Professional commercial management skills are the key to unlock infrastructure success

444

Richard Graham FRICS explains the importance of upskilling the industry and how professional commercial management skills can increase economic growth

Richard Graham FRICS has over 25 years’ experience in infrastructure, working for clients, consultancies and contractors alike. PBC Today spoke to him about his views on the current landscape and why upskilling the industry to eliminate poor value within the planning and implementation of major projects will drive greater performance of infrastructure assets and, in turn, unlock economic growth.

Why is infrastructure important to economic growth?

I believe that infrastructure has the power to drive social change, create jobs, support businesses, improve the environment and create a better world in which to live.

Successive UK Governments have identified the infrastructure sector as a key growth area which will drive our national economy forward with approximately £500bn committed to developing our national infrastructure assets over the next decade. At the same time, there is a growing need for our industry to deliver real value for money to infrastructure clients and end users. Outside of the UK, global demand for infrastructure is growing rapidly, (spending is expected to reach circa £41 trillion by 2030).

Given this investment, there will be a growing demand for professional expertise to manage this investment efficiently.

How is the role of the quantity surveyor changing? What skills do modern day infrastructure commercial management professionals need?

Professional commercial management, the domain of the modern day quantity surveyor and commercial manager, will become an increasingly crucial factor at a time of persistent national budgetary constraints.

Skilled commercial managers give confidence to their employers, clients, investors and the public, and they ensure that sound and robust commercial structures are in place for effective delivery, while managing costs and delivering value across the whole life of the infrastructure asset.

They effectively serve as ‘commercial stewards’ on major projects, driving down costs, mitigating risks and providing vital certainty for public and private investors. From Crossrail to Transport for the North, they ensure value for money for clients, taxpayers and investors alike.

Our industry can be incredibly inefficient, and there is a lack of consistency throughout programme life cycles. Commercial professionals need to be deployed very early in the lifecycle of complex projects to offer “respectful, professional challenge” so that they can weed out poor value.

RICS professionals are the leading providers of commercial advice and strategies for economic infrastructure. This enables “infrastructure assets” to reach the optimum value and benefits over their whole life. The commercial manager should help develop the economic business case and own the realisation of outcomes.

The key to this is justifying the investment and championing the business case throughout. Behaviours are key here – collaboration with an array of other disciplines and stakeholders is crucial to ensure programmes are run efficiently to deliver value for money outcomes.

With this in mind, I think that we need multi-faceted skills that adapt traditional QS capabilities. For example:

  • Cost and project controls, risk and benefits assessment;
  • Planning and environmental statements management;
  • Project management at early development stages, which requires a more iterative management style;
  • Digital engineering that combines knowledge of systems, method and value, with estimation of benefits and risk;
  • Procurement knowledge that addresses IPA Project Initiation Route Map and its approach to procurement and supply chain engagement;
  • Collaborative practices required to operate across a multi-stakeholder environment;
  • Financial acumen to address the requirements for more complex forms of financing.

It is also important to understand and experience the difference of operating in the infrastructure as opposed to the construction environment.

How, and why, is infrastructure different to general construction projects?

Infrastructure projects differ from general construction in scale, scope, complexity, timescale, risk, the number of parties involved and the split between owner, operator and user.

There are many descriptions of mega-projects, the primary overarching theme is that they are highly ‘uncertain’ endeavours, with high degrees of interdependency between multiple participants over long periods of time.

Their durations tend to be very long, making them almost hybrids between temporary and permanent organisations, thus impacting on such things as human resources and price fluctuations over such long periods.

It is often the front end (development phase) that is longer than the execution end (delivery phase).

How will the industry fill the skills gap?

Recent research from Arcadis highlights skills shortages both in white and blue collar skills as well as competition for skills between sectors and major clients or their supply chains.

In the short term, the market will seek to adapt and retrain skills, as well as accepting different employment models (e.g. the growth of self-employed professionals).

At present, bodies such as National Skills Academy for Rail (NSAR) and the major consultants are thinking about skills re-training between military and economic infrastructure or displaced individuals from other countries who possess technical skills.

In the longer term, schools and colleges ought to start producing the range of skills that the industry required.

I think we certainly need a collaborative approach from industry, government and professional bodies such as RICS to come together to ensure solutions are put forward to encourage more young people into the industry and upskill the existing workforce to ensure optimum infrastructure performance – a critical enabler of economic growth.

What are RICS doing to plug the skills gap?

This year RICS has launched the first in a new suite of guidance designed with the specific objective of supporting sound commercial stewardship for the delivery and whole life cycle management of infrastructure projects.

Alongside this RICS have recently launched a new six-month distance learning course – Commercial Management – Infrastructure Programme.

The distance learning programme offers learners the opportunity to the learn the best practice techniques needed for infrastructure project delivery.

Through initially setting the scene of the infrastructure industry, the course demonstrates best practice for a commercial manager.

From managing the main stakeholders and understanding their drivers and motivations to administrating the process of cost planning and benchmarking, risk, supply chains and procurement processes, the course teaches delegates how to manage the commercial aspect of a major programme.

Upon completion, they will have the practical knowledge required to successfully manage commercial activity on an infrastructure programme whether it be road, rail, energy or telecommunications.

It is an exciting time for the industry, but the overall level of commercial competency must be raised and adapted to the changing requirements of infrastructure to realise the full potential that the next decade of infrastructure programmes have to offer.

For more details on the RICS Commercial Management in Infrastructure distance learning course visit our website.

 

Richard Graham FRICS

RICS

www.rics.org

@RICSnews

LEAVE A REPLY