Project management is more than a familiar phrase to those of us in the construction industry; it is a job title for many of us. Maybe we aren't the project manager, but almost all of us work exclusively on projects. This is the nature of the construction industry, as projects are our lifeblood; they are the revenue-producing activities that we love to hate. For many, they can bring joy and pain, profit and loss, and success and failure.
The question is not whether we are involved in project management, but, "How well will we manage projects?" Is it more pain than joy, loss than profit, and failure than success?
Completion does not guarantee success. Completion is only one measurement for project success-the much more critical, long-term measurement is how well the project was managed. Many businesses are capable of completing projects, but those who do projects well succeed in the long-run.
In order to not only complete the project but to also manage the project well, it is vital to have a comprehensive project plan. Developing a comprehensive project plan requires a commitment on the part of the project manager and project sponsor. Creating the project plan takes time and energy. To some it seems entirely unnecessary, as they may know exactly how to build a certain structure. But the point is not merely to do the work, but to do the work in a profitable and efficient manner. By drafting a project plan, the project manager is attempting to ensure that the project's deliverables are produced in an efficient and profitable manner.
A Project Defined
Project management begins with an understanding of what a project is and what it is not. By recognizing the various parts of a project, we are better able to understand, and therefore, manage the project.
- Is a unique activity or series of activities
- Has a definite starting date and ending date and
- Is constrained by scope, time and cost (See Figure 1)
Understanding the basic definition of a project allows helpful insight into the dynamics of a project.
The Project Dynamics
As stated in the definition, a project is constrained by scope, time and cost which reflects a relational dynamic. If you change one of the constraints, it will affect the other constraints. For example, if the scope of the project is changed to include new work, then the cost could be increased, and additional time will probably be needed. If the budget is slashed, you will probably have to reduce the scope of the project, or you will run out of time and money. If you are told to finish the project early, you will probably need to reduce the scope or hire additional resources, which will increase the cost. By understanding this relationship, it is easily seen how particular factors will positively or negatively affect a project. This influences those drafting the project plan. As they are developing the plan, they should take into account how various events or factors will affect these constraints.
The Project Lifecycle
It is also important to understand the phases that every project will pass through. The five phases of every project include:
These phases act as a roadmap for your project, showing you where you have been and where you are going. Within each phase are specific tasks that should be accomplished to help assure that you successfully accomplish your project.
Initiation-A project is authorized during the initiation phase of a project. Sometimes this is a formal authorization, and sometimes it is a rather informal procedure. The primary result of the initiation phase is three-fold:
- A project manager is appointed
- A complete description of the project is provided
- Authorization to begin the project is given
Once these three items have been accomplished, it is time to assemble a project team and begin work on the planning phase.
Planning-During the planning phase, the project team develops a comprehensive project plan that is comprised of a number of elements. The comprehensiveness of the project plan will depend upon the complexity and duration of the project. The project plan for smaller projects may be relatively brief. It is important to match the amount of planning to the complexity of a project. The comprehensive project plan should include some, if not all, of the following items:
- Description of project work
- Work breakdown structure (WBS)
- Activity or work schedule
- Project budget
- Quality assurance plan
- Project human resource plan
- Communication plan for team members and stakeholders
- Risk assessment and response plan
- Purchasing and contract administration plan
Execution-The execution phase is where you put your plan into action. You know what work is to be done, who is to do it, when they are to do it and what materials and supplies are necessary, so you start to work as it has been outlined in your project plan.
Monitoring-As soon as the Execution phase begins, the monitoring phase begins. As the actual project work is accomplished, you should be comparing it to your planned work. This is what the monitoring phase is all about: comparing actual to planned work. When the two are the same, or relatively the same, you should be happy with the results, but if the results vary too greatly, then it is time to investigate why. Maybe the plan was faulty, or you performed the work incorrectly. Regardless of the reason, you will need to repair the problem. Ideally, you have already identified the issue as a possible risk, which means you have a response plan in place. If not, you will need to return to the planning phase to develop a new plan of action to overcome the obstacle. The planning and the monitoring phases are iterative processes-you keep repeating them as needed throughout the project. As you monitor the project, you will undoubtedly learn valuable lessons. These lessons learned should be documented and inserted as an appendix to the project plan so that should the issue arise in the future, the lessons you learned can be reviewed.
Closing-Once the entire project plan has been executed and the project deliverables have been produced, it is time to close the project. During the closing phase of the project, there are a few items that need to be accomplished. First, the customer needs to accept the project deliverables. Once he recognizes that what your project produced is what he wanted, you can then proceed with closing the project. After the deliverables have been accepted, you need to reassign project team members, make sure all payments have been made to suppliers and subcontractors and update all project documentation. Closing the project can be a relatively simple task if you have planned for it. By closing properly, you can make a smooth transition to your next project.
The Project Plan in the Planning Phase
The planning phase is especially important in the project life cycle. By going through each of the nine items during the planning phase, the project team will greatly improve their chances of not only producing the project deliverables but of managing the project in an efficient and profitable manner. Many individuals within the construction industry are capable of managing a project without creating a formal project management plan, which is a testament to one's experience and knowledge. However, it is also important that those new to the field and those who do not have a broad base of experience have the benefit of developing and referring to a project plan.
Description of Project Work: This section should simply summarize the project goal: what work will be done, what work will not be done and any assumptions and disclaimers that need to be stated.
Work Breakdown Structure (WBS): The WBS is a document that describes the work necessary to accomplish the project objectives and create the project deliverables. It is a hierarchical chart that includes all the work the project includes. See Figure 2 for a simple example of a WBS. A vital part of the WBS is the WBS dictionary, which provides detailed information about each project task.
Activity or Work Schedule: The work schedule acts as the project schedule baseline. It includes the work outlined in the WBS. The construction field presents unique challenges to scheduling work, as there are a number of unpredictable factors, yet a schedule will improve efficiency if managed and updated properly. The schedule baseline also acts as a tool to be used during the monitoring phase to predict both project efficiency and estimated completion dates. There are a variety of project management tools available for analyzing project performance.
Project Budget: The project budget is prepared based upon estimates prepared during the planning phase of the project. The WBS is a vital tool for developing the budget, as it shows all the work to be done. There are a number of ways to prepare a project budget. The most effective method is a bottom-up estimate. For this estimate, you start at the lowest level of the WBS and begin estimating each of the project tasks; those estimates are then rolled up into a total budget. The initial budget acts as a baseline to measure how well the project is performing. By comparing actual expenditures with the budget baseline, one can easily determine if the project is over or under budget. The more time that is spent on the initial budget, the more accurate it should reflect actual project expenditures.
Quality Assurance Plan: The quality assurance plan seeks to accomplish two items. First, it seeks to develop a way to ensure the quality of the work being performed during the project. This helps assure that the project deliverables are built according to the quality level required by the customer. Second, it includes a plan to assure the quality of the project's execution. It includes ways to assure that the project is being performed well. For instance, it might be necessary to set up someone to review all project documents on a regular interval to make certain that all project documentation is correct. This seemingly simple step could save the project manager from costly mistakes, such as special ordering the wrong materials.
Project Human Resource Plan: This part seeks to outline how project team members will be added and released from the project plan. It sets forth expectations of all team members in a very clear manner. Typically, it is not necessary to create a HR plan for every project. Many companies attach their company policies to the project plan.
Communication Plan: The communication plan is a relatively simple document but a vital part of every project. It tells who needs to know what information, when they need to know it and in what format they should receive the information. The communication plan should include not only immediate project team members but also project stakeholders. A stakeholder is anyone who has an interest in the project. Stakeholders could include the owner of the company, as he may want to receive regular updates. A local zoning official or building inspector could also be a project stakeholder. It needs to be clear to project team members who are responsible for coordinating with those involved in the project.
Risk Assessment and Response Plan: The risk assessment and response plan is a critical part of the project plan. During the planning phase, the project team members should attempt to outline the possible risks they think could occur. Once the possible risks are listed, it is time to assess both the likelihood of the risk occurring and what damage the risk occurrence could do to the project. For instance, a hurricane during the project could have a devastating impact, but it may not be very likely, therefore, it is not rated as a high threat. A sharp increase in material or labor costs, however, may be likely, therefore, the impact needs to be accounted for. Once the risks have been outlined and assessed, a risk response plan needs to be developed. Each risk event should have a planned response. Sometimes, the response will be to do nothing except deal with the consequences, or the response could be to change suppliers or subcontractors. Regardless of what happens, you have a plan of action to move the project forward.
Purchasing and Contract Administration Plan: This portion of the project plan details who the suppliers for the project will be. It includes the vendor account information, current pricing and alternative vendors. This provides a definitive source of information for all purchasing needs. This section also seeks to outline how contracts with suppliers and subcontractors will be administered. It assigns team members to be responsible for making certain that the terms of the contracts are being honored. Failing to properly manage contracts could lead to costly and avoidable litigation.
The nine areas mentioned above should be included in some form in your project plan. You may also think of other items that are particular to your organizational or project needs. The important result of the planning phase is a plan that will allow you to effectively manage your project.
A detailed project plan does not guarantee a successful project, but it does minimize the risk of failure. For more information about project management, visit the Project Management Institute's website at www.pmi.org where you can connect with a diverse community of project management information and experts. If you are interested in developing a formal project management system in your company, the PMI website is a great place to start. Remember to look for the PMP® (Project Management Professional) designation. Those with the designation have met rigorous training and experience standards.
Construction Business Owner, July 2007