With increasing demand for AI and cloud-based applications fuelling exponential growth in data centre development, Louisa Curcio of RLB looks at five essentials for ensuring smarter delivery of this essential digital infrastructure
You don’t need to work in the built environment or in technology to know that the growth of data centre development is exponential. With artificial intelligence (AI) moving from a nuanced possibility to an everyday operational tool and increased demand in cloud applications, data centres continue to be one of the fastest-growing sectors of the built environment.
According to research undertaken by RLB earlier in the year, operators expect to commission 65% more data centre capacity in 2024.
However, the same research showed that supply chain shortages and disruption are creating a real risk to this momentum, with 35% of operators already reducing the number of their planned developments and 57% of contractors turning down projects due to supply chain constraints.
Nevertheless, as one of the leading data centre consultants globally, we know that the demand for data centres isn’t going to abate, and the challenge is not how to limit digitalisation, but how we procure and deliver data centres more sustainably.
5 essentials we need to think about to deliver smarter and better data centres
1. Cradle-to-grave procurement strategy: With the fast-paced nature of the data centre sector, often procurement strategies are created based on lessons learned from the latest project or devised from previous ways of working by individual providers.
There is an opportunity to develop a cradle-to-grave strategy to procurement from across the data centre ecosystem – from designers, engineers, contractors and consultants – to form true best practice across the lifecycle of the project.
A playbook-style approach incorporating contracting and integrated project team delivery, with clear set of KPIs for all parties, would clearly drive towards the common goal for project success instead of the often siloed approach to procurement.
2. Effective planning & de-risking: With demand for power as one of the largest risks in our sector with potential to slow down the rate of growth, we are increasingly seeing longer periods in pre-construction and development phase.
Yet are we using this time correctly to de-risk upfront, better define design and construction methodologies, develop identify and plan for risk with suitable contracts to effectively manage and transfer this risk or to engage with the market early?
And do we have clear KPIs to work towards to drive project success? If we were to use this time more effectively, the pre-construction activities could optimise project delivery, secure cost certainty and early order placement, and increase offsite manufacturing with targets to reduce overall construction programmes, getting to service date faster.
3. Better visibility of pipeline: Effective planning ahead can benefit the industry to help get the right resources in the right places, at the right time. This visibility will lead to clearer programme indicators for equipment delivery, support cost certainty and production as well as bring a clear understanding of wait times or support the management of re-sequencing to effectively respond to market demands.
In addition, targeting effective recruitment and training for the long-term pipeline will allow us as an industry to improve the number and quality of capable and experienced people within the sector.
4. Supply chain availability: Forming partnerships with suppliers helps secure pipeline in delivery and can improve the certainty on cost through Owner Furnished Contractor Installed (OFCI) procurement methodologies, as this reduces GC uplists when procuring equipment.
Furthermore, this provides greater oversight and responsibility for the end client, while promoting predictability in the supply and build through having a centralised delivery system with a customer driven procurement strategy.
5. Collaboration across the industry: In the post-delivery period, often the need to keep driving forward to respond to customer demands, with an expectation that individual parties on the project team will implement improvements within their own discipline, restricting a collaborative approach to lessons learned and future best practice.
The future of data centre development
There is an opportunity for a post-delivery integrated project team, sharing pros and cons, giving constructive feedback and self-reflection to ensure that all are collectively working to improve the cycle of project delivery and implement long-term sustainable change for the benefit of wider portfolio delivery.
This, of course, needs to be balanced across region, with flexibility for different markets to ensure successful delivery.
It was this sort of collaboration I witnessed at a recent data centre industry roundtable, which I was invited to participate in. And what occurred to me as I listened and contributed to the discussions was that we are a dynamic industry, one that leads the change and one that can be agile in that change.
As the pace of demand continues in our sector, the pace we adapt to that demand must match it to ensure we when it comes to our delivery we don’t get left behind.