Major Projects - Keeping Track of Time and Money

by Marstan Group

You know you have a major project if.....

  1. It is difficult to predict a completion date and out-turn cost - sometimes a project is such a one-off that there is little to compare it with.
  2. The project is conducted under intense media or political scrutiny, particularly with regard to cost and programme.
  3. The scale makes it prudent to divide the project into sub-projects, each of which will need some autonomy.
  4. However, each of the sub-projects is interdependent and the project needs some over-arching controls.
  5. The fees alone for the project are be greater than the whole capital cost of most projects in the country.
  6. It is not easy to obtain an overview through the mass of detail required to manage the project.
  7. The number of parties directly involved in the project is considerable.

The most common problems in managing the time and budget on major projects

Major projects are often afflicted by seemingly intractable problems. In our experience, the 10 most common problems (and the solutions we apply to them) are as follows:

1. Control systems become an “industry” in themselves

There is a tendency for the scope of information systems to grow as the project progresses and, with each step, the added value becomes smaller, until the systems succeed in little more than adding needless expense.

Solution

The way to overcome this is to plan the procedures from the outset, to confine them to the minimum required to achieve their objectives, to subject them to scrutiny and to be ruthless about constraining them unless their added value can be identified clearly.

Positive action must be taken to identify and eliminate low value systems so that they no longer burden the project.

2. People become disillusioned about the programmes from the outset

There are two extremes to deal with; on one hand, people do not perform well if they believe that they are being set an impossible target, because they fear that they will be judged unfairly. On the other hand, it is clearly not possible to provide them with the extended time scales that make them feel more comfortable, because this would lead to an unacceptable programme from the outset.

Solution

The only way to overcome this is to consult extensively, take a “top down” and “bottom up” approach and seek a balance between the need to set an overall timetable to meet the project objectives, whilst taking account of the practicalities of doing the work. We believe that the key is being “tight but realistic”.

3. Many participants in a major project do not understand programmes

80% of people on large projects are not adept at reading conventional project programmes, particularly when there are many “soft” issues.

Solution

The remedy is to prepare summaries in a much more simple graphical format, which lifts the level of understanding from 20% to 80% or more.

4. Deadlines are not treated with sufficient urgency

Many people on major projects feel that delays are inevitable and all they have to do is justify it. This is best countered by dismissing discussions of extending the programme and asking what can be done to meet the agreed dates. The priority is to look for corrective action, not the reasons for delay.

Solution

If participants on a project sense that those at the top are flexible about adherence to the programme, it can be a disaster. Projects are a success when Directors “hold the line” on programme and programme managers promote this view on their behalf.

The programme management team and the Board should take the opportunity every day to make people realise that dates are important. The programme management team should meet or telephone people regularly to check progress (having done their homework about dates before they call).

5. Programmes do not always make it clear who is accountable for delivering each section

Too often, programmes are effectively a time line. They do not use all of the features of the software and do not give a clear view of the resources required to deliver each task.

Solution

The only way to overcome this is to identify people by name on each task and ensure that work-stream leaders are identified clearly on each heading in the programme. We make it clear that the named people are responsible for reporting and delivery.

Managers responsible for delivering each part of the programme must also be made aware that they are responsible for assessing and providing their own resources to meet the constraints of the programme.

6. Programmes often fail to cover the detail

If the programme excludes a lot of the work which is required to complete the project, then it is unlikely that programme dates are met.

Solution

The best way to overcome this is to insist that there is no substitute for including the detail and making sure that there are neither gaps nor overlaps in the programme.

Every major participant on the project should be consulted. They know the detail and it is important to find out:

  1. What they think they should do on the project
  2. What they need from others to enable them to carry out each activity
  3. What they do when each activity is completed

This should not be taken at face value by the programme management team, who should challenge it through their experience and ensure that the information is shared widely.

7. Programme managers do not always take positive action when delays are reported

If part of the project is in delay, programme managers must encourage the party responsible to examine options and establish the best course of action to eliminate the delay.

Solution

If they are unable to do so, the programme managers should not stand on ceremony. They should switch quickly from programme management to assisting with task management and to do so in a supportive manner. It is important for all participants in a project to realise that they are all on the same side.

8. Programmes are rarely in a form that can be used to communicate externally

A programme is useful for wide communication, not just for getting the job done. There is often a need to communicate with government or the press.

Solution

It is important that the programme presents information clearly and has the right level of detail. Summary programmes should be presented in a clear way.

9. Progress reports are often unrealistic

The majority of project participants are inclined to be over-optimistic when reporting progress on the programme. This is because there is a tendency for people to think that a delay today can be recovered later.

Solution

The best way of countering this is to insist on examining the deliverables associated with each activity, whether it be a piece of construction or a document.

It is also essential that the programme management team reports “without fear or favour”; never “crying wolf” about delays but neither flinching from the truth, even if it focuses unwelcome attention on others (including the Board).

Above all, they must try to resolve problems early and find solutions rather than just apportion blame.

10. Sometimes, major projects end up with large control systems and nobody notices that there are no strong links between the budget and the programme

On major projects, the budget for fees and claims should be linked to the programme, which has a profound effect, particularly if there are any delays. Delays usually mean additional costs unless this risk has been transferred at the outset, which means that the Client will have paid for it in the initial price.

Major projects frequently involve some complex situations with regard to claims for additional costs from large contractors and professional practices.

Solution

Programme management teams must be much more predictive about the likelihood of potential extras in order that some remedial action can be prompted.

Summary of key advice for Clients on major projects

There are a number of things that a Client of a major project can do to ensure that their project is managed in the right way:

  1. Take the prime role in setting the tone for adherence to programme. Attitude to the discipline of the programme will be as important as the technical delivery itself.
  2. Ensure that your team makes the link between progress on the programme and the assessment of out-turn cost of fees.
  3. Make sure that you have a clear overview, to ensure that you can assess progress, make decisions and fulfil your role of accountability.
  4. Ensure that you do not rely wholly on information from parties with responsibility to deliver.
  5. Make sure that the work of every stakeholder and every participant in the project is included on a programme.
  6. Take account of the fact that some parties in the project will not be accustomed to reading a programme or working to the discipline of a programme and ensure that the programme management team produce programmes in a number of different ways.
  7. Make sure that the major requirement to consult widely with external bodies and stakeholders is undertaken and that these work-streams are shown on the programme.
  8. Make sure that project controls are focussed so that they do not just become an excessively costly overhead.
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