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  • Olympic Games: Why We Must Compress Time and Reduce Cost -- Op Ed


    04/17/15

    Bob Richardson (KTS Global Group)
    My involvement with the Olympic Games started almost 30 years ago and my first visit to an Olympic City was Atlanta in 1996. There I was advised “‘whatever number you come up with multiply it by 5!”

    That advice unfortunately became a reality with evidence from various studies showing every Games, without exception, has experienced cost overruns. Defining what should be included in Olympic Games costs is not without difficulty. I am reminded of a comment by the New South Wales Auditor-General around the question of “what the final costs of the Olympic Games are”? His report following the Sydney 2000 Olympics stated ‘there is no one, simple answer to this apparently simple question.’

    Competition for hosting the Olympic Games has become hotly debated in the political arena. The decision of 4 of 6 countries to withdraw from the 2022 Winter Olympics brought into question the benefit of bidding and hosting the Games. Focusing on cost overruns to the budget is critical for future host cities, and their citizens, to understand the implications of the investment that they are undertaking.

    Hosting the Olympic Games is to take on one of the most financially risky mega-projects that exists.The size, scale and complexity of what is to be delivered, within a finite program, is generally not fully appreciated at bid stage. Risks and uncertainties of delivering the Games are often substantially different to those believed at the bidding stage and whilst budgets continue to evolve until the final costs are known. The public and the media rightly remember the bid cost. Thus there is constant criticism aimed at IOC, OCOG and the government for perceived poor cost management.

    As a professional cost manager given these realities and a great deal of painful experience I believed that there had to be better ways of doing things. I was delighted when I read that the International Olympic Committee (IOC) post London 2012 and Sochi 2014 have recognized the problems in bidding, and began work on Olympic Agenda 2020 with strategies and a road-map for the future of the Olympic movement.

    In terms of "cost," specifically the agenda sets out that the IOC intends to:
    1. Communicate the value of bidding and hosting the Olympic Games.
    2. Study opportunities for sustainable management, in particular costs, and a well-balanced, transparent financial model for organizing the Games
    3. Ensure candidate cities offer solid legacy programs.
    4. Encourage cities to maximize use of existing or temporary/demountable venues.
    5. Consider financial compensation and returns for stakeholder involvement.
    6. Introduce program flexibility while containing costs
    7. Empower the IOC and other stakeholders to contain overall costs .
    8. Create a working group on Olympic Games cost management.

    At last year’s SportAccord I met Tim Jacobs of KTS who told me of the initiatives they had been developing that was also able to address the matters identified in the IOC 2020 initiative. I was thus delighted a year later to be offered the position of Chairman of the KTS Advisory board and to join the 360EXPERT team of specialists.

    I have spent a career lifetime in Games involvement by providing strategic and cost management advice on every Summer Olympic Games since Sydney 2000.To be able to bring that experience & knowledge to KTS and the 360DIRECT suite is an opportunity to make a real difference in the support of the IOC 20/20 vision

    Collaboration and sharing information seem to be at the heart of changing and improving the way major events are delivered. The question was, how to assemble data and present ideas and solutions that would be taken seriously, which would bring real benefit and would not be "just" another consultancy service.

    As a consultant I want to know how software solutions can support my needs. I have witnessed numerous applications that were going to change the world! Whilst being naturally cynical at first I am now convinced that the 360DIRECT suite, and approach, has every chance of changing and mitigating the mistakes of the past

    This change of opinion was a result of understanding that the 360DIRECT approach was deigned to make a measurable difference to the value, cost, delivery and execution of projects. The holy grail for cost management! It was not just developed by IT specialists , but by individuals who were professional experts in their fields, with skills and personalities that came together as an integrated team striving to create something more powerful and effective than currently existed

    A service that seeks from candidate stage to finish, to educate and provide the necessary knowledge and expertise to make informed and intelligent decisions. Its collaborative framework and service when combined puts the client in control from the start with a consistency and integration not previously possible. Business and the world have changed and sharing information and solutions openly and freely is and rightly should be widely accepted now.

    The world of business is a fast changing one, methods must evolve and technology must be embraced. The 360DIRECT service challenges the traditional model and takes a leap of faith to establish something for the greater good.

    "If one always does what one always did then it must be no surprise that one will always get what one always got!"

    Op ed submitted by Bob Richardson, KTS Global

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