We often talk about and hear the term ‘project success’ but what is meant by this term how is the success of a project determined?
Kodak embarked upon a massive project to implement a new Advantix photographic system and upon completion in 1997 the Project Management Institute (PMI) recognized it as the International Project of the Year, and Business Week selected the system as one of the best new products of 1996. But Kodak's stock price fell 67% since the introduction of the Advantix system, in part because it failed to anticipate the accelerating switch to digital photography. Was this a successful project?
On the other side of the coin the Sydney Opera House (SOH) with its graceful sails dominating Sydney Harbor is arguably one of the most recognized buildings in the world and when construction started in 1959, it was estimated to cost $7 million and take four years to build. It was finally completed in 1973, some 14 years later, costing over $100 million. Today the SOH is considered one of the 7 modern wonders of the world and on 28th June 2007 was included on the UNESCO World Heritage List as ‘A masterpiece of human creative genius’. So, was the project a success?
Before you are able to answer both these questions another question must be asked and that is “from whose perspective are you determining the success?” A project has many stakeholders with differing objectives in terms of what is being delivered (the product) and how it is being delivered (the management) all of which need be identified and documented prior to the project commencing. These objectives form the ‘critical success factors’ that can be measured at project completion and thus determine the success of the project from individual stakeholder requirements.
Project success then, depends on two aspects namely ‘product success’ and ‘project management success’ depending on who you are and what your vested interest is in the project. A project may have been managed extremely well however, the end product may not be ‘fit for purpose’ rendering it a complete failure (Kodak) alternatively a project could have been totally mismanaged but the end product is a resounding success (SOH).
Product ‘success’ is linked to the strategic objectives (goals) of individual stakeholders thus the owner of the project is more likely to place a greater importance on the long term benefits of the project than on the short term effects of how it was managed. So while the SOH project was grossly over budget and delivered 14 years late all that is forgotten now as the reality is it is an enormous success. Kodak on the other hand failed to forecast the onslaught of the digital age, consequently the end product was deemed a failure as it did not meet the strategic objectives of senior stakeholders.
‘Project Management’ success focuses on the process of management the project and is usually measured through the achievement of metrics such as the triple constraints of time, cost and performance and therefore the contractor undertaking the project is more concerned with producing the deliverables on time, within budget and to the clients specification rather than whether the end product suits the needs of the users or if it has strategic alignment with the companies objectives.
The strategic objectives of the product success may seem somewhat obscure to external stakeholders or within the lower ranks of a company but items such as market share, political gain or company improvements may override the success of actually managing the project.
The term ‘project success’ cannot be stated in isolation from that of whose perspective the success is spoken about otherwise it will always be open to disagreement from other stakeholders. The SOH project whilst a total failure from a project managers perspective, is in fact a resounding project success to the owners due to the ongoing iconic value that the end product generates in tourism dollars as well as providing a world class stage for the performing arts.
So does a successful project rely on both ‘product’ and ‘project management’ success? Some believe that it does but my opinion is that at least one must be successful and to stick my neck right on the chopping block I believe that no matter how well the project is executed if it does not meet the client’s specification, then it is a failure.
The bottom line is that all stakeholders must agree on the critical success factors before the project even begins then, those factors can be used as a benchmark to measure the overall project successfulness upon completion.
Saturday, March 27, 2010
Monday, March 22, 2010
Treasury Re-classifies ‘Sick’ Projects (Borneo Post Friday 19th March 2010)
On Sept 1 2009 the Finance Ministry issued a new circular asking the Public Works Department (PWD) and other agencies to classify any project whose completion had been delayed by more than 20 per cent or two months, as a ‘sick’ project. This circular changes the existing criteria of categorizing a project as ‘sick’ when the completion delay exceeded 30 per cent or three months after the scheduled completion.
The Works Minister Datuk Shaziman Abu Mansor said on 24th November 2009 the re-classification of ‘sick’ projects will be immediately enforced on projects tendered out from September 2009 but existing projects the circular will be enforced beginning June 2010.
Before analyzing what this means let us discuss the intent of this classification.
As this circular has been imposed by the Finance Ministry one would have imagined there would be some cost restrictions or penalties imposed on those contractors whose projects fall into its classification however, we are assured by the minister that this is not the case. So what happens to projects that are delayed to the point that they are tagged as ‘sick’? The circular states that if a contractor cannot demonstrate its ability to recover the project to complete on time the ministries agents can terminate their contract and re-appoint a new contractor.
However, on Wednesday 23rd December the Borneo Post ( Page 22) reported the Health Minister Datuk Seri Liow Tiong Lai as saying “Another 18 ministry infrastructure projects out of 86 (21%) are now catogorised as ‘sick”. These contractors will now “...be imposed a penalty of RM3,600 for every delayed day, until the project is completed”.
One thing for sure is this classification should not be used by the contractor as a decision point for the commencement of action once the project reaches the 20% behind schedule point. Instead the circular should be the catalyst for companies to implement standardised project controls tools and methodologies providing the ‘early warning indicators’ that the project is diverging from the approved baselines.
Research has proven that any divergence from the baseline evident as early as 20% into the project forms an unrecoverable trend to completion. This is an important statistic as what it implies is that project recovery is almost impossible even at this early stage in the project life cycle. Therefore, early warning indicators should trigger the implementation of acceleration strategies as early as possible thus ensuring the project never reaches 20% behind schedule.
So why do so many projects fall behind schedule and what can contractors do to keep their projects ‘healthy’?
To ensure a project is completed successfully requires controlling the critical elements of scope, time, cost, resources and risk. Most contractors believe they do manage these elements, however if they are honest with themselves they will see they are only paying ‘lip service’ to these requirements as many will simply prepare a rudimentary project schedule, a budget allocation spreadsheet, a resource distribution document, a list of deliverables from the contract and then discuss the risk of the project over a cup of coffee.
Even if these elements are undertaken methodically the main characteristic that is missed is the integration of the above elements onto a single platform so that if a change occurs in any one of the scope, time, cost, resource or risk elements the others can be adjusted to reflect that change.
So if say a change in the scope of work occurs requiring additional deliverables, the schedule can be adjusted by adding the relevant activities required to produce the deliverables, the required resources can be assigned to those activities which in turn will generate the associated costs and, any risks associated with the change can be logged, monitored and controlled.
One platform that manages this integration extremely well is Primavera Project Management (P6) software in that it utilises a single database and the functionality therein is integrated to manage each of the elements of scope, time, cost, resource and risk. What must be remembered is that Primavera Project Management (P6) software is a project management tool to facilitate a methodology and the tool alone is not enough to produce successful projects. However, if the tool is implemented correctly and standardised methodologies are adopted then together they will produce an accurate assessment as to the health of a project through objective performance reports.
Should a project start to diverge from its approved baseline then early warning indicators obtained from the performance reports will trigger intervention and recovery action can be implemented to ensure the project is kept out of the ‘sick’ category and the contractor from being blacklisted.
Over the coming weeks I will discuss each of the elements of project scope, time, cost, resource and risk management in more detail showing the benefits of undertaking these in a structured and integrated manner.
The Works Minister Datuk Shaziman Abu Mansor said on 24th November 2009 the re-classification of ‘sick’ projects will be immediately enforced on projects tendered out from September 2009 but existing projects the circular will be enforced beginning June 2010.
Before analyzing what this means let us discuss the intent of this classification.
As this circular has been imposed by the Finance Ministry one would have imagined there would be some cost restrictions or penalties imposed on those contractors whose projects fall into its classification however, we are assured by the minister that this is not the case. So what happens to projects that are delayed to the point that they are tagged as ‘sick’? The circular states that if a contractor cannot demonstrate its ability to recover the project to complete on time the ministries agents can terminate their contract and re-appoint a new contractor.
However, on Wednesday 23rd December the Borneo Post ( Page 22) reported the Health Minister Datuk Seri Liow Tiong Lai as saying “Another 18 ministry infrastructure projects out of 86 (21%) are now catogorised as ‘sick”. These contractors will now “...be imposed a penalty of RM3,600 for every delayed day, until the project is completed”.
One thing for sure is this classification should not be used by the contractor as a decision point for the commencement of action once the project reaches the 20% behind schedule point. Instead the circular should be the catalyst for companies to implement standardised project controls tools and methodologies providing the ‘early warning indicators’ that the project is diverging from the approved baselines.
Research has proven that any divergence from the baseline evident as early as 20% into the project forms an unrecoverable trend to completion. This is an important statistic as what it implies is that project recovery is almost impossible even at this early stage in the project life cycle. Therefore, early warning indicators should trigger the implementation of acceleration strategies as early as possible thus ensuring the project never reaches 20% behind schedule.
So why do so many projects fall behind schedule and what can contractors do to keep their projects ‘healthy’?
To ensure a project is completed successfully requires controlling the critical elements of scope, time, cost, resources and risk. Most contractors believe they do manage these elements, however if they are honest with themselves they will see they are only paying ‘lip service’ to these requirements as many will simply prepare a rudimentary project schedule, a budget allocation spreadsheet, a resource distribution document, a list of deliverables from the contract and then discuss the risk of the project over a cup of coffee.
Even if these elements are undertaken methodically the main characteristic that is missed is the integration of the above elements onto a single platform so that if a change occurs in any one of the scope, time, cost, resource or risk elements the others can be adjusted to reflect that change.
So if say a change in the scope of work occurs requiring additional deliverables, the schedule can be adjusted by adding the relevant activities required to produce the deliverables, the required resources can be assigned to those activities which in turn will generate the associated costs and, any risks associated with the change can be logged, monitored and controlled.
One platform that manages this integration extremely well is Primavera Project Management (P6) software in that it utilises a single database and the functionality therein is integrated to manage each of the elements of scope, time, cost, resource and risk. What must be remembered is that Primavera Project Management (P6) software is a project management tool to facilitate a methodology and the tool alone is not enough to produce successful projects. However, if the tool is implemented correctly and standardised methodologies are adopted then together they will produce an accurate assessment as to the health of a project through objective performance reports.
Should a project start to diverge from its approved baseline then early warning indicators obtained from the performance reports will trigger intervention and recovery action can be implemented to ensure the project is kept out of the ‘sick’ category and the contractor from being blacklisted.
Over the coming weeks I will discuss each of the elements of project scope, time, cost, resource and risk management in more detail showing the benefits of undertaking these in a structured and integrated manner.
Thursday, March 11, 2010
Formal Training Essential for PM’s (Borneo Post 12th March 2010)
As Sarawak embarks upon a portfolio of projects under the SCORE banner it is essential that contractors and sub-contractors alike prepare to implement standardised project management methodologies to ensure these projects are completed successfully, on time, within budget and to the clients’ specification.
Foreign investors along with local stakeholders will be keeping a close eye on the progress of these projects and as such project management competencies such as Scope, Time, Cost, Resource and Risk management need to be improved. However, the most important competency is the ability for the Project Manager to manage the project team and provide leadership if the aforementioned competencies are to provide the required benefits.
I was having a coffee with a colleague last week when a friend of his turned up unexpectedly. After the initial introductions I casually asked what his profession was to which he responded he was a Civil Engineer but had been appointed as the Project Manager some twelve months prior.
“So how do you like the role of Project Manager?” I further enquired. “I really enjoy it; the only thing I don’t like is dealing with the ‘people’ issues”. This response left me speechless!
The natural progression from a degreed Engineer to that of Project Manager is a transition that must be accompanied with some formal project management training to fulfill the requirements of this extremely responsible and challenging position. It is also very common nowadays for the Project Manager not to have any formal engineering degree or to have a degree in some diversified field unrelated to the project they are currently engaged on.
Whatever the situation the roles of Project Manager and that of an Engineer are streets apart from each other as engineering deals with managing the technical issues of a project where as project management focuses on managing the people issues. Many people think project management is about ‘project business’ but in reality it is about ‘people business’ especially when it comes to communication, motivation and negotiation. To be a successful Project Manager takes a great amount of knowledge and skill especially with regard to the ‘people’ issues which is why it is classified as both a science and an art.
The Project Manager is akin to the conductor of an orchestra (credit to Ian McKinnon for the analogy) where the conductor must exercise his ‘people skills’ to motivate, coordinate and lead. If the conductor is skillful in his role he will build synergy between the individual talented musicians resulting in a masterpiece even though he may not be able to play all or even any of the individual instruments himself. And this is where a major problem exists when we see job advertisement for Project Mangers. In the main we will see requirements like, ‘10 years in Civil Engineering’ or ‘must have experience in the construction industry’ or ‘proven track record in road construction’. But what the position critically requires is the essential skill to manage and lead a project team and, to understand the requirements of project management methodologies. Just because a person is a good Engineer it may not necessarily follow that they will make a good Project Manager.
There are three main areas a Project Manager needs to focus on namely time, cost and performance (quality) and the Project Manager cannot cover these areas adequately without the engagement of other professional project management team members. I continually hear of projects that are required to provide to their clients, on a regular basis, a critical path network diagram (CPM), project schedules, resource reports and progress ‘S’ curves, but the role to provide these critical decision making performance reports is allocated to the Site Engineer to be performed on a part time basis rather than to a dedicated Planning Engineer.
Most projects do engage a dedicated Cost Engineer because the company needs to keep track of the actual and forecast project costs, but where many companies fail is the realisation in the benefits of a dedicated Planning Engineer who can monitor and control the projects deliverables, identify any divergence from the baseline and forecast variances to the completion date.
Without this skill the project will undoubtedly result in extension of time claims, additional costs in overtime or indirect costs, additional resources to catch up and the ultimate penalty of having liquidated and ascertained damages (LAD’s) applied from the client, all of which equate to money off the ‘bottom line’.
Many years ago I was engaged as the Project Controls Manager on the design, development and implementation of the public transport contactless smart card (CSC) system in Singapore where the Project Manager openly admitted he knew nothing of CSC technology and was in fact a Mechanical Engineer. His skill was in leadership derived partly from a charismatic personality plus experience, but in the main from formal project management training. He understood the importance of time, cost and quality management and engaged the appropriate skill sets to produce the deliverables he required to manage the project which ultimately led to project a successful completion.
Formal training is now available in Sarawak at a number of institutions with Curtin University of Technology (Curtin) in Miri providing a Master of Science post graduate degree in Project Management but there are also a number of short courses available that provide basic Project Management training. Curtin also provide a short 3 day project management course based on the 9 competencies of project management as detailed in the ‘Guide to Project Management Body of Knowledge’ (PMBOK) and upon completion will receive a certificate from Curtin.
Whatever project management course is embarked upon, any formal training will greatly enhance a Project Managers people skills that will go a long way in ensuring projects are completed successfully and thus keeping them out of the ‘sick’ category and being blacklisted.
As Sarawak embarks upon a portfolio of projects under the SCORE banner it is essential that contractors and sub-contractors alike prepare to implement standardised project management methodologies to ensure these projects are completed successfully, on time, within budget and to the clients’ specification.
Foreign investors along with local stakeholders will be keeping a close eye on the progress of these projects and as such project management competencies such as Scope, Time, Cost, Resource and Risk management need to be improved. However, the most important competency is the ability for the Project Manager to manage the project team and provide leadership if the aforementioned competencies are to provide the required benefits.
I was having a coffee with a colleague last week when a friend of his turned up unexpectedly. After the initial introductions I casually asked what his profession was to which he responded he was a Civil Engineer but had been appointed as the Project Manager some twelve months prior.
“So how do you like the role of Project Manager?” I further enquired. “I really enjoy it; the only thing I don’t like is dealing with the ‘people’ issues”. This response left me speechless!
The natural progression from a degreed Engineer to that of Project Manager is a transition that must be accompanied with some formal project management training to fulfill the requirements of this extremely responsible and challenging position. It is also very common nowadays for the Project Manager not to have any formal engineering degree or to have a degree in some diversified field unrelated to the project they are currently engaged on.
Whatever the situation the roles of Project Manager and that of an Engineer are streets apart from each other as engineering deals with managing the technical issues of a project where as project management focuses on managing the people issues. Many people think project management is about ‘project business’ but in reality it is about ‘people business’ especially when it comes to communication, motivation and negotiation. To be a successful Project Manager takes a great amount of knowledge and skill especially with regard to the ‘people’ issues which is why it is classified as both a science and an art.
The Project Manager is akin to the conductor of an orchestra (credit to Ian McKinnon for the analogy) where the conductor must exercise his ‘people skills’ to motivate, coordinate and lead. If the conductor is skillful in his role he will build synergy between the individual talented musicians resulting in a masterpiece even though he may not be able to play all or even any of the individual instruments himself. And this is where a major problem exists when we see job advertisement for Project Mangers. In the main we will see requirements like, ‘10 years in Civil Engineering’ or ‘must have experience in the construction industry’ or ‘proven track record in road construction’. But what the position critically requires is the essential skill to manage and lead a project team and, to understand the requirements of project management methodologies. Just because a person is a good Engineer it may not necessarily follow that they will make a good Project Manager.
There are three main areas a Project Manager needs to focus on namely time, cost and performance (quality) and the Project Manager cannot cover these areas adequately without the engagement of other professional project management team members. I continually hear of projects that are required to provide to their clients, on a regular basis, a critical path network diagram (CPM), project schedules, resource reports and progress ‘S’ curves, but the role to provide these critical decision making performance reports is allocated to the Site Engineer to be performed on a part time basis rather than to a dedicated Planning Engineer.
Most projects do engage a dedicated Cost Engineer because the company needs to keep track of the actual and forecast project costs, but where many companies fail is the realisation in the benefits of a dedicated Planning Engineer who can monitor and control the projects deliverables, identify any divergence from the baseline and forecast variances to the completion date.
Without this skill the project will undoubtedly result in extension of time claims, additional costs in overtime or indirect costs, additional resources to catch up and the ultimate penalty of having liquidated and ascertained damages (LAD’s) applied from the client, all of which equate to money off the ‘bottom line’.
Many years ago I was engaged as the Project Controls Manager on the design, development and implementation of the public transport contactless smart card (CSC) system in Singapore where the Project Manager openly admitted he knew nothing of CSC technology and was in fact a Mechanical Engineer. His skill was in leadership derived partly from a charismatic personality plus experience, but in the main from formal project management training. He understood the importance of time, cost and quality management and engaged the appropriate skill sets to produce the deliverables he required to manage the project which ultimately led to project a successful completion.
Formal training is now available in Sarawak at a number of institutions with Curtin University of Technology (Curtin) in Miri providing a Master of Science post graduate degree in Project Management but there are also a number of short courses available that provide basic Project Management training. Curtin also provide a short 3 day project management course based on the 9 competencies of project management as detailed in the ‘Guide to Project Management Body of Knowledge’ (PMBOK) and upon completion will receive a certificate from Curtin.
Whatever project management course is embarked upon, any formal training will greatly enhance a Project Managers people skills that will go a long way in ensuring projects are completed successfully and thus keeping them out of the ‘sick’ category and being blacklisted.
Subscribe to:
Posts (Atom)
