Here’s a hypothetical situation where Company X is building a state of the art data center. They have a track record for world class facilities and operational excellence supported by best practices and proactive maintenance. The project is highly visible, well-funded and a stakeholder priority. The buyout comes in close but slightly over budget. They are concerned about added costs that may materialize from a compressed schedule, El Nio weather patterns and the unknown. Despite being within their contingency, they explore cost savings opportunities. One opportunity can save maybe 1% but would sacrifice their ability to maintain the system. The consequences include increased maintenance costs, higher risk during maintenance and potentially higher risk from deferred maintenance or no maintenance. Stakeholders potentially affected include facilities, IT, internal and external customers. The onetime savings will be eclipsed over the 20 year life span from higher costs and increased risks. A single decision with a ripple effect.
Does this sound familiar? Maybe not, but realistic nonetheless. Whether it is an upgrade or new construction, every mission critical project is a collection of decisions too numerous to count. A saying one of our clients is fond of is, “How did we get here? One good decision after another.” Decisions can range from big picture and high impact ones, like site selection, to more mundane decisions, like equipment naming conventions. Many of the most critical decisions are made long before the first shovel breaks ground. These early decisions will weigh heavily on a facility’s ability to meet its operational and maintenance requirements.
As mission critical specialists, we are often asked to perform third-party reviews. Sometimes we review designs that exist only on paper so changes are still possible. Most of the time, however, we are brought in after the concrete has cured and kilowatts are consumed. Under these circumstances it is common to find misalignments between the owner’s requirements and the facility’s performance
The people who pay the price for these shortcomings are facility operators, IT, real estate and other business units, internal and external customers, and ultimately shareholders. The consequences of poor decisions include unnecessary operating expenses, costly redesigns or upgrades, inefficient capital investments, and increased risk. The absolute worst case result of poor decisions is what we call in the industry “a resume generating event”…downtime.
So how can you increase your chances for success and avoid, or at least marginalize, poor decisions? Here are three suggestions:
Involve Key Stakeholders Early and at the Appropriate Time
Stakeholders articulate and shape the requirements. Without their input there is no direction much less a project. An open dialogue is needed using interviews, group discussions and group consensus techniques to identify and prioritize the project requirements. Stakeholders need to be involved at the right time, when their requirements can be accounted for in the project budget. Prioritizing the requirements establishes the framework to evaluate and make informed decisions. This is especially true during value engineering exercises. Including stakeholder input during the budgeting process may help avoid value engineering altogether and making decisions that may end up plaguing the facility over its lifetime.
Take a Long View Approach: Consider TCO and Operational Risk
Risk can be hard to numerically quantify and true total cost of ownership may be hard to calculate because of hidden costs or unintended consequences. Despite these truths, our approach to solving today’s problems should not jeopardize tomorrow’s chance for success. In our example above, maintenance was a valued activity going into the project but was challenged over cost concerns. The short term budget issue might be solved but at the expense of higher maintenance costs and increased risk. It’s important to consider the short and long term ramifications and test the potential consequences against stakeholder requirements.
Don’t Delay or Defer Decisions That Have Lasting Impact
The window of opportunity to make decisions might be limited. Making decisions early will help get requirements included in the project budget. A reason why involving the necessary stakeholders early is key. Besides, wait too long and it may be costly or impossible to change course. Sometimes decisions are consciously deferred or accidently overlooked. That’s when experience and varied points of view can help identify the critical decisions with lasting impact. A simple example is vendor pre-qualification. Limiting the field will help contractors get bids for major equipment from reputable vendors with established service organizations for support over the life of the installation. An open bid list may make the decisions for you, based on the lowest first cost.
In most cases there are contributing factors that drive decisions one way or the other. Decisions are made with the best intentions and what may qualify as poor decisions are quite often passive omissions or oversights. Nobody sets out to design a flawed system. However, all too often that is the end result. For this reason we have a tool we call the Design Decision Log to have an open dialogue with stakeholders, ask the questions, discuss the ramifications and avoid the common and not-so-common pitfalls. For those that have been through the process with us understand it can be painstakingly thorough, but they also understand it is more than a design review meeting. While it does coincide with the design phase, the process works best when started up in the planning stage and used to develop, articulate and understand the requirements and components of the project and establish project funding. While a design review may be evaluating the design in terms of the requirements, the Design Decision Log is defining those very requirements. With the design decision process opened to a larger audience at the start of the project we very easily roll it into the Owner’s Project Requirements (OPR) and Basis of Design (BOD) documents that form the foundation of a comprehensive design and commissioning process. With focus on the long term, we strive to make design decisions we can all live with.