The Power, Utilities, and Infrastructure Sector Committee (PUIC) formed Research Team PUI-01 (RT-PUI-01) to answer an essential question:
“What is the current best practice for decision-making methodologies to proactively identify, evaluate, and respond to the impacts of regulations throughout the different project life cycle phases?”
The RT-PUI-01 research explored the effects of regulatory changes on capital projects in the power, utilities, and infrastructure sectors and identified ways that companies could better anticipate and adapt to regulatory changes.
The team adopted a T-shaped research approach: scanning across the industry for general trends and issues, but also diving deep into specific company experiences and practices. To gain a sense of the impacts of a regulatory change on a large capital project and the current challenges to addressing these impacts, the team conducted a literature review, surveyed 27 affected companies, and interviewed 47 subject matter experts with more than 800 collective years of experience in monitoring, evaluating, and complying with regulatory changes. The team also conducted a deep dive into three specific case studies of regulatory changes, to obtain a more granular and regulation-specific understanding of business and project procedures, processes, decision-making methodologies, and response strategies.
Building upon the findings of this research, RT-PUI-01 developed a regulatory future-proofing framework that regulated entities can follow to anticipate future regulatory actions, take proactive steps to minimize the risks and maximize opportunities created by those regulatory changes, and thereby capture value. This process involves gathering data, weeding out irrelevant information, routing critical details to the relevant teams for analysis, tracking accountability, determining the best course of action to avoid potential impacts or capitalize on opportunities, and mobilizing the organization in a timely manner to implement the response strategies.
In practice, regulatory future-proofing delivers real-time accountability and transparency across an organizational structure to facilitate more effective information sharing, better decision making, and more nimble responses. To support this process, RT-PUI-01 developed a guide for regulatory future-proofing in the construction industry. The guide includes a detailed process map, a comprehensive set of key actions, and good practices for implementation. In this way, the guide serves as a reference for individuals and companies who would like to improve their current practices.
Related Academic Publications (not published by CII)
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Stoa, R. (2019). “From the Clean Power Plan to the Affordable Clean Energy Rule: How Regulated Entities Adapt to Regulatory Change and Uncertainty” Hofstra Law Review 47(3).
Rasoulkhani, K.; Brannen, L.; Zhu, J.; Mostafavi, A.; Jaselskis, E.; Stoa, R.; Li, Q.; Alsharef, A.; Banerjee, S.; and Chowdhury, S. (2020). “Establishing a Future-Proofing Framework for Infrastructure Projects to Proactively Adapt to Complex Regulatory Landscapes” Journal of Management in Engineering 36(4).
5 : Implementation Tool #1: Future-Proofing Guide for the Construction Industry
RT-PUI-01 designed a Future-proofing Guide to assist any company that wishes to improve its practices, no matter where it sits on the spectrum, or any individual who wants to improve specific practices or just seeks a better understanding of the regulatory process, no matter where that person sits in an organization.
The Future-proofing Guide is organized into two main parts:
- The Regulatory Future-proofing Framework and Process Map outlines how companies generally identify and adapt to regulatory changes (i.e., “the process”). A general overview of the Future-proofing Framework is accompanied by a visualization of the process (the Process Map). Each step is then described in more detail, offering a set of key actions for each stage to provide the “know-how” for effective regulatory future-proofing. Real-life examples are provided where appropriate.
- Good Practices for Implementation presents four overarching implementation areas for companies to consider when assessing their own practices and seeking process improvements for better regulatory adaptation.
To better understand the overall future-proofing process:
- Start with the Future-proofing Framework Background section and the description of the Process Map.
- In the sections that describe each sub-process, concentrate on the first two sections (detailing “challenges” and “who does and when”)
- Consider who in your company currently conducts each phase of the future-proofing process, how the information flows, and your role in supporting the effort.
To improve a company’s overall system:
To improve specific practices:
- Concentrate on the “key actions” call-out boxes and descriptions in the Future-proofing Framework section.
- Consult the Good Practices for Implementation section.