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COVID-19 and the money: challenge for project management
The issues of COVID-19 and money are closely linked in many industries. A problematic picture is emerging. Learn more here.
Allgemein Borgmeier
Jun 15, 2023
The COVID-19 crisis costs money – after almost a year of living in the pandemic, this is probably no longer a secret. Different sectors are affected to varying degrees. Especially economic sectors that rely on the international transport of goods and coordination to a significant extent now find themselves in a critical situation. Among others, project management in plant engineering is struggling with the ongoing effects of the crisis. But even in the long term, many companies are still threatened by after-effects due to the numerous delays that have occurred.
Project management: software creates short-term clarity
Those in the mechanical and plant engineering sector who rely on a fully comprehensive project management software such as COMAN are already at an advantage for current and future projects. With such a solution it is possible to keep track of things even in large projects. Via interfaces, all relevant project data on progress, delays, material stocks, and more are summarised in one place. This creates a clear picture much faster than would be the case if data were processed and viewed separately. Therefore, it is an excellent solution for immediate problem-solving
In contrast, project management software is not designed for defining a long-term overall strategy. In general, the eventual consequences of the pandemic are very difficult to foresee anyway. Nobody knows what the world will look like in three, six or nine months. This automatically leads to problems for the long-term planning in large-scale industrial projects. The COVID-19 pandemic shows: for all the money invested in machinery and plant engineering projects, there is still a clear vulnerability to disruptive influences.
Planning with COVID-19 means being prepared for extra costs
COVID-19 will continue to play a role in determining the factor of money in many companies for years to come. Wherever possible, project management should therefore calculate with additional costs and prepare for the corresponding consequences. In mechanical and plant engineering, this concerns above all an extension of the construction period, which could be accompanied by contractual penalties. It is still unclear whether the COVID-19 pandemic will be considered a force majeure due to the complex geopolitical circumstances. In such a case, it could be argued that an extended construction period is acceptable under the circumstances cited.
Industries that are currently carrying out generously financed experiments and innovations are particularly challenged in the crisis. This is true in the automotive sector, for example, where OEMs and suppliers are now experiencing sales losses due to the pandemic and project delays in the conversion to alternative drives. Once again, the mechanical and plant engineering sector is highly affected by this, as it is responsible for the construction of new production lines and the adaptation of existing ones, among other things. This type of situation in turn results in consequential damage: a weaker economy inevitably leads to fewer orders. Investors might bail out, which could make the financial leeway in many companies even smaller. A lot of time could pass before a recovery occurs.
Conclusion: save money and preserve value with COVID-19 realism
COVID-19 and the factor of money are inextricably linked in all industries. Thus, companies should continue to be realistic. This means understanding the current constraints and working with them as best they can in all areas. Only those who keep a cool head during the crisis can ultimately emerge successfully from these uncertain times.
Clearly determining the impact of the pandemic on one's own company is already a big factor. Although the exact course cannot be predicted, it is more than likely that restrictions will make themselves felt in the construction phase. Here it is important to approach the problems constructively and to talk to clients about solutions that are acceptable to all sides. What looks like a loss in the short term can strengthen trust in the medium and long term and lead to a successful project completion despite all adversities.