Bryan Chan provides his insights into the Data Centre Sector, focusing on how good project management processes can enhance data centre delivery, effective front-end planning, and how people can get involved in this booming sector.
How is the data centre industry different from commercial office fit-out?
Data centres are predominantly engineering-focused, functional buildings so it’s usual for the design to be led and coordinated by MEP / building services engineers with mission-critical expertise, as opposed to architects. This is particularly the case for the expansion and fit-out of existing data centre facilities. Data centre clients are technically minded and know what they want in terms of the performance of their MEP infrastructure; they are focused on critical power, cooling, fire systems and security. The testing and commissioning of MEP plant from a system-by-system basis to final Integrated System Testing is essential before a successful handover can be achieved. Enough time must be allowed for this in the project schedule.
Data centre projects are usually fast-paced with tight deadlines, particularly when capacity has been pre-let to one of the ‘hyperscale’ cloud providers and there is a fixed Ready for Service (RFS) date with penalties for delay. These end-users will have their own global engineering standards that can dictate and change the design trajectory. To add another layer of challenges, phasing and sequencing of works need to be carefully considered, particularly in live environments. Construction activities must not impact BAU operations and performance; the uptime (or availability) of data centre services must be maintained at all times.
How can good project management processes enhance data centre delivery?
Project management spans the entire RIBA Plan of Work from inception through design, procurement, construction, and handover. Good project management practices need to be put in place at the outset. Having a solid project management framework and good governance in place increases the chances of successful project delivery.
A project manager’s job is to juggle scope, time and cost whilst maintaining quality, managing stakeholders’ expectations, and mitigating risks. But it’s not always as easy as it seems. The trick is to apply time and effort at the critical stages of a project, one of them being the outset. Projects don’t fail at the end; they fail at the beginning. That’s why front-end planning is so important. It’s all about getting ahead – that is, having the right processes and controls in place – and then staying ahead of the game with the end goal in mind.
How does front-end planning translate to project delivery from a practical perspective?
Developing and maintaining the Project Execution Plan (PEP) is essential. It details how the project will be managed and what is expected of each team member. It should set out a procurement strategy that is commercially attractive to prospective bidders and reflects the client’s risk appetite at the same time. This is particularly important in the current market where contractors’ margins are being squeezed as building cost inflation is currently outstripping tender price inflation. Global shortages of materials and skilled labour, transport delays and the hike in fuel prices stemming from the invasion of Ukraine are exacerbating the issue. To protect themselves, clients may appoint a contractor under a pre-construction services agreement (PCSA) to provide buildability inputs and obtain price certainty. They may also procure long-lead equipment early to secure manufacturing slots and gain programme advantage. These long-lead equipment items are then either free-issued (i.e., owner furnished-contractor installed, OFCI) or novated to the contractor for final positioning, installation, testing, and commissioning.
The PEP must set out a change control process that aligns with the client’s project governance and the main building contract. Regarding the latter, some contracts are quite prescriptive; for example, the FIDIC Red and Yellow Books have express conditions on how change is to be managed. We need to be careful that the proposed change control process doesn’t fall foul of client contractual obligations. At Buro Four | Data, we have established a project management framework (or toolkit) that can be tailored to suit any project / contractual conditions for rapid deployment.
What are the characteristics of the players (consultants & contractors) operating in the data centre industry as compared to others?
Albeit booming, the data centre industry is quite a niche, with a relatively high barrier to new players. Clients are generally risk-averse and will only engage consultants and contractors with relevant experience and a proven track record. In terms of design, there are small to medium-sized firms that only operate in the data centre sector. Big players will normally have a separate mission-critical team or business unit to tailor their approach to data centre clients. I also notice that the extent of engineering details requested by data centre clients is more extensive, rendering design development more onerous than say, a typical fit-out project.
Traditionally, mechanical and electrical sub-contractors have been employed by a much bigger General Contractor (GC) or management contractor to undertake the design and build of data centres. Increasingly, we are seeing M&E services contractors extending their service to offer a full general contracting role. They have developed competencies to perform the roles of Principal Designer (D&B contract) and Principal Contractor under CDM 2015, and carry out CSA works (civil, structural and architectural) and increasingly, they are eating into GCs’ market share.
How can people get involved?
There is a skill shortage in the industry and experienced candidates are scarce. In the recent Data Centre World Event in London, the panel highlighted the lack of new talent entering the industry despite continued growth driven by the data revolution (e.g. AI, big data, IoT, etc).
The ideal project management candidate has a good technical background, be it MEP, Civil, Architectural, Structural or Construction Management. A candidate who has experience in adjacent industries such as railway, aviation, maritime, nuclear, oil & gas and pharmaceutical can easily move into the data centre sector. The skills are transferrable, and this is an exciting time to enter the industry. If you are a project manager who wants to join an independent, employee-owned company that cares about your learning and development, why not contact us?