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© 2015
A/E/C Project Management Bootcamp
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List 3 things you want to learn (on page 3)
This information is copyrighted by PSMJ Resources, Inc.® All rights reserved.
1
© 2015 2
Tell me a bit about you and your firm
Please get out your cell phones.
© 2015
David Burstein, PE
1. B.S., M.S. Civil Engineering from New Mexico State
2. Surveyed I-25 and I-40 in NM
3. 26 years with Parsons Corp.
4. Affiliated with PSMJ since 1979• Part time from 1979 – 1997• Full time since 1997
5. Wrote the first textbook on project management for A/E firms
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© 2015
Who is PSMJ Resources?
4
NewslettersSurveys &
BooksSeminars & Conferences
Consulting
Strategy
Marketing
Project Delivery
Finance
Human Resources
Transition
© 2015
Why Are You Here?
1. ____________________
2. ____________________
3. ____________________
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What do you want to learn about project management?
© 2015
Full 2-Day PM Bootcamp Agenda
1. Action Plan
2. What is a Project Manager?
3. Business Development for PMs
4. Planning the Project Project Management Plans
Scope, WBS and ABS
Scheduling the Project
Project Financial Plan
Specific Challenges in Planning Different Kinds of Projects
5. Managing Quality & Risk
6. Managing Scope Creep and Other Project Changes
7. Leading the Project Team
8. Managing Your Clients
9. Personal Productivity
10. Controlling Budget & Schedule
11. Getting Out of Trouble
12. Wrapping Up the Project
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Implementing this Seminar
© 2015
Our UCLS Agenda (for Today)
1. Keynote (8 am – 10 am) Action Plan
What is a Project Manager?
Personal Productivity
2. Starting the Project (10:30 am – Noon) Business Development
for PMs
Project Planning
3. Managing Large Projects(1 pm – 3 pm) Scope, WBS and ABS
Project Financial Plan
4. Project Leadership (3:30 pm – 5 pm) Leading the Project Team
Managing Your Clients
7
Implementing this Seminar
© 2015 8
© 2015
Action Plan
“After all is said and done, more is said than done.”
-- Aesop
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© 2015
Your Seminar Implementation Plan
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Idea to Implement Tool Page No. Implement By Discuss With *
Review digital toolbox http://go.psmj.com/pmtoolbox
© 2015
Ideas for Firm-Wide Implementation
Idea to Implement Tool Page No. Discuss with
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In-house program: Hand this sheet in at the end of the program.Public program: Discuss with the appropriate person(s) in your firm.
© 2015
What is a Project Manager?
Never mind what your business card says. Are you really a PM?
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ABC Design, Inc.231 Main St.El Paso, TX [email protected]
doreen allen, aia
© 2015 13
Traits of the Best Project Manager You Know
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
The name of the best PM I know is _____________________
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
_____________________
© 2015
Top 10 PM Traits as Viewed by 40 Clients1. Follows through - on both their
own & others' commitments
2. Good listener
3. Proactive
4. On top of every aspect of the job
5. Leads by example
6. Good communicator
7. Backs decisions of team members
8. Organized
9. Handles multiple priorities well
10. Technically proficient
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© 2015 15
As a PM Do YOU?….
Manage proposal efforts Little involvement in marketing/sales
Negotiate fees Get fees from others in the firm
Participate in fee negotiations Rely on others to negotiate fee
Participate in team selection Rely on dept. heads for staffing
Evaluate team members' performance Lack authority to direct team members
Get non-performers off your jobs Feel required to use non-performers
Control technical direction Delegate tech. matters to dept. heads
Control budgets and schedules Monitor budget & schedule
Maintain rapport with clients Report status to client
Direct fee collection strategies Let accounting handle collections
Feel responsible for success or failure Keep records of who did not perform
Strong Project Manager Project Administrator
Total Total
© 2015 16
Build Strong PIC - PM Partnerships
Activities Project Manager Principal-in-Charge
Fee proposals Prepares Approves
Fee negotiations Participates Directs
Team selection Requests Approves
Performance evaluations Inputs Performs
Removing non-performers Recommends Acts
Design/technical decisions Meets standards Set standards
Client relations Maintains Client Sponsor
Future work Secures Approves
Accountability Maintains Rewards/punishes
© 2015
The A/E/C PM Role: "Seller-Manager-Doer"
Roles of all PMs: Plan the work
Organize the team
Direct the team
Control the project
Additional roles of A/E/C PMs: Up-sell & cross-sell
Close new opportunities
Design/technical direction
Earn THE profit
Bill the client
Secure payment
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© 2015 18
Project Management Workflow
Define Scope
Develop WBS
Set up Schedule
Set up Budget
Set up Project Team
Agreement for Services
Project Management
Plan
Monitor Scope
Monitor Schedule
Monitor Budget
Communicate
Action and
Control
Project Completion
Analysis
Planning Start-up Execution Analysis
Quality Control
© 2015
How Much Is Enough?
Technical/Design Work (90%)
Project Management (10%)
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The PM 10% Rule*:
Project planning
Project statusing
Client & scope management
Project close-out
*Range = 6% – 14%
Project Management
(10%)
Technical/Design Work (90%)
© 2015
We recently surveyed 229 A/E firms about their PM practices
Under 2020%
20 to 4023%
50 to 9919%
100 to 19918%
200 to 3499%
350 to 7505%
Over 7506%
FIRM SIZE (EMPLOYEES)
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© 2015 21
Participating firms represented a broad range of typical project sizes
Less than $50,000 in fees15%
$50,000 to $200,000 in fees
46%
$200,000 to $1 million in fees
20%
$1 million to $5 million in fees
8%
Over $5 million in fees5%
Other6%
© 2015
We compared their PM practices to the results they achieved
Project Management Practices
Result #1: Project Budget Performance
Result #2: Client Satisfaction
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© 2015
Recommendations for SurveyorsRecommendations
Improved Project Budget Performance
Increased Client
Satisfaction
1. If your firm is in the 20-99 employee size range, pay particular attention to be sure your clients are satisfied.
2. Pay special attention to projects in the $50,000 to $200,000 fee range. They tend to have sub-par budget performance and more dissatisfied clients.
3. Don’t overload your PMs with too many projects. (1 to 2 projects per PM is optimum.)
4. Establish key project management performance metrics and monitor them regularly
5. Develop a project management certification program
6. Implement a comprehensive PM training program Train all your project managers. Duration should be about 24 classroom hours. Use a tiered and/or multi-faceted approach. Use mostly in-house instructors including on-the-job
training by your best PMs. Include outside instructors in your training program
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© 2015
Recommendations (cont.)Recommendations
ImprovedProject Budget Performance
Increased Client
Satisfaction
7. Institutionalize the use of Project Management Plans, including formal risk management, as part of your standard project planning process.
8. Be sure your PMs use either the estimate-at-completion or earned value method to consistently monitor the budget status of their projects.
9. Principals should not rely on reports from Accounting to monitor project budget performance. Get written status reports from your PMs Conduct formal and/or informal project reviews with
your PMs
10. Just talking with your clients isn’t enough to keep them satisfied. Solicit regular written client evaluations (preferably by an external source).
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A full report on the completed survey is available upon request.
© 2015
MuchAbove Target
MuchBelowTarget Profit
Target Profit
BelowTargetProfit
AboveTarget Profit
Unacceptable
Needed Improvement
Acceptable
Met Expectations
Exceeded Expectations
Excellent
Exceptional
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How One Successful Firm* Evaluates Their Project Managers
Clie
nt
Eval
uat
ion
s
Profitability
1 1 PM #11
1
1
1
1
1
2
2 PM #2
2
2
2
22
3
3 PM #3
3
3 3
33
3
4
4 PM #4
4 4
4
4
4
* Reproduced courtesy of ClientFeedbackTool
© 2015
Project Failure: Top 20 Excuses1. The project team was full of
incompetents.
2. I didn't have enough time.
3. The client kept making changes.
4. The budget was unrealistic.
5. I couldn't get enough help.
6. Working for that client is impossible!
7. I couldn't get the information I needed from accounting.
8. The schedule was unrealistic.
9. Everyone kept charging to the job.
10. _____ was taken off the job at the worst possible time.
11. I wasn't given enough authority.
12. The designers wouldn't stop designing.
13. The contractor didn't understand the job.
14. This job was unique.
15. The building dept. is full of idiots.
16. Principals kept charging to the job.
17. The subs would not cooperate.
18. The word processing people kept getting pulled off my job.
19. ________ quit and left me holding the bag.
20. The CADD operators didn't know what they were doing.
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© 2015 27
Project Management Sins
Level 1Letting the job get into trouble
Level 2Not knowing it’s in trouble
Level 3Knowing, but not asking for help
Level 4Hiding the fact that it’s trouble
© 2015
Personal Productivity
“To be a successful PM, you must be comfortable being uncomfortable.”
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© 2015
How Do You Spend Your Time?
1. Pick an average week to monitor how you spend your time.
2. Using the Excel spreadsheet in your Digital Toolbox, fill out the Daily Time Log for each day of the week (including weekend).
3. The spreadsheet in your Digital Toolbox will tally the results.
4. You may be surprised at how much time you spend on relatively unimportant things.
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© 2015
Your Personal Time Log
Your digital toolbox contains an Excel template that includes…
A form to record your daily activities for a typical week
A linked spreadsheet to tally the activities (see format in workbook)
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© 2015
Are You a High Performer?
Quadrant I
Most People: 25-30%
High Performers:
20-25%
Quadrant II
Most People: ~15%
High Performers:
65-80%
Quadrant III
Most People: 50-60%
High Performers:
~15%
Quadrant IV
Most People: 2-3%
High Performers:
<1%
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Urgent Not Urgent
No
t Im
po
rtan
tIm
po
rtan
t
Source: "The Seven Habits of Highly Effective People" by Stephen Covey
© 2015 32
Set aside 1 hour of uninterrupted time every day. Force yourself to work on only the “important” things.
Quiet Hour
Please come back at ____
© 2015
Understanding Time Allocation
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0-5 5-10 10-15 >15
Years of Experience33
Helping Your Boss Do His/Her Work
Managing the Work
Doing the Work
© 2015
Mastering Productivity
1. Capture all your commitments
2. Plan your NEXT ACTION
Do it
Delegate it
Dump it
Defer it (only once)
3. Spend enough time planning
4. Focus on what’s important
FOCUS = PRODUCTIVITY
Based on “Getting Things Done, The Art of Stress-Free Productivity” By David Allen (2001)
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The OHIO Principle– Trash
– Refer
– Act
– File
© 2015
Get Control of Your Day
Predictability of Your Time
0
20
40
60
80
100
Years of Experience
% P
red
icta
bilit
y
1 How much of your day is spent doing what you thought you would do at the start of the day?
2 Handling drop-in visitors
3 Grouping discussion items
4 Don’t invite visitors into your office
5 Don’t keep checking your e-mail inbox
6 Using the QUIET TIME effectively
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© 2015
Make Your Meetings Work
Efficiency1. Eliminate the meeting2. Eliminate your attendance3. Start meetings exactly on
time4. Finish meetings exactly on
time5. “Stand-up” meetings6. Consider time of day7. Effective agendas8. Consent agenda9. “Action” minutes
Effectiveness1. Remember the Golden Rule:
“Praise in public, criticize in private”
2. Don’t use peer pressure to log-roll conclusions
3. Don’t hold meetings outside normal business hours
4. Kill regular meetings that no longer serve their purpose
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© 2015 37
What’s Unusual About This Meeting Agenda?
Date: March 5
Location: 4th Floor Conference Room
Attendance: Mike DeweyAlice CheathamRoger Howe
Subject: Improving Profitability
Topics: 8:57 1. Reasons for Poor Profits9:10 2. Alternative Ways to Skin Clients9:45 3. Techniques for not Getting Caught10:15 4. Flight Schedules to Rio10:35 5. Meeting Adjourns
Meeting Cost: $1,200 per hour
© 2015 38
E-mail is not a natural form of communications
© 2015
It’s About the People, Not the Technology
Do
1. Include complete contact information on every email
2. Use proper grammar and punctuation
3. Use Subject line to enable the reader to decide if it applies to him/her
4. Update Subject line when the thread changes
Don’t1. USE ALL CAPS
2. Spread off-color humor
3. Use email to carry out extended conversations
4. Send emails when you push the “send” button –build in a delay
Remember: email is just like written correspondence except it’s easier for people to spread it around.
Quiz: What's the "e" stand for?
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© 2015
Never Forget: Every Email is Discoverable
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Harry –
I reviewed the design per your request. I have some concerns but, because of the short time you allowed me, couldn’t review it as thoroughly as I normally do. So go ahead and fix the corrections I made in red and get it out to bid.
Design review
© 2015
Constantly Handling Emails Kills Productivity
Weekly business emails received on average
Times the average employee checks emails per hour
MinutesSpent refocusing after handling incoming email
304 3616
Source: Atlassian
© 2015
I check my emails only twice per day. If you need an immediate response, please call or text me at 1-677-555-2222.
Put This Onto Your Email Signature?
© 2015
The Telephone: An Underutilized Communication Tool?
Managing the Telephone
1. Answering the phone
2. Grouping your calls
3. Holding calls
4. Getting off the phone
Voicemail
1. Let callers know when you can return their call.
2. Tell callers how to reach a human being.
3. Leave short messages.
4. Always leave your phone number
5. Speak s-l-o-w-l-y when leaving your number.
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© 2015 44
What’s the Best Form of Communication?
Communication Media E-mail Phone Meeting
Issuing simple instructions
Delivering bad news
Confirming an understanding
Discussing a simple issue
Discussing a complex issue
You can tell an e-mail string has gone too long when…
The string is more than 3 exchanges long
The subject line no longer has anything to do with the discussion
The sender is less than 100 feet from the recipient
It’s time to talk (either in person or via telephone)!
© 2015 45
The Principle of Reinforcement
Communication Media Verbal WrittenBody
Language
Letters
Memos
Telephone calls
E-mails
Face-to-face meetings
Web meetings
To communicate effectively, you must reinforce one form of key communication with at least one other.
✔
✔
✔
✔
✔ ✔
✔ ?
© 2015
How Well Do You Delegate
Take this quiz to find out.
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© 2015 47
The “Static” View of Delegation
Barriers to Delegation
1. I can do it faster myself
2. I don’t trust anyone else to do it
3. If I’m responsible, I’m going to do it myself to be sure it’s done right
4. No one else is available
Your time todo the task
Your time todelegate it
Delegatee'stime to do it
Tim
e R
eq
uir
ed
© 2015
Delegation Dynamics
1 2 3 4 5 6 7 8 9 10Number of Iterations
Tim
e R
eq
uir
ed
Your time to delegate the task
Delegatee's time to do the task
Time spent doing it yourself
1 2 3 4 5 6 7 8 9 10Number of Iterations
Tim
e R
eq
uir
ed
Your time to delegate the task
Delegatee's time to do the task
Time spent doing it yourself
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© 2015
Plan the Delegation
1. Plan - beforehand
Select the right person
Vision of the end result
2. Define - the task to be completed
Be specific
Confirm mutual understanding
Is all the information available to do the work?
3. Schedule - clearly define time frame
4. Level of effort - how to measure it?
5. Follow-up - pre-arrange time to discuss (MBWA & MBAQ)
6. Expect the product to be 30% different; 10% wrong
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© 2015
Regular Feedback Helps Keep People on Target
1. Regular feedback keeps people on target
2. Have balance:
two prepared compliments
two prepared suggestions
3. Must be timely, focused, and specific
4. Encourage outstanding behavior
5. Identify priority areas for improvement
Based on “Formula 2 + 2, The Simple Solution for Successful Coaching”, Allen and Allen (2004)
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© 2015
If You Would Like to Learn More…Principals Bootcamp: a 2-day seminar on how to effectively manage your A/E firm – Spring 2016
Emerging Leaders Workshop: a 2-day hands-on workshop in how to become a great A/E firm leader – Fall 2016
Financial Management for A/E Firm Leaders: a 2-day seminar for A/E firm principals and financial managers – Summer 2016
Ownership and Leadership Transition: a 2-day senior executive roundtable – Spring and Fall 2016
A/E/C Industry Summit: PSMJ’s annual conference – October 2016 in Nashville
Go to www.psmj.com for more details
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© 2015
PSMJ is forming a new Project Management AssociationMission Statement: To advance the skills and certify the competence of project managers in the architecture/engineering/environmental consulting community.
5-Year Vision: The Professional Services Project Management Association (PSPMA) is recognized by both clients and consultants in the architecture, engineering and environmental community as the authority for best project management practices.
The PSPMA will be launched this year. Let me know if you are interested in becoming a charter member.
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© 2015
A/E/C Project Management Bootcamp
Thank you for your attention!
Join us for the next 3 Breakout Sessions
This information is copyrighted by PSMJ Resources, Inc.® All rights reserved.
53
© 2015
A/E/C Project Management Bootcamp
10:30 am – Noon
Business Development for PMs
Project Management Plans
This information is copyrighted by PSMJ Resources, Inc.® All rights reserved.
55
© 2015
Business Development for PMs
“Power comes to those who bring in work.”
-- Frank Stasiowski
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© 2015
BD
PM Roles in the Business Development Triangle
Look for Prospects
Negotiate Contract
Decision to Propose
Client Management
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© 2015
Was Vilfredo Pareto Right?
Annual Revenue Generation
Repeat clients = %
New clients = %
Total = 100%
Business Development Budget Consumption
Repeat clients = %New clients = %
Total = 100%
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80
8020
20
The 80/20 Rule
© 2015
Use Client Touches
1. Articles about the client’s business
2. Info on new legislation affecting them
3. Book about strategies in their business
4. Tool or checklist that makes their job easier
5. Offer to present a seminar on a topic of interest
6. Handwritten thank you notes
7. Lunches & breakfasts
8. Company newsletters
9. Participate in organizations they belong to
10. Invite them to company events
11. Call periodically just to ask how they're doing
12. All e-mails = one touch
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© 2015
Up-Selling and Cross-Selling
Can I supersize that for you?
Would you like fries with that?
Up-selling is easy Cross-selling is hard (but worth it)
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© 2015 61
The Cross Sell Matrix
New Service to Existing Client Rep
New Service to New Client Rep
Existing Service to Existing Client Rep
Exist Service to New Client Rep
Serv
ice
Relationship
Exis
tin
gN
ew
NewExisting
A
B
Source: The Trusted Advisor by David Maister
© 2015
Cross Selling Opportunity Plan
Transit and Rail
Water Treatment
Highway
Dam Rehabilitation
• Structural Engineering• Architectural• Mechanical Engineering• Construction Services• Site Development• Systems Engineering
• Structural Engineering• Geotechnical Services• Construction Services
• Geotechnical Services• Construction Services
• Geotechnical Services• Structural Engineering• Security and Safety
The Client May Also Need…If We Are Hired for…
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© 2015
Cross-Sell Exercise
Which of your existing projects have opportunities for cross-selling? Pick the top prospect that is not currently being pursued by anyone at your firm. Answer these questions on the form in your workbook:
Which services is your firm currently providing to this client?
What new services could you cross-sell?
What are the potential fees if you succeed?
What are the odds that you will be successful?
Compute the discounted revenue projection.
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© 2015
Cross-sell Worksheet Tally
See workbook
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© 2015
Client OpportunitySales Lead
Probability of Success*
PotentialRevenue
WeightedRevenue
GA DOT Enviro Feasibility Don 50% $50,000 $25,000
FL DOT Bridge Inspect Lisa 75% $550,000 $410,000
Jax DPW Paving Recycle Mark 33% $75,000 $25,000
Orl Water GIS Jeff 30% $100,000 $30,000
Pens DPW GIS Tom 50% $100,000 $50,000
Jax Aviation Security Assess Phil 40% $50,000 $20,000
Totals $925,000 $560,000
* Consider the likelihood of the opportunity moving ahead and the likelihood of your firm winning that opportunity.
65
Sample Tally of Cross-Sell Opportunities
© 2015 66
Strategy for Winning Large Jobs
v
What are the client’s hottest buttons?
How does our proposal address the client’s most important issues?
So what? What’s in it for them?
Why should they believe your claims?
Issues
Features
Benefits
Proof
© 2015
IFBP Worksheet
See workbook
67
© 2015 68
IFBP ExampleIssues
• Client plans to make lots of short-term changes• Client wants to be heavily involved in the design process• Project will require difficult rezoning
Features• We have an effective change control process• Entire project team is in the local office• We’ve had a local office for many years• Our PM has worked successfully with this client
Benefits• Minimize cost of changes• The work won’t be shipped to some distant location• We can be in your office on 30-minutes notice• We know the key permit writers, so we’ll get approvals faster• We know how your agency likes things done• You can be more involved in the design process
Proofs• Map showing proximity of our office to client’s office• Commendation letter from same client from previous project• List of successful rezoning projects• Photos of similar projects on tight sites• Track record of change orders on recent projects
© 2015 69
What Are Your Personal Business Development Goals?
Business Development Goals MetricsMarketing Goals
Make presentations at national, regional, and local conferences that clients attend
1 presentation at national conference; 2 presentations at local/regional conferences
Get reference letters from happy clients 3 reference letters
Other marketing goals? Call on 4 new clients
Sales Goals
Sell add-services work from existing clients $50,000 in add-services
Sell new services to existing clients (cross-selling)
$75,000 in new services to existing clients
Develop new clients Land one job with a new client
Other sales goals? Serve as Proposal Manager on one major proposal
© 2015
Planning the Project
70
"If you don't know where you are going, you'll probably end up somewhere else."
-- Yogi Berra
© 2015
Why Do Projects Fail?
1. Lack of Planning
2. Lack of Clear Roles &
Responsibilities
3. Lack of Change
Management
4. Poor Budgeting
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One Company's
Analysis of
500 Projects
© 2015
The Importance of Project PlanningGeneral Patton’s
3 Rules of Battle Planning
Rule 1: Never go into battle without a battle plan.
PSMJ’s 3 Rules of Project Planning
Rule 1: Never start a project without a project execution plan.
Rule 2: No battle plan survives first contact with the enemy.
Rule 2: Keep your project execution plan updated.
Rule 3: A good battle plan vigorously executed beats hell out of a perfect plan that’s late.
Rule 3: A good PEP vigorously executed beats hell out of a perfect plan that’s late.
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© 2015
When Should You Start to Plan?
PMP
Negotiate contract
Award
Mobilize project
Do the work
Close the job number
1. Convert project goals into manageable tasks
2. Anticipate problems
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Submit proposal
Understand client’s priorities
Accomplish the 2 main objectives of planning
Start proposal
Get the RFP
Project Concept by Client
© 2015
You Should Already Know the Client’s Key Issues…
I
F
B
PBut they sometimes change during the BD process.
So we’ll now call them “Critical Success Factors” (CSFs)
74
© 2015
How Well Do You Know Your Client’s Critical Success Factors?
1. Source of funding
2. Financial constraints
3. Schedule constraints
4. Other critical stakeholders
5. Impacts of this project on your client’s career
75
© 2015
CO
ST
Potential for _________________
Potential for ____________________
LE
VE
L O
F Q
UA
LIT
YPERFECTION
Professional Standard for Quality
Meet all applicable laws, codes & standards
Do what the contract says
Do it as well as the average competent A/E/C
Client #2 Expectation for Quality
Firm’s Expectation for Quality
Client #1 Expectation
unhappy client
going over budget
Get Aligned with Your Client’s Quality Expectations
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© 2015
Matching Cost to Need
CostLow High
Quality
High
Low
School
Hospital
Lab
Clean
Room
Nuclear
Power
Plant
Warehouse
Residence
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© 2015
One Client’s Goals from a Real (Hospital) Project
• Visually arresting architecture
• Ecology that promotes healing
• Superior clinical results
• Optimize building’s performance over the long run
• Time optimization of staff
• Inviting & supportive work environment
• Value received for assets spent
• Recognize the soul & spirit of the site
Are these…
Specific?
Measurable?
Achievable?
Relevant?
Time Based?
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© 2015 79
Convert Vague Critical Success Factors into SMART Objectives
Attractive building
Client’s CSFs Client’s SMART Objectives
Environmentally friendly
Adequate parking
Reasonable cost
Minimal change orders
Envision and LEED CertifiedAchieve LEED silver or better
Change orders cannot exceed 10% of the construction budgetChange orders under 5% of construction cost
Construction budget is $2.5MConstruction cost under $2.5 million
Parking is for 25 carsParking for 45 cars + 3 handicap spaces
Match adjacent building style
Finish on schedule Out to bid by September 14Out to bid by September 14
© 2015
Client’s Issue
Client’s CSFs
SMART Objectives
Scope
After a heavy rain, homeowner finds large puddle of water on the floor
Fix the leak in the roof quickly and inexpensively
Objective #1:No leaks after the
next heavy rain
Objective #2:Fix the leak before
the upcoming party
Objective #3:Spend less than
$1,000 to fix the leak
Task 1:Remove old
shingles
Task 2:Repair rotted wood
Task 3:Install new shingles
Relationship Between CSFs and Scope
Will the client be satisfied if all the tasks are completed, but the roof still leaks?
Perhaps you should have added a task?
Task 4:Water test
new roofing
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© 2015
You’ve been assigned as PM to survey and design a parking lot expansion
Your mental image of the project
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© 2015
Ask Probing Questions to Find Out the Client’s CSFs
Client Issue Existing parking lot won’t handle all the cars
Purpose?
Why?What result is the client trying to achieve?What are the biggest concerns?What are the most significant constraints?
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© 2015
Client’s Issue
Client’s CSF
SMART Objectives
Existing parking lot won’t handle all the cars
Design a new parking lot for impounded cars
Objective #1:Parking for 75
impounded cars
Objective #2:Provide 24-
hour security monitoring
Objective #3:Complete design by
October 20
Has Your Mental Image Changed?
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© 2015
Your New (and More Accurate) Mental Image
84
© 2015
What About Our Own CSFs?
Make a reasonable profit
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Our Firm's CSFs Our SMART Objectives
Enhance our reputation
Satisfied client
Enhance our portfolio
Manage legal risks
Get project published
Enter detailed information into Marketing Database
Rating of at least 4 of 5 in client satisfaction survey
Profit = 10-20% of total revenue
No claims or lawsuits
© 2015 86
PMPs for Small Projects Can Fit Onto Just One Page
Work ElementTask Lead
Due Date
Budget
1. Survey Zack 1 Apr $1,000
2. Data Analysis Don 1 May 500
3. Report Outline Don 5 May 500
4. Permitting Rhonda 15 May 250
5. Agency Meeting Rhonda 25 May 150
6. Project Mgmt Don 30 May 150
7. Final Report Don 30 May 500
Totals $3,050
Spent to Date $
Over/under $
% Complete
Earned Value
© 2015 87
PlanTrax Lite Can Help You
PSMJ's PlanTrax® LiteEARNED VALUE TRACKING FOR SMALL PROJECTS
Project: Report Date: 2/17/2016
Project Start Date: 4/1/2014 Tuesday Project End Date: 5/26/2014
Project No.:
Client:
End
Date
Gilbert 04/16/14 2,400
Ron 04/28/14 8,500
Gilbert 05/06/14 9,200
Darrell 04/25/14 3,500
Darrell 05/09/14 5,900
Darrell 05/09/14 8,300
Tony 05/09/14 2,000
Totals $39,800
ABC Residential Developers
9098-14
Topo field work
ALTA field work
Tree survey field work
Tony Primo
Task LeadWork Element Budget
ALTA office work
Topo office work
Tree office work
Project management
Enter Your Data in the Green Cells
Sunrise Subdivision
© 2015
Example Table of Contents for a Large Project PMP
1. Introduction
2. Project Organization
3. Scope Of Work & Contract Document
4. Project Schedule & Deliverables
5. Project Budget & Performance Control
6. Project Design Procedures
7. Project Administrative Procedures
8. Post-project Procedures
89
© 2015
PSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Enter Basic Project Data in the geen cells below. It will be automatically copied to the appropriate sheets.
Table of Contents:
1. Vision, Critical Success Factors and Objectives
2. WBS, Schedule, and Budget
3. Project Team Roles and Responsibilities
4. Document Distribution Plan
5. Communications Plan
6. Opportunity Plan
7. Risk Management Plan
8. Quality Control Plan
10. Client Care Plan
9. Change Management Plan
PROJECT MANAGEMENT PLAN
PN 1234
Sam Smith
Project Title:
Client:
Project Number:
Project Manager:
Adams AFB Dormitory Schematic Design
U.S. Air Force
PSM
J P
MP
Te
mp
late
Init
iati
on
Tab Project
Information
Table ofContents
90
© 2015
PSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Vision, Critical Success Factors and Objectives
Project Title:
Client:
Project Number:
Project Manager:
2 Client satisfaction metric:Achieve above average ratings in ACASS
system
3 Enhance reputation for dorm design metric: Receive commendation letter from client
To provide the client with a new 200-room dormitory that will be completed within budget, on time and meeting the client's quality
expectations. The project will serve as a showcase for future dormitory projects that are planned by the client. The current authorization
is for the Schematic Design Phase only. This will be followed by negotiated contracts for the remaining phases.
Project Vision
Our Critical Success Factors Performance Objectives
1 Profitable project metric: Achieve at least a 3.3 direct labor multiplier
Manage construction costs
On time delivery
Achieve LEED silverEnvironmentally responsible
Quality design
Client's Critical Success Factors Performance Objectives
Keep change orders under 5%
Out to bid by September 15
Conform to USAF requirements for airman
dorms3
Adams AFB Dormitory Schematic
USAF
PN 1234
Sam Smith
1
2
4
metric:
metric:
metric:
metric:
Project Vision
Client’s CSFs
Client’sSMART
Objectives
Vis
ion
, Cri
tica
l Su
cce
ss F
acto
rs O
bje
ctiv
es
OurCSFs
Our SMART Objectives
91
© 2015
WB
S, S
che
du
le &
Bu
dge
tPSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
WBS, Schedule and Budget
Project Title:
Client:
Project Number:
Project Manager:
Enter data in shaded cells only.
Totals 119,980$ 62,480$ 57,500$
Start Finish Total Total Total
Phase and/or Task Manager Date Date Cost Labor Cost ODC
Task Code Task Description $ $ $
PN 1234.01 Prelim site visit Tony Russo 1-Feb 15-Feb 5,840 3,840 2,000
PN 1234.01 Site Sketches Tony Russo 15-Feb 22-Feb 2,360 2,360 -
PN 1234.01 Sketch Meeting Tony Russo 22-Feb 22-Feb 1,920 1,920 -
PN 1234.01 Follow up Sketches Tony Russo 22-Feb 26-Feb 1,460 1,460 -
PN 1234.01 Follow up meeting Tony Russo 22-Feb 26-Feb 1,920 1,920 -
PN 1234.02 Floor Plans, Elevations, Site Plan Kim Alchem 26-Feb 22-Mar 4,560 4,560 -
PN 1234.02 Follow up meeting Kim Alchem 22-Mar 22-Mar 1,920 1,920 -
PN 1234.03 Geotech Investigation Pat Jarvis 26-Feb 22-Apr 35,280 1,280 34,000
PN 1234.01 Site survey Tony Russo 15-Feb 15-Mar 18,000 - 18,000
PN 1234.04 Selection of other facilities to visit Dan Martin 22-Feb 27-Feb 3,280 3,280 -
PN 1234.04 Visits to other facilities Dan Martin 1-Mar 1-Apr 8,120 5,120 3,000
PN 1234.04 Site visit to Adams AFB Dan Martin 15-Mar 1-Apr 5,280 5,280 -
PN 1234.04 Site Visit reports Dan Martin 1-Apr 15-Apr 5,880 5,880 -
Adams AFB Dormitory Schematic Design
USAF
PN 1234
Sam Smith
Acct. Codes
WBS Elements
TaskMgr.
StartDate
End Date
Task Budgets
Project Budget
92
© 2015
Team
Ro
les
& R
esp
on
sib
iliti
es
PSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Project Team Roles and Responsibilities
Project Title:
Client:
Project Number:
Project Manager:
Name Organization Role Phone # Email Responsibilities
1 Bill Solby XYZ Design Principal in Charge 201-7649 [email protected] Oversight
2 Dan Martin XYZ Design Project Manager 201-3538 [email protected] Building and leading the PDT
3 Terry Donahue XYZ Design Design Team Leader 201-7702 [email protected] all design aspects and coordinate
disciplines
4 Steve Wong USAF USAF Project Manager 764-0810 [email protected] USAF and user requested
changes Clarifying scope
5 Paul Pearson USAF Asst. Project Manager 349-9857 [email protected] Coordinating customer and contractor
requirements
6 Pete Ramirez USACEQuality
control/acquisition201-7693 [email protected]
Coordinating access to & from construction
site Internal reporting
7 Kim Alchem XYZ Design Architect 201-7179 [email protected] Lead discipline; maintain overall BIM file
8 Pat Jarvis XYZ Design Structural Engineer 201-7645 [email protected] Lead structural engineer
9 Tony Russo XYZ Design Civil Engineer 201-7597 [email protected] Lead civil engineer
10 Matt Hanson XYZ Design Mechanical Engineer 201-7203 [email protected] Lead mechanical engineer
11 Rob Underwood XYZ Design Electrical Engineer 201-7696 [email protected] Lead electrical engineer
12 Susan Cole XYZ Design Resident Engineer 201-5839 [email protected] Resident engineer during construction
Project Team Roles and Responsibilities
Adams AFB Dormitory Schematic Design
U.S. Air Force
PN 1234
Sam Smith
Name and Organization
ProjectRole
ContactInformation
ProjectResponsibilities
93
© 2015
Do
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istr
ibu
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nPSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Document Distribution Plan
Project Title:
Client:
Project Number:
Project Manager:
Document Bill Solby Dan
Martin
Terry
Donahue
Steve
Wong
Paul
Pearson
Pete
Ramirez
Kim
Alchem
Pat
Jarvis
Tony
Russo
Matt
Hanson
Rob
Underwoo
d
Susan Cole 0 0 0 0 0 0 0
Project Management Plan 1 1 1 1 1 1 1 1 1 1 1
Invoices 1 1 4
Monthly Progress Reports 1 1 1 3 1 1 1 1 1 1 1
Internal Meeting Minutes 1 1 1 1 1 1 1
Client Meeting Minutes 1 1 1 3 1 1 1 1 1 1 1
Basis of Design Report 1 1 1 5 1 1 1 1 1 1 1 1
30% Design Documents 1 1 5 1 1 1 1 1 1 1 1
60% Design Documents 1 1 5 1 1 1 1 1 1 1 1
90% Design Documents 1 1 5 1 1 1 1 1 1 1 1
Final Bid Documents 1 1 3 1 1 1 1 1 1 1 1
Adams AFB Dormitory
U.S. Air Force
PN 1234
Sam Smith
Document DistributionNumber of Copies
Document
Names
Number of Copies
94
© 2015
Co
mm
un
icat
ion
Pla
nPSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Communication Plan
Project Title:
Client:
Project Number:
Project Manager:
Adams AFB Dormitory Schematic Design
U.S. Air Force
PN 1234
Sam Smith
Communication Plan
Media/SettingCommunication Element Participants Frequency
Internal kick-off meeting
Client kick-off meeting
Client meetings
Telephone updates
Informal progress reports
Formal progress reports
All internal PDT members
XYZ Design -- PIC PM, Design Team
Leader, Discipline Leaders
Client -- USAF PM, Assist. PM, USACE rep
XYZ Design -- PIC PM, Design Team
Leader, Discipline Leaders
Client -- USAF PM, Assist. PM, USACE rep
XYZ Design -- PIC PM, Design Team
Leader, Discipline Leaders
Client -- USAF PM, Assist. PM, USACE rep
Sent by XYZ's PM (see Document
Distribution)
Sent by XYZ's PM (see Document
Distribution)
Once Face to face plus videoconference as needed
Once
1st Monday of each month
at 10:00am
Every Monday at 10:00am
(except when holding in-
person meetings)
Every Friday
First Friday of each Month
Face to face plus videoconference as needed
Face to face plus videoconference as needed
Skype
Email w/attachments
CommunicationElement
Participants
Frequency
Media/Setting
95
© 2015
Op
po
rtu
nit
y P
lan
PSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Opportunity Plan
Project Title:
Client:
Project Number:
Project Manager:
Opportunities Potential Benefits to Our Firm
Benefits
(1 to 10)
Probability
(1 to 5)*
Priority Rating
(Benefits x
Probability) Actions
Construction management contract for
Adams AFB dorms
Approximately $230,000 in fees 3 4 12 Get to know the construction chief for the
cognizant Corps district
Design of other USAF dorms at other
bases
Potentially millions in fees 8 2 16 Develop strong relationship with Steve Wong's
counterparts at other AFBs
Enhance reputation for dorm design Allow us to penetrate the university
market using our expertise in dorm
design
5 2 10 Prepare a paper to present at a conference
attended by university asset managers
Adams AFB Dormitory Schematic Design
U.S. Air Force
PN 1234
Sam Smith
Opportunity Plan
Opportunities and Potential Benefits
Priority Calculation
Actions
96
© 2015
Risk Management Plan
Project Title:
Client:
Project Number:
Project Manager:
Risk Factors Potential Impacts to CSFs
Severity
(1 to 10)
Probabilit
y (%)
Priority Rating
(Severity x
Probability) Mitigation Measures
By
Whom By When
There may be a significant delay between
currently authorized phase and the next
phase
Project team will have to be
disbanned and reassembled later (if
they are available), resulting in loss
of efficiency
4 40% 1.6 Include term in contract for a
remobilization fee if project is delayed
between phases
Sam 14 March
Construction cost may come in above
client's available funds
Project will have to be redesigned to
come in under client's available
funds
7 50% 3.5 Incude in scope a construction cost
estimate at the end of each phase
Fran 14 March
Project may not achieve LEED silver status Client will fail to meet one of their
critical success factors
9 20% 1.8 Include a USGBC auditor as part of the
project delivery team
Sam 2 April
Risk Management Plan
Adams AFB Dormitory Schematic Design
U.S. Air Force
PN 1234
Sam Smith
Ris
k M
anag
em
en
t P
lan
Risk Factors and Potential Impacts
Priority Calculation
Mitigation Measures
97
© 2015
Qu
alit
y C
on
tro
l Pla
n
PSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Quality Control Plan
Project Title:
Client:
Project Number:
Project Manager:
Adams AFB Dormitory Schematic Design
U.S. Air Force
PN 1234
Sam Smith
Quality Control Plan
Quality Control Element Responsibility
Target
Date
Completion
Date
Review draft PMP Bill Solesby 15-Feb
Review Site Visit ReportsTerry Donahue, Bill
Solesby10-Apr
Review parametric cost estimate Terry Donahue 20-Apr
Review Design/Systems Summary Report Bill Solesby 5-May
QC Element Responsibility Dates
98
© 2015
Ch
ange
Man
age
me
nt
Pla
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PSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Change Management Plan
Project Title:
Client:
Project Number:
Project Manager:
Contract Requirements for Processing a Change:
Identify Change (to be completed for each identified change):
Impact To:
Budget:
Schedule:
Other:
Individuals Endorsing Change:
Bill Solby x
x
x
x
x
Authorization to Proceed With Change:
(A/E) (owner/client)
Date: Date:
Consultant may not proceed with any changes without prior approval of the Contracting
Officer. All contract changes must be submitted in writing within 30 days of identification of
the need for the change.
Adams AFB Dormitory Schematic Design
U.S. Air Force
PN 1234
Sam Smith
Change Management Plan
(signature)
(name)
Steve Wong
(signature)
(signature)
(signature)
(signature)
(name)
(name)
(name)
(name)
Pete Ramirez
Contract Requirements
Description of Each Change
Impacts
Approvals
99
© 2015
Clie
nt
Car
e P
lan
PSMJ Resources, Inc www.psmj.com 1.800.537.7765 (PSMJ) [email protected]
Project Title: Adams AFB Dormitory Schematic Design
Client: U.S. Air Force
Project Number: PN 1234
Project Manager: Sam Smith
Project Phase Service Opportunity Status
Discuss with client and get agreement to
their project goals and objectives
Offer to set up joint filing system for use
by project team and client
Offer to send PMP to client in exchange
for a 10% mobilization fee
Offer to provide copies of review
documents for permitting agencies and
other key stakeholders
Offer to host an on-site review meeting in
which all team members are present to
answer questions in order to expedite and
improve the quality of the client's review
process
Offer to provide weekly progress reports
and get client input on their contents
Assure client that final documents will have
been thoroughly reviewed in house before
moving to the next phase
Offer to attend public hearings on the
project
Write a paper that can be co-presented
with the client at a major conference
Project Closeout
Post Project Follow up
Client Care Plan
Client Care Plan
Project Kick-off
Draft Deliverable Stage
Review Meetings
Final Deliverable Stage
Project Phase
Service Opportunity
Status
100
© 2015
Who Sees Which PMP Documents?
PMP DocumentInternal
TeamExternal
Team
Project Initiation ✔ ✔
Vision, Goals & Objectives ✔ ✔
WBS, Schedule & Budget ✔ Maybe
Team Roles & Responsibilities ✔ ✔
Document Distribution ✔ ✔
Communication Plan ✔ ✔
Opportunity Plan ✔ No
Risk Management Plan ✔ Maybe
Quality Control Plan ✔ ✔
Change Management Plan ✔ ✔
Client Care Plan ✔ No
101
© 2015
A/E/C Project Management Bootcamp
Thank you for your attention!
If you want to learn more about
managing large projects, join us for the
1:00pm breakout session
This information is copyrighted by PSMJ Resources, Inc.® All rights reserved. 102
© 2015
A/E/C Project Management Bootcamp
1 pm – 3 pm
Managing Large Projects
Scope, WBS and ABS
Project Financial Plan
This information is copyrighted by PSMJ Resources, Inc.® All rights reserved.
105
© 2015
Scope, WBS and ABS
106
Your Scope, WBS and ABS are the foundation for your Project Management Plan.
© 2015
Client’s Issue
Client’s CSFs
SMART Objectives
Scope/WBS
After a heavy rain, homeowner finds large puddle of water on the floor
Fix the leak in the roof quickly and inexpensively
Objective #1:No leaks after the
next heavy rain
Objective #2:Fix the leak before
the upcoming party
Objective #3:Spend less than
$1,000 to fix the leak
Task 1:Remove old
shingles
Task 2:Repair rotted wood
Task 3:Install new shingles
Relationship Between CSFs and WBS
Will the client be satisfied if all the tasks are completed, but the roof still leaks?
Perhaps you should have added a task?
Task 4:Water test
new roofing
107
© 2015 108
The Work Breakdown Structure (WBS):
W Is the basic organizational framework for a project
Is deliverables-based
Defines and groups project’s discrete work elements
Establishes project hierarchy and task relationships
Must be logical; detail to match project complexity
Can be used to develop a “bottom-up” budget
© 2015
WBS/Scope of Work Strategies What is the Advantage?
109
DEFINITION OF DETAIL?
© 2015 110
The WBS Must Be Detailed Enough for You to Answer These Questions:
What needs to be done? (Deliverables)Scope
How many labor hours will each task take?
What other costs will be required? Budget
In what order will the tasks be done?
How much time will they take? Schedule
Who will be responsible for each task?
What expertise is needed? Resources
A good check: The WBS should not change unless there is a contract mod.
© 2015
Sequence Breakdown for Large Projects
WBS• Work
Breakdown Structure
OBS• Organization
Breakdown Structure
ABS• Accounting
Breakdown Structure
111
© 2015
Examples of WBS and ABS
See workbook
112
© 2015
Example WBS Levels
Level Used for
1. Phase • Managing overall deadlines and major milestones
• Reporting status by the PM to the client
2. Discipline • Managing disciplines or other first-level activities
• Reporting status by discipline managers to PM
3. Task • Managing work elements by discipline managers
• Reporting status to discipline managers
4. Subtask or Deliverable
• Estimating level of effort
• Monitoring progress of each work element
113
© 2015
Putting It All Together
Example WBSWBS Level
OBS Responsibility
ABS Numbers (Job Nos.)
I. Master plan 1 PM (David) Job #3471.01
II. Schematic design 1 PM (David) Job #3471.02
III. Design development 1 PM (David) Job #3471.03
IV. Contract documents 1 PM (David) Job #3471.04
A. Architectural drawings 2 Lead Architect (Frank)
Job #3471.04.01
1. Floor plans 3
2. Elevations 3
a. Front elevations 4
b. Rear elevations 4
c. Side elevations 4
3. Wall sections 3
4. Details 3
B. Civil/Structural drawings 2 Lead Civil/Struc.(John)
Job #3471.04.02
C. Mech/Elec drawings 2 Lead MEP (Lois) Job #3471.04.03
114
NoJobCost Codes
© 2015
When You Are the Sub
1. Get a copy of the Prime’s contract with the Client
2. Write a clear scope of work
3. Negotiate invoicing and payment provisions that maximize cash flow
4. Try to identify tasks that will be funded directly by the Client
115
© 2015
Project Financial Plan
116
“There are many ways your firm can spend money. But there is only one way it can make money – on projects.”
-- Mike D’Alessandro
© 2015
A/E Firms Have Long Been the Least Profitable Professional Services Firms
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
117
Source: Jan. 2008 Forbes.com
© 2015
Despite Recent Improvement, Our Profitability Still Lags Behind
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
10.0%
11.0%
2009 2010 2011 2012 2013
Pro
fita
bili
ty (
% o
f To
tal R
eve
nu
e)
All Professional, Scientificand Technical Services*
Architectural, Engineeringand Related Services
118
* Includes law firms, accounting firms, facility management firms, advertising agencies, HR consulting firms, graphic design firms, PR firms, commercial photographers, etc. (also includes A/E firms). Excludes medical services providers. Source: Sageworks, a financial information company
© 2015
Four Budgeting Methods
119
© 2015 120
Method #1: Upward Budgeting
BillingRates
WBS (Task Outline)
Staff Hoursx
Hourly Rate=
Direct Laborx
Overhead Rate=
Total Cost+
Profit
+Expenses (ODCs)
+Contingency
=Proposed Fee
Initial Scope Start Here
© 2015 121
Method #2:Downward Budgeting
BillingRates
Staff Hours=
Hourly Rate÷
Direct Labor
Overhead Rate
Total Cost=
Profit-
Expenses (ODCs)-
Contingency-
Achievable Fee
=
÷
WBS (Task Outline)
Initial Scope
Start Here
© 2015
Initial Scope
Task List
Staff Hours
Hourly Rate
Direct Labor
Overhead
Total Cost
Profit
Proposed
Contract Fee
Initial Scope
Task List
Staff Hours
Hourly Rate
Direct Labor
Overhead
Total Cost
Profit
Achievable
Contract Fee
122
Budget Method #2a: Real World Budgeting
© 2015
Budget Method #3: Unit Price Budgeting
1. Hours/Drawing
2. $/Drawing
3. % of Construction Cost
4. $/Square Foot
5. $/Ft of Boring
6. $/Acre of Land
7. Others?
123
© 2015
Budget Method #4: Staffing Level Budgeting
Project Duration = 4 weeks
Principal @ ¼ time = 40 hours
Project Manager @ ¼ time = 40 hours
Project Architect @ ½ time = 80 hours
Technical Support @ ¼ time = 40 hours
Admin Support @ ½ time = 80 hours
Total Labor = 280 hours
Labor Budget = 280 hrs @ $100/hr = $28,000
Expenses @ 10% = $ 2,800
Total Budget = $30,800
124
© 2015
Use Multiple Methods
Final Budget
Down-ward
Budget
Unit Price
Budget
Upward Budget
Staff Level
Budget
125
Upward Budget $248,600
Downward Budget $218,000
Unit Price Budget $248,100
Staffing Level Budget $246,100
Mathematical Average $238,950
Revised (Final) Upward Budget
$240,000
Example
© 2015
Do Your Staff Really Make >$100/Hour?
0.00
0.50
1.00
1.50
2.00
2.50
3.00
Multiplier
1.00
0.51
1.13
0.45 Profit = $15.61/hour
Overhead = $39.33/hour– Rent/Utilities– Marketing– Insurance– Accounting
Fringes = $17.58/hour– Federal/State Taxes– Social Security– Health Insurance– Paid Time Off– Retirement
Direct Labor = $34.68/hour– What the median employee makes
Source: Median North American A/E firm in the 2015 PSMJ Financial Performance Survey
126
Total = $107/hour (3.09 multiplier)
© 2015 128
What Happens if You Don’t Know Your Client’s Budget or Market Price?
Ran
ge o
f P
rice
s
Your costs and minimum profit
Market price
Client’s budget
© 2015 129
What Do You Do Now?R
ange
of
Pri
ces
Your costs and minimum profit
Market price
Client’s budget
© 2015
The Concept of “Lowest Credible Scope”
1. Address all issues recognized by the client
2. Identify the lowest cost method of solving the problem
3. Price only the activities required to solve the problem
4. Keep track of possible extras for later
130
© 2015 131
Does Contract Type Relate to Risk of Losing Money?
Contract Type High Medium Low
Lump Sum or Unit Price
% of Actual Construction Cost
Hourly (No Limit)
Hourly Not-to-Exceed (GMax)
What most people think
What PSMJ research shows
© 2015 132
How Does the Money Flow?
Project Costs
Personnel
Expenses
Value Added(Pricing)
Equipment Usage
Ad
just
me
nts
AccrualMeter
CashMeter
Invo
ice
Co
llect
ion
Cash in the Bank
Payroll
WIP A/R
Accounts Payable
Write-offs
1
2
3
Negative Cash Flow
© 2015 133
How Does Your Firm’s Project Financial Performance Compare?
Benchmark MedianFirm*
Median Canadian
Firm
Circle of Excellence
Median
Your Firm
Labor utilization (based on payroll $$$) 58.8% 66.9% 63.6%
Target direct labor multiplier 3.10 3.00 3.20Net achieved direct labor multiplier (net revenue ÷ D.L.) 3.09 2.66 3.38
Net revenue surplus (deficit) as a % of net revenue -1.0% -4.9% +3.8%
WIP days 16 15 15
A/R collection days 67 79 58Operating profit (% of net revenue before bonus & tax) 14.3% 15.6% 28.4%
*Consists of 93% U.S., 6% Canadian, 1% outside North AmericaSource: 2015 PSMJ Financial Performance Survey
© 2015 134
Causes and Cures for Net Revenue Deficit
22.12.22.32.42.52.62.72.82.9
33.13.23.33.43.5
Uncollectable A/R
Unbillable WIP
Over budget
Negotiations
Proposal cut
Dir
ect
Lab
or
Mu
ltip
lier
Target
Achieved
Cure #1 – Raise prices and improve negotiations
Cure #2 – Improve project management
© 2015
1. Higher pricing strategies
2. Target multiplier viewed as “floor,” not “ceiling”
3. Most jobs done lump sum, unit price or w/ incentives
4. More capable project managers
5. Strong focus on organizational priorities: exceeding budget & client expectations
6. Systematic implementation of earned value tracking
7. Strong accountability for project performance: dealing with non-performers & rewarding excellence
How Circle of Excellence Firms Achieve High Multipliers
135
© 2015
Improve Cash Flow by Reducing WIP
1. Bill a “mobilization fee” up front.
2. Review job cost reports every week.
3. Review draft invoices within 2 days
4. Stop signing invoices
5. Use two-envelope system for progress reports
6. Invoice electronic PDFs
7. Keep lump sum jobs under budget
136
© 2015
Improve Cash Flow by Reducing A/R
1. Get the invoice out on time
2. If you don’t ask for the money, clients will assume you don’t need it
3. Package payment discussions around technical or design discussions
4. Know your client's accounting process - and your client's accountant
137
© 2015
A/E/C Project Management Bootcamp
Thank you for your attention!
Join us for the Final Breakout Session on
becoming a PM Leader
This information is copyrighted by PSMJ Resources, Inc.® All rights reserved.
138
© 2015
A/E/C Project Management Bootcamp
3:30 pm – 5:00 pm
Leading the Project Team
Managing Your Clients
This information is copyrighted by PSMJ Resources, Inc.® All rights reserved.
140
© 2015
Leading the Project Team
Leadership Develop new ideas Do the right things Inspire people
Management Turn ideas into reality Do things right Direct people
141
© 2015 142
If You Forecast the Time of Each Employee…
Employee: Kerri Department: Structural
Job # Job Name
Job # Project
Hours Next
Week
100 COORS 10
125 COCA-COLA 15
136 FMC 13
Total Billable Backlog 38
Hours on Overhead Jobs
600 GM Proposal 10
610 Performance Reviews 2
Total Overhead Backlog 12
Total Backlog 50
Comments:
Kerri has been working OT for 5 weeks straight.
© 2015 143
You Can Streamline Your Weekly PM Meetings
Kerri 10 15 13 38 10 2 12 50 76%
Bill 16 20 36 0 36 100%
Phil 14 8 22 12 12 34 65%
Mike 0 24 24 24 0%
Don 8 40 8 56 8 8 64 88%
Jay 8 40 8 56 4 4 60 93%
Will 24 20 44 8 8 52 85%
Mark 24 20 44 8 8 52 85%
Sherri 8 8 20 36 12 12 48 75%
John 40 40 0 40 100%
Mary 8 12 20 0 20 100%
Sue 8 8 16 16 24 33%
Jessi 30 30 0 30 100%
Bob 8 30 38 8 8 46 83%
Colleen 8 30 38 0 38 100%
Anna 0 32 32 32 0%
Helen 8 40 48 0 48 100%
42 15 13 0 120 20 16 46 56 8 20 60 138 0 554 42 6 40 16 40 144 698 79%
To
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Overhead Hours
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Summary
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Billable Project Hours
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© 2015
Ensure Key Staff Are Available at Critical Points
During the project
• Do regular staffing forecasts
• Remind key people of their commitments
When the contract is signed
• Finalize the tentative commitments
• Get commit-ments for key milestone dates
During proposal preparation
• Get tentative commitments for key team members
When the lead is identified
• Identify key team leaders
144
If you want the best people on your team, make them want to work on your project.
© 2015
Effective Teams
1. Collective and individual accountability
2. “Atmosphere” is relaxed
3. Lots of discussion
4. Objective well understood
5. Members listen to each other
6. Most decisions by consensus
7. Constructive disagreements
8. Criticism is comfortable
9. Clear assignments made & accepted
145
© 2015 146
Personality Traits
0
05
10
10
Assertive
Responsive
Controls Emotes
Tells
Asks
© 2015
Personality Traits
Pushy
Severe
Tough Minded
Dominating
Harsh
Manipulative Excitable Undisciplined Reacting Promotional
147
Critical Indecisive Stuffy Exacting Moralistic
Conforming Retiring Pliable Dependent Awkward
0 10
0
10Driver (Control Taker)
Determined Requiring Thorough Decisive Efficient
Expressive (Emotional)
Personable Stimulating Enthusiastic Dramatic Gregarious
Analytic (Data Collector)
Industrious Persistent Serious Vigilant Orderly
Amiable (Friendly)
Supportive Respectful Willing Dependable Agreeable
For more information, go to www.tracomcorp.com
© 2015 148
Five Practices of Leadership(from “The Leadership Challenge, Kouzes & Posner, 2012)
Model the Way
Inspire a Shared Vision
Challenge the Process
Enable Others to Act
Encourage the Heart
APP
iTunes App
© 2015
Your Personal Leadership Assessment
Leadership Practice Areas Your Assessment (1-5)
Model the way
Inspire a shared vision
Challenge the process
Enable others to act
Encourage the heart
149
Score your behavior for each area of leadership on a scale of 5 down to 1 as follows:
5 = You exhibit these behaviors 90% or more of the time (upper end)4 = 3 = 2 =1 = You exhibit these behaviors 10% or less of the time (lower end)
Give yourself one score for each practice area
© 2015 150
© 2015
Few PMs Use the Most Powerful Motivational Techniques
0 10 20 30 40 50
Morale BuildingMeetings
Public Praise
Written Thanks
Personal Thanks
Managers Using This Technique (%)
Top
Mo
tiva
tin
g Te
chn
iqu
es
Source: Study of 65 workplace incentives, conducted by Dr. Gerald Graham, Wichita State University
151
© 2015 152
According to Frederic Herzberg…
Achievement
RecognitionThe work itself
Responsibility
AdvancementGrowth
Company policies and administrationSupervision
Relationship with supervisorWork conditions
SalaryRelationship with peers
Personal life
Relationship with subordinates
Status
Security
IntrinsicMotivationFactors
Hygiene Factors
Factors Leading to Extreme Dissatisfaction
Factors Leading to Extreme Satisfaction
© 2015
Managing Your Clients
It costs 10-15 times more to get a dollar of revenue from a new client than from an existing one.
-- PSMJ Research
153
50%60%70%80%90%
100%
LowerQuartile
Median UpperQuartile
% of Revenue from Repeat Clients
© 2015 154
Sometimes You Have to Work for Clients Who Are Less Than Ideal
© 2015
Category25th
%ileMedian
75th
%ile
Responsiveness 5.51 5.82 6.10
Helpfulness 5.20 5.60 5.89
Quality 5.13 5.59 5.85
Accuracy 5.10 5.56 5.74
Scope and Fees 5.05 5.46 5.82
Schedule 4.90 5.39 5.72
Budget Performance 4.79 5.28 5.55
155
Most Clients Are Quite Satisfied With Their A/E Consultants
Source: Client Feedback Tool results for 2013-14. Data is from over 200 A/E firms and 10,000 clients.
Rating Scale
© 2015
Factors That Influence Client Loyalty
0% 10% 20% 30% 40% 50%
Delivered on promises
Price/value
Existing contract
Reliability
Firm's fit to client's needs
Survey of 432 Buyers of A/E Services
156Source: Hinge Research Institute
© 2015
How Well Do You Know Your Client?
1. Who does your client report to?
2. What is their organizational structure?
3. What are their strategic drivers?
4. Where do the decision makers sit?
5. What do they value & expect in their relationship with you?
6. What do they read?
7. What is their career path?
8. What are their outside interests?
9. What hassles can you remove from their life?
157
Check out the “Mackay 66 Customer Profile”
(www.harveymackay.com)
© 2015
How Wow’ed Are Your Clients?
1. Solicit feedback (1 page surveys)
2. Internet Surveys Client Feedback Tool
Ratingsource.com
Surveymonkey.com
3. Ask clients to make a list entitled, “Things consultants do that bug me”
4. Collect, summarize, share, do it again!!!!!
158
Keeping Clients Happy = Keeping Clients
© 2015 159
12 Steps To Better Client Relationships
Management8. Keep your files organized9. Respond to client requests
promptly10. Meet your commitments11. Give your client regular
progress reports – whether they ask for them or not
12. Be persistent when you need input
Leadership1. Know your client personally2. Understand your client’s
business3. Be an equal partner4. Foster trust5. Demonstrate credibility6. Anticipate – Don’t react7. Never, never lie to the client
(but beware of TMI)
And NO Surprises!!!!!!
© 2015 160
6 Win-Win Negotiating Tactics
1. Have something to give away, of value to client, at little or no cost to you
2. What can you request that will give you value at little or no cost to client?
3. Keep track of all concessions in writing -- even small ones
4. Establish your "walk-away" position beforehand
5. When the going gets tough, the tough keep talking
6. Include all concessions in the contract or in a memo of understanding
Critical Pre-Meeting Homework:Know your scope of work better than anyone in the room.
© 2015 161
Get Firm Commitments from Your Client
Client Decisions Needed Target Date Actual Date
Site entrance location 4/10/14
Lab ceiling height 5/5/14
Site lighting type 6/8/14
Information Required from the Client Target Date Actual Date
As-Built Drawings 2/5/14
Utility Connection Info 3/1/14
Design Standards 3/15/14
© 2015 162
Never deliver bad news via email!
© 2015
Unlike Fine Wine, Bad News Does Not Improve With Age
1. Make sure clients hear it from you first
2. Take immediate responsibility for the solution (not necessarily for causing the problem)
3. Use the “3 alternative rule”
4. “Your first loss is your best loss”
5. If you handle it right, it can be a great opportunity
163
© 2015 164
You Should Initiate at Least 80% of the Interactions With Your ClientsCommunications
MediumHow to be Proactive
Meetings• Agree on a regular meeting schedule
• Synchronize your calendars
Telephone• Agree on a regular phone call schedule
• Synchronize your calendars
Written • Send brief e-mail updates
• Send formal monthly progress reports
Propose in the PMP and confirm in kickoff meeting
© 2015 165
One-page Progress Report in 15 minutes
Progress Report with a Twist
1. What did we do last week?
2. What will we do this week?
3. Scope changes/Value added
4. Budget status
5. Invoice status
6. Schedule/Deliverable status
7. Input needed from client or others?
8. Other issues/concerns
© 2015 166
Does Proactive Communication Take Too Long?
0
1
2
3
4
5
No RegularContact
With RegularContact
Preparing StatusReport
You
r Ti
me
(Ho
urs
)
© 2015
Building Lasting Client Relationships
Level 1: Casual
Your first meeting with the client
Level 2: Professional
Win your first assignment
Level 3: Personal
Your client thinks of you as a friend
Level 4: Organizational
You manage the relationship between your client’s organization and yours
167
Your ultimate goal
© 2015
Client’s Senior Management
Client’s PMOur PM
168
“Zipper” Your Client Relationships
Our PIC
Our Technical
Staff
Client’s Technical Staff
Our Accounting
Staff
Client’s Accounts Payable Staff
