circumstances and to prepare to be ready for future growth, several industry stakeholders got together in 2014 to establish PAAD- Project Alignment and Delivery; a platform for collaboration under the administrative and facilitative support from GO Productivity – a not-for-profit firm. Figure 1 provides a description of the principles of the PAAD collaboration platform.
Exceptional results have been achieved so far in improving project executions through sharing best practices. However, there was still a significant investment in large and mega projects that needed completion. PAAD’s agenda was therefore mainly focused on the larger projects until end of 2017. With the completion of the larger projects, the next phase is coming more into focus. To mobilize the capacity within industry and to bring the right people to the collaboration table PAAD founders decided to establish several industry wide work groups. Figure 2 provide a summary of the different industry segment work groups that is on the table:
The first two platforms to be kicked off will be the small projects and turnaround work groups. The planned schedule for this is around early fall 2018. Getting ready for the future will commence after the small projects and turnaround work groups are up and running. The following steps are envisaged for the work groups:
• Having a public kick off workshop to learn about how the work group will function. Also to create the opportunity to collaboratively assess the current state of small project execution and turnarounds in the industry. The participants, will come with the background of a shared understanding of the factors influencing competitiveness in the province and develop a shared future state/ brand that we would all invest into
• The workgroups will then start working in regular meetings on developing the agenda of things to change, create, adopt, improve, and implement to lead to the new industry performance and brand;
• Work group activities will continue addressing the agenda over the next few years to work together and share knowledge and expertise to create the competitive practices and brand that we decided upon.
Let’s accept the challenge to limit our human and organizational tendency to blame and be victims of circumstances outside our control. The challenge is to join the work group as a stakeholder in the supply pipeline of small projects and turnaround projects and contribute with your knowledge and experience to make our industry competitive again. It is going to be hard work, but we can and will be the catalyst for creating the Alberta future.