SOLUTIoNS issue 36
Unlocking new gas reserves LNG INFRASTRUCTURE CHALLENGES also in this issue:
UAE retail buoyancy Malaysia aims higher UK brings manufacturing home Pharma’s emerging global markets
CONTENTS 4 Connecting People and Places Anaheim Regional Transportation Intermodal Centre (ARTIC), Southern California 6 Pharma’s Emerging Markets Future growth likely to occur outside of traditional core markets 8 Emirates Embraces Retail Therapy Al Maryah Central, Al Maryah Island, Abu Dhabi 10 UK Manufacturing Comes Home Businesses consider relocating production operations to domestic shores
12 The Culture Clash Financial services organisations strive to accommodate their digital businesses
14 Malaysia Aims High Supporting the Vision 2020 Economic Plan
16 Unlocking New Gas Reserves LNG infrastructure challenges
18 Commercial Property and BIM Why no traction?
20 Welcome to Asia Pacific’s Hotels Investors and developers enjoy active market
22 PPP Market on the Upswing Gulf Cooperation Council (GCC) governments explore public-private partnership
24 Working Beyond Walls Supporting flexible working practices and reducing real estate costs
26 Consensual Dispute Resolution The Gulf Cooperation Council (GCC) region sees shift towards this model
28 Emerging Asia’s Real Estate Potential Funders and developers focus on delivering best returns for their investors
30 Raising the Standard ISO 9001:2015 brings leadership focus to organisational knowledge management programmes
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VIEWPOINT Welcome to a new issue of Solutions, where we present the constructive expertise we’re demonstrating in so many sectors. We are leading some great projects in the Middle East, contributing to national economic development visions in countries such as Qatar and Kuwait. Page 8 highlights our extensive retail experience in the UAE, focusing on Al Maryah Central in Abu Dhabi’s Al Maryah Island community. Page 10 considers the UK’s potential for inward investors and domestic clients who are exploring re-shoring options for their manufacturing operations. Faithful+Gould is well placed to support these organisations and has plenty of relevant experience to bring to the table. Our corporate heritage began in the UK, and, unusually for a project and cost consultancy, our earliest success was founded on the industrial and manufacturing sectors. Our first clients in the US were also in the industrial and manufacturing sectors, helping to grow our business globally. We remain committed to these sectors, leading a wide range of global projects. Read about our work in the LNG industry on page 16.
best practice, together with a detailed understanding of local nuances. Our wider Asia Pacific operations are also thriving, and page 20 profiles our work in the hospitality sector. Renewed investment in hospitality in the region has led to a surge in development, and our current portfolio includes 5000 keys across Singapore and Hong Kong, with exciting projects such as Fairmont Singapore. The back cover demonstrates our ongoing commitment to developing the best systems and tools to benefit projects in every sector. Increasingly, clients expect a fully integrated service model when procuring project and programme management services. Our partnership with Oracle Primavera helps make this a reality, and enables clients to drive best value from their investment. Your interest in Faithful+Gould is greatly appreciated and I hope you’ll find something relevant to you and your business in this issue of Solutions. To find out more, contact any contributor by using the details on each page or via our website. You can also join us on LinkedIn, Twitter and our blog. Finally, I’d like to wish you the compliments of the season, an enjoyable break and a great year ahead in 2015.
Other current US highlights include the ARTIC transportation hub, featured on page 4. I’d also like to congratulate our NYC team as they reach the end of the ten-year World Trade Center Memorial commission. We feel honoured to have made a contribution to this important project. We introduce our new office in Kuala Lumpur on page 14. New and emerging markets such as Malaysia present us with opportunities to demonstrate global
Donald Lawson, CEO Worldwide Operations
For further information, contact Donald Lawson on +44 (0)20 7121 2192. Scan the QR code for full details.
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CONNECTING PEOPLE AND
Places
The City of Anaheim, Orange County, Southern California, has created an exciting new transportation hub, the Anaheim Regional Transportation Intermodal Centre (ARTIC). This iconic project is the starting point in long-term transportation planning to provide fast, economical connections between Anaheim, the region, and the state of California. Ten thousand people a day will use the hub to access local and regional trains, commuter and charter bus lines, shuttles, taxis, and transit to Disneyland, Honda Centre and Angel Stadium of Anaheim. ARTIC will also be a future terminal for California high-speed rail and CaliforniaNevada Maglev.
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Anaheim Regional Transportation Intermodal Centre will improve transport and stimulate the economy. It’s good news for Anaheim as ARTIC is expected to stimulate the local economy, thereby creating jobs, enhancing tourism, and improving transportation links. Transit-oriented development in the immediate area will integrate with ARTIC to form a vibrant Southern California community. Together, this represents Orange County’s continuing transformation from rural farmland and suburban community to a thriving metropolis. To support this vision, ARTIC will be a destination in its own right, featuring amenities
such as transit oriented retail, speciality dining, Wi-Fi and charging stations, parking, bike racks and lockers, as well as community space for the public to enjoy. The hub’s infrastructure includes a railroad bridge, baggage tunnel and pedestrian tunnel, two-sided rail station platform, pedestrian concourse bridge, bus terminal, parking for nearly 1,100 vehicles, and improvements to local utilities and roadways. ARTIC is the result of a partnership between the City of Anaheim and Orange County Transportation Authority (OCTA). Faithful+Gould
Image courtesy of HOK
For further information, contact Lukas Van Schalkwyk on +1 562 314 4200. Scan the QR code for full details.
worked with the City of Anaheim during the project’s initial concept stage in 2009 and provided early input that informed the team of any cost impact that would stem from proposed design changes. A number of conceptual designs were presented to the City of Anaheim – with the budget for each laid out – before the final design was chosen.
advantageous than the design and build approach they originally favoured.
We continued to support from the conceptual and design development phases to the final bid and project go-ahead phase, when construction began in 2012. We were responsible for establishing the project budget and providing budget control, cost estimates, value engineering and life cycle cost analysis services.
The result is an impressive sight. The iconic design creates a 67,000 square foot, 120-foot tall, steel-framed, light-filled tubular structure with three storeys. Innovative materials and techniques were used to reduce energy usage, maximise water preservation and reduce waste. The roof is shaped from three layers of ETFE, a reflective material that lets in light and reflects heat; the radiant flooring has a cooling system throughout. The project is well-positioned for LEED® Platinum certification. For more information about ARTIC, visit www.articinfo. com or follow on Facebook.com/ARTICAnaheim or Twitter.com/ARTICAnaheim.
At every stage we made sure that costs were aligned with the client’s budget, remaining mindful of this as a publicly funded scheme with multiple secondary funding sources and stakeholders. We advised on the procurement and bid strategy, convincing the client that full design and competitive bidding was more
The complex scheme is now nearing completion and is ready to meet the community’s transportation needs, starting December 2014. This is just one of Faithful+Gould’s leading transportation projects. We have extensive global rail expertise, reinforced by strong links with our parent company Atkins, leading
providers of rail engineering and systems design. Our infrastructure experience includes track remodelling and renewals, signalling, electrification, telecommunications, structures, stations and depots. We have also been involved in major station enhancement schemes, multi-modal interchanges and major transportation hubs, providing commercial support throughout the feasibility, design development and procurement phases. Our global transport hub experience includes Penn Station, New York; High Speed 1, St Pancras International Station, London Bridge Station, Birmingham Gateway, Heathrow Terminal 5, Manchester Airport, UK, and Barajas Airport, Madrid, Spain. In Asia Pacific we have worked on the Kai Tak Cruise Terminal Building, and the West Kowloon Terminus/high-speed rail station, Hong Kong. In the Middle East our projects include King Abdulaziz International Airport, Saudi Arabia, RTA Dubai Metro, UAE, Doha Metro, Qatar, and Riyadh Metro, Saudi Arabia.
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Emerging The global pharmaceuticals market is undergoing rapid change, with future growth likely to occur outside of traditional core markets.
Many pharma companies plan ambitious geographical diversification to engage with new opportunities in the emerging economies where public health is increasingly affected by chronic diseases. These problems are associated with an ageing global population, rapid unplanned urbanisation and the globalisation of unhealthy diet and lifestyle. Pharma companies anticipate significant opportunity as these locations show strong GDP growth, expansion of government healthcare, increased purchasing power of growing middle classes, and better awareness around health. Pharma industry sales in emerging markets are estimated to reach US$300 billion by 2017, equivalent to today’s American market plus the top five European markets. This is significant in an industry battling with mature market stagnation, patent expirations, and increased regulatory hurdles.
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In recent years, companies operating in mature markets have reduced capital and revenue expenditure, consolidated assets, and focused on improving asset efficiency and driving out unnecessary operational costs. Some have reallocated these savings to build up local operations in emerging markets, resulting in go-to-market models that include local R&D, manufacturing and large salesforces. Brazil, Russia, India, China, Mexico, and Turkey (the BRICMT economies) have become more competitive as industrial locations. Pharma companies have already targeted these markets, via collaboration with governments, local salesforces, local manufacturing and local R&D. Government policy is especially influential. The Chinese government, for example, has committed to invest billions in healthcare reforms. China is now the fastest-growing market for
pharmaceuticals and is expected to be the largest by 2050. Southeast Asia is the second-largest emerging market, with Africa in third place. Government relationships, partnerships and other collaboration within the existing infrastructure are an especially important part of the strategy for project delivery in second-tier and African markets. Close collaboration with local distributors allows firms to leverage the distributor in order to increase market coverage. The BRICMT markets are the most mature of the three clusters, and here companies expect to apply strategies similar to those used in mature markets. In the second tier, however, companies are feeling their way carefully, concentrating on networking and distribution. In Africa, strategies are really only just being formulated, with a more cautious approach
MARKETS
based on risks balanced against market share, before committing resources. The focus is very much on local partnerships and only limited investment in building local infrastructure.
failures, potentially leading to loss of both revenue and business confidence.
As well as developing the right products and strategy for the right market, pharma companies also face real estate challenges. Outside of staffing costs, owning, operating and maintaining facilities constitute the largest expense, and these emerging markets are no exception. Companies are therefore exploring leaner ways of working, to ensure that their new market’s property portfolio is fit for purpose and aligned with the overall business strategy.
Challenges, risks, and investment needs can be addressed by developing long-term robust plans, including a procurement strategy tailored to the local construction market. Effective stakeholder engagement plans will facilitate a timely decision-making process (particularly where issues need to be referred to a central organisation). Other essentials include understanding and detailing the risks and potential mitigation process, addressing a risk-based contingency approach to delivery, and understanding total project cost.
The first challenge is to define market-tailored and effective business procurement strategies for each market segment, with appropriate schedule timeframes. Get this wrong and the result is project delivery with cost and schedule
Faithful+Gould has a strong track record in all the above service elements, delivered via our integrated project and programme management approach. We have 30 years’ sector experience, working with leading pharma companies, from our
long-standing operations in the Americas, UK and Europe, Middle East and Asia Pacific. We lead viable project delivery within the right cost model and the right schedule time frame, reinforced by a detailed understanding of the asset life cycle. We are committed to supporting the global pharma sector. Our highly mobile team of professionals are already bringing best practice to some of the emerging markets, as well as gathering cost data for others. We continue to invest in talent to successfully deliver these complex projects.
For further information, contact John MacDonald on +44 (0)1782 222233. Scan the QR code for full details.
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EMIRATES EMBRACES
RETAIL
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THERAPY Al Maryah Central will open in March 2018 in Abu Dhabi’s prestigious Al Maryah Island community.
Retail is one of the Gulf Cooperation Council (GCC) states’ fastest-growing sectors, and the second largest behind oil. Increasing populations, local and expatriate wealth, strong household consumption and a growing tourism industry are the drivers for this major contributor to economic growth in the region.
roads. Designed by Gensler, the vertical mall design comprises five floors, with an additional four levels of parking. This brings efficiency challenges as a greater area is required for vertical transportation. A vertical design also presents challenges in terms of natural light and store visibility from other levels.
The most active markets, with highest growth potential, are the UAE, Qatar, Saudi Arabia and Kuwait. It’s a competitive arena, with developers differentiating on scale, quality, accessibility, food & beverage offerings, leisure provision, and the introduction of new brands.
Flexibility in design is especially important for retail clients, as they also have to satisfy the needs of their tenants. Leasing layouts change, openings in floors are added or removed, and malls are regularly expanded or renovated to maintain their position in evolving local markets. We have been involved in assessing the impact of future-proofing design studies, to maximise future flexibility for the client within the boundaries of commercial viability.
Regional developer Gulf Related is developing its first super-regional shopping destination, Al Maryah Central, located on Al Maryah Island in the heart of Abu Dhabi city, the UAE capital. The emirate’s Urban Planning Council has designated the island as the capital’s Central Business District. The district is expected to be a catalyst in fulfilling Abu Dhabi’s urban master plan objective of environmental, economic and social sustainability. Gulf Related is a joint venture between asset management company Gulf Capital and US real estate developer Related. Gulf Related also built the adjacent high-end Galleria, on Al Maryah Island opposite the Al Maryah Central site. Al Maryah Central complements the overall provision by bringing high street retailers to the neighbourhood, within a high-quality facility. Al Maryah Central will provide over 1.3 million square feet of leasable retail floor space over four floors. Bloomingdale’s and Macy’s have recently been confirmed as anchor tenants (brought to Abu Dhabi in a joint agreement between Gulf Related and Dubai-based Al Tayer Group), with 400 other retail outlets planned. For further information, contact Donal O’Leary on +971 2627 0500 Scan the QR code for full details.
Over 90 food outlets are also planned, with a gourmet food market, cinema, health club, children’s entertainment and public realm roof gardens. The food & beverage offering is intended as a key market differentiator, with a contemporary, culturally diverse, market-style food hall acting as a destination in its own right. The site is tightly constrained, due to surrounding elevated
Faithful+Gould is providing cost management services on the project, to help Gulf Related achieve maximum efficiency and best value. We control and manage costs throughout the project lifecycle, and services include cost control, tender documentation, and risk and value management. Procurement strategies are aimed at delivering the mall in accordance with cost and programme aspirations. We incorporate change management procedures into project procurement to allow full cost control and to enable informed, timely decisions to be made. This is just one of our ongoing retail projects in the GCC region. We’ve delivered integrated project, programme and cost management services on several malls throughout the Middle East. We have an excellent in-depth understanding of the sector, and support clients from the earliest speculative stages through to completion of construction works. We also work with a range of tenant clients, including Tiffany & Co, VOX Cinemas, Magic Planet, Costa Coffee, Nike, Nokia and IKEA, managing fit-outs to meet corporate brand standards in single units as well as large department stores. We lead retail projects throughout the Middle East, Americas, Asia Pacific, UK and Europe, providing our integrated project and programme management approach on major developments, individual stores and refurbishments.
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UK MANUFACTURING
COMES HOME The tide is beginning to turn for some parts of the UK manufacturing industry, as more businesses consider relocating their production operations back to domestic shores. Many companies are now reconsidering where best to make their products. After years of shifting production to lower-cost countries, there are signs of a return to the UK in some sectors of the economy. As offshore operations begins to look less attractive, the UK’s manufacturing heritage has an opportunity to re-establish itself. Certainly, the government intends manufacturing to play its part in self-sustaining economic recovery. The challenge is to convince manufacturers that the UK can compete on safe working practices, location costs, quality, delivery speed and customisation. The reshoring initiative is driven by rising overseas labour and transportation costs, and a search for better control of quality and of the supply chain. Just-in-time processes are typically more feasible with a shorter supply chain and when manufacturing geographically closer to the point of sale. There are also advantages in co-locating production and R&D. It’s a gradual but encouraging trend. One in six companies reshored its manufacturing in the last three years1, compared with one in seven in 2009. If it’s here to stay, it’s good news for the UK. Reshoring has the potential to create 100,000 to 200,000 extra UK jobs over the next decade, in sectors from textiles and advanced manufacturing to business support services, telecommunications and R&D2.
Enterprise Zones in England, to help them attract global companies. A Local Investment Showcase ‘one-stop shop’ will enable investors to search the assets of every Local Enterprise Partnership, Enterprise Zone and City Deal, and to compare local sector strengths. The labour market will need more attention, however, if reshoring is to become a serious long-term economic strategy. Lack of investment means that key skills have been lost and there are too few experienced UK manufacturing engineers in particular. Other countries also offer very attractive incentives (see article on Malaysia on page 14). The construction industry in its current form will also struggle to respond to the huge capital investment anticipated by the government. Major infrastructure projects are tying up resource over long periods of time, potentially creating a capacity problem for manufacturing and other project delivery. The skilled labour workforce is a specific concern. These are challenges that current and successor governments need to address. In the meantime, a rush to create support/ incentive organisations is under way. UKTI has joined forces with the Manufacturing Advisory Service (MAS) to launch Reshore UK, a service to help companies bring production back to the UK. Part of MAS’s role is to ensure capacity in the UK supply chain, to take advantage of the reshoring opportunities.
management approach encompasses a range of services. We lead lifecycle investment appraisals and find the best deals for our clients, making sure that any government incentives are explored. With close relationships in UKTI, our knowledge is up to date and supports a lateral thinking perspective. For many companies, the biggest challenge is the availability of good development space in the UK. Our extensive knowledge of Enterprise Zones aids UK-wide site selection. We help clients navigate the government incentives for brownfield site development, advising on site selection and purchase, costs, implications and scheduling of remediation, and subsequent procurement and implementation strategies. Designing the manufacturing facility properly is crucial and our early input ensures that the design team thinks beyond the building. Working with our clients to fully understand their manufacturing process, we ensure that their built assets will support their process. This optimises production layouts to suit the manufacturing operation. The building can then be designed around the production needs, including flexibility for future-proofing. We’re backing the UK – ready to help domestic and inward investors get the very best from their project. 1 2
The government is obviously keen to emphasise the benefits for companies. These include a relatively stable economy, competitive corporate tax rates, a good regulatory environment and strong legal frameworks. UK Trade & Investment (UKTI) has developed inward investment plans for each of the 24
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Faithful+Gould is well placed to support inward investors and domestic clients who are exploring reshoring options. Reinforced by our relationship with our parent company Atkins, we remain committed to the manufacturing sector, leading a wide range of global projects. Our integrated project and programme
EEF, 2014, Backing Britain, a manufacturing base for the future. PwC, 2014, Reshoring – a new direction for the UK economy.
For further information, contact Mark Grayson on +44 (0) 113 306 6600. Scan the QR code for full details.
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THE cultur
FINANCIAL SERVICES Digital technology continues to transform the financial services industry, with companies acquiring and/or developing digital businesses to strengthen their research and development capabilities. This initiative accelerates the gathering of select customer and target market data. More precise analytics can then be applied to test innovative products in development, giving these companies a competitive edge in penetrating new markets. When it comes to locating these new ventures, financial services organisations find that their typically conservative workspaces are not ideal for their digital colleagues. This brings challenges for real estate programme managers as they strive to develop office environments that support two highly disparate working cultures.
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In the US, financial services companies typically operate in Class A office buildings, with interiors programmes bottom-line driven and designed under the watchful eye of corporate governance. Their space is classically subdivided to accommodate multiple businesses and minimise the structural changes associated with flexibility. Digital businesses, however, are comfortable in a very different warehouse-type space. They thrive in organically designed and collaborative environments that are eclectic and inherently flexible to support inspired thinking. In our experience, financial services companies get the best from these projects if they embrace their niche industry colleagues. They need to provide unique environments that foster creative thinking while honouring the more structured work styles and culture of their primary businesses. The digital lab offers a
solution – this is a non-traditional workspace, developed in real estate segregated from the balance of the portfolio, and uniquely designed with significant digital leadership input at regional level. The search for location usually takes the organisation out of its comfort zone, into premium leased space in fashionable neighbourhoods not typically inhabited by established, corporate entities. Design also differs significantly. Some of the unique architectural features of the digital lab are step-away spaces designed with specialist materials and finishes for creative inspiration; for example, lofts and treehouses, think pods and game areas for tabletop sports. Amenity spaces such as fully equipped kitchens and lounges are required to support overnight and weekend hackathon conclaves, networking events and software testing.
ure CLASH
THE DIGITAL LAB Clients’ nationwide design teams may not be the right option for these boutique workspaces. Contrary to the sector norm, these spaces are often best handled by multiple architectural and engineering teams, local to each project. This empowers line directors to participate in the process, thus bringing the desired measure of individuality to each lab for recruitment purposes. FF&E requirements are also a departure from the standard workstation and casegood furniture programmes typical of financial services companies. A flexible furniture programme is needed, given the emphasis on impromptu collaboration and clearing of the space for events. Pieces such as stand-up desks on castors, with adjustable height stools and modular sofas that can convert to individual seats, are paramount to achieving this goal. The communications infrastructure will differ
from the core estate portfolio’s traditional, hard-wired voice and data network services. Digital teams use wireless, cellular voice and data services to maximise their flexibility in reorganising their workspaces. Project schedules may run longer than clients are accustomed to working with for their strategic planning purposes. The digital lab’s eclectic design produces build-out costs that can top out at more than 400 per cent higher than customary projects. Approval of project budgets (and schedules) is therefore often protracted as a result of an inherently iterative design process and the programme manager must manage expectations accordingly. Creative spaces and premium amenities are becoming essential for firms looking to develop digital businesses in-house. Though the digital lab programme represents a departure from both corporate standard design
protocol and appropriate budget and schedule benchmarks, a successfully executed project results in businesses that are thriving and growing as intended. Drawing on many years’ project management experience in the financial services sector and a track record of successfully delivering modern workplaces, Faithful+Gould’s integrated project and programme management services can help clients strike the balance between tradition and innovation in a competitive marketplace.
For further information, contact Carolyn Jinks on +1 212 252 7070. Scan the QR code for full details.
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MALAYSIA
AIMS HIGH
SUPPORTING THE VISION 2020 ECONOMIC PLAN
Malaysia is in the process of transforming itself into a high-income nation by 2020. The Southeast Asian nation plans to reduce reliance on oil revenues, evolving to a more servicebased, private sector-driven economy. The Malaysian government’s Vision 2020 blueprint not only outlines economic aspirations, but also an enhanced social and political environment. Generating new domestic and inward investment is central to the economic reform programme, enabling Malaysian industries to compete successfully in the global markets. A range of incentives encourages inward investment, particularly in exportoriented high-tech industries and back office service operations. The government is especially keen to create a world-class workforce and has developed initiatives to support this. The Returning Expert
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Programme (REP) facilitates the return of Malaysian professionals from abroad to augment the country’s resident pool of professional and technical expertise. The Malaysia My Second Home (MM2H) programme offers a renewable, ten-year, multiple entry visa for qualified applicants (mostly retired) who would like to live in Malaysia or spend extended periods in the country. It’s hoped that MM2H will encourage residential property investment. The built environment industries play an important role in stimulating and sustaining the economy. The government is now keen to secure private sector and investor participation, particularly for public projects such as construction and management of schools, hospitals, and other community infrastructure. Both commercial and residential real estate are
expanding rapidly, with ten per cent additional office space capacity expected on the market in the next two years. Firms are starting to move out of their older properties, creating a refurbishment market as well as a demand for new space. Malaysia faces competition from its neighbours in attracting inward investors, but recent figures demonstrate a very favourable annual cost to a company of US$4,000 per desk in Kuala Lumpur, compared to US$11,000 in Singapore. Occupancy rates are also good, with the Klang Valley, a Kuala Lumpur suburb, securing 80 per cent occupancy rates. Faithful+Gould’s operations in Malaysia began in 1996, leading projects for a wide range of clients, largely managed from our Singapore regional headquarters. We are delighted to now have a permanent office in Malaysia, with a
As Malaysia pursues its Vision 2020 goal, we’re excited to offer integrated project and programme management services from our new Kuala Lumpur office. For further information, contact Bala Vijayasingam on +603 2690 1548. Scan the QR code for full details.
team of eight co-located with our parent company Atkins, at the Intermark development in Kuala Lumpur. Our commissions typically begin with helping clients develop robust project plans. We then explore the best way to achieve project delivery. It’s essential to use the optimum procurement approach for all trades on the project and to employ the appropriate contract. We have the local knowledge to ensure client expectations take into account local nuances and that the appointed team delivers the expected quality under our close management. We add value at an early stage by challenging assumptions and expectations where appropriate, to ensure no surprises and to mitigate risks. Navigating the local business environment, processes and authority approvals can be a barrier for clients. In Malaysia, it’s not always
easy to understand the approvals process although the One Stop Centres, responsible for collating and distributing applications, have achieved more consistency. Faithful+Gould adds considerable value by guiding clients at the early planning stage. Acting in the best interests of clients, we have improved the way professional fees are handled on our projects. In Malaysia, it’s common for these fees to be based on a percentage of the project’s end value, potentially encouraging inefficiency. We have therefore introduced transparent resource-based fee schedule requirements, following global best practice in procuring consultant teams. We are fully aware of the contractual obligations of all parties, and clients can be confident that integrity will be maintained throughout their project. Recently we have provided integrated project
and programme management services to clients across the Malaysia corporate real estate, industrial, pharmaceutical, education and government sectors. Our project portfolio here includes GlaxoSmithKline, Shell, Intel and Dyson. We have recently delivered a 12,000 square-foot office fit-out project in Kuala Lumpur, and completed a technical due diligence exercise on a US$100 million property transaction. We are managing the delivery of new offices facilities for a major technology firm’s 550 staff in Kuala Lumpur, with a build period of only eight weeks. We are also appointed on a new build 25-storey tower located at the Tun Razak Exchange, Kuala Lumpur’s future Central Business District. As well as working closely with our other Asia Pacific offices, we support our parent company Atkins and we were part of the bid team that won the Asia Aerospace City project.
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Unlocking ne gas
The global LNG industry shows strong growth, with project proposals growing faster than the industry’s capabilities to develop them. The development of new supply is a challenge the US hopes to address, potentially becoming the world’s third-largest LNG exporter, after Qatar and Australia, by the end of the decade. It’s an exciting opportunity for global oil and gas industry players across the LNG value chain, from exploration and liquefaction to transportation and regasification. Faithful+Gould has been examining a number of natural gas facilities with our clients, witnessing a significant volume of LNG facility development along US coastlines. The increase in shale gas production and lower price in the US has renewed interest in exporting LNG. Four LNG
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export terminals have therefore been given construction go-ahead by the US Federal Energy Regulatory Commission (FERC) and more than a dozen are queuing up for approval. Project finance, however, remains a critical issue. To build these large-scale high quantum LNG liquefaction plants, the industry is exploring creative financing models that could improve the risk and reward relation in the LNG value chain. Some US LNG plants are spearheaded by companies with insufficient resources to shoulder multi-billion projects. As a result, they are seeking both equity and debt from various financing sources including banks, Export Credit Agencies (ECAs), Master Limited Partnerships (MLPs) and bond investors.
These projects have high levels of complexity and risk, and significant technological, managerial and logistical challenges. A credible and dependable supply chain, strong delivery track record and high-calibre management is vital for reaching the final investment decision (FID) in the expected timescales. Achieving the FID and raising the finance does not guarantee the project’s success. Technical, commercial and financial perils, if not managed effectively, can lead to potential cost and schedule overruns, affecting overall project performance. Several LNG liquefaction projects under construction in Australia, for example, have reported significant overruns. A robust risk management process can help to mitigate these problems
ew reserves Continued growth is forecast in the global demand for liquefied natural gas (LNG). The US plans to build more LNG infrastructure.
and enables the owner’s project expectations to be met. The LNG regulatory approval processes pose a significant risk to the project schedule. Although progress has been made to streamline the permitting, it remains complex and lengthy. LNG plant owners who invest in advance preparation for the regulatory and agency approvals tend to achieve the FID earlier and start construction works on time. As well as avoiding unwanted delays, this prevents exposing the project to additional changes and negotiations with EPC contractors and other supply chain partners. Project success depends on a myriad of technically and commercially complex decisions. These include the development plan; approvals
and permits; contracts and agreements; selection of EPCs; procurement strategy; engineering, design and technology; construction approach; costs and schedule, and project interfaces with existing and future infrastructure. Faithful+Gould provides an integrated project and programme management service to ensure the LNG project concept can be taken through to reality. Our portfolio of offshore and onshore oil & gas projects includes the full LNG value chain, reinforced by the expertise of our parent company Atkins. Together we have contributed to the development of large-scale liquefaction facilities worldwide. As technical advisors to both owners and lenders, we not only understand what makes a
successful project, but more importantly why some fail. Drawing on our extensive experience on some of the world’s most challenging energy projects, we assist clients in meeting time, cost, quality and strategic project objectives. Our global LNG knowledge and local presence enables our clients to balance the known and unknown risks through all life cycle phases and improve the overall performance and delivery.
For further information, contact Masjood Jafri on +1 832 476 3300. Scan the QR code for full details.
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Commercial
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l Property and BIM... ...WHY NO TRACTION?
Across the supply chain, designers, contractors and consultants have made significant capital and time investments in the adoption of Building Information Modelling (BIM). Suppliers are increasingly defining BIM as their preferred method of delivery because of the benefits which are realised through its use. Benefits include better co-ordination of design and project information which produces reduced risk and greater efficiency, although this requires teams to work more collaboratively. Studies suggest that the industry is reaching a tipping point, but that means many suppliers are not yet convinced1, 2. Commercial property is one sector where the benefits of BIM have yet to gain broad recognition, and while some commercial developers are championing BIM, many remain to be convinced. BIM is used increasingly by suppliers in this sector, but is rarely driven by the client. Why is this? What stops the business case stacking up for the commercial property sector? National governments are often among the first client groups to favour BIM. Governments not only identify direct benefits to public capital programmes, but also seek to enhance construction sector efficiency and international competitiveness. The 2014 RICS International BIM Implementation Guide identifies countries such as the UK, Australia, Hong Kong and Singapore where targets have been set for BIM adoption. And all UK government construction projects must be delivered using BIM by 2016, with expected capital cost savings of 20 per cent as well as programme and quality benefits. Private sector clients have also recognised the benefits. The UK university sector is one example where there are clear advantages from an estate-wide digital view established during design and construction. Crucially, this approach can then be used to operate and maintain the estate over its lifetime.
For further information, contact Adrian Malone on +44 (0)113 306 6600. Scan the QR code for full details.
Facilities Management (FM) is often cited as the stage in the asset lifecycle where BIM’s greatest return on investment is realised. For commercial developers, the realisation of benefits during the operational life of assets is of little value if those assets are sold upon completion. Developers should perhaps look at ways to transfer the benefits of BIM to their tenants and/or future freeholders. In sectors such as retail, the benefits of BIM are focused on planning, design and construction. For large retailers, BIM can support complex planning applications, particularly where engagement with local stakeholders is required to overcome potential objections. Retail
1. McGraw Hill. The Business Value of BIM for Construction in Major Global Markets. 2014. 2. NBS National BIM Report 2014. 3. Building Information Modelling for Commercial Office Buildings. May 2013.
clients often seek standardised store design, and here BIM provides efficiency in applying pre-defined standard design elements and in supporting modular construction techniques and offsite fabrication. This is especially relevant on schemes where space and logistics are challenging, as in most major cities. The business case for BIM in commercial property is therefore mixed, and this is reflected in the limited appetite of clients to mandate the use of BIM by their suppliers. Using BIM during design allows configuration of gross-to-net space to be optimised, and use during construction takes risk out of site works, which should be reflected in a reduction in contingency built into contractors’ pricing. A recent BCO report3 identified that BIM can reduce cost, risk and construction time and deliver more efficient buildings. BIM can also be expected to assist clients in delivering the vast quantities of information about the building which must be transferred to the owner/operator upon completion. Yet developers generally seem content to allow market forces to drive BIM adoption within the supply chain – if BIM enables a supplier to submit a better bid, the client need not worry about the detail if they are confident the proposal is realistic. For commercial property clients to more directly engage with BIM, a stronger connection is needed between the benefits brought to the operator and their tenants, and the value realised by the developer and their investors. Influencing factors include recognition of BIM’s value by agents engaged in valuing and letting property, but the strongest appeal will be created when the Facilities Management (FM) industry wakes up to BIM’s potential. As FM software providers begin to integrate BIM into their solutions and the use of BIM within FM matures, commercial property developers may see a stronger pull towards BIM. There will be challenges – for example, the digital model must be updated as tenants customise office space during their lease, but these issues are not insurmountable. With suppliers’ increasing uptake of BIM, it should not prove too difficult for developers to respond to this need as it emerges. BIM is already in use in the commercial property supply chain, but largely for schemes facing significant technical or logistical challenges. If clients are to engage more closely, a value proposition bridging the gap between the end user/ operator and developer will certainly be required.
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Welcome to
Asia Pacific’s Image courtesy of Fairmont Singapore
Asia Pacific’s hotel developers and investors enjoy active market. The Asia Pacific region’s hotel sector has matured over recent years, due to strong regional economic growth and increased corporate and leisure travel. With hotel occupancy rates in excess of 80 per cent1 in major gateway cities and performance improving year on year, investor interest is high. The sector’s top five pipeline destinations are China, India, Indonesia, Malaysia and Thailand2, with international hotel groups rapidly expanding into these countries. Throughout the region, market activity includes development of new properties, repositioning
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and/or refurbishing of existing assets, and acquisition of new assets into the portfolio. There’s a healthy appetite for mixed-use development schemes comprising upmarket hotel, retail and residential, some with commercial provision too. A combination of revenue streams is important to owners, as is creating a destination that caters for a wide cross-section of the population. Faithful+Gould has a strong hospitality portfolio in Asia Pacific, supporting investors, owners, lenders, developers, management companies and operators. For existing properties and
portfolios, we help stakeholders to think critically about a hotel’s physical envelope and, where appropriate, to consider change of use and/or intensity of development. We explore ways of reconfiguring a property, to increase revenue streams and increase the overall value of the asset. Examples include conversion of under-utilised front-of-house areas into retail or additional food and beverage offerings; increasing the overall size of a property; increasing the number of bedrooms; or a change of use, such as residential apartments, for one section. We are currently leading refurbishments totalling 5000 keys across Singapore and Hong Kong. High occupancy rates bring scheduling challenges as operators are understandably
hotels project brief and help with negotiations between owners and operators. We establish and manage the most suitable consultant design team, and lead the procurement and management of construction. We then oversee the installation of furniture, fittings and equipment, and operating supplies and equipment, through to commissioning and opening of the hotel. Most of our hospitality projects have multiple stakeholders. Typical challenges for clients include interpretation of brand guidelines, implementation of brand standards, switching from one brand to another on acquisition, and refurbishment following global brand refresh. We draw on our experience of being commissioned by both owners and operators, which allows us to better understand and manage the objectives of each party. In Asia Pacific, clients are not only seeking an integrated project and programme management offering, but are also looking to the added benefits of engaging with multidisciplinary design consultants. We work
closely with our parent company Atkins to satisfy this requirement, providing a one-stop solution through our many shared office locations. In addition to our hospitality experience in the Asia Pacific region, we are active in the Middle East, Americas, UK and mainland Europe. Our global hotel clients include Marriott, Wyndham, Crown Plaza, DisneyŽ, Ritz-Carlton, Jumeirah Group, Shangri-La Group, Hilton Hotels, Hyatt, Intercontinental Hotel Group, Mandarin Oriental Hotel Group, Marina Bay Sands, Ascott, Carlson Hotels, FRHI Hotels & Resorts, and The Hong Kong and Shanghai Hotels Limited (The Peninsula Hotels). 1, 2
STR Global, 2014.
For further information, contact Rick Hancock on +65 6227 6144. Scan the QR code for full details.
reluctant to decommission rooms and lose revenue. Refurbishment usually has to be managed in phases within a live hotel environment, requiring skilled scheduling, a high degree of communication and close attention to safety issues. For the acquisition of new assets, we work alongside the transaction team to provide pre-acquisition surveys, together with advice on capital expenditure and operational costs. We also offer strategic advice on the current performance of the asset, and recommendations for product improvement that can be factored into the evaluation for the acquisition. We are typically appointed at the earliest stages of new-build hotel projects, to lead the site and infrastructure evaluation, develop a Image courtesy of Anti:dote, Fairmont Singapore
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PPP MARKET on
the upswin
Gulf Cooperation Council regional governments are under pressure to boost investment in infrastructure. Public-private partnership is becoming an important funding mechanism to achieve this. The Gulf Cooperation Council (GCC) region’s sizable infrastructure investment gap is driving increased interest in public-private partnership (PPP). Infrastructure is at the forefront of each country’s development plans, but the public sector alone cannot fulfil every need in sectors such as water, power, transport, education, telecommunications and healthcare. The speed and volume of proposed development also brings challenges. The need to diversify its economies, through a combination of government investment and increased private sector participation, has intensified the region’s interest in alternative
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project finance. This has the potential to bring important benefits and it may be crucial to the region’s ability to deliver its projects. PPP is seen as a way of bringing in specialist private sector expertise and efficiencies, as well as attracting international inward investment and local private sector involvement. The region’s thirst for ambitious developments has triggered a range of PPP deals, securing buy-in and long-term commitment from the private sector to deliver nationally important projects, the Expo 2020 and the World Cup in Qatar for example. Other countries have used PPP arrangements to construct airports and
shopping malls. We can expect to see growing commitment to PPP implementation, with models becoming more diverse and robust. The UK pioneered the PPP framework through its Private Finance Initiative (PFI), whereby the private sector designs, builds and maintains infrastructure and other capital assets, then operates those assets to sell services to the public sector. PFI gives the private operator strong incentives to deliver the project on cost and on time, and enables the government to spread the cost of investment over, for example, 25-30 years.1 Although the GCC countries are using the UK framework principles, it’s important to note that PPP cannot be simply imported from a global template. A comprehensive PPP programme includes legislative, regulatory and process
ing
frameworks, and this approach is vital for PPP success. To attract appropriate private sector investment requires high-level government commitment to PPPs, with a clear and transparent PPP policy framework. With these frameworks in place, PPP provides a very comprehensive transfer of risk and responsibility for delivering and maintaining the building or asset, providing the optimum cost for the building over its life. Public sector borrowing is reduced, private sector skills are unlocked, and new technologies potentially introduced. The increased engagement with global best practice concepts is a major benefit, helping secure a lasting legacy. Operational benefits are also possible. Governments can focus their own resource on delivering strategy and policy,
while outsourcing operational delivery to the private sector. If operated properly, this secures better overall value without affecting the delivery of front-line public services.
from inception to operational phase. Monitoring of the concessionaire’s performance throughout the concession period can similarly be provided.
Faithful+Gould provides consultancy advice to public sector clients, private sector investors, and funders requiring due diligence services. Our integrated project management, programme management and technical and commercial skills enables clients to get the very best from PPP. Our thorough understanding of the public sector market is reinforced by our experience of best practice from the private sector. This helps all parties to achieve their goals, on a nationally strategic level or on an operationally deliverable level.
We also have the support of our colleagues throughout the global Atkins and Faithful+Gould businesses and can draw on this very broad PPP experience.
We can assemble a team with all the skills required to take a PPP procurement
1 Confederation of British Industries (CBI), Going global: The world of public private partnerships, 2007.
For further information, contact Huw Davies on +974 7021 7477. Scan the QR code for full details.
sOLUTIONS Issue thirty-six
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WORKING
beyond walls Supporting flexible working practices is a standard requirement for office fit-outs as companies reduce real estate costs and attract the best talent. The office has become just one workplace option as the tools for supporting effective working become increasingly accessible and mobile. Many companies have embraced more flexible working patterns and locations, and adapted their real estate portfolio to better support this. An office providing an average of 12 square metres of space per person, each with a permanent desk, was once typical, but we now routinely see eight square metres or less, as well as the introduction of desk sharing. The shift away from permanently allocated personal space has coincided with an acknowledgement that collaborative and break-out spaces contribute towards a positive and productive environment. However, collaborative areas, on their own, do not meet everyone’s needs. Individuals perform best in environments suited to their personal style of working and while some people benefit from team energy, and using collaborative areas to interact, others function less well in this environment. An office devoid of quieter areas may not get the best from people who prefer to do their creative thinking surrounded by a degree of quiet or privacy. Increasingly, our clients complement their collaborative spaces with more private zones, and space that may be awkward to use, such as adjacent to columns etc, can help with this. The transition to new ways of working can produce unexpected consequences. Some companies are surprised that despite investing in tools to support home working, staff still prefer to come into the office. This may well be due to work reasons, but sometimes it is simply a fear that they will not be considered to be working as hard as their colleagues in the office. Therefore, if flexible working is to be
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successful, it needs to become an embedded behaviour rather than something staff are just expected to adopt as soon as it is available. This cultural change needs to be led from the top, through senior managers using the collaborative space and demonstrating their willingness to work from home if there is a drive to promote this. The provision of communication tools and their operational support are vital if staff are to participate remotely in meetings and share presentations, but this alone will not be successful if attending internal meetings in person remains the company default position. Monitoring the response to flexible and remote working enables new solutions to be developed. Most individuals sometimes need to come into the office, but once they have experienced the choice, their need and behaviour can be further explored. To better understand work patterns, for example, staff can be asked whether their office priority is its location or its facilities. One of our financial services clients discovered that many staff visiting its central London offices could achieve the same outcomes from an alternative office. They mapped their existing real estate against staff’s home addresses and identified geographically convenient satellite offices in low-cost locations. Flexible spaces were provided in these smaller offices and the central London visits reduced significantly. This informed our client’s strategic decisions on prime central London real estate.
An alternative is the allocation of IDs for each desk and the introduction of a live desk booking system for all locations, but this needs good management to maximise availability and restrict block bookings.
Technology continues to make workspace more efficient. Finding people in large offices can be difficult without permanently allocated desking and while establishing team zones or groups of desks where teams are encouraged to locate are a possibility, this does affect the true flexibility of the office.
A more recent innovation in collaboration spaces or touch-down areas is the installation of sensors to track mobile phone signals, identifying individuals as they move around the building. This also illustrates which teams interact most, facilitating future space planning. The same technology can improve the customer
Image: GSK, Navy Yard, Philadelphia. Courtesy of Eric Laignel for Francis Cauffman
experience in client-facing areas, ensuring that the welcome and next step are well co-ordinated. In our experience of leading global workspace projects, space flexibility and future-proofing are key for developers, tenants and owner occupiers. Developers strive to maintain flexibility in the office design to attract the widest range of tenants. For many projects, full Category A fit-out has given way to ‘shell and floor’ provision, to allow tenants’ individual specifications to be incorporated and avoid
having to strip out an installation which doesn’t suit their needs. As always, an alignment of both the landlord’s and tenant’s needs produces the best result, and we find that facilitating the tenant’s early engagement with the landlord produces best value. Faithful+Gould’s integrated project and programme management approach ensures that the project is the right one. We help clients define their brief, assess their priorities and decide
exactly how they want to occupy their space. The aim is to think beyond the walls – to ensure the real estate portfolio is designed to support the business and not the other way around.
For further information, contact Stuart Flaxton on +44 (0)207 121 2121. Scan the QR code for full details.
sOLUTIONS Issue thirty-six
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CONSENSUAL
dispute resolution
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The GCC region is seeing a shift towards consensual dispute resolution, a powerful approach in a fast-paced and often adversarial construction market. Amid renewed confidence the Gulf Cooperation Council (GCC) region is experiencing a second construction boom. Public sector megaprojects are leading the field, notably the preparation for major sporting events in Qatar, flanked by major construction and transportation projects throughout the region. Things are different this time around. There’s a more measured approach to the region’s development spend, a drive towards more sustainable growth in the built environment, and far greater alignment with national economic visions. Key challenges include capacity pressures on labour and materials, and finding more collaborative ways of working in order to deliver these national visions. The pace of construction suggests that a high volume of construction disputes will continue to challenge the industry. Iconic design ambitions, high project values, a history of selecting lowest bids, and unrealistic schedule expectations have combined to shape an adversarial climate. However GCC countries are among the least efficient in enforcing contracts through the judicial systems. Traditionally, the interests of project owners and contractors have been pitted against one another, with most of the risk transferred down the supply chain. Buoyant demand has started to tip the balance of power towards contractors, who can increasingly pick which clients they work with. Contractors have now become more confident about entering into disputes. Over 60 per cent have been involved in disputes over the past 12 months, or expect to be involved in disputes over the next 12 months, and contractual disputes have been identified as a major external challenge1. Protracted disputes tie up resources in a market already suffering from resource constraint, resulting in increased costs and delays. Average value of disputes in 2013 was US$50-60 million,
taking 12-18 months to resolve via traditional means. Early effective resolution enables completion and the reallocation of resources to other projects. Although consensual dispute resolution approaches are at the early stage in this maturing construction market, there is an appetite for swifter outcomes that preserve working relationships. Consensual dispute resolution offers a powerful and cost-effective solution, avoiding lengthy and costly arbitration or litigation. There are many benefits associated with the consensual approach. The facilitated process aims to broker a collaborative solution, rather than one that’s imposed on the parties. It’s a private process which reduces reputational risk and allows business relationships to be maintained. As well as resolving the dispute, recovering from dissent should be part of the aim. This means the project, if still live, gets back on track and there’s less baggage the next time the parties encounter one another. Flexibility is key – it’s likely that both parties will have to compromise. Most won’t have the in-house skills, experience and lateral thinking needed to make consensual dispute resolution work, so expert facilitation is important. Although these skills are already in use in the region, there is a need to raise general awareness, familiarise the client community with a new way of thinking, and instil confidence that it works. Many disputes could be prevented altogether, by creating and implementing better contract
conditions that encourage partnership models of working. Incentivising contractors rather than overloading them with risk would help to resolve some of the region’s delivery issues, as would avoiding the traditional low-price approach. Prevention begins at the earliest project stages. We encourage the parties to be collaborative and open, sharing information freely. Successful negotiation at this stage will help avoid problems as the project progresses, facilitating productive outcomes for all. Consensual dispute resolution is not a new approach for Faithful+Gould, but we are tailoring it for the local market. We bring creative and innovative thinking to the contractual process, aiming for the smooth running of our clients’ projects, and the prevention of disputes. Where disputes have already arisen, we aim for efficient and effective resolution in a spirit of co-operation and continued commercial relationships. We handle complex and sensitive disputes in all GCC countries, delivering our services via an integrated project and programme approach. 1
Construction Dispute Market Trends, Trowers & Hamlins, 2014
For further information, contact Michael Connor on +974 4465 1170. Scan the QR code for full details.
sOLUTIONS Issue thirty-six
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EMERGING ASIA’S
REAL ESTATE POTENTIAL
Real estate markets in Asia have remained strong in the last 12 months. Funders and developers are focused on delivering the best possible returns for their investors. The region’s real estate owners, users, lenders and investors are confronted by a range of diverse factors, such as complex infrastructure requirements, environmental regulations, compliance related issues, local market considerations, and political and geographic risk. Other issues include portfolio risk, changing
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capital markets, building design technologies, planning and construction requirements, as well as fluctuating costs and market absorption rates. Any one of these factors can significantly impact overall investment performance. The speed of urbanisation across much of
emerging Asia has led to an increase in the development of masterplanned communities. China, India, Sri Lanka, Malaysia, Thailand, Indonesia and the Philippines are turning to this approach. Masterplans address the complex issues that affect towns, cities and neighbourhoods, responding to a wide range of local social, economic and environmental issues. The development of masterplanned communities brings significant commercial
questions. Developers are under pressure to deliver maximum returns, with each asset required to earn its keep. When forecasting community needs, additional business elements will ideally be embedded within the development mix, to generate further revenue streams. Residential components will benefit from community shopping and healthcare facilities, for example, and these can be branded, franchised and rolled out in other locations. Development phasing has become increasingly important to investment returns. Masterplanned communities are often delivered in phases as a result of funding constraints and geo-political drivers, and to progressively respond to market sales. Development sales strategies can be modelled in detail, determining the components that should be completed first. These components will generate early sales income that can fund subsequent phases. The same phasing approach applies to infrastructure, including transportation, water supply and treatment, waste water treatment, energy, and district cooling. The capital and life-cycle operating cost of infrastructure is a significant driver for investment returns, and it may not be economically efficient to construct it during the first phase. Careful planning and design are needed to ensure that the infrastructure fits the development budget and the return on investment criteria. Intelligent traffic forecasting and modelling will support efficient transportation planning, connecting retail, commercial and industrial nodes that generate income. Masterplan community developers are also looking for innovative ways to raise additional funding for infrastructure. For example, plot developers may be permitted to develop individual building sites in accordance with the masterplan requirements. The plot developers contribute to both capital and life-cycle costs of the power, water and district cooling infrastructure, thereby improving returns for the masterplan developer. Securing the best return on investment poses similar challenges throughout emerging Asia’s real estate sector. Real estate funds focused on
building ownership and asset management are looking for best value on their acquisitions. There is also increased appetite for renovation and change of use projects, releasing the potential of under-utilised quality buildings to generate improved income streams for their owners. Examples include changing commercial buildings into residential developments, industrial buildings into warehousing/logistics facilities, and industrial facilities into co-location datacentres. Some developers are upgrading commercial buildings with facade, public area and mechanical & electrical infrastructure refurbishments. They may also improve the asset quality by providing on-site datacentre facilities, an increasingly important requirement for financial sector tenants. Faithful+Gould’s Development Advisory Services business offers comprehensive support to private sector and public sector real estate developers and funds. We are currently supporting several masterplanning community schemes. We inform clients’ decision-making, resulting in developments that are strategically planned, designed, phased and delivered to maximise returns.
Elsewhere, we are helping clients explore and understand the technical possibilities and economic models associated with change of building use. We lead multi-disciplinary teams to advise our clients on regulatory approvals, planning, cost, design, procurement, construction, commissioning and facilities operation. Through our integrated project and programme management approach, we provide a suite of services, including advisory services, programme and project management, cost and commercial management, construction management and asset management. In collaboration with our parent company Atkins, we bring an excellent understanding of business case planning, programme management, urban planning, design and engineering to our clients’ development planning.
For further information, contact Callum Bothwell on +852 2972 1118. Scan the QR code for full details.
sOLUTIONS Issue thirty-six
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Raising the
standard
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ISO 9001:2015 brings additional leadership focus to organisational knowledge management programmes. The international standard ISO 9001 is under review, with the final updated version expected by the end of 2015. The draft ISO 9001:2015 introduces a requirement that organisations ‘determine the knowledge necessary for the operation of the quality management system and its processes to assure conformity of goods and services and customer satisfaction’. This comes at a time of resurgence in organisational knowledge management programmes and its introduction will bring additional leadership focus to the subject. The origins of knowledge management can be traced back over a number of decades. Management consultant Peter F Drucker coined the term ‘knowledge worker’ in 1959. Drucker identified a seismic shift, at least within developed countries, towards workers whose primary purpose was to use and create knowledge. Drucker’s work was built upon by organisational theorist Ikujiro Nonaka, who developed the theory of the knowledge-creating company. Early knowledge management programmes fell into two broad approaches. One favoured an attempt to capture knowledge and to manage it as a resource. The second approach focused on the development of Communities of Interest (COIs) and Communities of Practice (COPs), which brought together groups of employees connected by a common interest or purpose. For mainstream industry, the first wave of knowledge management came in the early 1990s. Swedish firm Skandia appointed the world’s first Chief Knowledge Officer in 1991. In the same year, Fortune magazine ran a feature which stated ‘intellectual capital is becoming corporate America’s most valuable asset and can be its sharpest competitive weapon’.
For further information, contact Adrian Malone on +44 (0)113 306 6600. Scan the QR code for full details.
The theory became more embedded in practice, with firms seeking solutions to the challenges of managing knowledge, and technology providers developing tools in response. Intranets and extranets became common, and some organisations began to invest in software to scan digital content such as emails and documents, surfacing what would otherwise be hidden. These early technology solutions took the approach that knowledge is a tangible ‘entity’ to be captured and managed. As technology progressed further, social networking tools were introduced, supporting a renewed emphasis on knowledge as an intangible asset. Rather than managing knowledge itself, technology allowed organisations to manage the environment which facilitated the sharing of
knowledge. These tools were initially disruptive as organisations feared social media and the risk of employees posting inappropriate comments. However, organisations are now learning to embrace social media, reaping the benefits of greater reach and richer connections at almost zero cost. Projects and project-based firms face the same problems in managing knowledge, but the nature of projects brings specific challenges. Knowledge sharing requires trusted relationships, but because projects are temporary, teams often begin with limited trust. Silos occur as an unintended consequence of organising teams into projects, with the team unaware of the wider organisation’s knowledge and resources unless through previous project relationships. Faithful+Gould is convinced that knowledge management has an important role in successful project delivery. We feel that more can be done to bring the benefits of the knowledge management discipline to the built environment industries. We were therefore pleased to support the creation of a new Association for Project Management (APM) Specific Interest Group, the Knowledge SIG. The SIG was established by a cross-industry group consisting of knowledge management and project management professionals, including Adrian Malone, our Head of BIM and Knowledge Management. The SIG explores the role of knowledge management in project environments, engaging with the cross-sector project management community. This stimulates debate and understanding about approaches to managing knowledge and fostering effective collaborative environments. The Knowledge SIG recognised the different understandings of the term ‘knowledge’, and differing views about how it should be managed. For some, knowledge was information and data; for others, knowledge is embedded in practice. The SIG therefore undertook APM-funded research, to identify and benchmark knowledge management practices across project based organisations. The findings will be published in 2015, providing valuable insight into the different approaches, and should stimulate further debate. Whether or not the revised ISO standard creates an imperative for knowledge management, knowledge sharing is clearly at the heart of the modern economy and vital to project success. We continue to support the work of the APM Knowledge SIG, contributing to best practice development, and reinforcing our own integrated project and programme management approach.
sOLUTIONS Issue thirty-six
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UK AND EUROPE
INNOVATING THROUGH
partnership
Aberdeen +44 (0)1224 620202 Athens +30 210 724 1311 Basel +41 76 456 61 36 Belfast +44 (0)28 9089 5870 Birmingham +44 (0)121 483 5483 Bristol +44 (0)1454 663000 Cambridge +44 (0)1223 814200 Cardiff +44 (0)2920 485181 Dublin +353 1890 8600 Edinburgh +44 (0)131 221 5600 Epsom +44 (0)1372 753121 Exeter +44 (0)1392 813100 Glasgow +44 (0)141 220 2200 Leeds +44 (0)113 306 6600 London +44 (0)20 7121 2121 Manchester +44 (0)161 245 3555 Newcastle upon Tyne +44 (0)191 272 5150 Nottingham +44 (0)115 957 4800 Oxford +44 (0)1865 734100 Paris +33 142 68 50 65 Southampton +44 (0)23 8033 8835 Stockton-on-Tees +44 (0)1642 675136 Stoke-on-Trent +44 (0)1782 222233 Swansea +44 (0)1792 641185 Tunbridge Wells +44 (0)1892 510500 Warrington +44 (0)1925 238300 AMERICAS
We have partnered with Oracle Primavera to provide clients with world-leading project and programme management solutions. Our integrated project and programme management services ensure project success, driving programme level benefits and outcomes of strategic importance to our clients. We specialise in the configuration and implementation of Oracle Primavera products to complement our constructive expertise when managing clients’ projects and programmes. Over the last eight years our Americas business has developed a service that pairs our business process consulting with Oracle Primavera Unifier, to embed project and portfolio practices within flexible, workflow technology. In 2013, we became an Oracle Gold Partner. We are now investing further in this relationship, to leverage additional benefits and deliver the best possible results for our clients worldwide. Increasingly, clients expect a fully integrated service model when procuring project and programme management services. This frequently extends to information management systems, but the configuration of these can delay or disrupt project and programme mobilisation. Our unique partnership and extensive experience with Unifier avoids unnecessary delays for clients. By proactively evolving Primavera products with Oracle, we meet expectations and improve our
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clients’ ability to drive value from their investment. We have developed sector and service configurations that can be deployed rapidly at short notice. Two great examples include bespoke NEC3 and electronic Strategic Asset Management solutions. Project and asset data is planned and executed within a single solution, enabling clients to make informed investment decisions. Assets can then be successfully managed from initial design, through transition to operations, and eventual decommissioning. This is part of our ongoing initiative to develop solutions that are integral to the services we provide. We are committed to continuing this development for additional sectors and in response to clients’ specific needs – please get in touch to discuss yours.
For further information, contact Alex Catmur on +44 (0)2920 485 181. Scan the QR code for full details.
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