American Society of Civil Engineers
Engineering management is in many ways different from construction management, yet both should use the same project management concepts and techniques. Many organizations and individuals do manage both design and construction of the same project.
This paper reviews the definitions and practice of construction management and engineering management in order to examine their similarities and differences. It then briefly considers project management concepts and techniques that are applicable to each and concludes with some suggestions for better project management.
1. Construction Management—The management of construction projects and construction organizations by contractors. For clarity this is referred to as the management of construction.
2. Construction Management (CM)—A professional service to manage the design and construction of a project. This is referred to as CM.
3. Engineering Management—The management of design projects and engineering organizations.
4. Project Management (Project Management Services)—A professional service to assist the Owner and his architect/engineer in managing the design and construction of a project. This is designated as Project Management Services.
5. Project Management—The concepts and techniques of managing projects, whether it be a design project, a construction project, or a design and construction project. This is referred to as project management.
6. Design/Build—A method of project delivery that provides both final design and construction based on scope documents and other criteria. It combines professional design services with construction in one contract.
7. Turnkey—This is the same as design/build except that the designer builder provides financing until the key is turned over to the owner.
Management of Construction Projects.—This is the management of individual projects. It is usually accomplished by an isolated project team with a project manager, project superintendent, and project engineer at a site separate from the rest of the organization. The project manager generally has a great deal of authority and must be a good general manager. The project manager often operates with limited supervision or assistance, much as an independent company. Construction project management is a very different environment from CM or engineering management. A project manager must have an intimate knowledge of labor law and be skilled at dealing with union leaders and supervisory personnel. Also required is a great deal of experience in construction methods, equipment maintenance, building materials, and cost control, in addition to skill in project management techniques.
Although many construction project managers are graduate engineers, few are registered engineers. They also have different attitudes and philosophies than their contemporaries in engineering management.
CM Services.—CM is a professional service and a project delivery method that is quite different from the traditional design-bid-construct method. A construction manager, as an agent of the owner, manages the overall process. CM often, but not always, includes: (1) Fast tracking or phased design/construction; (2) multiple prime contracts; (3) special contract provisions such as guaranteed maximum price; and (4) modem project management techniques such as CPM/PERT scheduling, cost and scope management, cash flow forecasting, value engineering, etc.
CM is usually practiced with one of three basic approaches, which include:
1. General Contractor or GSA CM—A general contractor provides a guaranteed maximum price (after the basic design is established), provides input to the design process, and subcontracts most (or all) the construction work for the owner. The General Contractor CM often does a portion of the work with his own forces.
2. Designer CM—An architect/engineer manages the process and sometimes does the design. Characteristically, they place a heavier emphasis on design input and less on construction supervision. Sometimes the construction is done with one general contractor instead of multiple prime contracts.
3. Business Manager CM—A specialist in some business management area, like computerized data processing or scheduling, provides the same services but emphasizes cost/time tracking or some other management tool. Management of CM projects is an integrated effort of four teams: owner, architect/engineer, contractor(s), and construction manager. Each team manages their own part of the project and the construction manager integrates their efforts. The CM project manager must have a great deal of skill at negotiation and interpersonal relations. Other needs include expertise in the project management process and a good general knowledge of the design process, the construction process, construction methods, and the actual design for the particular project. CM project management is different from engineering management or the management of construction. The CM project manager usually has no direct control over the people doing the work but must rely on others to carry out the plan they have jointly developed.
The popularity of CM has encouraged a few unprepared or unqualified firms to offer CM services. Some problems, owner dissatisfaction, and some dissatisfaction in the CM concept have been the result. Hopefully, owners are becoming more sophisticated in identifying their needs and in the selection of qualified firms to do the job.
There are also some problems with the CM concept itself. Everyone should be aware of these problems and try to avoid them. The first problem is the name itself: “Construction Management.” It really should be “design and construction management.” Some people mistakenly believe that they have to have a contractor to do CM. There are many fine contractor CMs and, in fact, many of the largest and best CM firms are general contractors. However, a good general contractor is not necessarily a good CM. Many do not use CPM scheduling, value engineering, or project monitoring and reporting techniques. Some also have trouble working closely with designers and in providing a true professional service since their contracting work so often puts them in an adversary role.
Incidently, a designer CM also may not really have expertise in CPM scheduling, value engineering, cost management, etc. Just as there is a tendency for the contractor CM to be very skilled at the construction phase but less skilled in the design phase of CM, there is similarly a tendency for the designer CM to be less skilled in the construction phase. The business management CM also has an area of strength (usually CPM scheduling, cost management, computerized monitoring and reporting, etc.) and a possible area of weakness (design and construction methods).
The second problem with CM involves the difficulty of the task itself. The design of a major project, the construction, and the management of either are very challenging responsibilities. The integration of all and the management of the overall process is therefore complex. It requires an intimate knowledge of the design, of the construction, of CPM/PERT scheduling, cost estimating, value engineering, electronic data processing, human relations, and numerous other skills. Few individuals have a good grasp of the overall process and few organizations have the breadth of skills and experience.
Although it has a few problems, CM is an excellent professional service and project delivery system that more and more owners will be using in the future.
Management of Engineering Projects.—This is the management of an engineering design or planning project. It can be accomplished within a functional organization where a project manager is not designated. It can also be accomplished with project management.
Project management of an individual project can work in an otherwise functional organization. This may cause some problems but sometimes works very well to accomplish a high priority project within project objectives (usually expressed in terms of cost, time and scope/quality).
Project management of engineering projects can also be accomplished in a matrix organization. This is an organizational structure and certain management practices that combine functional departments with project teams in a matrix of responsibility. Properly administered, a matrix management approach is ideal for the management of engineering projects.
Today, most engineering tasks are managed as projects and are often done within a matrix organization. Besides the obvious need for a strong technical base in the primary discipline of the project, a project manager must also have a good grasp of the other design disciplines involved and considerable knowledge of the design process itself.
Usually the design project team is a part of a larger organization which provides most of the support needed. Unlike the manager of a construction project who must be a good general manager, the design project manager must have a high level of interpersonal/organizational skill as well as the ability to get support and resources from throughout the organization. Informal communication and implementing skills are essential.
Project Management Services.—Project Management Services is one of the latest “buzz words” in the industry. Some owners still prefer the traditional approach to project delivery, i.e., design-bid-construct but recognize that they and their architect/engineer might not have sufficient in-house capability to manage a major new project. They sometimes retain a project management. specialist to assist them in managing the project. Owners often see this as preferable to CM with its many unknowns. Project Management Services is especially desirable when an owner is going design/build or turnkey and does not have a staff with the available capacity to deal with a large, sophisticated, design/build contractor.
Project Management Services can vary from simply assisting with the initial scheduling of design and construction to complete services, comparable to CM. The Project Management Services project manager is usually limited to the management of the process rather than being closely involved in the design or construction. He often has only a monitoring and reporting role with major responsibilities revolving around computer processing, CPM scheduling, cost estimating, and project monitoring and reporting techniques. Usually the project manager acts as an independent consultant and a resource person advising the owner or architect/engineer.
Project Management Services works very well, in most instances. Occasionally, however, an owner is not willing to pay for sufficient effort to allow the project management firm to do more than passive cost/time tracking. Often this is heavy on computer usage and business management techniques but short on authority to take effective action to correct problems.
As more owners become aware of the advantages of outside Project Management Services, there will be a considerable demand for this service.
Design/Build and Turnkey.—These two concepts both involve management of design and construction. Both are usually negotiated and involve a high degree of service, repeat work through referrals, and a need for a good reputation in order to get new business.
The design/build or turnkey project manager must manage the entire process just as the CM project manager. In addition, however, he usually directly manages the construction and oversees the design.
Comparison.—The three types of project managers are: (I) Design; (2) construction; and (3) design/construction (CM, project management, design/build, and turnkey). The first two must have an intimate knowledge of methods (design practice and construction methods). They also must be skilled in the management of the process (design or construction) and need to use good project management techniques. In addition, the design project manager must have a grasp of the construction process in order to fulfill his obligation during construction.
The design/construction project manager must have a good grasp of design practice, the design process, construction methods, and the construction process. In addition, he or she must be expert at managing the overall process of project conceptualization, planning, design, construction, move-in, and startup. Needless to say, this requires a high level of expertise in project management concepts and techniques.
PROJECT MANAGEMENT CONCEPTS AND TECHNIQUES
Good project management concepts and techniques are needed on all projects – design, construction, design/construction, or even administrative projects.
This section first looks at the functions and concepts of project management and then at some of the techniques.
Basic Concept of Project Management.—Project management is really a philosophy and an approach to managing a “project.” Projects can be managed without a project management approach, but they merely become a series of related tasks performed by semi-independent departments without clear-cut responsibility and authority to achieve project objectives.
Definitions for Project Management.—These include the following:
1. Project—A series of related tasks (usually called activities) that lead to some specific objective or endpoint within a period of time.
2. Activity—A discrete task with a definable beginning and end that must be accomplished, along with other tasks, in order to complete a project.
3. Program—A group of individual projects undertaken by an organization. Often, the projects are related in that they are directed towards some long-range general organizational goal. Programs are broader in scope than projects and may be open-ended.
4. Function—An ongoing series of similar (but not directly related) tasks that are repeated indefinitely to fulfill the responsibilities assigned to an individual or organization.
5. Program Management—The task of overseeing the project management of many projects and integrating their accomplishment in the achievement of some organizational goal.
6. Project Management—The art and science of effectively and efficiently managing projects.
7. Project Manager—An individual with authority (hopefully) and responsibility for accomplishment of project objectives. Sometimes called project coordinator, project engineer, team leader, or project expeditor, but if so, usually with less than full, i.e., sufficient, authority.
Functions of Project Management.—The functions of project management are those of general management: planning, organizing, staffing, directing, controlling, and decision-making. They can be summarized as shown in Fig. 1.
A well-conceived plan to achieve project objectives should be made before taking action. The action should follow the plan. Feedback should describe the results of the action. A revised plan should be prepared based on the feedback of prior action and new action taken.
Project Management Objectives.—Objectives are essential to the concept of project management. They are also a key part of the techniques of managing projects.
Project objectives are usually expressed in terms of cost, time, and scope (quantity and quality). First, a scope should be established to fulfill a need. Then a cost estimate should be made from the scope and a contingency added to form a budget. Normally this budget is approved by some authorized group or individual before the project proceeds. Also, a schedule (or at least a completion date) should be developed from the scope and cost.
Often the project scope is described in what is termed a “scope definition” or “architectural program.” Normally, all three (scope definition, budget, and schedule) are combined into one document called the scope document. This document is prepared during the planning phase. Its approval initiates the design phase.
Properly managed, the scope document becomes the standard against which to measure the design as it develops, and against which the completed project is compared in some final analysis and report. If the scope is modified, the modifications must be identified, their cost and time impact estimated, an approval given, and the scope document changed. Success in managing a project should be measured in terms of accomplishment of project objectives as described in the scope document.
Delegation and Verification.—To make project management work, the program manager has to delegate both responsibility and authority to the project manager. This responsibility should include clearly identified objectives, preferably in writing. The program manager does not transfer this responsibility but creates new responsibility so that both the program manager and the project manager are now responsible.
Verification is the corollary to delegation. If the program manager is to delegate responsibility, he must have some assurance that the delegated responsibility is properly discharged. The project manager should, therefore, be required to monitor and report progress so that the program manager can verify performance and take corrective action when required, before it is too late.
Evaluation of Results.—Performance must be monitored periodically for corrective action to be taken before it is too late. When necessary, assistance must be given to help subordinates meet assigned objectives. A project manager’s performance should be largely measured by his or her success in meeting project objectives with proper documentation of the reasons for variation. Evaluations should also consider interpersonal relations and other less measurable factors.
Planning.—Good project management requires prior planning. This should include the following steps:
1. Identify, evaluate, and select the project objectives. This is sometimes the most difficult task in a project. Unfortunately, it is sometimes slighted and some projects end up accomplishing the wrong objectives.
2. Establish a basic strategy and identify the major tasks needed to achieve the project objective(s).
3. Estimate the resources and cost needed to accomplish the major tasks. If given previously, compare the budget with the estimate and reconcile any differences.
4. Develop a detailed plan and schedule. This is usually done with CPM/PERT techniques.
5. Forecast the cost and resource needs over time and reschedule or obtain more resources if required.
6. Organize the project team. This normally includes determining the number, type, and responsibilities of staff in addition to obtaining that staff and other resources. It also includes establishing communication channels and project monitoring and reporting systems.
7. Set the project policies, procedures, and standards. These need to be in conformance with organizational policies and procedures and must lead to the accomplishment of the project objectives.
Scheduling Techniques.—Critical path scheduling (CPM/PERT) is an extremely powerful, adaptable, but simple technique for project planning and controlling. Unfortunately, most project managers in design or construction do not use it. Much of this may be due to an overemphasis on computer scheduling and a lack of understanding of what is really a very simple technique.
The process of CPM/PERT network diagramming is the key to the project manager gaining a grasp over project. It should not be delegated to a scheduling technician and a computer; it should be done by or under the close supervision of the project manager. It can then be expanded, computerized, and maintained by others.
One of the most successful and simplest scheduling techniques is timescale arrow diagramming, which takes a little more effort initially than other network diagramming techniques but is vastly superior for communicating and understanding. It is similar to the bar chart yet shows relationships. If updated with status lines rather than redrafted, it is easy to maintain for monitoring, reporting, and controlling progress. It can also be used to prepare cash flow forecasts and manpower projections.
Cost and Scope Management Techniques.—Scope management first requires that the project scope be defined. Then the project manager must ensure that the design as it develops conforms to the scope. This includes careful review of preliminary and final design documents and construction change orders to identify scope changes. The cost and time impact of any proposed changes must be estimated, and all must be reviewed by the appropriate authority. Upon approval, the scope document (scope definition, budget, and schedule) must be revised. Upon project completion, the final project report should compare the authorized scope, cost, and schedule with the actual report.
Cost management is closely related to scope management as it requires that a scope definition be prepared and monitored throughout the project. If the budget is not prepared from the scope definition, then the budget must be reconciled with an estimate made from the scope definition. Periodically during the project, the budget must be compared with the current estimate. If the budget is exceeded, the project must not proceed until the design is changed so that the estimate is within the budget or until a budget increase is authorized.
To be effective, the comparison between the budget and the current estimate must be on a line item basis with increasing level of detail as the design progresses.
Monitoring and Reporting Techniques.—There are many excellent techniques for project monitoring and reporting. To be effective, however, they generally are: (1) Based on communication needs; (2) combined into a “system,” (3) targeted on the “right” information; and (4) leading to a decision or action when required.
The “system” must provide the project manager with the feedback needed to verify that his actions are leading to the desired result. It must also allow the program manager: (I) To verify the progress of all projects; (2) to manage the overall program, i.e., all projects, so that resources (manpower, equipment, and money) are available when needed; and (3) to evaluate the project manager performance. Later, the “system” must provide data for estimating new projects, budgeting next year’s work, and determining future manpower requirements.
A computerized Project Management Information System is often proposed as the solution to project monitoring and reporting needs. Unfortunately, a focus on computers without an understanding of fundamental communication needs can obscure more than it clarifies. Detailed costing and scheduling data is necessary but does not achieve communication. What is needed is a focus on the essential information in a manner that will lead to effective action. This should include:
1. A summary of project status.
2. Work accomplished this period (including the effort expended compared with the budget and the actual progress versus planned).
3. Work planned next period (including resource needs).
4. Problems and opportunities (with alternative solutions and their impacts).
5. Action needed, by whom, and when.
This type of report works as well to control a county’s design effort of a $50,000 street improvement project as it does for total CM services on a $25,000,000 fast-tracked, CM-managed advanced wastewater treatment plant. The difference is detail. One is filled out by hand on a single page having the previous five headings reproduced on the page. The other is a 20-page typed report.
Other Project Management Techniques.—There are a number of other valuable techniques (such as value engineering) that are either unique to project management or common to any type of management. These should all be considered and used as appropriate. One should be aware, however, that an overemphasis on techniques and a failure to focus on essentials can result in a very efficient but ineffective effort.
Common Definitions and Understanding.—A common set of definitions of the different project delivery systems and project management terms should help everyone. In addition, it will help project owners know what they need and how to obtain it from the right party.
Knowledge of What Others Do.—Each type of project management (design, construction, and design/construction) and each type of project (municipality, manufacturing, construction, etc.) has a different set of problems and solutions. All will benefit if individuals in those fields analyze their work. In addition, those seeking a career can better determine if that is really what they want to do.
Development of Project Management Systems.—Although the previously mentioned material is addressed to the project manager, it is also applicable to anyone with the authority to change or create a new project management system. In doing so, one should be aware of the basic concepts of project management, how they fit together, what techniques can be used, and how the different types of project managers use these techniques.
Use of Concepts and Techniques.—The basic concepts and techniques mentioned can be applied to any type of project within almost any type of existing project management “system.” Many existing systems will not support the concepts with the needed data, but the project manager can make some improvements, e.g., all project managers can use CPM/PERT scheduling even without computers. They can also develop scope documents and manage the scope and budget. In addition, they can include the five recommended topics in their reports.
Management of engineering projects is quite different from management of construction projects, yet both use the same basic project management techniques. A better understanding of the different project delivery systems and project management concepts and techniques will benefit all project managers, improve the management of individual projects, and lead to better project management systems.
There is need for a clear and definitive expansion of the ideas expressed here and the communication of this basic information to all project managers. This is even more important than using more sophisticated techniques and systems.
American City & County Magazine – July 1988
Managing a capital improvement program is one of the most difficult tasks facing a public-works director or city or county engineer. Funds often are inadequate, staffs are too small, priorities change without notice, costs overrun and schedules slip. Yet, most accounting and reporting systems do not provide timely, useable feedback to facilitate solutions to problems. Better management procedures and software can reduce these problems.
Five elements to successful program management exist. The first step is to develop a five-year plan. Define and prioritize programs and individual projects, based on general goals and specific objectives.
The second step involves establishing an annual budget. Fund and schedule project milestones based on the five-year plan, historical costs and available resources, such as staff and equipment. Develop a program work plan, adjust schedules for staff availability, and prepare a schedule for each project.
Third, estimate the required resources, such as staff, for each activity based on previous standards, with adjustments for levels of difficulty and staff productivity. Forecast resources requirements over time and adjust project schedules to fit available staff.
Fourth, delegate responsibility. Assign each project a project engineer or manager; who must commit to a budget, schedule and staff assignments.
Finally, monitor and report on each aspect of the project monthly. Report progress on three levels: project engineer/ manager, program manager (engineering or public-works manager), and elected officials. Analyze the actual implementations vs. the planned implementations, and the impact of those changes. Then, reprioritize, reschedule and rebudget the projects as needed. Document actual cost, resource productivity and scheduling data for future planning and budgeting efforts.
The reality is actual operations never work that easily. Accounting, fiscal management, and most existing public-works software packages cannot generate a program work plan and, do not provide all the information needed for program control.
Although project-management techniques generally are understood and several good project management software packages are available, good management procedures are not always followed. Program management (the management of individual projects within a program and the overall management of the program itself) often is misunderstood, and few software packages have the required flexibility and capacity.
The first task is to document existing project- and program management procedures, and correct any discrepancies. The second task is to select the best software to plan and control the program.
For managing an individual public-works project, almost any project management software will suffice, providing it is easy to use. A capacity of only 100 activities per project is sufficient, and a hand-drawn bar chart probably will meet most engineering needs. However, a manual or simple computerized system will not work for overall program management because it does not permit tracking of total resource, requirements, cannot handle a large number of projects, and lacks the flexibility to meet the different requirements of most public-works agencies.
The third task is to prepare a project manager’s procedures manual integrating the new procedures and the software. This requires an in-house or outside consultant, with the expertise and time to do the job.
The fourth and most important task is staff training. All managers, project engineers and key support staff should attend a two- or three-day seminar on management techniques, and the newly implemented project/program-management procedures and software. This assures everyone speaks the same language and understands the process.
Another important task is to assign responsibility and authority for each project to an individual project engineer or manager. Finally, implement and verify the new system is being used and then improve it.
Before selecting the software, the degree of central control of the program database (the project data files) should be determined. Also, whether to operate a single-user PC or a multi-user environment (LAN network, UNIX microcomputer or mainframe) should be considered. PC-based software is: easiest to use with a few of the more powerful packages ported to UNIX. Program- management software is available on mainframe but is expensive and not available on many computers.
Initially, central control of the software is needed on data entry, processing and reports even with project responsibility distributed to individual project engineers and managers. Training one person to use a new system is easier with others gaining familiarity and access over time. Also, less incorrect data entry or loss of data will occur if only a few people use the software directly. Software that cannot be upgraded to multi-user operation should be avoided because changing software is difficult and expensive.
Almost any size public-works programs can be handled with a 386 microcomputer with a fast, hard disk. RAM-based software can only handle the data requirements of a small agency.
The project engineer or manager can access data directly after the database is established, everyone is trained in the new procedures and adequate safeguards are installed. But management-imposed requirements, such as budgets and milestone dates, and the manager’s original commitments must be maintained. This requires considerable experience and sophisticated software, and should not be attempted during the first year.
The software must be able to batch edit and copy standard networks into the program database. to avoid tedious input and reduce errors.
The standard networks should be simple, from as few as 10 to as many as 30 activities for medium-sized projects, and a maximum of 100 for large projects. One of the most frequent and serious mistakes is to track too much detail too soon. The system will bog down and be dropped. Adding detail later is better, after the system has been in operation for a year.
However, the initial network and activity coding must be designed for easy expansion, with a hierarchical structure for consistent coding between small and large projects. Eventually, network activity codes can be integrated with cost accounting.
A frequent comment by public-works managers is “but our needs are different.” In some respects, his is true. Although project-management procedures are similar across all industries, technology and reporting requirements are different from one public-works agency to another.
Menus and screenforms should be customized, if more than a few people see them. But sorts, selective prints, and report formats must be customized without program modifications. The software must be able to import and export data from accounting systems, and with word-processing and database management software.
Monthly reporting is recommended, coinciding with payroll reporting so effort expended can be compared to effort planned and work accomplished.
Both tabular and graphic reports are needed, with detailed tabular reports for analysis and project level control, graphic output also is needed for project level control, as it can show what otherwise would take hours of study and years of experience to grasp. Color graphics are best for public-works managers and elected officials.
Three levels of reports are needed details For project engineers and managers, summaries for the engineering and public-works managers and highlights for elected officials. Although the focus usually is on managing design, a good software package also will track the contractor’s schedule, forecast survey and testing staff requirements, and even create progress payment reports.
One example of a successful public works program-management system is King County. Wash. In addition to well-considered requirements and reasonable expectations by department managers and their consultants, a key element in the system’s success was a seminar and workshop for 30 people in engineering services, plus the publics-works director, manager of engineering services and key managers from other sections.
During the training, work plans were developed; along with resource estimates and schedules for many of the current ongoing projects. Subsequently, four or five standard networks were developed covering the majority of projects.
Six months after the system’s implementation, a management audit by the county auditor found substantial improvements in project planning and monitoring. There were substantial increase in communication among staff, and coordination with other divisions. Peak staffing requirements were minimized by permitting adjustment of project schedules.
Construction administration and inspection staff needs were reduced, and less, expensive, temporary summer employees were used more frequently, allowing a smaller permanent staff during winter. Temporarily transferring engineers between design teams meets short-term workload peaks. Improved reporting to top managers enables them to monitor performance more closely and respond more quickly to essential delays or acceleration. Finally, projects advertised on schedule increased from between 37 percent to 54 percent for the previous three years, to 82 percent for the first year with the new system.
The county also switched from mainframe contract payment software, which cost more than $10,00 per year, to the progress-payment module of the project-management software for a onetime cost of $2,500. In addition to saving money, the system requires less staff time, is more flexible and faster.
Engineering services sanctions and public-works departments can benefit from better project and program management procedures and software. But a significant commitment in time and money is required to make it work.
The Military Engineer
Project management is a demanding task that requires considerable skill and experience. When performed in a multi-project environment as part of a complete design and construction program, it can be nearly impossible. And, managing the program itself to achieve the program goals is equally difficult.
Problems with project management in a multi-project environment usually include:
Inadequate planning, with a loose definition of objectives, and no list of the tasks that are needed to meet them, let alone an identification of the critical path to achieve the objectives in the shortest possible time.
Unreliable, incomplete, and untimely project status reporting.
Limited feedback on the actual progress so that corrective actions can be taken. Also, there is no recording of historical data for planning future projects of defending against contractor claims.
No reliable estimates of the in-house labor (resources) that are required for a project, with no forecast over time of the staff needed to maintain schedules.
Poor use of manpower. This is made obvious by insufficient staffing, the attendant project delays, rescheduling, confusion, and inefficiencies.
Inaccurate or untimely reporting of the actual labor used. Also there is no comparison of actual labor planned to date, nor a forecast of the resources required to complete the project. There is no analysis of earned value, cost performance index, or other performance factors.
Inefficient and ineffective management of the overall program, with cost overruns, delays, failure to achieve major objectives, and the waste of limited resources.
The Engineering and Planning Division of the Charleston District, Corps of Engineers, has been able to resolve most of these difficulties and to reduce the impact of the rest of them to manageable levels. This required a concerted effort, including:
Selecting the right project management software that is not only powerful and flexible, but can also be configured or modified to meet Corps’ requirements. PMS80 (a project management software package from Pinnell Engineering in Portland, OR) provided unique features such as a time-scaled arrow diagram, extensive import/export capabilities, and an online help and glossary.
Establishing an interface between the Corps’ mainframe accounting database and the project management software. This entailed:
Producing the actual project database, using PMS80’s split/merge feature to copy a standard network “template” from a library of typical projects and batch edit it for the unique tasks of individual projects. This was done for all 75 projects in the Engineering and Planning Division’s program.
Training the Engineering and Planning Division’s project engineers so they will know what information is required to maintain the database and which reports and other features are available to help them manage their projects.
Ensuring that the database is updated monthly with progress and changes, so that deficiencies can be corrected.
The process that the Charleston District went through to create their program management “system,” the lessons learned in creating it, and the availability of the system to other Districts are of immediate interest to many others.
Project Management Institute
Does the title question seem a tough one? To many project managers, it is not. “I don’t need project management, I just need a good golf course” (a golf course developer). “If the CNC machine I am developing turns out in line with the specifications, this project will be okay” (a product development manager). “We are looking at the bottom line – a functional water treatment plant” (a municipality program manager). All of these responses have one thing in common – they believe that quality of project management performance should focus exclusively on the project’s end product (golf course, CNC machine, water treatment plant).
Traditionally, American Project Management (PM) practices have concentrated on the fact of “producing” the project’s end product. After, the fact, they may identify product defects and try to correct those for future purposes. While this approach has been decently effective in preventing most unsatisfactory end products from reaching the customers, it did little to change the internal PM processes that created the defects. Changing these processes requires a thorough understanding of the PM mission.
The PM mission is to provide for project success. Project success refers to the degree to which:
We believe that a majority of the organizations undertaking the management of projects only measure the end product, which may be just one facet of the project success.
Project success is closely related to the quality of PM. The higher the quality of project management, the more likely the project success. In our opinion, success should be measured for every project on a regular basis, during the course of its life cycle, and after its completion. By measuring success of an ongoing project, we are able to measure quality of PM. Hence, the answer to the above question, “How do you measure the quality of your PM?” is: By measuring the project success.
Here Comes The Rising Sun
The practice of focusing on the end product worked well until global competition entered the American marketplace. This competition has given birth to the Total Quality Management and Partnering wave in the U.S. With the advent of these concepts, project organizations and customers will discover that being “end product-oriented” may be very ineffective. Have you heard of the companies that developed perfect products, but their costs of development were so high that they generated no return on investment? Focusing improvement efforts on the PM process is the most effective means for achieving a wide range of project success.
How Do You Spell “PM”?
Focusing on the PM process calls for an in-depth understanding of PM, and many project managers lack this basic understanding: e.g. “Project goals? I have no time to think about that, I have to work on my project.” “PM means that I have a CPM schedule on the job. Right?” But there are also project managers who have a good understanding of the PM ballgame, e.g., “It is really easy to deliver one extraordinary project. Get the best people, pour money in, give ’em top priority and management support, and they will deliver. But it is very tough to deliver a bunch of extraordinary projects because no organization has such abundant resources to ‘get the best people, pour money in…’ To deliver a bunch of extraordinary projects, it takes extraordinary PM.”
To build such PM, the organization must first set the stage. This includes basic PM training, which should be beyond the miraculous learn-everything-about-PM-in-one-day seminars that are currently available. Setting the stage means goal setting, barrier reduction, and leadership. Management should have a clear vision of what it wants to achieve and how it will get there. The support systems to help focus on the PM process must be in place. For example, just having the PM software does not make the organization capable of performing PM. Unless the users have a clear understanding of PM concepts and principles, the true power of PM software is underutilized, or worse yet, misused.
Once the stage has been set, the organization should define its PM process as clearly and thoroughly as possible. The purpose is to determine how PM is currently performed and identify its measures of performance (e.g., scheduling performance index). All key project participants should be involved in this task. Otherwise, once the process has been defined, those not involved may comment, “It doesn’t work this way. You guys should’ve asked us.” Working together, project participants precisely define the purpose of each step of the PM process and its outcome.
The definition of the PM process becomes the PM standard for the organization. By standardizing its process, the organization will establish the best current way to perform its PM process, measure its performance, and increase its projects’ success in other terms as well as in basic time, quality and cost. Project people need to be trained to the PM standards, which facilitate and enforce its use. These standards should be continually improved in order to enhance every facet of the PM process.
In a nutshell, the PM standards that organizations must strive for should be SMART … Simple,Measurable, Adaptable, Realistic, and Timely.
Focusing on the PM process is not the only solution to an internal organizational goal. Rather, it is the only avenue leading to the ultimate goal of PM – deliver the project that exceeds customers’ expectations, with world-class PM standards.
Pinnell Busch, Inc., founded in 1975, provides project and program management expertise to construction manufacturing firms, owners of major facilities projects, and government agencies involved in project and program management. The firm’s services include:
The firm has provided services for more than one billion dollars of construction throughout the United States, Europe and Asia. The firm’s clients include: high technology manufacturing firms, agencies of the federal and several state governments, numerous cities and counties and over 200 construction contractors.
From its beginning, Pinnell Busch has been an innovator in several areas of project management: computerized management systems, claims prevention and resolution, alternative contracting strategies, quality management techniques and procedures.
Daily Journal of Commerce
Design & Construction – June 15, 1994
By Steven Pinnell and Jeff Davidson
- Owners. Planning, decision-making and oversight – so that projects are not delayed until the last minute nor started with ambiguous objectives or incomplete criteria, but are planned and managed effectively and efficiently.
- Designers. Pre-design to ensure the project scope, cost, and budget are clearly defined; design management to eliminate errors, ambiguities, and incomplete documents; and contract administration to facilitate rather than hinder construction activities. This may require slightly higher design fees, but it will pay enormous dividends.
- Contractors. Jobsite management so that work is carefully planned, diligently pursued, correctly constructed, and safely managed.
Direct your construction projects through “total quality project management.” Old-fashioned models for project management are outdated and there is new technology to replace them.
Your project managers and supervisors need the latest tools and techniques, and the training to integrate them into your ongoing operations.
Do you have multiple projects that share people and equipment? Then you’ should identify ‘which projects share which resources, coordinate schedules accordingly and integrate these schedules with each other and with your day-to-day operations.
Good project management is relatively inexpensive and pays dividends far beyond the cost of implementation. It requires documented procedures and an investment in training.
These procedures should be simple, but cover all essential functions. They also need to be flexible to allow for differing size, complexity of projects, for the project owner’s needs and for the style of each project superintendent.
INTERPERSONAL SKILLS: One other area where additional training will pay big dividends is in the area of interpersonal and communication skills. Far too often, the source of a dispute stems from a simple and avoidable misunderstanding between two personalities or miscommunication between two parties.
One approach to improving your team’s interpersonal skills is a multiple-step training program offering:
- Training in recognizing behavior styles based on some reasonably easy-to-understand models.
- Guiding each individual through a self-administered test to determine his or her own behavioral style.
- Explaining how each individual’s style affects success in dealing with others.
- Teaching how to recognize the behavior styles of others and techniques for dealing more cooperatively with a wide range of personality types.
The typical training session for this approach encompasses a two-day seminar. These courses can be crucial to your field supervisors and to your entire project management team.
Other areas where additional training should be considered include communication skills, negotiating techniques, team building, and collaborative problem solving.
Taking the time and the money to invest in a little preventative training and preparation can turn out to be one of the key ingredients to more’ profitable projects.
Program management is the management of a very large project ($100+ million), or a group of related projects that are managed both independently by project managers and as a group by the program manager (e.g. a county public works road program or sewer program).
If you’re a program director (or project manager) with a poorly defined or unrealistic scope of work, an inadequate budget, or an overly optimistic schedule for the scope and available resources – what do you do?
One option is to find another job. If that’s not possible, we suggest the following steps:
1. Clearly Define The Scope
2. Prepare an Independent Cost Estimate
Program directors should require their project managers to develop, track, and take responsibility for their current estimates. If widely different from the official budget, either change the scope or the budget – now, not later. Track and control costs at the line item level, not the bottom line.
3. Prepare a Project Schedule
4. Prepare a Detailed Work Plan
The key problem facing multi-project programs, like those for a public works department, is the limited number of in-house personnel available to complete all of the projects as scheduled. Although each individual project could be accomplished with the assigned personnel, when adding up the labor needed for all projects for each timeframe, you may find that the total demand exceeds the available resources.
5. Track Progress, Compare Actual Progress with Plan, and Take Corrective Action if Needed
During design, monitor for ‘scope creep’ and obtain a Scope Change Authorization before allowing any changes that affect the budget. Don’t use the contingency for scope changes. Also ensure that you are achieving the program objectives and contract deliverables.
During construction, manage change proactively and notify the governing body if your current estimate significantly exceeds the budget. Negotiate and settle changes and claims promptly to avoid unnecessary conflict and impact.
6. Conduct a Performance Audit
Daily Journal of Commerce
Design & Construction – July 6, 1994
By Steven Pinnell and Jeff Davidson
Construction contract disputes, and the added costs and delays they create, can erode contractor profits faster than any other single occurrence.In the modern contractor’s arsenal of dispute avoidance techniques, one of the most effective weapons is partnering.Partnering has received a great deal of attention in the past few years, and it can easily fall prey to the “fad of the moment” label too often given new management techniques. Though a formal partnering process is relatively new to the construction industry, the principles of partnering are very traditional. They are based on the common belief that every construction project should be a cooperative endeavor between owners, designers, contractors, sub-contractors, suppliers, and the public, and that each party has an equal stake and responsibility in seeing that the project is a success.
Partnering is simply a change in attitude, from an adversarial relationship to a partnership in which there is mutual trust and respect. It requires a change in the “culture” of the project team.
Changing attitudes and cultures in construction is not easy and it is best to adopt some formal procedures with considerable follow-up efforts.
STEPS TO PARTNERING: Partnering usually includes these steps, which may vary depending on the size of the project and the participants’ past experience with partnering:
- Include a partnering clause in all contracts.
- Secure top management commitment. If management is unfamiliar with partnering, an introduction to the basics of partnering is in order.
- Identify a strong partnering “champion” on the project team.
- Conduct a partnering workshop prior to project start-up. This workshop is essential in ensuring that the partnering process will be embraced by all “stakeholders” in the project and will set ground rules for dealing with issues during the course of the project. Workshops should be conducted by a trained, experienced, outside facilitator.
Workshops should be preceded by planning and analysis which will allow the facilitator to understand the basic elements of the project, critical dates and tasks, personalities and past histories of key participants, and the basic expectations and concerns of each stakeholder. The workshop should be held at a neutral site.
- Develop a project mission statement signed by all stakeholders. It should include all common goals and measurable objectives (quality of product, safety, time schedule, budget, profit for all involved, etc.)
- Schedule a follow-up workshop after arrival of additional subcontractors or after one or two months into the project to review progress.
- Conduct random site visits or phone conferences to ensure partnering efforts remain ongoing.
- Document achievements with photos, framed missing statements and project banners.
- Use symbols and team identification such as a joint/project logos, and include project items such as coffee cups or caps. This may seem naive, but it does build team spirit and a sense of unity for all participants.
- Celebrate success when achieving major project milestones, accomplishing the objectives in the charter/mission statement or completing the project.
These last three items may seem excessive and too “cheerleaderish” for many. But past experience shows that these simple steps can work. Professional teams take great care in steps like this (think of the Portland Trail Blazers) and the logos, symbols, and celebrations all help build a sense of teamwork.
BENEFITS ARE IMMENSE: The success of partnering is measurable and can translate directly to your bottom line. One industrial contractor reported a 16% savings on the 18 projects they have partnered.
A government agency we’ve worked with has experienced better cost control, reduced paperwork, attainment of value engineering objectives and no litigation on the projects they have partnered.
Partnering should not be considered merely a fad or an added cost. Though one-day fees for a professional facilitator can range from $1,800 to $7,000 or more depending on the preparation requirements, the investment can result in a multiple return to your bottom line.
Learn more about team building and add to your existing knowledge of what works. Partnering works.