m sc pm lecture no 4 risk

PROJECT PROCUREMENT&

ORGANISATIONS

Roy Clarke

MSc.PROJECT MANAGEMENT

Primary, Secondary & Tertiary Stakeholder Classification (Generic Model)

PrimaryPrimary

SecondarySecondary

TertiaryTertiary

Has direct “financial” interest Has direct “financial” interest in the projectin the project

(Clients, PM, Architect etc)(Clients, PM, Architect etc)

Has a statutory interest in Has a statutory interest in the project the project

(BCO, EHO, Planning etc.)(BCO, EHO, Planning etc.)

Has a non direct financial Has a non direct financial interest in the project interest in the project (Neighbours, Lobbyists)(Neighbours, Lobbyists)

Stakeholder Needs and Expectations

Passively InvolvedActively Involved

Active & Passive Stakeholder Classification (Ulrich’s Model)

Designers

Decision Maker

Passive ParticipantsClient

Stakeholder Needs and Expectations

External StakeholdersInternal Stakeholders

Internal / External Stakeholder mix (Winch’s Model)

Client’s Suppliers

ArchaeologistsMaterials Suppliers

Client’sTenants

ConservationistsSub ContractorsClient’s Customers

National Government.

EnvironmentalistsPrincipal Contractors

Client’s Employees

Local Government

Local Landowners

EngineersFinanciers

Regulatory Agencies

Local ResidentsArchitectsClient

Supply SideDemand SideSupply SideDemand Side

Stakeholders Needs – The CLIENT

1) Public Sector: Central / Local Gov. MOD etc.

Value for (Public) money. Bad Publicity Adverse. Usually have high social agenda. Key decision makers often not Experts. Risk adverse – many consultants usually

involved. High quality for civic statements (traditionally) Require longevity of building (often misplaced) Construction duration not always a high priority.


Stakeholders Needs – The CLIENT

2) Private Sector: Individual and group ventures etc.

Require right quality for given capital cost. Time is usually a priority. Cost is usually a priority. High proportion of expert decision makers.

3) Commercial Property Developer Maximum return on expenditure Sets out to limit future liability. Requires the quickest turnaround possible.


Stakeholders Needs – continued.

Lead Designers / Architects

Recognition of their Creative Ability. ££££’s Repeat Work

The Contractor

££££’s Repeat Work Recognition of their Creative Ability.


Stakeholders Needs – continued.

The PROJECT MANAGER

££££’s ££££’s ££££’s


SETTING THE STAGE FOR SUCCESS

• Why are we doing this? (Purpose)

• What organisational level goal does this support? ( Goals & Objectives)

• How does this fit with the other projects that are going on? (Project context and project dependencies.)

• What is the expected benefit from this project? (Benefits and value, business case)

• What are we going to do? (Scope)

• Who is Impacted by this and who must be involved (Stakeholder and stake holder context.)

• How will we Know when we are done or if the project was successful? (Success criteria)

Project Definition

Project Definition

STARTS 1.

2

3

4

5

67

8

9

10

11

12

1.1

1.2

1.4

1.3

2.1

2.2

3.1 3.2

3.3

4.1

4.2

5.1

6.1

6.2

6.3

7.1

7.2 6.4

8.1

9.1

9.5

9.4

9.3

9.2

10.1

11.1

12.1

12.2

PROJECT DEFINITION

PURPOSE

GOALS & OBJECTIVES

SUCCESS CRITERIA

PROJECT CONTEXT

PROJECT DEPENDENCIES

SCOPE SPECIFICATIONSOUT OF SCOPE

SPECIFICATION

ASSUMPTIONS

CONSTRAINTS

RISKS

STAKEHOLDERS

RECOMMENDED APPROACH

WHY ARE WE DOING IT

CLEARLY COMMUNICATE

THE VALUE

OR SHOW WHAT IS BEING SOLVED

SHOW ITS RELATIVE

PRIORITY LEVEL

COMMUNICATES THE TARGETED

OUTCOMES

Answers the "WHAT ARE YOU GOING TO

ACHIEVE QUESTION"

CLOSELY RELATED TO

GOALS BUT.... LISTS THE MEASURABLE,

VERIFIABLE RESULTS

MAY BE REFERRED TO AS "CRITICAL

SUCCESS FACTORS"(CSF)

DOCUMENTS HOW PROJECT RELATE TO EACH OTHER

SHOWS HOW THE PROJECT FITS IN THE

ORGANISATION BUSINESS FLOW

IDENTIFIES AND DOCUMENT ISSUES THAT

COULD IMPACT ON THE RESULT OF THE PROJECT

SETS ORGANISATIONAL

BOUNDARIES

SETS PROCESS & SYSTEM

BOUNDARIES

SETS FUNCTIONAL SPECIFICATION

BOUNDARIES

INDICATES ITEMS THAT ARE RELATED TO THE INITIATIVE BUT ARE NOT PART OF THE

PROJECT REMIT

MANAGES EXPECTATIONS

SHOULD CLEARLY COMMUNICATE THE CRITERIA THAT ARE NOT

DIRECTLY CONSIDERED IN DETAIL BUT HAVE AN EFFECT ON THE

OUTCOME

LIMITING FACTORS

RESOURCES

TECHNOLOGY

BUDGET

TIME

UNCERTAINTIES THAT WILL HAVE A NEGATIVE EFFECT OF THE ONE OR MORE OF THE SUCCESS CRITERIA

LISTS ALL THOSE WITH AN INVOLVEMENT IN THE

SCHEME AND HOW THEY RELATE TO ONE ANOTHER

NOTES KEY DELIVERY

STRATEGIES, METHODOLOGIES

AND TECHNOLOGIES

MOVE THE PROJECT INTO

THE NEXT STAGE

Project Definition

Development of a Project Definition Document.

PURPOSE Goals & Objectives Success Criteria

Project ContextProject

Dependencies Scope

Specifications

Out of Scope Specifications

Assumptions Constraints

RisksStakeholderRecommended

Approach

Adapted from Absolute Beginners guide to project management: G. Hoirine

CLARKES LAW (# 2): On careers in project management

You are only as good as your last Project

(or *UCK UP!!) (or MUCK UP!!)


CLARKES LAW (# 3): On knowing where to focus

It’s always the “small” projects that will trip you up.

Usually through – •Lack of Resource

•Lack of Kudos


Assignment 1

Briefing


Project Management

A1 - Briefing Learning Outcomes (or Key Areas)

Understand the different project procurement routes currently employed in the UK construction industry and how they influence both the design and construction phases of the project.

Understand how the integration or separation of the project design phase and the construction phase place differing emphasis on design innovation and development to the practical issues associated with the construction phase.

Understand the implications associated with the use of varying strategies in dealing with design and “build-ability” issues in conjunction with individuals, groups and the project in general.

Project Management

Procurement and Organization Hierarchical – Pros and Cons Pro’s

• Clear chain of Command

• Able to deal with large single projects

• Manager has authority to control subordinates.

• Works well with remote & self contained projects (- construction sites ???)

Cons

• Chain of Command can be easily broken leading to a directionless team.

• Possible suppression of empowerment.

• Project teams may have to dissolve as there is no base work.

• Team size may force multiple roles – diminishing expertise and focus

Project Management

A1 - Briefing TASKS (to be completed)

1) The different procurement options currently found within the construction industry in relation to new build projects - this should include the identification of the design and construction phases and whether these are considered to be integrated or separated.

3) Discuss the impact of design innovation on build-ability and vice versus. Give consideration to the way that the design and construction teams may try to champion their aspects of the project to the detriment of the other team.

5) Explain the contractual relationships between the client, design team and construction team for each procurement route and how this may or may not affect the cohesiveness of the collective project team effort.

4) Discuss how the Project Manager can influence and manage the above – leading to the successful completion of the project objectives.

Project Management

A1 - Briefing Method (on how its to be done)

All papers are to be word processed in A4 format and suitably bound (ring binder, plastic folder or stapled along the back edge). For reasons of clarity the use of 12pt Times New Roman font with 1.5 line spacing is required.

You are required to submit a written paper (maximum 2,000 words). The paper must be referenced as appropriate using the Harvard system of referencing. Any appended material must be relevant and cross referenced with the main body of text.

Project Management

A1 - Briefing MARKING CRITERIA (& how to maximise your marks)

Introduction and Background Research 20%

Analysis and Synthesis of the task (Main Content) 50%

Conclusion and Recommendation 20%

Presentation 10%

INNOVATION v BUILDABILITY

Project Management

Procurement and Organization Theoretical Organizational Structures –

Hierarchical ManagingDirector

Operations Director

Finance Director

HR Director

BDU Director

Head ofFacilities

Mgt.

Head ofOperations

Regional Managers

H&SManager

Area FM’s

Account Managers

Head ofFinance &

Admin

Head ofHR

PersonnelManager

Training Manager

Head of Marketing

Head ofDevelopment

Project Management

Procurement and Organization Hierarchical – Pros and Cons Pro’s

• Clear chain of Command

• Able to deal with large single projects

• Manager has authority to control subordinates.

• Works well with remote & self contained projects (- construction sites ???)

Cons

• Chain of Command can be easily broken leading to a directionless team.

• Possible suppression of empowerment.

• Project teams may have to dissolve as there is no base work.

• Team size may force multiple roles – diminishing expertise and focus

Project Management

Procurement and Organization Theoretical Organisational Structures –

MATRIX.GENERAL MANAGER

PROJECT MANAGER

(1)

PROJECT MANAGER

(2)

Research &

DevelopmentEngineering

Finance &

ProcurementMarketing

Project Management

Procurement and Organization Matrix – Pros and Cons

Pro’s

• Management of Multiple / Complex projects & operations.

• Better with small projects.

• Can potentially provide expert focus

• Gives an extended life/purpose for the team that goes on after the Project

Cons

• Multiple draw on resources.

• Project manager may have lack of authority and has to act in coordinator role (unless a Secondment Management type i.e. PM has higher authority. )

• Relies on good communication and “goodwill” between departments.

Project Management

Procurement and Organization Theoretical Organizational Structures –

Hybrid (rotational)

Managing Director

HRDirector

OperationsDirector

FinanceDirector

BDUDirector

Head ofFacilities

Mgt.

Head ofOperations

Head ofDevelopment

Head of Marketing

Head ofHR

Head ofFinance &

Admin

Project Management

Procurement and Organization Hybrid – Pros and Cons Pro’s

• Allows range of specialist skills to be tapped into.

• Lets Managers manage.

• Allows directorate team to adopt strategic position away from day to day ops

• Works well with remote & self contained teams departments.

Cons

• Directorates feeling of loss of control

• fuzzy top down structuring.

• Prevailing department alignment.

• Competition for resources.

Project procurement Strategies – Organisation of the Construction Industry

Project Management

Procurement and Organization

CLIENT

ARCHITECTQS ENGINEERING

CONSULTANTS

MAIN CONTRACTOR

NOMINATEDSUB CONT

DOMESTICSUB CONT

DIRECTLABOUR

MATERIALSSUPPLIER

PLANTSUPPLIER

Traditional


Project Management


CLIENT

ARCHITECT

QS

ENGINEERING CONSULTANTS

MAIN CONTRACTOR

NOMINATEDSUB CONT

DOMESTICSUB CONT

DIRECTLABOUR

MATERIALSSUPPLIER

PLANTSUPPLIER

DESIGN& BUILD

CLIENT

ARCHITECT(Lead Designer)

Specialist Design CONSULTANTS

Package CONTRACTOR

Management Contracting

Management Contractor

Package CONTRACTOR

Package CONTRACTOR

Project Management


Construction Management


Project Management


CLIENT

ARCHITECT(Lead Designer)

QSSpecialist Design CONSULTANTS

MAIN CONTRACTOR

NOMINATEDSUB CONT

DOMESTICSUB CONT

DIRECTLABOUR

MATERIALSSUPPLIER

Project Management

PROJECT MANAGER


Project Management


The Future - PARTNERING CLIENT

PROJECT MANAGER

ARCHITECTMAIN

CONTRACTOR

NominatedSub Cont

DomesticSub Cont

Structural Consultant

ContractAdministrator

PlanningSupervisor

Specialist Advisors

Q.S

M&E Consultant

CLARKES LAW (# 4): On Partnering

“PROJECT PARTNERINGPROJECT PARTNERING

is ais a

TEAM ETHOSTEAM ETHOS

not anot a

CONTRACT METHOD”CONTRACT METHOD”

Project ManagementProcurement and Organization

Design Stages in Procurement

10 common mistakes of Project Managers

Not clearly understanding how the project is aligned with the organisational objectives.

Not managing stake holder expectations throughout the project Not gaining “Buy in” on project goals & success criteria. Not developing a realistic schedule that includes all tasks and

dependencies and getting “buy in” on the schedules. Not clearly deciding and communicating who is responsible for

what Not managing changes to the scope of the project. Not communicating with stakeholders. Not tackling risks early in the project. Not aggressively pursuing issue resolution. Not being a leader.

Adapted from Absolute Beginners guide to project management: G. Hoirine


m sc pm lecture no 4 risk

Business