First and foremost, all projects must deliver value to their stakeholders, especially their key stakeholders.
value by Material Boy via Flickr
Why else would we be doing the project in the first place? Sometimes value is easy to measure, and other times it can be more qualitative in nature.
I’ve seen different definitions of value, and to me it’s a ratio of the benefits produced by an action and the total cost involved. Benefits and cost certainly include monetary measures, and they also include everything else that has an impact on stakeholders. Morale, risk, sustainability, general well-being, etc. are also a part of the equation.
Value from what perspective?
It’s also an equation that is different for every stakeholder. This is one reason why it’s so important to identify the key stakeholder(s) up front and understand explicitly what their goals are. Something that creates value for one stakeholder may take some value away from another. You can’t please everyone all the time. It’s a balancing act, and in that mix the key stakeholders get priority when there are competing interests. In the end, it’s that key stakeholder or group of key stakeholders who you need to deliver value to.
Delivering to what requirements?
In some circles, fullfilling the requirements and delivering the project on time and on budget are the only factors of success. If you delivered what you committed to (in a contract or otherwise) you’re golden.
I disagree.
Poor requirements elicitation and/or not involving the key stakeholders during the project can easily result in a product delivered to specifications and within time/budget constraints, and yet the product is not valuable to the key stakeholders. When this happens, it’s the project manager’s fault.
Systems in delivering value
I’ve seen individual managers who didn’t think of themselves as project managers, had no formal methodology, and delivered value. Perhaps they could have done even better with some guiding theory to approach the work with. I can tell you the number of people who can deliver projects well without a system is small. The more complexity you introduce, the harder it becomes to deliver value.
I’m sure (I hope) this will generate a lot of discussion, so please leave your thoughts on this attribute of project management in a comment!
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{ 36 comments… read them below or add one }
Josh, while I share your sentiments, I think you put too much of a burden on many project managers, ESPECIALLY those coming from the ranks of contractors.
For us, the contract is our project charter, and often, we have little or no control over what was designed, specified or otherwise was defined by the contract documents.
And often when we do make suggestions, contractors are accused of using change orders to enrich themselves.
So what is the solution? In 2007, the American Institute of Architects came up with what they term Integrated Project Delivery Guide http://www.aia.org/contractdocs/index.htm
In this document, the AIA advocated not only including government agencies, owners, designers, design consultants, general contractors and sub or trade contractors on as part of the integrated project team, but brining them on board during the conceptualization and preliminary design phases of the project.
In the oil, gas and mining sectors, we have long referred to this as “Front End Loading” (FEL). Yet even though this concept has been around for 30 or more years, rarely have I seen it implemented the way it could or should be.
For our IT, Telecommunications and government readers, perhaps it would be worth downloading the AIA IPD Guide (Free) and seeing if you can adapt or adopt the concepts being advocated?
It may just help your projects become more consistently successful?
BR,
Dr. PDG, Jakarta
http://www.getpmcertified.com
Excellent info Dr. Paul!
I know what you mean. Having been on federal contracts, it can be difficult to put my suggestion into place. A recent decision was made by my customer and enforced via contract that went against my key stakeholders’ interests. I fully supported an effort by the chief engineer and the rest of my team to conduct a review with the customer, even though many of my key stakeholders did not support it. We were able to garner enough support from the primary key stakeholders to make it happen, and it resulted in a better plan that meets everyone’s needs much better.
Who knows, I wouldn’t doubt a few individuals wanted me fired because of this. To me, that’s one role of a project manager though, to put ourselves on the line for the greater good. My team and I had to play the politics right and get support from the right people to make it happen.
You raise another very important point. IF we want to raise the level of real or perceived standing of practitioners to be recognized as professionals (if not the practice of project management to be recognized and accepted as a profession) then we MUST be willing to push back when clients or stakeholders insist on asking or expecting us to do the impossible or constraining us in ways that make the success highly unlikely.
For those who want to see what I consider to be a model code of conduct/code of ethics for project managers, take a few minutes to peruse the CoC/CoE from the Society of Corporate Compliance and Ethics professionals. http://www.corporatecompliance.org/Content/NavigationMenu/Resources/ProfessionalCode/SCCECodeOfEthics_English.pdf
Pay special attention to Paragraph R1.4 on pages 3 and 4. Essentially, this would require us to try to do the right thing, but if the organization cannot or will not, the SCCE CoC/COE requires we QUIT if the organization forced us to do something that we know isn’t right and won’t correct it.
Now THAT is a professional code of conduct/code of ethics I buy into and support.
BR,
Dr. PDG, Jakarta, Indonesia
http://www.getpmcertified.com
Josh,
The AIA concept, while applicable to some forms of construction and mirrored on many other domains. The conceptual development process has been embedded in the DoD 5000.02 procurement process for decades. It’s called Milestone A.
https://acc.dau.mil/IFC/index.htm
is the overall process. The concept development and refinement process between CD and MS-A.
We work similar programs for DOE where this is call CD0 where the mission need is defined. The conceptual planning lands on CD1. Our current CO2 sequestration program is in BP1/CD1.
http://www.srs.gov/general/EFCOG/05ProjectReferences/LMSandia/SandiaProcessDescription.pdf
provides some background on how DOE sees these “phases.”
The term FEL (front end loading) pervades every conversation with our sub recipients on the DOE programs we work. Keeping cost control down during FEL discussions is a problem for many power plant and alternative fuels (algae fuel is our current engagement). It becomes a dumping group for all the under utilized engineering services. So there is a flip side to every good idea.
When you say FEL becomes a dumping ground for all the under-utilized engineering services, do you mean there are aspects that add no value to be involved up front? I wonder if you could give an example to illustrate the point..
No I mean its a way for the E&C firm recover previously sunk costs. It goes like this “we’ve been working for some time on all the ideas you want us to do for this conceptual development phase. So his is a way to roll up the previous costs.”
Most FAR based procurements allow cost to be absorbed for work performed up t0 90 days prior to Contract Award. This is a good approach in principle.
What we do is substantiate the claims of the vendor through “Deliverables Based Planning” as to what value these prior efforts have contributed to the current Budget Period work.
It’s not a show stopper problem, but care is needed to move from theory and classroom explanations to practice.
Remember Yogi’s advice…
“In theory there is no difference between theory and practice. In practice there is.”
I think Josh is right. The PM, contractor or not, has the responsibility to highlight issues with the value and other “given” constraints like the methodology and the technology. If you get criticism on trying to enhance your contract, remind people this is why they hired you, to bring your expertise to the project. If your superiors agree with your assessment then let the nay sayers complain to management. They will not get too far calling your advice self-serving if the boss agrees with you. We (consultants) are not here simply to do as told.
Cheers, Todd
Thanks Todd. I can think of more than a few instances where I had to save a customer from themselves. It comes with the territory.
Todd,
One clarification on my post. I was talking about the General or Sub Contractor actually DOING the work, not the consultants.
Yes, of course it is the consultants job to provide feedback to the client. That is what we are paid to do. And normally, we are being paid on a day or hourly rate basis.
The contractor on the other hand is usually working on a fixed price contract, and that fixed price contract was predicated (for better or worse) on the contract documents.
One of my long standing frustrations with many of these posts comes from the failure to put the perspective in context. Looking at project management from the perspective of a contractor is significantly different than looking at project management from the perspective of an owner or a consultant.
BR,
Dr. PDG, Jakarta
http://www.getpmcertified.com
Paul — keep in mind as well that your context is foreign to most of the posters and readers here. The “owner, consultant, prime, sub” structure that you take for granted as the norm is pretty much unknown in IT and NPD.
And I believe the original name for “front end loading” was “concurrent engineering,” although the PMP Prep industry seems to think that concurrent engineering and fast-tracking are the same thing.
Hi Bill,
Well, the name of this forum is PM Student and while my context may be foreign, having earned a living for all these years as a contractor, I figure I have something to share….. But maybe not….
As for FEL and Concurrent Engineering, I believe FEL predates CE by at least 15 or 20 years. As I have used all terms, concurrent engineering is fast tracking, but with a focus on engineering tasks, not just the construction. Concurrent engineering as I know and understand it common in EPCC or Design Build contracts.
But then as we both know, the terminology is very loose and imprecise.
BR,
Dr. PDG, Kuala Lumpur, Malaysia.
http://www.getpmcertified.com
Good point Bill.
Context is very important, even within the same industry. Paul and I are both in construction, yet what he terms front end loading has always been called “pre-construction services. We even have departments called the same and include recouping those costs as a line item in the estimate/budgets.
And as you pointed out, this is not ‘fast-tracking’, but more scope refinement/requirements gathering.
We use the term “front end loading” to describe building a schedule of values that allows for billing right away for those costs we’re ABOUT to incur – mobilization, deposits, etc. that may not be a specific line item.
So even within the same industry context is crucial.
Trevor and Bill,
Some of the behaviors Paul speaks about are unheard of in the US construction. My former employee (at Ricky Flats) CH2M Hill, along with Bechtel, Parson, B&R, and similar firms are rarely if ever late, over budget or “cook the books” in ways Paul speaks about.
In the middle east and SE Asia the “rules of engagement” I am sure are different.
As well the perspectives Paul speaks about vary wildly in the US construction world. IPT’s are common on many of the electrical utility job we work. CH is essentially a “master contract” with all the work subed through IPTs, partnerships, JV’c and sometimes simple subK’s.
From me limited inside CONUS, there is no simple context for generalized statements. Speaking to specific contractual vehicles, project domains and contexts, and even sub-elements of a project each have differing contexts
Glen, my comments about late and over budget apply mostly to OWNER companies, not contractors. By definition, if we (contractors) are consistently late and/or over budget, we would soon be out of business. As a successful contractor, we have no choice- project management MUST BE a core competency or we are out of business…
My comments are about OWNER organizations, and I think at one time or another, I have shared some of FMI/CMAA research on that topic, which backs up my assertions….
But, I do agree it is MORE challenging outside of the USA, as there are no lien laws or prompt payment clauses or Earned Value to provide reasonable expectation that we will get paid….
BR,
Dr. PDG, Kuala Lumpur, Malaysia
http://www.getpmcertified.com
Bill,
It is common in the DOE, with several handbooks on how to manage all the participants. The O-413 series is a good source.
But for all other Federal agencies this is foreign as well.
Paul,
How, or does, competitive bidding factor into a project where the contractor is brought in at the conceptualization phase?
The phases after that I can see, but not that early. Having worked in an architecture studio for several years, I never brought contractors in until our designs and concepts were at least roughed out.
Hi Trevor,
I just finished attending the CMAA Conference in Orlando, FL a few weeks back and as I understand the AIA’s IPD, contractors are brought in just after the Conceptualization stage during the beginning of the Front End Engineering and Design.
Like other consultants, we are paid for our ideas and expertise in constructability. That is, can what is being designed be built pragmatically, and are there any better ways to do it to achieve the same end result.
Check out ENR for articles on “Hypertracking” or “Bridging Design Build” to see implementations of the same principle.
The driver behind this seems to be Building Information Modeling (BIM). As BIM puts a huge burden on the Architect and Engineer to “construct” the project using 3D CAD, which in turn, generates the contract documents, cost estimates and schedules, it becomes crucial that the contractors be able to provide their experience and expertise in creating the construction sequencing.
We are using BIM on a pilot “green roof” project in Indonesia right now and one of my PhD students is using it as the basis for his research. So I will have to let you know how it is working out….
So far, the project is late and over budget….. BUT, the client is happy….. (Project is being done on a T&M contract)
BR,
Dr. PDG, Kuala Lumpur, Malaysia
http://www.getpmcertified.com
Josh, while I share your sentiments, I think you put too much of a burden on many project managers, ESPECIALLY those coming from the ranks of contractors.
For us, the contract is our project charter, and often, we have little or no control over what was designed, specified or otherwise was defined by the contract documents.
And often when we do make suggestions, contractors are accused of using change orders to enrich themselves.
So what is the solution? In 2007, the American Institute of Architects came up with what they term Integrated Project Delivery Guide http://www.aia.org/contractdocs/index.htm
In this document, the AIA advocated not only including government agencies, owners, designers, design consultants, general contractors and sub or trade contractors on as part of the integrated project team, but brining them on board during the conceptualization and preliminary design phases of the project.
In the oil, gas and mining sectors, we have long referred to this as “Front End Loading” (FEL). Yet even though this concept has been around for 30 or more years, rarely have I seen it implemented the way it could or should be.
For our IT, Telecommunications and government readers, perhaps it would be worth downloading the AIA IPD Guide (Free) and seeing if you can adapt or adopt the concepts being advocated?
It may just help your projects become more consistently successful?
BR,
Dr. PDG, Jakarta
http://www.getpmcertified.com
Excellent info Dr. Paul!
I know what you mean. Having been on federal contracts, it can be difficult to put my suggestion into place. A recent decision was made by my customer and enforced via contract that went against my key stakeholders’ interests. I fully supported an effort by the chief engineer and the rest of my team to conduct a review with the customer, even though many of my key stakeholders did not support it. We were able to garner enough support from the primary key stakeholders to make it happen, and it resulted in a better plan that meets everyone’s needs much better.
Who knows, I wouldn’t doubt a few individuals wanted me fired because of this. To me, that’s one role of a project manager though, to put ourselves on the line for the greater good. My team and I had to play the politics right and get support from the right people to make it happen.
You raise another very important point. IF we want to raise the level of real or perceived standing of practitioners to be recognized as professionals (if not the practice of project management to be recognized and accepted as a profession) then we MUST be willing to push back when clients or stakeholders insist on asking or expecting us to do the impossible or constraining us in ways that make the success highly unlikely.
For those who want to see what I consider to be a model code of conduct/code of ethics for project managers, take a few minutes to peruse the CoC/CoE from the Society of Corporate Compliance and Ethics professionals. http://www.corporatecompliance.org/Content/NavigationMenu/Resources/ProfessionalCode/SCCECodeOfEthics_English.pdf
Pay special attention to Paragraph R1.4 on pages 3 and 4. Essentially, this would require us to try to do the right thing, but if the organization cannot or will not, the SCCE CoC/COE requires we QUIT if the organization forced us to do something that we know isn’t right and won’t correct it.
Now THAT is a professional code of conduct/code of ethics I buy into and support.
BR,
Dr. PDG, Jakarta, Indonesia
http://www.getpmcertified.com
Josh,
The AIA concept, while applicable to some forms of construction and mirrored on many other domains. The conceptual development process has been embedded in the DoD 5000.02 procurement process for decades. It’s called Milestone A.
https://acc.dau.mil/IFC/index.htm
is the overall process. The concept development and refinement process between CD and MS-A.
We work similar programs for DOE where this is call CD0 where the mission need is defined. The conceptual planning lands on CD1. Our current CO2 sequestration program is in BP1/CD1.
http://www.srs.gov/general/EFCOG/05ProjectReferences/LMSandia/SandiaProcessDescription.pdf
provides some background on how DOE sees these “phases.”
The term FEL (front end loading) pervades every conversation with our sub recipients on the DOE programs we work. Keeping cost control down during FEL discussions is a problem for many power plant and alternative fuels (algae fuel is our current engagement). It becomes a dumping group for all the under utilized engineering services. So there is a flip side to every good idea.
When you say FEL becomes a dumping ground for all the under-utilized engineering services, do you mean there are aspects that add no value to be involved up front? I wonder if you could give an example to illustrate the point..
No I mean its a way for the E&C firm recover previously sunk costs. It goes like this “we’ve been working for some time on all the ideas you want us to do for this conceptual development phase. So his is a way to roll up the previous costs.”
Most FAR based procurements allow cost to be absorbed for work performed up t0 90 days prior to Contract Award. This is a good approach in principle.
What we do is substantiate the claims of the vendor through “Deliverables Based Planning” as to what value these prior efforts have contributed to the current Budget Period work.
It’s not a show stopper problem, but care is needed to move from theory and classroom explanations to practice.
Remember Yogi’s advice…
“In theory there is no difference between theory and practice. In practice there is.”
I think Josh is right. The PM, contractor or not, has the responsibility to highlight issues with the value and other “given” constraints like the methodology and the technology. If you get criticism on trying to enhance your contract, remind people this is why they hired you, to bring your expertise to the project. If your superiors agree with your assessment then let the nay sayers complain to management. They will not get too far calling your advice self-serving if the boss agrees with you. We (consultants) are not here simply to do as told.
Cheers, Todd
Thanks Todd. I can think of more than a few instances where I had to save a customer from themselves. It comes with the territory.
Todd,
One clarification on my post. I was talking about the General or Sub Contractor actually DOING the work, not the consultants.
Yes, of course it is the consultants job to provide feedback to the client. That is what we are paid to do. And normally, we are being paid on a day or hourly rate basis.
The contractor on the other hand is usually working on a fixed price contract, and that fixed price contract was predicated (for better or worse) on the contract documents.
One of my long standing frustrations with many of these posts comes from the failure to put the perspective in context. Looking at project management from the perspective of a contractor is significantly different than looking at project management from the perspective of an owner or a consultant.
BR,
Dr. PDG, Jakarta
http://www.getpmcertified.com
Paul — keep in mind as well that your context is foreign to most of the posters and readers here. The “owner, consultant, prime, sub” structure that you take for granted as the norm is pretty much unknown in IT and NPD.
And I believe the original name for “front end loading” was “concurrent engineering,” although the PMP Prep industry seems to think that concurrent engineering and fast-tracking are the same thing.
Hi Bill,
Well, the name of this forum is PM Student and while my context may be foreign, having earned a living for all these years as a contractor, I figure I have something to share….. But maybe not….
As for FEL and Concurrent Engineering, I believe FEL predates CE by at least 15 or 20 years. As I have used all terms, concurrent engineering is fast tracking, but with a focus on engineering tasks, not just the construction. Concurrent engineering as I know and understand it common in EPCC or Design Build contracts.
But then as we both know, the terminology is very loose and imprecise.
BR,
Dr. PDG, Kuala Lumpur, Malaysia.
http://www.getpmcertified.com
Good point Bill.
Context is very important, even within the same industry. Paul and I are both in construction, yet what he terms front end loading has always been called “pre-construction services. We even have departments called the same and include recouping those costs as a line item in the estimate/budgets.
And as you pointed out, this is not ‘fast-tracking’, but more scope refinement/requirements gathering.
We use the term “front end loading” to describe building a schedule of values that allows for billing right away for those costs we’re ABOUT to incur – mobilization, deposits, etc. that may not be a specific line item.
So even within the same industry context is crucial.
Trevor and Bill,
Some of the behaviors Paul speaks about are unheard of in the US construction. My former employee (at Ricky Flats) CH2M Hill, along with Bechtel, Parson, B&R, and similar firms are rarely if ever late, over budget or “cook the books” in ways Paul speaks about.
In the middle east and SE Asia the “rules of engagement” I am sure are different.
As well the perspectives Paul speaks about vary wildly in the US construction world. IPT’s are common on many of the electrical utility job we work. CH is essentially a “master contract” with all the work subed through IPTs, partnerships, JV’c and sometimes simple subK’s.
From me limited inside CONUS, there is no simple context for generalized statements. Speaking to specific contractual vehicles, project domains and contexts, and even sub-elements of a project each have differing contexts
Glen, my comments about late and over budget apply mostly to OWNER companies, not contractors. By definition, if we (contractors) are consistently late and/or over budget, we would soon be out of business. As a successful contractor, we have no choice- project management MUST BE a core competency or we are out of business…
My comments are about OWNER organizations, and I think at one time or another, I have shared some of FMI/CMAA research on that topic, which backs up my assertions….
But, I do agree it is MORE challenging outside of the USA, as there are no lien laws or prompt payment clauses or Earned Value to provide reasonable expectation that we will get paid….
BR,
Dr. PDG, Kuala Lumpur, Malaysia
http://www.getpmcertified.com
Bill,
It is common in the DOE, with several handbooks on how to manage all the participants. The O-413 series is a good source.
But for all other Federal agencies this is foreign as well.
Paul,
How, or does, competitive bidding factor into a project where the contractor is brought in at the conceptualization phase?
The phases after that I can see, but not that early. Having worked in an architecture studio for several years, I never brought contractors in until our designs and concepts were at least roughed out.
Hi Trevor,
I just finished attending the CMAA Conference in Orlando, FL a few weeks back and as I understand the AIA’s IPD, contractors are brought in just after the Conceptualization stage during the beginning of the Front End Engineering and Design.
Like other consultants, we are paid for our ideas and expertise in constructability. That is, can what is being designed be built pragmatically, and are there any better ways to do it to achieve the same end result.
Check out ENR for articles on “Hypertracking” or “Bridging Design Build” to see implementations of the same principle.
The driver behind this seems to be Building Information Modeling (BIM). As BIM puts a huge burden on the Architect and Engineer to “construct” the project using 3D CAD, which in turn, generates the contract documents, cost estimates and schedules, it becomes crucial that the contractors be able to provide their experience and expertise in creating the construction sequencing.
We are using BIM on a pilot “green roof” project in Indonesia right now and one of my PhD students is using it as the basis for his research. So I will have to let you know how it is working out….
So far, the project is late and over budget….. BUT, the client is happy….. (Project is being done on a T&M contract)
BR,
Dr. PDG, Kuala Lumpur, Malaysia
http://www.getpmcertified.com
Trevor,
this is likely context sensitive. DOE is one of the largest constructors in the US – many billions / year.
http://www.srs.gov/general/EFCOG/05ProjectReferences/LMSandia/SandiaProcessDescription.pdf
describes how these project are managed
The concept of an IPT (Integrated Project Team) is called out in DOE O 413 series guidance. On day one the IPT’s are sitting at the same table as DOE. The large E&C firms follow much of this guidance.
I’m sure on the other end with the local contractor (I have experience with some waster water builders) the processes are much more loose. At the same time the regionals (Shaw, Kitchel and others) are “buttoned up” firms building hospitals, shopping center (big malls) and the like. I know many PM’s through our PMI chapter. They behave much like government contractors – on time, on budget.
There’s just too many varieties of domain and context to speak in general terms like we hear hear.
Trevor,
this is likely context sensitive. DOE is one of the largest constructors in the US – many billions / year.
http://www.srs.gov/general/EFCOG/05ProjectReferences/LMSandia/SandiaProcessDescription.pdf
describes how these project are managed
The concept of an IPT (Integrated Project Team) is called out in DOE O 413 series guidance. On day one the IPT’s are sitting at the same table as DOE. The large E&C firms follow much of this guidance.
I’m sure on the other end with the local contractor (I have experience with some waster water builders) the processes are much more loose. At the same time the regionals (Shaw, Kitchel and others) are “buttoned up” firms building hospitals, shopping center (big malls) and the like. I know many PM’s through our PMI chapter. They behave much like government contractors – on time, on budget.
There’s just too many varieties of domain and context to speak in general terms like we hear hear.