Introduction
Energy-sector projects are known for their large scale, complexity and long duration. In this article, we examine key areas of project management in the energy sector, such as stakeholder and resource management, the importance of industry expertise, and the selection of project management methods. We also look at the role of external project managers, the added value they bring to projects, and share practical tips and best practices for successful project management.
Energy-sector project management: tips and best practices
Energy-sector projects are often large, complex and long-term initiatives. Since 2019, we have helped our customers succeed in projects such as smart meter mass replacements and the implementation or replacement of new systems, including metering data management systems (MDM) and enterprise resource planning systems (ERP). In projects like these, the project manager's project management competence often plays a central role in achieving the project goals.
The project manager's responsibilities include leading the project on schedule and within the agreed budget, proactively and effectively managing resources and risks, and identifying dependencies. In energy-sector projects, strict quality requirements and possible regulatory obligations often also need to be considered. The scale of projects is often so large that procurement thresholds may be exceeded. A good project manager identifies these areas early and knows how to support the organisation in successfully carrying out the tendering process.
The importance of risk management is emphasised especially because a realised risk in one area can easily lead to significant financial losses, not to mention reputational damage. In our experience, organisations often try to lead large projects using an internal project manager, even when that person does not have sufficient project management competence or experience and is already fully loaded with other business-critical tasks. In such situations, the project schedule often slips, which directly increases costs and leads to budget overruns. Organisations should often consider bringing in an external project manager who already has experience in energy-sector projects and their successful delivery.
An external project manager can focus fully on project management tasks and can be released to other assignments once the project ends. In our experience, external project managers are also often more strongly committed to successful project delivery than an organisation's internal resources. An external project manager must also meet quality requirements in the same way as other suppliers. From the customer's perspective, the project manager's ability to provide an external viewpoint and bring industry best practices that may not previously have been used within the organisation is especially valuable. Explore our projects.
Stakeholder and resource management and the importance of communication and networks
Energy-sector projects often involve a wide range of stakeholders, such as authorities, technology suppliers, metering device manufacturers and contractors. In addition to these external stakeholders, projects often also affect the organisation's internal stakeholders, such as teams responsible for business-critical tasks like metering data management or customer service. Identifying, managing and engaging stakeholders is critically important in energy-sector projects, and it must be handled carefully already during the planning phase. Who would want to discover in the middle of a project that a critical stakeholder has been overlooked? It is especially important to identify each stakeholder's expectations, requirements and schedules so that the project can progress without interruption.
Managing both internal and external resources requires continuous optimisation, as the availability of labour and materials can vary significantly during a project. For example, anticipating material logistics is especially important because delivery delays for components or devices can slow down critical project phases. The project manager must ensure not only the timely use of resources but also their sufficiency in every phase of the project.
Effective communication plays a decisive role in project success, and its importance is especially clear in crisis situations where unexpected challenges require a rapid response. A communication plan must be in place, and communication chains must not contain bottlenecks that slow down problem-solving. Communication between key people must be established quickly so that challenges can be solved without delay.
The importance of stakeholder management and communication is especially high in large project entities, such as smart meter mass replacements, which involve internal and external experts, system suppliers, contractors, device manufacturers and legal experts. A good project manager can take the needs and schedules of different stakeholders into account when preparing the project plan. The project manager must also ensure that all stakeholders are up to date on the project situation and committed to its success.
An external project manager often has experience from projects in other energy-sector organisations, and their network may already include a broad range of different actors. This network can be valuable in helping the project move forward smoothly.
Industry expertise and the importance of technological expertise and legislative changes
Industry expertise and experience in delivering similar projects are an advantage for a project manager in energy-sector projects. Understanding energy-sector organisations' business processes and technologies helps the project manager achieve project goals efficiently. Although the project manager does not need to master every technology in depth, it is useful if they can recommend solutions that have worked well in previous projects. For example, implementing a new integration platform that is already used by similar organisations can bring significant added value to a project.
Legislative changes have tested the energy sector significantly in recent years. For example, the centralised information exchange system Datahub was introduced in 2022, and Finland moved to 15-minute settlement in 2023. These changes caused significant system-related changes for many actors in the energy sector. Legislative changes often set tight schedules for projects, and organisations must be able to respond to them. We have been involved in delivering projects like these, ensuring, for example, that systems and integrations operate in accordance with legislative obligations. Our proactive attitude toward upcoming changes also helps us support the successful delivery of your project.
Project management methods in energy-sector projects: agile methods, waterfall and hybrid models
How do you choose the right project management method for an energy-sector project? The energy sector uses a wide range of project management methods depending on the nature of the project. The traditional waterfall model is still common in large infrastructure projects, such as power plant construction or smart meter mass replacements. The linear structure of the waterfall model provides a clear framework, especially when project requirements are precisely defined and changes are rare and limited.
Agile methods, such as Scrum and Kanban, have become more common especially in technology and information system projects where continuous development and rapid response to changing requirements are central. This is highlighted, for example, in the development and implementation of new data analytics systems or metering data management systems (MDM), where customer feedback and market requirements guide development.
Energy-sector projects often require combining different project management methods. A hybrid model uses both the waterfall model and agile methods, making it possible to benefit from the strengths of both. A significant advantage of the hybrid model is that different stakeholders can operate in their own areas of strength without needing to radically change their ways of working. For example, in smart meter mass replacements, the actual meter replacements can proceed phase by phase according to a pre-planned waterfall model, while software and integration development can use the adaptability and rapid response of agile development.
Summary
Energy-sector project management requires broad expertise and the ability to combine different methods. Industry expertise, effective stakeholder and resource management, and combining agile and traditional methods are key factors in meeting the demanding needs of the sector.
If you are looking for an experienced and reliable project management partner, we are ready to help. Meet our experts here. Our broad experience and strong commitment help ensure that your project succeeds in every situation. Let us handle demanding project management work so that you can focus on developing and growing your core business.