pvd project control best practices for large projects

© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m

Project Value Delivery

Best Practices forLarge Complex Projects Control

Jeremie AverousSenior Managing Partner

V0 – March 2015

Contents


Large Complex ProjectsBest Practices

• Introduction: Specifics of Large, Complex Projects

• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary

© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 3

• Be Focused on the right things – Convergence Monitoring

• Be in Control while remaining Agile

• Address Complexity

• Create Space for Responding to the Unexpected

Section

1


• Introduction: specifics of Large, Complex Projects



What is Complexity?


Complex System = System with many independent components and strong interactions


Complicated vs Complex

Section

2





Project Team Best Practices

• Strong Project governance• Strong Project Manager authority / specialized

disciplines providing resources• Project Leadership not just Management• An effective, integrated team with full-time

contributors in a separate open-space• Effective teambuilding and operating practices• The Project Execution Plans are developed and

revisited as a group during workshops at project start-up

• To the extent practical ensure alignment between individual capabilities and interests and project goals


Why?

• Diminish complexity– Improve contributors’ alignment

• Strength of Project Sponsorship & governance• Familiarization, alignment workshops• Incentive schemes

– Minimize the number of contributors and interfaces

• Integrated work package / subcontractors

• Integrated teams


Integrated teams

• High Authority Level of Project Manager• Most people are allocated full time to a project• The project-team is collocated in an open-plan

space to facilitate communication• They do what it takes for the project

– recognition of need to contribute outside formal role description for overall success

• A Matrix organization is implemented within the project with delivery responsibility


Project Governance• Proper project governance is often lacking on large

projects– Project sponsor should understand specifics of large

projects,– Project sponsorship should be strong and present,– Project execution strategy and decision-making key points

for management should be well defined (gates),– Utilization of contingency reserves process should be clear,– Will to invest to prevent future costs or manage risks.

…You need to build an effective integrated team to find the solution in complexity


A team where blaming starts

=100% project failure

Section

3





The Three Fundamental Questions

WHERE ARE WE?(ARE WE ON COURSE?)

WHERE ARE WE GOING?

WHAT DO WE NEED TO DO TO BE BACK ON COURSE?


Project Control Best Practices

• Project Control is implemented as a specific senior role reporting to the PM – does not exist as such in smaller projects

• Project Control to ensure consistency between cost, schedule, risk and contracts at the adequate level of detail– Breakdown structures– Forecasts / Earned Value Management– Contingency, reserves, allowances

• Project Control sets up the relevant measurement and reporting processes & systems

• Project Control is not just about compliance - it needs to be the strategic advisor for the PMT


Large projects typical organizationProject

managerProject Control

manager

Package Manager 1

HSE, Q

Package Manager 2

Package Manager 3

Engineering Manager

Procurement manager

Construction manager

Commissioning Manager


What is Project Controls?

Project Control is about buildinginformation sensors, and makingsense of the information.


Project Breakdown detail level(Cost Model, Schedule)

Breakdown detail

Too little detailwill not allow

to graspthe project drivers

Too much detaildrowns the team

and removes agility

Effectiveness

OptimalCost /

ScheduleDetailRange


Too much detail!= Not enough time for analysis!

Section

4





Project Cost Control Best Practices

• Fully distinct from Accounting• Focus on commitments and Project-end forecast• Actual Cost (VOWD) is evaluated independently of

invoicing• Breakdown structures are owned by Project Control and

coordinated with Procurement and Construction contracting strategies

• A full Project Cost Model is maintained (in source currency, time-phased, by work package)

• Issues / events are reported immediately in the forecast• Sensitivities are provided in addition to the (prudent)

forecast• Data integrity is maintained, all variances remain

traceable


Common “maturity’ observations when no strong Cost Management

• Costs for internal resources as actual costs instead of standard rates– Extreme complication of cost tracking

• Commitments are not tracked – only invoicing– Invoicing without commitments– Poor control on project bottom line because of

invoicing delays• Poor consistency with project execution strategy

and forecast schedule• No support to PM in scenario planning• No sensitivities available

Section

5





Project Schedule Best Practices

• Limit the detail of the Project Integrated Schedule – use a proper scheduling hierarchy

• Use the Convergence Planning / monitoring method + communicate focus to the team

• Float and Buffers are owned by the PM• Avoid ‘virtual float’ generation by constraining delivery

on fixed dates• Implement float monitoring / trending (evolution of float

from one update to the next)• Avoid having different schedules for different

stakeholders• Prefer to increase the schedule robustness and

resilience instead of minimizing the critical path.


Best Practice Schedule Vision

Integrated Project Schedule1,500 – 2,500 activities

Convergence Plan

~ 100-200 deliverables M

ORE DETA

ILS

MO

RE FOC

US

Document List &

detailed engineering

schedule

SCMDetailed

Plan

Construction Sub-

contractor’s schedules

Commi-ssioningPlan /

schedule

InstallationPlan

Simplified Project Schedule200-400Activities

(Schedule Risk Analysis)


Convergence processFor Complex Projects, the focus needs to be on

convergence


Convergence process

Simple Project Complex Project


Convergence process

Project Performance Driver(or, what kills a project)

Simple project Large project

Efficiency ConvergencePotential upside/

downside±10% +20%- 30, -50, -100%


Most Projects fail

because of a small piece

missing…


Convergence Plan Example

Section

6





Project Risk Best Practices• Opportunity and Risks, and ratings to be discussed as a team• Focused action-taking. Prioritize ruthlessly and focus effort• The earlier, the better for action-taking• Use all opportunities of contractual relationships to transfer risk• Do not confuse allowances, contingency, management

reserves• Schedule risk analysis focus on improving schedule resilience• Monte Carlo methods are conventional and their limits must

be understood (e.g. low probability risk, independence assumptions)

• Most of the project risk is related to schedule slippage & lack of convergence, and consequential impacts

• Prevention of major accidents is essential – industrial risk management

• In case of major event, create a separate task-force to minimize consequential impact on project execution


Advanced Risk Management approaches

• Industrial Risk Management– Specific methods to prevent major catastrophic

events (low probability, high consequences)• Portfolio risk management

– Manage dependencies between projects (resources etc) and consequential effects

• Minimize complexity• Ensure there is a way to escape the project if it goes

bad – contractual T&C– Limit of liability, termination clause etc

• Proper contingency calculation and Senior Management ownership

Section

7





Systems

• Large project = lots of data to control– Manual systems are overwhelmed, high error rate

• Need to:– manage inter-office remote work, remote sites– guarantee data correctness and accurate

reporting• What minimum systems?

– Document control & Correspondence control– Cost control (different from accounting)– Commitments & approvals

• SCM• Logistics• Travel, HR• Timesheets

– Scheduling & convergence planning


Project Systems Best Practices

• Minimize risks of mistakes by having systems that synchronize or are shared/ accessible between different sites & worksite (new trend = in addition, go mobile) and across the full process cycles (e.g. site commitments)

• Single integrated systems (~ERP) often less effective in terms of control and efficiency than a suite of specialized systems with checks at the interface; and in addition longer and more expensive to set-up

• All action-tracking systems to be coordinated to allow real prioritization across the board

• Reporting to be as automated as possible to leave space for actual analysis work (new trend = real time dashboards)

• Leverage systems to create performance indicators and reports• Ensure shared breakdown structures and consistent references

across the entire contracting levels

Conclusion



Moving into Larger, more Complex Projects

• Management by “efficient” hierarchical departments

• Purely rational approaches• Following an immutable baseline

plan(a.k.a the Stalinist approach)

…DON’T WORK!


So, is your organization is ready for large projects?

Key indicators:

• Strength of project managers vs department heads• Project leadership capabilities and effective teams• Office lay-out – really integrated teams• Cost mindset vs investment mindset at

management level• Strength of project governance process• Strength of IT systems for project data management


• Be Focused on the right things – Convergence Monitoring

• Be in Control while remaining Agile

• Address Complexity

• Create Space for Responding to the Unexpected

LEAD!


This presentation summarizes key best practices for Large Complex Projects.

More information is available on our White Papers and other documents on www.ProjectValueDelivery.com

…as well as in our handbooks!

http://www.projectvaluedelivery.com/

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Organizational maturity

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Advanced project trainingProject Startup support

Project Recovery

Advanced risk management

Project Control and Reporting

Support systems integration

Convergence planning

Remote sites integration

Leadership development

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