From Costs to Value: How Investment-Based Project Management (IBPM) Can Save Infrastructure Projects
In recent years, the maintenance backlog of bridges, civil structures, and major infrastructure projects in the Netherlands has become a growing concern. Whether it's the HSL bridges, the KARGO Project in the Port of Rotterdam, or other critical structures, we're seeing delays, cost overruns, and deferred maintenance across the board. The question is: How did we get here in a country known for its innovation and efficiency?
The answer lies, in part, in how we approach projects. Too often, we focus on the short term, treating projects as cost centers rather than investments. But what if we changed that?
The Problem: Short-Sighted Project Management
Take the KARGO Project in Rotterdam, for example. This ambitious initiative, aimed at sustainable and efficient cargo handling, shows how complex projects can go off track under traditional Project management approaches. The focus is often on:
- Budget control (How do we keep costs in check?)
- Scheduling (How do we deliver on time?)
- Risk management (How do we avoid problems?)
But a value-driven approach is missing. Projects like KARGO aren't just costs—they are investments in our economy's future, sustainability, and competitiveness. If we treat them only as cost centers, we miss the opportunity to maximize their value.
The Solution: Investment-Based Project Management (IBPM)
This is where Investment-Based Project Management (IBPM) comes into play. Based on the groundbreaking work of Stephen Deveaux, IBPM shifts the focus from "How much does it cost?" to "How much value does it create?" It does this through four key concepts:
1)Value Breakdown Structure (VBS)
Instead of breaking projects down into cost items, IBPM breaks them down into value components. What does each part of the Project contribute to the overall value? For the KARGO Project, this means looking not just at construction costs but also at the long-term benefits like efficiency, sustainability, and economic growth.
2)Drag & Drag Cost
Delays in projects like KARGO don't just have direct costs—they also incur hidden costs (Drag Cost). Think of missed opportunities, loss of competitive advantage, or additional maintenance costs due to deferred work. IBPM helps map and minimize these hidden costs.
3)Estimated Project Profit (EPP)
Traditional project management measures success based on budget and time. IBPM adds profit to the equation. What is the true ROI of the Project? For KARGO, this means looking not just at construction costs, but also at returns in efficiency, sustainability, and economic impact.
4)Strategic Alignment
IBPM ensures projects align with the organization's strategic goals. For KARGO, this means aligning the project with the Port of Rotterdam's long-term vision, rather than focusing only on short-term delivery.
Why IBPM Works
IBPM isn't just theory—it's a practical approach already used across sectors, from oil and gas projects to large-scale infrastructure works. By treating projects as investments rather than cost centers, you can:
- Make better decisions based on value, not just cost.
- Minimize delays and hidden costs.
- Achieve maximum ROI for both public and private projects.
What to Expect in This Creative Room
In this IBPM Creative Room, I'll dive deeper into how you can apply IBPM to your own projects. Over the coming weeks, you can expect:
- In-depth articles on VBS, Drag, Drag Cost, and EPP.
- Case studies (like KARGO and other infrastructure projects).
- Templates and tools to apply IBPM directly.
- Discussions on challenges and solutions in Project management.
Call to Action
Are you ready to approach projects differently? Do you want to learn how to apply IBPM in your own work? Then follow this Creative Room and join the discussion!
Leave a comment if you have questions or specific topics you'd like to see covered. Let's work together to transform projects from cost centers into value creators!
Jan van den Berg
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Comentario (4)
Jackie H hace 1 mes
Very good and convincing article and perspective Jan 👍🏻. Project Management in some sectors at least needs a shift in perspective : a look not only at how much a project costs by also at how much it yields – in other words, not just at the cost of doing it, but also at the cost of inaction and status quo.
However, it seems to me that this is exactly how projects used to be considered in the very old days (otherwise this flood dam in Rotterdam would never have been built, or no man would ever have set foot on the moon). Maybe it is a budget thing, especially in public projects, but it seems to me that short-termism started creeping in in the eighties and nineties : cost killing was in, long--term vision was out, and that's been true ever since. Of course it's healthy and necessary to keep costs in control, I'm no one to deny that, but maybe it's time to rediscover the other side of project management : not just cost but also yield 🙂
Jan Van Den Berg hace 1 mes
"Thank you, Jackie, for your thoughtful comment and the historical perspective! You’re absolutely right: the idea of viewing projects as investments rather than mere costs isn’t new. The Delta Works in the Netherlands or the Apollo missions are perfect examples of how long-term vision and value-driven thinking led to groundbreaking achievements.
The shift toward short-termism in the 80s and 90s—where cost-cutting became the primary focus—did indeed push long-term value into the background. And while cost control is undeniably important, it’s often at the expense of asking: ‘What are we gaining by doing this?’ and ‘What are we losing by not doing it?’
That’s precisely where Investment-Based Project Management (IBPM) comes in. It’s not about abandoning cost discipline but balancing it with a focus on yield, ROI, and strategic alignment. The tools and frameworks like Value Breakdown Structure (VBS), Drag Cost, and Estimated Project Profit (EPP) help us quantify and visualize the long-term benefits that traditional project management often overlooks.
I’d love to hear your thoughts: Do you think the public sector could adopt this mindset more widely, or are there structural barriers (like budget cycles) that make it difficult? Let’s explore this further in the Creative Room!
Thanks again for your input—it’s exactly the kind of discussion we need to move forward."
Jan
Alexandre Leforestier hace 1 mes
You can add tags (via the long format web editor) to improve significantly the disvovering rate of your publication inside and outside Panodyssey (SEO\GEO)
Jan Van Den Berg hace 1 mes
Hi Alexandre, thanks for the tip! I’ll definitely start adding relevant tags to my publications using the long-format web editor. This sounds like a great way to boost visibility both inside and outside Panodessy—especially for SEO and geo-targeting.
Do you have any recommendations for effective tags (e.g., keywords, categories, or location-based terms) that work well for [your book’s topic, e.g., IBPM, project management, or scheduling]? I’d love to optimize this as much as possible.
Looking forward to your insights!
Best regards,
Jan van den Berg
Alexandre Leforestier hace 1 mes
Sounds great ! I guess we need updating algorithm and news feed now ! I am curious to know how you discovered Panodyssey