Effective Project Management

GARTH G.F. WARD manages the project management consultancy and training business Ritchie Ward Associates. For sixteen years he lectured at Cranfield School of Management and for ten years was Director of the Masters Course in Project Management. In addition, Garth has over twenty years of experience as a project manager in both client and contracting organizations, including Shell-Mex and BP, Bechtel, Kellogg and Chemico.

Preface xix

Acknowledgements xxi

Introduction 1

Part I Projects and Their Management 5

Section A Project Characteristics and Phases 6

1 Characteristics 7

2 Phases 8

3 Project Patterns 11

4 Reasons for Projects 12

5 Project Needs 12

Section B Project Management Characteristics 14

1 Models 16

2 Characteristics 18

3 Key Management Decisions and Phases 20

4 Project Management Patterns 24

Section C Execution Planning Influences 26

1 Project Characteristics, Size, and Complexity 26

2 Strategic Decisions 27

3 The Historic Nature of an Industry 30

4 The Characteristics of the Industry/Business Sector 31

5 Phases and Schedule 41

6 Execution Planning 41

7 Generic Influences on Project Execution 42

Section D The Project Management Role 43

1 Strategic and Contractual 43

2 Organizational and Functions 43

3 Responsibilities and Orientation 46

4 Competencies and Leadership 47

5 Abilities and Skills 48

6 The Project Manager 50

Section E The Manager of Projects 52

1 Financial Situation 52

2 Scope of Work and Change Orders 54

3 Project Progress and Status 54

4 Health, Safety, and Environment 56

5 Quality Audits and Status 56

6 Risk Management 56

7 Client Relations 56

8 Formal Reviews 56

9 The Project Management Group 57

10 Evaluating a Project Manager 57

11 The Manager of Projects and the Client(s) 58

Section F The Owner and Client 59

1 Some Fundamentals 59

2 Cost and Planning 61

3 Things to Watch 61

4 Most Important of All – Safety 62

Section G Achieving Success 63

1 The Project Management 66

2 Alignment of Objectives and Client-Contractor Relations 67

3 Involvement of Users 68

4 Get and Build the Right Team with Clear Roles and Responsibilities 70

5 Clear and Complete Scope Definition 70

6 Thorough Planning of the Work 71

7 Planning Communications 72

8 The Efficiency of the Project Launch Phase 73

9 Change Control 74

10 Effective Decision Making 74

11 Tackle Things Today – Tomorrow They Will Be Bigger 75

12 Conclusions for Success 75

Part II Programme Management 77

Section A Programme Management – What’s in A Name? 78

1 Programme Management Conclusions 79

2 Summarizing Programme Management 80

3 Key Roles for a Programme Manager 81

Section B Business Change Programmes 82

1 Blueprint 82

2 Programme Organization 82

3 Change Stakeholders 83

4 Benefits Realization 83

5 Gate Reviews 84

6 Project Controls 84

7 Terminating the Programme 85

Section C Management of Portfolios 86

Part III Feasibility and Contracting 89

Section A Feasibility Studies 90

1 Feasibility Study Plan 91

2 Defining the Project 92

3 The Feasibility Report 92

4 Proposed Execution Plan 94

5 The Next Step 95

Section B Contracting Strategy Considerations 96

1 Business Strategy and Stakeholder Alignment 96

2 Regional and Local Factors 96

3 Market Intelligence 97

4 Prequalification Processes 97

5 General Contracting Issues 98

Section C Issuing an Enquiry 103

1 Enquiry Preparation Phase 103

2 Tendering Phase 106

3 Evaluation Phase 106

Section D To Tender or Not to Tender 109

1 The Tendering Decision 109

2 The Tender Decision Analysis 110

3 The Final Tendering Decision 113

Section E Tendering and Proposal Phase 115

1 Tendering Preliminaries 115

2 Developing the Tender or Proposal – In-house Work 117

3 Coordinating with Third Parties 121

4 Coordinating with the Client 121

5 Commercial 122

6 Reviewing the Tender or Proposal 124

7 Before Submitting the Tender or Proposal 125

8 After Completion of the Tender or Proposal 125

9 Proposal Team Presentation 126

10 Possible Client Questions for the Proposal Team 129

Section F Contracts 131

1 Starting Work 133

2 Awarding Contracts 134

3 Contract Document 134

4 Contract Awarded 136

5 Contractual Issues 137

6 Some Contractual Reminders 138

7 Discharge of a Contract 138

Part IV Project Execution 139

Section A Project Launch 140

1 Project Checks 142

2 Project Objectives 143

3 Scope Launch 144

4 Team Launch 144

5 Execution Launch 145

6 Launch Controls 145

7 Hold Kick-Off Meeting 146

8 Kick-Off Meeting Agenda 146

9 Kick-Off Schedule 148

Section B Establishing An Office 150

Section C Getting Organized 152

1 Setting up the Project Infrastructure 152

2 Controlling the Documents 154

3 Responsibilities 155

4 Procedures 156

5 Project Execution Plan 156

6 Formalities 157

7 Project Insurance 157

8 Some Advice 158

Section D Mobilization 159

Section E Client Relations 161

Section F Scope 163

1 Scope Documents 164

2 Changes to the Scope 164

3 Work Packaging 164

Section G Estimates and Budget 166

1 Establishing the Estimate(s) 167

2 Trend Programme 167

3 Allowances 168

4 The Budget 168

Section H Accounting 170

1 Looking after the Finances 170

2 Bonds 172

Section J Planning and Scheduling 173

1 Getting Organized 173

2 Planning 173

3 Scheduling 174

Section K Project Controls 176

1 Setting Up 177

2 Progress and Reporting 178

3 Cost Progress and Control 179

4 The Critical Path 179

Section L Variations/Changes/Claims 181

1 Trend Base Estimate 182

2 Trend Meetings 183

3 Potential Trends 184

4 Claims for Changes 184

5 Managing Claims 186

6 Resist Change 187

Section M Reporting 188

1 Reporting Cycle 188

2 Visibility 189

3 Progress Reporting 190

4 Progress Report 191

5 Cost Reporting 192

Section N Project Meetings 193

Section O Design 195

1 Getting Organized 195

2 Reviewing the Design 196

3 Some Specific Design Ideas 198

4 Construction Issues 198

Section P Procurement 200

1 Getting Organized 200

2 Evaluating Suppliers 201

3 Expediting and Inspection 202

4 Some Specific Procurement Ideas 202

5 Payment Terms 204

Section Q Installation and Construction 205

1 The Key Staff 205

2 Construction Planning 207

3 Work Packaging 210

4 Construction Site Work 210

5 Some Specific Construction Ideas 213

6 Establishing Authority 214

Section R Subcontracting 215

1 Questions to Ask Before Subcontracting 215

2 Contracting Checks 216

3 Management Issues 217

4 List of Some Subcontracts 217

Section S Commissioning and Setting To Work 219

Section T Contract Completion - Close Out 222

1 Handover of Documentation 222

2 Handover of Equipment 223

3 Clean Up 223

4 Disposal of Surplus Material 223

5 Closing Contracts 224

6 Financial Matters 225

7 Close Out 225

Section U Post Project Activities 227

1 Completing the Records 227

2 Post-project Appraisal – Internal Performance Review 227

3 Project/Client Review Meeting/Lessons Learned 228

4 Historical Report 230

5 Client Follow-up and Marketing 230

6 Internal Projects Benefits 231

Part V Specialist Topics 233

Section A Completed and Inspected Work 234

1 Completed Work 234

2 Inspecting Work 236

Section B Coordination Procedure 238

1 Basic Organizing Information 238

2 Coordination with the Company 239

Section C Cultural Issues 243

1 Some Definitions of Culture 243

2 A Seminal Grouping of Cultures 244

3 Some Cultural Issues to be Aware of 244

4 Management Style 246

Section D Documentation 247

1 Contractor’s Own Documents and Drawings 247

2 Vendor Drawings and Documents 249

Section E Estimating and Contingency 250

1 Types of Estimate 250

2 Estimate Planning Sequence 252

3 The Estimating Process 253

4 Estimate Information and Content 255

5 Contingency Estimation 259

Section F Filing and Archiving 261

1 The Filing System 261

2 Archiving 263

3 Master File Index: Recommended Minor Categories and Suggested Subjects 264

Section G Financial Appraisal 270

1 Cash versus Profit 270

2 Simple Project Appraisal Methods 272

3 Payback 273

4 Discounted Cash Flow Techniques 273

5 Internal Rate of Return – IRR 276

6 Sensitivity and Risk Analysis 277

7 Financial Appraisal Conclusion 277

Section H Incoterms® 280

1 Rules for Any Mode or Modes of Transport 280

2 Rules for Sea and Inland Waterway Transport 281

3 Transfer of Risks and Obligations 281

4 Sellers’ and Buyers’ Detailed Obligations 282

5 Additional Information 282

Section J Joint Associations 283

1 Reasons for Joint Association 283

2 Documentation and Legal Requirements 284

3 Selecting a Partner 284

4 Joint Association Risks 285

5 Steps to Evaluate Joint Associations 285

6 Key Issues for a Joint Association 287

7 Steps in Tendering 288

8 Control of the Work 289

9 Financial Control 289

10 Essentials for Success 290

11 Why Joint Associations Fail 290

Section K Performance Appraisals 292

1 Purpose and Preparation 292

2 The Interview 292

3 Post-interview Actions 293

Section L Performance Measurement and Earned Value 295

1 Design/Engineering Performance 295

2 Procurement Performance 297

3 Construction Performance 297

4 Practical Performance Details 298

5 Linking Deliverables to Programme 299

6 Recording and Comparing Data 300

7 Earned Value Terminology 302

8 Useful Health Ratios or Indices 302

Section M Risk and Risk List 303

1 Process Model 304

2 Prioritising Risk 306

3 Risk List 309

4 People and Risk 312

5 Country Risk Assessment 313

Section N ‘S‘ Curves 315

1 Interpreting the Curves 315

2 Change Orders 319

Section O Site Checks 323

1 Country Data 323

2 Site Data 323

3 Local Authorities 323

4 Suppliers and Local Contractors 323

5 Labour Availability 324

6 Non-manual Employees 324

7 Housing and Camp 324

8 Shipping and Handling 325

Section P Surety Bonds 326

1 Types of Bonds 326

2 Characteristics of Bonds 328

Section Q Selecting and Building the Team 329

1 Selecting the Team 329

2 Building the Team 332

3 New to the Team 336

Section R Team Roles 337

1 Specification of the Eight Team Roles 337

2 A Suggestion for a Project Manager 341

3 Matching the Roles to the Project Process 342

Section S Value Management/Engineering 343

1 VM/VE Process 343

2 Group Process 346

Part VI Skills Check Lists 349

Section A Communications 350

1 Correspondence 351

2 Documents 353

3 ElectronicMedia 354

4 Oral 357

5 Social 358

6 Visual 359

7 Other Communication Tools 359

8 Translators 359

9 A Difficulty 360

10 Some Reminders 361

Section B Leadership and Motivation 362

1 Consensus to Dictatorial Continuum by Tannenbaum and Schmidt 363

2 The Three S’s of Group Communications 364

3 Situational Leadership by Kenneth Blanchard and Dr. Paul Hersey 365

4 Task, Team, Individual – Action Centred Leadership by John Adair 367

5 Leadership and Management Roles 368

6 Management by Walking/Wandering Around MBWA 369

7 Responsibility 369

8 Leadership – More Than a Management Model 370

9 Thoughts for the Day 371

Section C Managing and Conducting Meetings 373

1 Planning the Meeting 373

2 The Agenda 374

3 Manage the Process and the People 375

4 Control the Discussion 377

5 Construct Decisions and Summarize 378

6 Record and Notify 379

Section D Negotiation 381

1 Preparation for Negotiation 381

2 Discuss Interests 382

3 Signal 382

4 Propose for Movement 383

5 Package 383

6 Bargain 383

7 Close the Deal 383

8 Agree the Deal 383

9 Techniques and Tricks 384

Section E Personal Skills 386

1 Planning an Interaction with Others 386

2 The Exchange 387

3 Asking Questions 388

4 Changing Style 388

5 Team Role Style 390

6 Finalizing the Interaction 391

7 Giving and Receiving Feedback 391

8 Dealing with Difficult People 392

9 Being Angry 394

10 Priorities 395

11 Time Management 395

12 Learning 396

13 Motivating Skills 397

14 Some Personal Advice 397

15 Questionnaires 398

Section F Politics in Projects 399

1 Typical Destructive Behaviour 400

2 Dubious Behaviour? 401

3 How Politics Can Affect a Project 402

4 Some Advice 403

5 Something to Think About 405

Section G Presentation Skills 406

1 Fundamentals for All Presentations 406

2 Format for a Presentation to Inform/Explain 408

3 Presentation to Influence/Convince 409

4 Presentation Expressing a Viewpoint/Opinion 410

5 Team Presentations 410

6 Your Audience 411

7 Presentation Skills Analysis 412

8 Organizing the Location 413

9 Visual and Other Aids 415

10 Dealing with Questions 416

11 Summarizing a Presentation 417

Section H Prioritising Techniques 418

1 Group Work Using Flip Charts 418

2 Graphical Plots 418

3 Binary Decision-making 420

Section J Problem-solving Process 422

1 Define the Problem 423

2 Define the Objectives and Success Criteria 423

3 Analyse the Problem 423

4 Create and Propose Solutions 424

5 Evaluate, Forecast Consequences, and Select 424

6 Recommend, Plan Action, and Implement the Solution 425

7 Evaluate the Outcome and Follow Up 426

Section K Problem-solving Techniques 427

1 Brainstorming 427

2 Check Sheets 428

3 Pareto and Other Diagrams 429

4 Cause and Effect – Ishikawa or Fish Bone Diagram 430

5 Force Field Analysis 430

Section L Report Writing 433

1 The Report Objective 433

2 The Reader 433

3 The Material for the Report 434

4 The Report Structure 435

5 The Executive Summary 435

6 Introduction to the Report 435

7 The Body of the Report 436

8 Writing the Report 436

9 Conclusions and Recommendations 438

10 Appendices 439

11 Finalizing the Report 439

Abbreviations 441

Index 447