The Practitioner Handbook of Project Controls

Shane Forth, Dennis Lock, Dennis Lock, Shane Forth, Dennis Lock

• Publisher: Routledge
• Year: 2020
• Print ISBN: 9780367253097
• eBook ISBN: 9781000194227
• Topic: Business
• Subtopic: Business generale
• Index: Business

Although projects always carry risk, too many projects run late or exceed their original budgets by eye-watering amounts. This book is a comprehensive guide to the procedures needed to ensure that projects will be delivered on time, to specification and within budget.

Eight expert contributors have combined their considerable talents to explain all aspects of project control from project conception to completion in an informative text, liberally supported where necessary by clear illustrations.

This handbook will benefit all project practitioners, including project managers and those working in project management offices. It will also provide an invaluable guide for students studying for higher degrees in project management and its associated disciplines.

PART I

Getting started

1

Project fundamentals

Dennis Lock

This chapter describes the principal characteristics of projects.

Different types of project

A project is generally different from the ‘business-as-usual’ work undertaken by organizations in several respects. Projects are usually not repetitive, but each is a unique undertaking requiring new designs, organization and planning, incurring some risk and needing a defined management structure. Projects generally (but not quite always) have recognizable start and finish dates, which encompass a fairly predictable lifecycle pattern (see Figure 1.1). Further definition depends on the kind of project being considered, and I usually categorize projects as belonging to one of four recognizable groups, which are described below (not in any particular order of importance).

Figure 1.1Three examples of project lifecycles.

Civil engineering, construction, mining and quarrying projects

These projects are usually the first that come to mind when we think of the history of project management. This category includes construction and civil engineering projects to build roads, houses, public buildings, bridges and so on. I include mining, land reclamation, quarrying and tunnelling here. Although designed in offices, the physical work for these projects is carried out at sites that are often exposed to the public gaze but remote from the contractor’s headquarters. Projects range in size from single buildings to entire townships.

These projects carry all kinds of risks that could delay completion, increase costs over budget, or result in physical harm or even death to workers. Progress can be delayed by factors outside project management control (particularly the weather). Profit margins are typically low compared with other types of project, and risk of the contractor suffering financial loss or running into serious cash flow problems can be great. Not long before this chapter was written the giant construction organization Carillion had collapsed, not through lack of contracts and work but because it ran out of liquid funds and could not pay its bills, so causing many subcontractors serious cash difficulties.

Project organizations tend to be complex, involving not only the main contractor, but many subcontractors and suppliers, providers of funds and possibly a financial guarantor. In the UK very large infrastructure projects can even be subject to parliamentary approval.

Manufacturing projects

Manufacturing projects include everything from micro-technology and the computing sciences to heavy engineering and (arguably) shipbuilding. What they all have in common is that the core activities of these projects can be conducted in enclosed premises, where the contractor is able to exercise greater control over the work, access, working conditions, security and confidentiality. With the exception of shipbuilding, extreme weather conditions are less likely to have a damaging effect. Each of these projects results in a tangible result such as a ship, aircraft, vehicle, machine, electrical or electronic item that will be of practical use to the customer or end user.

The owners of these projects are exposed to commercial and technical risks, particularly from things such as competition from others selling in the same market, inaccurate market forecasts, poor performance or even the collapse of suppliers and subcontractors, political actions (such as increased import tariffs imposed by foreign governments) and so on.

Management or change projects

These are projects that seek to improve business performance by reorganizing companies, updating IT systems, dealing with company mergers and acquisitions and so forth. Their success (or failure) is measured in terms of the resulting benefits, usually forecast in a business plan and quantified by key performance indicators (KPIs). At one time managing such projects was regarded as a separate profession from other project categories but now that distinction is less apparent. A big risk in these projects is that they can affect the status and careers of people working in the changed organizations, sometimes leading to redundancies and often causing personal anxiety or distress.

I include some projects in the entertainment industry in this category because a public performance of any kind is a project that needs some project management skills. However, unlike other projects, these are ephemeral, leaving no permanent structure or physical object after the project ends.

Pure scientific research projects

Setting up a building or other capability for a research project can be a project in itself. However once a research project is authorized to proceed, usual project management methods for planning, measuring and controlling progress are not relevant because the end result cannot be planned or predicted. So spending and work takes place in a continuous stream, often without a positive prediction or expectation of a useful result.

Some companies are willing to accept this apparent lack of control, and even encourage their staff to embark on independent research ventures with the hope (but not positive expectation) of a profitable result. Not many organizations will tolerate expenditure without any checks or controls at all, and here is a good case for stage gate controls. With this process, an individual researcher or a research team is allowed (or encouraged) to pursue work using an allocated budget for a set period (which might be six months or a year). Regular reviews indicate how the research is progressing and can perhaps predict a result. Each periodic review can be regarded as a kind of gate that can be shut if it becomes clear to the provider of funds that the research has no hope of achieving any useful result. Figure 1.1 includes an illustration of this ‘stage gate’ form of project control.

Stakeholders

A stakeholder is any person, organization or community that will be affected profitably or otherwise during the course of a project or after its completion. Investors in the project are primary stakeholders.

I like to use the case of a project to build a shopping mall on a greenfield site to illustrate the various kinds of project stakeholders. Investors in the project clearly have a direct interest in the outcome. People who have reserved shops and other commercial premises in the new mall are also obvious stakeholders. The local authority can expect to benefit from the increased number of business rate payers, but will also have to provide services such as waste disposal. We can identify all these people and organizations as primary stakeholders. Most primary stakeholders will expect regular progress reports as the project proceeds.

Then there are the secondary stakeholders; people and organizations whose lives and interests will be affected in some way by the project. For example, nearby residents will benefit from the new local shopping and entertainment facilities but might be concerned at the prospect of increased noise and traffic. Environmental pressure groups with objections to the project might organize publicity, demonstrations and other activities that could delay the project. The project manager needs to be aware of all these secondary stakeholders and take care that, as far as possible, they are treated with respect and fairly.

It can be useful to list all the stakeholders well before the project begins and display their interests in a matrix, such as that shown in Figure 1.2.

Figure 1.2A matrix for displaying the interests of stakeholders in a public project.

Multiple projects and programmes

Some companies, especially when they are large organizations, will have work at any given time that mixes everyday business-as-usual acti...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Dedication
• Contents
• List of figures
• Notes on contributors
• PART I Getting started
• PART II Project organization
• PART III Cost control
• PART IV Scheduling
• PART V Risk management
• PART VI Purchasing and contracts
• PART VII Monitoring and measuring for control
• PART VIII Information and communications
• PART IX Assurance and governance
• PART X People
• PART XI Case examples
• Index