So what can data centre operators and contractors do to mitigate supply chain risks and get construction projects moving?

Some measures are practical, such as buying materials further in advance: 46% of respondents that buy construction materials and components, whether operators or contractors, have done so further in advance in response to supply chain constraints.

Securing sought-after materials and components from suppliers in advance requires a trusting and transparent relationship – and a committed pipeline of projects. When planning their portfolios, operators should therefore consider how they can order from key suppliers as far in advance as possible.

“Engagement with vendors is vital,” agrees Ada Infrastructure’s Barry. “They want to know the potential supply line, so they are looking at how many projects you have down the line. Can you enter into an agreement with them, so they are your supplier of choice?”

Ordering further in advance also has a knock-on effect on cashflow, requiring buyers to pay out earlier than they might have expected. It also challenges operators to anticipate demand at a time when a new technology paradigm – AI – is making customer requirements difficult to predict.

Many operators have taken matters into their own hands: 85% of the operators we surveyed are involved in the selection and/or purchase of construction materials and infrastructure components of data centres they commission and operate.

Owner Furnished Contractor Installed (OFCI), as this is known, enhances operators’ ability to mitigate supply chain risk, by broadening their supplier base, responding flexibly to evolving requirements, and reducing their dependence on contractors. But it also means that operators take on the responsibility for assessing the financial stability, regulatory compliance, and environmental health and safety record of their suppliers, and for ensuring there are no hidden costs that might take them by surprise.

But addressing supply chain risk requires more than just new approaches to procurement: the way in which data centres are designed and built must also evolve. Just over three in 10 (31%) have increased their use of prefabricated data centre components, the survey shows. This, combined with standardised data centre designs, can also help buyers to order further in advance, confident in the knowledge that these components will find some use.

Of course, this standardisation must be balanced against the specific requirements of each project and region. We advise that operators mitigate project risks by ensuring their data centre specifications reflect the complexities of procuring their required materials and adhere to regional regulators obligations.

Meanwhile, some larger operators that have a portfolio of facilities in construction are ordering materials and infrastructure components far in advance and allocating them to projects on a 'just in time' basis. This helps them to offer suppliers a long-term commitment and therefore secure their pipeline of essential components.

Beyond these practical measures, supply chain disruption calls for a new approach to risk. Supply chain disruption exposes the entire sector to the risk of price volatility and project delays. It might be tempting to pass this risk onto suppliers, contractors, or other stakeholders but this will erode the goodwill and collaboration required to overcome a sector-wide challenge.

“The industry should be having a sensible discussion about where the risk sits,” says Jon at Mace. “There is a lot of risk in the construction at the moment, and we have to be sure that we are dealing with it the right way.”

Some operators are happy to acknowledge and share the risk that supply chain disruptions cause price increases and project delays, Jon reports, but others are aggressive in forcing the risk onto the contractor. This increasingly determines who Mace is prepared to work with, he adds. “We will look at who we want to work with on that basis, as much as anything else.”

Stephen at Mercury Engineering agrees that a partnership approach, with greater transparency between contractor and operator, is the way forward.

“We have engaged with various clients on a pre-construction agreement and jointly developed the design and constructability of the project, reducing risk and increasing value for the client,” he explains.

“Some clients are agreeing to a preliminary cost and fee, and then we jointly run an open book bidding process for the large packages. They get to see the pricing, which builds trust.”

This is the most widely adopted response to supply chain disruption: 66% of contractors and 47% of operators say they have used contractual measures to share supply chain risk with their counterparties.

A more open relationship between supply chain partners, in which risks are shared more equally, will also help the sector meet its sustainability obligations, and limit its exposure to physical climate risk as climate change intensifies.

Stronger partnerships, built on transparency and trust, will help the data centre sector build the capacity that Europe needs, profitably and sustainability. With those relationships in place, there is plenty of opportunity to go round. Without them, demand will go unmet and Europe’s ability to compete in the global digital economy will suffer.