One of the common misconceptions about project management
is that it is just scheduling. At last report, Microsoft had sold a
huge number of copies of Microsoft Project®, yet the project failure
rate remains high. Scheduling is certainly a major tool used to
manage projects, but it is not nearly as important as developing a
shared understanding of what the project is supposed to accomplish
or constructing a good work breakdown structure (WBS) to
identify all the work to be done (I discuss the WBS in Chapter 6).
In fact, without practicing good project management, the only
thing a detailed schedule is going to do is allow you to document
your failures with great precision!
I do want to make one point about scheduling software. It
doesn’t matter too much which package you select, as they all have
strong and weak points. However, the tendency is to give people
the software and expect them to learn how to use it without any
training. This simply does not work. The features of scheduling
software are such that most people don’t learn the subtleties by
themselves. They don’t have the time, because they are trying to
do their regular jobs, and not everyone is good at self-paced learning.
You wouldn’t hire a green person to run a complex machine
in a factory and put him to work without training, because you
know he will destroy something or injure himself. So why do it
with software?

The role of the project manager is
that of an enabler. Her job is to help the
team get the work completed, to “run
interference” for the team, to get scarce resources that team
members need, and to buffer them from outside forces that
would disrupt the work. She is not a project czar. She should
be—above everything—a leader, in the true sense of the word.
The best definition of leadership that I have found is the one
by Vance Packard, in his book The Pyramid Climbers. He says,
“Leadership is the art of getting others
to want to do something that you believe
should be done.” The operative
word here is “want.” Dictators get others
to do things that they want done. So
do guards who supervisThe role of the project manager is
that of an enabler. Her job is to help the
team get the work completed, to “run
interference” for the team, to get scarce resources that team
members need, and to buffer them from outside forces that
would disrupt the work. She is not a project czar. She should
be—above everything—a leader, in the true sense of the word.
The best definition of leadership that I have found is the one
by Vance Packard, in his book The Pyramid Climbers. He says,
“Leadership is the art of getting others
to want to do something that you believe
should be done.” The operative
word here is “want.” Dictators get others
to do things that they want done. So
do guards who supervise prison work
teams. But a leader gets people to want
to do the work, and that is a significant
difference.
The planning, scheduling, and control
of work represent the management
or administrative part of the job. But,
without leadership, projects tend to just
satisfy bare minimum requirements. With leadership, they can exceed
those bare minimums.e prison work
teams. But a leader gets people to want
to do the work, and that is a significant
difference.
The planning, scheduling, and control
of work represent the management
or administrative part of the job. But,
without leadership, projects tend to just
satisfy bare minimum requirements. With leadership, they can exceed
those bare minimums.

In fact, the Standish Group (www.standishgroup.com) has found
that only about 17 percent of all software projects done in theUnited States meet the original PCTS targets, 50 percent must
have the targets changed—meaning they are usually late or overspent
and must have their performance requirements reduced—
and the remaining 33 percent are actually canceled. One year,
U.S. companies spent more than $250 billion on software development
nationwide, so this means that $80 billion was completely
lost on canceled projects. What is truly astonishing is that
83 percent of all software projects get into trouble!
Now, lest you think I am picking on software companies, let
me say that these statistics apply to many different kinds of proj -
ects. Product development, for example, shares similar dismal
rates of failure, waste, and cancellation. Experts on product development
estimate that about 30 percent of the cost to develop a
new product is rework. That means that one of every three engineers
assigned to a project is working full time just redoing what
two other engineers did wrong in the first place!
I also have a colleague, Bob Dudley, who has been involved
in construction projects for thirty-five years. He tells me that
these jobs also tend to have about 30 percent rework, a fact that
I found difficult to believe, because I have always thought of construction
as being fairly well defined and thus easier to control
than might be the case for research projects, for example. Nevertheless,
several colleagues of mine confirm Bob’s statistics.
The reason for these failures is consistently found to be inadequate
project planning. People adopt a ready-fire-aim approach
in an effort to get a job done really fast and end up spending far
more time than necessary by reworking errors, recovering from
diversions down “blind alleys,” and so on.
I am frequently asked how to justify formal project management
to senior managers in companies, and I always cite these statistics.
However, they want to know whether using good project
management really reduces the failures and the rework, and I can
only say you will have to try it and see for yourself. If you can
achieve levels of rework of only a few percent using a seat-of-thepants
approach to managing projects, then keep doing what you’re
doing! However, I don’t believe you will find this to be true.
The question I would ask is whether general management
makes a difference. If we locked up all the managers in a company
for a couple of months, would business
continue at the same levels of performance,
or would those levels decline? If
they decline, then we could argue that
management must have been doing
something positive, and vice versa. I
doubt that many general managers
would want to say that what they do
doesn’t matter. However, we all know
that there are effective and ineffective
general managers, and this is true of project
managers, as well.

PwC projects that by the year 2030 construction output will grow to $15.5 trillion worldwide. That means that just a 1% reduction in costs would provide savings of over $150 billion.

The reality is that the size, volume and complexity of today’s and tomorrow’s projects cannot be supported using yesterday’s methods.

So, what is keeping us from improving how we deliver projects in the construction and engineering sectors? According to: The World Economic Forum, Boston Consulting Group, and McKinsey & Company:

• We focus too much on each individual projects.
• We innovate in areas of engineering and construction, but not business processes.
• There are disconnects between the field and office that make it hard to prioritize and gain adoption of new processes.
• Contract types and project structure can get in the way of the cross-organization collaboration, that is so essential to efficiently running a project.

“ROI orientation. Measuring and communicating how new technology will improve construction…the positive effects on cost, schedule, and risk optimization—is the surest way to build a compelling case for adoption.”  ~ McKinsey & Company – Imagining Construction’s Digital Future

Hans Hoppe, the Director of Project Risk at Parsons (one of the world’s largest leading engineering and construction organizations) recently hosted a webinar with Aconex. Hans shared five steps to ensuring successful delivery of alternative delivery projects. They include:

1. Adopt a collaborative leadership mindset
   A committed and enthusiastic leadership team will help set the tone for their cross-organizational project team– often scattered across the globe—to follow. Leaders should encourage their organization to adopt new construction project management software and share timely, cross-functional program information.

2. Develop a program-wide document repository
   During project kick-off, Parsons relies on a project-wide document repository as a crucial element to mobilizing their projects. With this new project management standard, they invalidated a claim in less than 24 hours by swiftly accessing pertinent documentation.

3. Implement flexible systems
   Relying on offline processes to manage megaprojects poses major risks. Manage your processes via an easily-configurable project-wide system instead. A flexible, cloud-based system provides faster visibility into your progress and performance across your entire portfolio.

4. Select neutral systems
   Project teams collaborate best without barriers. With a neutral system, no single company controls the information. Each organization has their own secure space and can easily share what they choose to with others. Software adoption rates are high because a neutral system helps everyone.

5. Begin with the end in mind
   Avoid errors, rework, and disputes by selecting a system with the flexibility and functionality to support your entire project team. An efficient and unalterable project record created at the beginning of your project will help support operations and maintenance for decades to come.

Over the past decade, the size, expense, and number of organizations working on engineering and construction (E&C) projects has grown exponentially, spawning a new species dubbed “megaprojects”.

The risk inherent in megaprojects is massive. In many cases, mitigating “mega-risk” on these projects require alternative delivery methods – such as joint ventures (JVs) and public-private partnerships (P3s) – to prevent a single organization from shouldering the burden of risk alone.

Business Process Reengineering (BPR) is a business management strategy focused on the analysis and design of workflows and processes within an organization. BPR—with a focus on standardization and optimization—is a smart approach towards boosting E&C productivity because reengineering is the easiest place to earn some quick wins.

Most large owners, contractors, EPCs, and consultants we work with are undertaking some form of process standardization initiative. Standardization can help launch large scale business transformation programs once organizations grasp the value of this approach.

Below are four questions that are typically asked before adopting BPR:

1. What processes are typically executed and how long do they take on average?
2. Which systems are used and how does information flow across organizational boundaries?
3. Are there obvious areas of efficiency improvements?
4. How do we move the dial, how long will it take, and what competitive advantage can we gain?

We’ve worked on thousands of projects across the world at Aconex. In our analysis, there’s a stark contrast between what’s documented as “the process” (including design, cycle times, and quality) versus what happens in the field. Understanding this difference between expected and actual outcomes and crafting ways to manage this variability could be a game changer. With nearly $50 trillion in capital investment projected over the next 15 years, managing variability will be paramount as the need for global infrastructure projects continues to expand. Read more here.

For the past several decades, manufacturing has led the way by adopting technology and digitizing work processes to increase productivity. Meanwhile, over the past twenty years, the global average value added per hour in the E&C industry has grown roughly a quarter of the rate of manufacturing.

McKinsey recently published an article co-authored by myself and our Aconex Founder and CEO Leigh Jasper discussing project performance optimization in the E&C industry. We explore ways to reduce variability, or better yet—capitalize on variability to yield better results. Our article explains how to follow DMAIC (Define, Measure, Analyze, Improve, Control) as a useful data-driven improvement technique to increase productivity- something that manufacturing has been leveraging for a long time. Now it’s the E&C industry’s turn to shine.

With pre-fabrication, modular design, BIM, and mass production, construction is beginning to resemble manufacturing more closely than ever before. Some might argue that construction is really a manufacturing process; providing ample reasons to apply manufacturing best practices to an industry that’s flat-lined in terms of productivity.

When we evaluate construction change order and variation management, it’s important to consider the common causes of variation orders including:

• the scope or the schedule of the project has changed
• the equipment needed to perform a task is unavailable
• the project owner or contractor is suffering financial difficulties
• there are conflicts between contract documents
• working drawings are inadequate or incomplete
• changes in design by consultants
• a shortage of skilled manpower
• a shortage of quality materials
• shoddy workmanship, requiring demolition and rework
• delays in procuring building materials
• poor weather conditions or natural disasters
• a lack of strategic planning

Variation might be the spice of life, but it can be the death of a complex construction project operating on tight margins.

No matter how methodically you’ve planned a project and how carefully you’ve spec’d out materials and labor costs, change will inevitably occur. Change or variation orders are where a lot of highly complex construction projects bog down.