Effective solutions are required by companies for easy management of their large-scale projects. For a long time, organizations have been opting for a turnkey model in the management of their projects because it is a very efficient one. This way they can rely on different organizations that will completely take care of the project on their behalf.
It allows a corporation to pass on the entire project execution to one organization and reduce risk levels while also ensuring that the project gets completed on time. Further, this article will consider the concept of turnkey projects, their main features, types of contracts that can be used, and practical examples from different trades.
What is a turnkey project?
A turnkey project is one in which a contractor designs, executes, and delivers a fully operating system or facility to the client. They provide all the services to the client as per their needs and objectives. The word “turnkey” suggests that the client simply needs to “turn the key” to start using the completed project. This strategy is widely used in many well-established industries, such as construction, information technology, and manufacturing, where businesses choose to outsource complex projects to specialists.
Features of a Turnkey Project
Turnkey projects have various advantages, making them a popular choice among enterprises. They require a lot of precision, but when relying on a well-known organization, it can become easier. Read out the blog to learn about the fundamental features that define a turnkey project:
1. Single Point of Responsibility
One of the most significant benefits of a turnkey project is that a single organization oversees the entire process. Infrastructure Support Services providers do the planning, design execution, and delivery. This minimises misunderstanding and assures accountability. This results in lowering the possibility of project delays and disagreements.
2. Fixed-Price Contracts
Most of the turnkey projects are completed under fixed-price contracts, in which the client and contractor agree on a defined cost before the project begins. This way the company can instantly get an idea about how much they have to spend.
A turnkey project aids in budget control and lowers financial risks. If we look at the stats, then fixed-price contracts can reduce project cost overruns by 20-30% when compared to traditional arrangements.
3. Comprehensive Service
Contractors involved in turnkey projects manage every single aspect of the project, which entails procurement, installation, testing, and commissioning. This way, the client can receive a fully operational system or facility without the need to interface with several vendors.
4. Time Efficiency
Another important aspect of turnkey projects is that they have a structured timeline with clear milestones and deadlines. Since the contractor is completely accountable for project completion, they employ effective project management practices to ensure timely delivery.
5. Speed and Efficiency
These projects frequently use new technologies and best practices to execute projects more quickly than traditional approaches. This is especially advantageous in areas like IT and construction, where delays can result in considerable financial losses.
6. Quality assurance
Contracts of the turnkey projects usually incorporate tight quality control methods. Contractors are responsible for producing a high-quality, defect-free product, with all components meeting industry standards and customer expectations.
Turnkey Project Examples:
Turnkey Projects are commonly employed throughout industries. The projects have been expanding, which shows the versatility and the credibility of the turnkey project. Scroll down to learn more about the turnkey project examples:
1. Construction
At first, Turnkey projects generally involve construction work for large-scale infrastructure developments, including highways, bridges, airports, and residential complexes. As an example, the Dubai Metro Project was a turnkey solution made by China State Construction Engineering Corporation, taking care of everything from design to final completion.
2. IT systems
The most typical turnkey IT systems are those that companies acquire while looking for corporate software solutions. A case in point is seeking an IT firm to design and implement an entire ERP (Enterprise Resource Planning) system. It is turnkey enterprise-wide resource planning solutions that provide the full spectrum of the information needed to run operations in a company, such as SAP and Oracle.
3. Industrial projects
In manufacturing and industries, turnkey solutions come into play. Siemens and GE (global leaders in innovation and technology-driven solutions) are big enough to offer turnkey solutions for their projects, including power plants, oil refineries, and industrial automation. A fair manifestation of this is a complete wind energy project developed by Siemens in the Netherlands, which leads to an operational offshore wind farm.
4. Hospitality
The hospitality industry relies on turnkey projects to create hotels and resorts. Major brands such as Marriott and Hilton frequently work with turnkey contractors to build and furnish whole hotel facilities. These projects cover everything from architectural design to interior layout, resulting in a fully operating building when completed.
5. Technology
Turnkey projects are widely used by technology businesses to build data centres and telecommunications infrastructure. For example, Google Cloud and Amazon Web Services (AWS) offer turnkey cloud solutions that enable enterprises to easily integrate cloud computing without the need for in-house development.
Conclusion
Turnkey Projects allow companies to streamline project management by assigning tasks to experienced professionals. They ensure quality control, efficiency, cost certainty, and several other advantages that contribute to a company’s rapid growth.