AI & digital tools essential to tackling project delays

Research from Accenture reveals widespread issues with cost overruns and schedule delays in large-scale infrastructure and capital projects.

In Australia, significant investment in major infrastructure projects is being hindered by cost blowouts and ongoing delivery delays, with national construction insolvencies increasing by 25% since the prior year. Projects often exceed budgets by an average of 30%, with 92% failing to meet schedule and budget targets.

In contrast, a minority of organisations report underspending by 14% while delivering projects ahead of schedule.

Accenture identifies several factors contributing to this success, notably the use of artificial intelligence (AI) in project planning.

Organisations employing AI are 40% more likely to achieve intended outcomes by predicting costs, optimising resources, and identifying potential delays, while Digital Twins assist in planning by highlighting inefficiencies before construction begins.

Increased stakeholder scrutiny is identified as a major challenge, with 59% of infrastructure project executives citing it as a key factor in cost overruns and delays. Furthermore, a shrinking labour pool heightens the need for attracting and developing talent, a particularly pressing issue in Australia.

Mark Hilton, APAC Industry X Infrastructure and Capital Projects Lead at Accenture, flagged the challenges faced by capital projects.

"Delays and spiraling costs are so common among capital projects they're almost expected, and yet rarely are they successfully mitigated. As demand for projects increases over the coming decade, these challenges will become even greater unless organizations improve the planning and management of a growing list of complex factors."

Hilton highlighted talent shortages as a significant threat, stating, "A main factor threatening the performance of capital projects long-term is a talent shortage."

"More people are retiring than joining the workforce, and, at the same time, skills in technologies are becoming important to plan and execute projects but are hard to recruit and retain. That makes upskilling people vital. So far, only 36% of organizations have a strong internal training capability, and a mere 12% use external training programs."

He added, "When organizations align their operating model and governance across functions for capital efficiency, they can increase collaboration, amplify leadership insights, and mitigate risks that result in immediate and measurable improvement in project performance of up to 30% on cost and schedule."

Andy Webster, Global Lead for Infrastructure and Capital Projects at Accenture, commented on the impact of project deviations.

"The staggering deviations to schedules and budgets we've identified can materially impact an organization, cause stakeholder tensions, and carry inherent financial risk."

"The fact that there are ten times as many organizations significantly missing their targets than those delivering ahead, shows that the industry must reinvent how it plans and executes large-scale infrastructure projects. Our research provides a great opportunity for almost every organization to learn from the 6% that consistently deliver ahead of project targets."

Webster also pointed out the role of AI, stating, "AI is emerging as a key enabler of project success. For example, generative AI tools can analyze past data and current market trends to give accurate estimates, which reduces the risk to the budget and schedule. As project conditions shift, AI can provide dynamic updates to help teams stay on track."

"Combined with human ingenuity, the technology will drive reinvention and add value in an industry experiencing skill gaps and significantly lagging in using technology to plan, manage and execute multi-million to multi-billion investments."

Accenture's research encompassed 700 leaders globally responsible for infrastructure and capital projects, offering a comprehensive overview of industry challenges and opportunities for improvement in project execution and management.