Any property developer will tell you that there are three things that keep them awake at night. The first is cost, the second is securing revenue and the third is, yes you guessed it – time.
According to global consultancy group McKinsey & Company, the construction industry is ‘ripe for disruption’.
In a report, McKinsey stated: “Large projects across asset classes typically take 20 per cent longer to finish than scheduled and are up to 80 per cent over budget.”
The message this data presents is extremely relevant, concerning and all too familiar. Anyone working in property development will confirm that overruns remain a thorn in the side of developers and sadly have become the norm rather than the exception for development projects of all types.
There is a strong argument for the application of new technology, even artificial intelligence, to solve some of these issues but the solution, at least in part, may already be right before our eyes.
According to DMA Partners Managing Director Ryan Andersen, a development project manager (DPM) is possibly the most underrated role in the entire development process. However, he says a good project manager can have an enormously positive impact on the outcome of a project, and of course the financial return to the owner.
In fact, the performance of the DPM can be the difference between a project that works and one that fails.
Andersen says it matters not whether the person with project oversight is labelled a development manager, a project manager or a hybrid of the two.
“Label the job how you choose but what matters is that this function is about much more than managing inputs against a delivery timeline.
“Being creative about things, perhaps chief project strategist might be a better label for the role of a good DPM,” Andersen says (a little tongue in cheek).
“A good DPM is worth their weight in gold because frankly that’s what you could buy with the savings they can find through effective planning, feasibility analysis, securing finance, head contractor procurement and risk management over the life of a project.”
He says a development project manager who is embedded into the team early, brings strategic thinking, valuable relationships and critical experience to forecast ‘hurdles and potholes’, and ultimately makes for smoother delivery and vastly reduced risk on cost, revenue and time.
“The real question to ask is whether your DPM is functional or strategic.”
Managing the day-to-day delivery of a project is one thing but the real value of a development project manager is the advice they can bring well before anyone is on site.
“Project conception, site planning, feasibility and procurement strategy should be part of the early phase involvement of your DPM,” says Andersen.
“Similarly, it’s your project manager who can proactively manage your authority approval process and this is where the real issues of cost, time and realising revenue can be devastating to a project.”
Andersen says property owners who try to ‘go it alone’ are taking an enormous risk. Development project management is a make or break role in any project regardless of size, cost or location.
If there was ever an example of why and how, he said one particular project comes to mind.
“This particular project owner thought that they had made it through the rough water when their development application received the green light. However, they didn’t count on the two years of negotiations it took to negotiate the operational works approvals and the millions of dollars in additional works that could have been avoided. Mishandling this phase not only cost them time and much stress but also the entire project as it was ultimately unviable.”
Andersen says a good development project manager should be the first and last line of defence against the complexity of property development.