What Can We Do About Soaring Transactional Costs?
Article initially published at Velocity Quarterly
Forty percent of all project funds are wasted on transactional costs. That's too much.
In an important editorial posted earlier this month, Construction Industry Institute (CII) director and leader of the OS2.0 project, Stephen Mulva, warned that the capital projects industry is in a fiscal “death spiral” and that EPC companies need to stop managing projects “like a caveman with a checkbook.” It was a clarion call to industry leaders and capital project leaders, buttressed with a long list of troubling statistics. The most jaw-dropping of those figures is the one highlighted above.
One possible solution: Platform Technology.
The linked article explains how platform technology can streamline work processes and related transactions by connecting project stakeholders, and centralizing contractual needs making it a great system to cut transactional costs.
To paraphrase an old American proverb: To the early adopter will go the spoils.
Many would say that our industry has never been "an early adopter", some would say "innovation is not even part of our DNA and culture". I believe, to survive, both Owner and EPC companies need to be willing to embrace transformative technologies.
"Everybody, we ought to change sometime!"
Click on this link here to read the whole article.
"Everybody, we ought to change sometime,
because sooner or later,
We're going out in that lonesome ground".
(Eric Clapton, Money and Cigarettes, 1983)
About Concord Project Technologies Inc. | Technology Business Model
Concord Project Technologies is an innovative start-up company driving transformative change in capital projects through innovative technology and business model. The cost of innovation is built into Concord's outcome-based business model. Companies can fit the use of our knowledge-enabling technology to their unique investment plans. Simply put, if your project never makes it through the full funding gate, your organization and project should not have to pay for a technology license that will never be used, and you should not have to worry about losing the ability to mine the data you’ve collected for years.
The only way to know what will work on your project, right now, is to have up-to-the-minute feedback and assurance on what’s working and what’s not. This is real-time innovation, on the fly. That’s how you create knowledge and value. That’s how you create a real competitive advantage. Let's talk