A new report from the Institution of Civil Engineers shows how infrastructure projects, programmes, and supply chain businesses are using systems thinking to deliver better outcomes - with Tideway and Anglian Water Strategic Pipeline Alliance cited as exemplar projects.

The second report from ICE’s Systems Approach to Infrastructure Delivery (SAID) review shows how infrastructure projects, programmes, and supply chain businesses are using systems thinking to deliver better outcomes - with Tideway and Anglian Water Strategic Pipeline Alliance cited as exemplar projects.

In December 2020, ICE published the findings of a major review into improving the delivery of major infrastructure projects. The first SAID report proposed 8 principles for a new approach grounded in systems thinking .

In the second report, the principles are used to analyse the real-world experience and lessons learnt from the following five projects and programmes:

• Anglian Water’s Strategic Pipeline Alliance
• British Antarctic Survey’s Infrastructure Modernisation Programme
• Crossrail
• East West Rail
• Tideway

The report also draws on insight from Costain from a supplier point of viewon the challenges of developing the capability to adopt a systems approach within a large supply-chain business.

Findings from the first ICE research study included:

• the infrastructure sector too often struggles to cope with projects that require the planning, delivery and integration of complex systems.
• professionals need to become better at planning, constructing and integrating the complex systems that will deliver a service which needs to support the achievement of a much wider set of outcomes than the sector has traditionally dealt with
• asset owners and the public are increasingly expecting infrastructure investments to contribute to the decarbonisation of the UK and the levelling up of its economy
• the services provided by infrastructure operators are increasingly dependent on technology and software that is evolving at a far faster rate than the lifecycle of the road, tunnel or other structure in which they are embedded
• traditional civil engineering remains a large capital cost – however, a construction focused approach to bringing new and upgraded infrastructure into operation appears increasingly obsolete

“Construction’s traditional, ‘heroic’ style of leadership is not fit for purpose for modern infrastructure projects”

One of the main recommendations of the latest report is an overhaul of outdated leadership models - the report concludes:

“Leadership was a recurring theme across all of the case study interviews and roundtable sessions that made up the second phase of the review.

“Construction’s traditional, ‘heroic’ style of leadership is not fit for purpose for modern infrastructure projects, but the solution is not to introduce swathes of new controls and processes either.

“Instead, the sector needs to adopt leadership models that spread authority and empower highly competent individuals to take the key decisions in their areas of a project, while ensuring that everyone involved is focused on maintaining the integrity of the system to deliver the outcome demanded by its users and owners.”

It adds:

“Scale matters. The larger and more complex a project, the less likely it is that it can be successfully led by a ‘warrior’ leader who can manage crises by force of will, or by a super-project manager who is focused overwhelmingly on process and deliverables.”

The report cites cost overruns and delays to Crossrail as an example for ensuring “the right skills and experience” are in place during the right parts of a project’s lifecycle.

It adds:

“A retrospective review of Crossrail supports the case for planning for baton handovers to ensure that leadership has the right skills and experience to deal with the very different risks that need to be managed at different stages of a project.”

Many of Crossrail’s problems started when civils work drew to a close and systems integration begun. However, the ICE report adds that “simply planning for a handover between a civils team and a systems team would not […] have avoided all of the problems encountered by Crossrail”.

“Systems integration considerations need to be baked into a project leadership’s priorities from day one,” it says. “The challenge for project sponsors is to ensure that all relevant voices are heard throughout the project lifecycle and that their prominence rises and falls with the changing risk profile.

Tideway – “extensive front-end work needed” to ensure project was attractive to equity investors and supply-chain partners

Commenting on the Tideway Tunnel, one of the largest infrastructure projects currently in progress in Europe, the report says that “extensive front-end work was needed to package up the project so that it was attractive to equity investors and supply-chain partners.”

The report states:

“Tideway procured its construction partners slightly ahead of identifying its financing partners. This allowed it to go to the market for investors with both a budget and transparency on contractors’ prices.

“Risk management was baked into the organisation design for construction delivery via splitting the project into three joint ventures, reflecting different technology and ground conditions in different parts of the scheme, and a desire to avoid the risks associated with a single ‘Godzilla’ joint venture.”

On innovation, the report goes on to point out that much of the innovation on Tideway took place pre-construction, citing “the use of a regulated asset base model to finance the project made it more investable and reduced costs by encouraging competition” as an example.

Other key findings include:

• Identity and narrative matter - Tideway is clear that constructing a tunnel is only a means to an end in reconnecting Londoners to the Thames
• ‘Owners must own’ meant committing significant resources to creating a high-quality reference design and delivery schedule that established the ‘what’ and ‘how’ of the project
• Front-end planning between Thames Water and Tideway and a delivery strategy based on three large joint ventures kept interfaces to a manageable level.
• Standardisation. Tideway, Thames Water and the joint ventures agreed a common set of mechanical and electrical (M&E) specifications and suppliers, thereby considerably reducing risk and complexity

Anglian’s Strategic Pipeline Alliance “achieved success by building strong, positive relationships with suppliers”

The report is particularly complimentary of Anglian Water’s Strategic Pipeline Alliance, describing this as has having “achieved success by building strong, positive relationships with suppliers” and concluding that the design of the SPA “reflects Anglian’s recognition that it is operating in a complex, highly uncertain environment, which means access to expertise, backed by strong, positive relationships with suppliers, is vital for success.”

Key insights in the SPA case study include:

• The SPA is a collaborative enterprise designed to deliver outcomes not scope, supportedby a commercial model which incentivises collaboration and outperformance
• Suppliers critical to the delivery of the programme were invited to become full strategic partners and be involvedin solution development
• The SPA embraced the principle of ‘shovel worthy not shovel ready’ with resources frontloaded into system optimisation and programme planning. Production management and digital rehearsal were core competencies sought when procuring partners.
• The active role played by Anglian’s senior leadership team in building supply-chain trust in the SPA enterprise model is vital if partners are to be asked to move away from traditional transactional commercial relationships.

The report describes the Anglian Water SPA case study as an example of the radical change that is needed to overcome problems associated with traditional delivery models, saying:

“As one contributor put it, owners need to be able to have their ‘own handshake’ – a direct relationship – with organisations much further down the supply chain than has traditionally been the case in the UK construction industry.”

“To achieve this goal, owners must be able to align all partners to a shared outcome. The partners also need a shared understanding of what has to happen to achieve the outcome, and that must include how individual assets will be integrated to create the system.”

“During phase two of the SAID project, we heard from owners that had achieved alignment around outcomes with their Tier 1 contractors, only to find that these partners were defaulting to traditional transactional relationships with their own subcontractors.”

“This behaviour was, in part, driven by the historic operating models and risk management processes inside those Tier 1 organisations.”

The Costain case study explores some of the practical issues encountered by a large supply-chain business in developing and deploying a systems approach. Commenting on why the business chose to develop a systems approach capability, the report cites an increasing expectation from major clients for the use of a systems approach from their supply chains, coupled with Ofwat’s push for greater use of systems thinking in the face of complex challenges.

The report concludes by setting out a number of pertinent and cross-cutting questions all major infrastructure providers should be asking, including:

• Do you have to deliver it all at once?
• How will the project organisation and commercial model ensure that participants are collaborating to achieve the outcome – and not just delivering ‘their’ outputs?
• How will the project demonstrate that the outputs it delivers work together as asystem that safely delivers the owner’s desired outcomes?
• How will you track the implications of decisions in one part of the project on the performance of the system?
• Can you establish a minimum viable product as part of project initiation? What can be done to reduce complexity and risk and deliver some benefits earlier?
• How will you take advantage of more functionality moving into the digital sphere to better meet users’ needs – and how will you manage the risk of accelerating technological obsolescence?

Click here to download A Systems Approach to Infrastructure Delivery Part 2: Putting the principles into practice