Introduction to Project Management

What is Project Management?

Project management is the overall planning, control and co-ordination of a project from inception to operational completion, aimed at meeting a Client’s objectives within the agreed programme, budget and quality standards.

How does project management differ from the day to day management of a business or organisation?

1. Unlike day to day management, a project has a planned beginning and end.
2. The completion of a project often requires the assembly of a team specifically to execute the project. They may not have worked together before and are unlikely to do so again, so attention to detail in managing a team becomes even more important.

"A project is complete when it starts working for you, rather than you working for it." (Scott Allen)

How to approach capital project management

The most significant contribution that an organisation can make to the success of a project is to approach it in a planned way.

Do not take anything for granted and insist that all participants in the project conduct the project in a professional manner, which includes pre-planning and first class documentation.

Projects that are planned thoroughly and start well are more likely to be completed successfully than those which are started without proper direction and therefore need time-consuming and expensive back-tracking. There is real benefit in building momentum from the outset.

"The beginning is the most important part of the work." (Plato)

Project management succeeds only when a team of people is committed, motivated and focussed.

Therefore—project management is people management.

The 7 stages of a capital project

There are seven stages to a capital project and they each have different management requirements:

1. Project inception
2. Feasibility and cost planning
3. Assembling the project team
4. Managing the design phase
5. Construction and implementation
6. Completion, handover and utilisation
7. Project evaluation and close-out

"The single best payoff in terms of success comes from having a good project definition early." (Rand Corporation)

Stage 1—Project inception

Outline brief

This has a variety of names in practice such as the brief, project requirements or project definition.

The main purpose of an outline brief is to make sure that the project needs are established in order that the scope of the project can be recorded and tested. Time spent here saves time and money later.

A brief is not something which should be produced by a Client alone. It’s a clear statement of what is needed and should be produced in partnership between a Client and a Project Manager in order that it can be communicated to the rest of the team. It is usually advisable to arrange the early appointment of some of the designers so that they can also be consulted. The brief will therefore encapsulate a vast amount of experience.

Strategy & feasibility

Once a brief has been produced, it is important to produce a strategy on how it should be delivered (e.g. does it need to be a refurbishment, new building or an extension).

It is then essential to check the feasibility of the scheme. Can it be done, practically ?

Budget costs

It is often the case that initial ideas from the outline brief are unaffordable. At the earliest stage, it is important to establish the Client’s budget cost.

Option appraisals

The majority of projects can be delivered in a number of different ways. An option appraisal compares each of the options and invariably makes it easier to select the preferred option.

An effective option appraisal can save time and money later.

Stage 2—Feasibility and cost planning

As soon as a Client has established what they think they need, it is time to carry out more detailed cost checks to ensure that finance is available and the scheme is in line with expectations and affordable.

"Price is what you pay. Value is what you get." (Warren Buffett)

There are two main parts to this stage:

1. Business cases
2. Funding submissions

A business case should always be in place before any capital is committed to a scheme.

Funding submissions are required to formally apply for funds, whether they be from a bank, a public authority or from the Board of a company.

Stage 3—Assembling the project team

Before this stage, the number of people involved in the project is relatively small. However, when a project has been tested and finance is known to be available, it is time to formally assemble a wider team and put the best possible procedures in place.

During this stage there are four main activities:

1. Team building and appointment
2. Contact selection and procurement
3. Planning and programming
4. Budget and cost control

The appointment of professional advisers and team building is a vital process. Projects require a wide range of expertise and the teams need to be well briefed and co-ordinated. Establishing the right team of people is a complex and important task.

There are many different forms of contract and types of procurement. Most projects could be carried out in a number of different ways, but making the right choice on the procurement route often has a beneficial impact on time and cost.

One of the most important aspects of project management is controlling the programme. As soon as a team is in place and you have chosen your procurement route, an accurate programme is required to guide everyone’s actions.

When the content, procurement route and programme is in place, it is possible to set a clear budget allocation for the project, establish the cash flow requirements and establish the cost control procedures.

Stage 4—Managing the design phase

Design has an impact on the quality of a project. The rate at which design development progresses also has a significant effect on cost and timing. It follows, therefore, that the effective management of this phase will produce many benefits for the time, cost and quality of the entire project.

"Quality is never an accident, it is always the result of intelligent effort." (John Ruskin)

There are four main tasks during this phase of the project:

1. Design management
2. Cost planning
3. Value management
4. Risk management

Design management

Design, in common with all aspects of the project, should be managed against a programme and checked against the brief.

Cost planning

In addition to early cost plans, regular cost checks are needed to ensure that the emerging design is within agreed cost limits.

Value management

This will maximise value. It is a structured team exercise which optimises the balance between cost and the function of the components of the project.

Risk management

All organisations need to minimise the impact of risks on their projects. A detailed approach allows risks to be spotted early and for plans to be put in place to mitigate or respond to the risks effectively.

Stage 5—Construction and implementation

Whilst this is usually the longest phase of a project, it is essentially a case of ensuring that the project is implemented in accordance with the agreed design, costs and programme.

Programme management

The key to effective management is attention to detail. Any deviation from agreed dates should be identified and discussed early enough to take corrective action.

Quality management

This process requires observation, vigilance and firmness to protect the interests of the Client.

Cost control

A Client should try to avoid changes after setting the contracts, because it causes delay and additional costs. If changes are necessary, they should be instructed quickly and only after cost information is available and the full consequences are known.

Stage 6—Completion, handover and utilisation

A project can be considered as completed effectively if it is handed over to the Client without delay and with no significant or persistent faults.

In addition to the technical aspects of a project, which are executed by Contractors and supervised by the Design Team, there are four main tasks during this phase:

1. Equipping
2. Commissioning
3. Testing and handover
4. Move management

Equipping

Property and engineering projects often involve the installation of substantial equipment, installed outside of the construction contracts. Where this is the case, it should be considered as an integral part of the whole project and be part of the project management procedures.

Commissioning

Detailed commissioning and testing is essential before facilities “go live”.

Testing and handover

All capital projects should be handed over to the Client formally, after going through an extensive process of communication, consultation and familiarisation. Only when everything is fully functioning should a Client accept responsibility.

Move management

When capital projects involve property, they usually entail moving people or equipment. Successful move management means minimal disruption and involve thorough planning, effective consultation and co-operation.

Stage 7—Project evaluation and close-out

At the end of each project, it is invaluable to analyse and reflect on the project to see which aspects were successful and which could have been improved, with the benefit of hindsight.

The purpose of this is to ensure that experience is passed on to every participant in the project to improve their performance.