Accenture’s recent Blueprint for Success research report reveals that most organizations overspend massively on infrastructure and capital projects. The minority of projects completed ahead of plan save stakeholders hundreds of millions of dollars.

The Costs of Missing Targets

The study was done by surveying 700 leaders globally responsible for infrastructure and capital projects in 23 countries and 12 industries.

With 92% of projects finishing late and costing more than initially planned, 66% of organizations are missing targets. This leads to organizations overspending by almost 29% on an average $2 billion project, which is $570 million.

This data was gathered after Accenture noticed some concerning trends in infrastructure and capital projects.

“We saw the rising spending and increasing demand for infrastructure and capital projects,” Bryan Carruthers, Americas infrastructure and capital projects co-lead at Accenture, told METRO. “At the same time, staggering deviations in schedules and budgets seem almost expected. Yet, from working with clients we know that delays and spiraling costs can be avoided. We decided to systematically assess what makes certain organizations and their projects perform significantly better than others, so we could bring those insights to our clients. Particularly, as demand for projects is increasing over the coming decade, which, in turn, will lead to even greater challenges for organizations.”

While two-thirds of organizations are missing targets, 28% are consistently hitting budget and schedule goals within a 10% margin. 

The remaining 6% of organizations are the few that consistently finish projects ahead of schedule and under budget, which can save 275 million or around 14% on a typical project.

“The staggering deviations to schedules and budgets we’ve identified can materially impact an organization, cause stakeholder tensions, and carry inherent financial risk,” said Andy Webster, global lead for infrastructure and capital projects at Accenture. “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.”

What Organizations Are Doing to Get Ahead

Accenture identified what the few consistently ahead-of-schedule organizations are doing to keep costs low.

Attracting and developing a skilled workforce to handle the projects is one step companies are taking to keep costs down. With a currently declining labor pool for such projects, recruitment timelines, and costs can increase. 

The shortage is particularly noticeable when looking for experienced capital project leaders. This makes keeping and training those who are interested in leading capital projects more important than ever.

Integrating sustainability into the core of projects is also an important step to take early on. By using data-driven environmental insights, organizations can be 65% more likely to complete projects according to plan.

Managing internal and external stakeholders is also important to a project’s success. The research revealed that 59% of infrastructure project executives name “increased project scrutiny from stakeholders” as one of the top three factors contributing to cost overruns and schedule delays.

Making Use of AI

The biggest factor that can affect the success of a project is using AI to help during the process.

With such a significant performance gap, Accenture turned to the data to determine what factors could be causing successful companies to succeed.

“The full extent of the performance gap we identified is quite staggering,” said Carruthers. “More than nine in ten projects don’t meet their targets. Then there is this huge difference of almost $850 billion on average between organizations missing their targets on a typical $2 billion project and that small, 6%-group of organizations that consistently outperforms their peers. They are the North Star. When we assessed what they do differently, a key factor was their technological capabilities, particularly applying AI to planning, managing and evaluating projects.”

By generating project insights and turning them into foresight, organizations can use AI to plan projects that are 40% more likely to meet their intended outcomes. 

AI models trained on historical project schedule data can identify and manage risks and uncertainties. This is most useful when project teams lack prior internal reference experience in certain project elements.

“AI is emerging as a key enabler of project success,” said Webster. “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.”

With these discoveries in mind, Accenture is looking to further research how organizations can get the most out of AI and what it takes to build a strong digital core to support it.