- ‘The whole is more than the sum of the parts’,
- ‘The parts are dynamically interrelated & interdependent’ and
- 'The parts cannot be understood if considered in isolation from the whole’
Systems Theory leads onto Systems Thinking that teaches us to look at the total system performance and the relationships between systems. Take for instance the human body, it is a system that has many inter-related sub-systems like the heart, lungs, arteries and veins. While the heart is the most efficient and relatively maintenance free ‘pump’ known to man, on its own it is just a pump, but when it is inter-related with the lungs, arteries and veins it provides life to the human body.
Every project is a ‘system’ in that it consists of many interrelated and interconnected parts or elements which must function together as a ‘whole’. Project Managers need to be concerned with the ‘big picture’, and as such, they must be systems thinkers and allocate adequate attention to every part of the project management system.
When we talk about controlling projects we are talking about the management of Scope, Time, Cost, Resources and Risk which are all sub-systems of project management as a whole however, as sub-systems they cannot work in isolation they must be interrelated.
Scope Management is mission critical for the success of all projects and must be identified, documented and baselined prior to the commencement of any work. This provides a solid foundation to the project management processes to enable accurate progress monitoring and a baseline to determine if additional work is within the original scope. This will decide if the additional work constitutes an authorised variation order that could result in an extension of time (EOT) or additional costs to the contractor.
Time Management utilises the documented and baselined scope as the project deliverables in the form of a Work Breakdown Structure (WBS). The project schedule will be developed by assigning activities that define how the deliverables in the WBS will be produced and the duration each of those activities will take.
Resource Management sees the assignment of labour, material and equipment resources to the project schedule activities and ensures the activities can be completed through optimisation of the available resources
Cost Management applies the rates in terms of manhours and/or dollars to the assigned resources to enable the generation of performance reports such as progress ‘S’ curves, Earned Value Management (EVM) and cash flow.
Risk Management determines the probability of completing the project through quantitative analysis models such as Monte Carlo and/or qualitative brainstorming sessions. The result from both will identify potential risks as to the probability of occurrence and the impact on the project should they occur. The amount of contingency allocated to cover these potential risks can be determined objectively and applied to the overall project cost budget.
One of the main reasons why projects are not completed successfully today is firstly not all the above sub-systems are utilised on projects and secondly if they are utilised they are done in isolation from each other. Let’s model a typical construction contractor that tenders for a project worth around RM20 million and analyse the bid document they submit.
Scope Management is usually determined through the bill of quantities (BOQ) but no formal scope statement or WBS will be generated resulting in difficulties when determining if deliverables are within the original scope or not.
Time Management may see the development of a high level schedule developed without using Critical Path Method (CPM) and usually in a spreadsheet format that shows high level activities to be performed.
Resource Management is usually a high level arbitrary estimate of what resources would be required documented in a spreadsheet.
Cost Management will see rates applied to each BQ line item to determine the total direct cost. The total direct cost will then have an arbitrary 10%-15% added for contingency determined from a ‘gut feel’ rather than any objective method. In addition an overhead cost plus profit margin is added to finalise the estimated cost to complete the project.
Risk Management is rarely undertaken as a formal process to identify and manage potential risks and only a few companies in my experience have utilised the results to determine contingency costs.
Therefore, if any changes occur to the scope of work there will be a knock on effect to the project schedule activities, resource assignments, cost allocations and risks to the project as a whole and all changes along with the effected project management elements require management to ensure total control over the project.
There are software tools available that allow the integration of the 5 elements of project controls, the most comprehensive being Primavera Project Management (P6). This software provides functionality to manage projects objectively, and reports that highlight divergence from all baselines as early warning indicators ensuring effective intervention necessary to complete projects successfully within the triple constraints of Time, Cost and Performance.
Conclusion
To undertake any of the 5 elements described above in isolation from each is only paying lip service to project management methodologies and will more than likely result in project failure, remebering the example of the human heart, if beating in isolation is of no benefit to the human body as a whole.
I hope this article provides some enlightenment to the students at Curtin University of Technology (Miri) MSc. (Project Management) programme, assignment No.1.
All comments are welcomed.
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