Project Diagnostics: The Key to Successful Delivery of Projects … · 2019. 3. 6. · Checks operational requirements and legal compliance wrt health, safety and environment 2 Within

www.apicollege.edu.au Copyright: Prof. A. Jaafari

5 April 2011

Project Diagnostics: The

Key to Successful Delivery

of Projects and Programs

Professor Ali Jaafari, Asia Pacific International CollegeNorth Sydney, 2060, Australia

www.apicollege.edu.au

Profile, Professor A Jaafari

• 1968 Graduate of University of Tehran Engineering Faculty with distinction

• 1969-70: Project Engineering National Iranian Steel Corporation

• 1970-73 Senior Project Engineer, ITSC, London, UK

• 1973-4 MSc, University of Surrey, UK

• 1974-77 PhD, Business Economics, University of Surrey, UK

• 1977-81, Various consulting roles and Academic Staff of University of Tehran Engineering Faculty

• 1982-2004, the University of Sydney, last position, Chair Professor and Director of Program.

• 1988 Distinguished Professor of Engineering Construction and Management, University of New Mexico, USA

• 2004-Current, Honorary Research Professor of the University of Sydney


Profile, Professor A Jaafari

• 1989 Consultant to various government agencies

• 1990-93 Chief Manager, Snowy Mountains Engineering Corporation (managed or involved in projects >$10 billion worldwide)

• 1994-1998 Consultant to the EU on the PIP Program

• 2004 Consultant to Taiwanese Defence College on the establishment of a military university

• 2004- President and Principal Executive Officer, Asia Pacific International College

• 2003-5 Visiting Professor in a number of European and North American universities (incl. Helsinki University of Technology)

• Trained some 4,500 managers worldwide, supervised many PhDs

• Published >190 papers, monographs, book chapters, etc.

• Conducted research projects >$50 million in value over years

• Won numerous prizes and awards


About Asia Pacific International College

• Registered Australian higher education institution

• Focused on research and postgraduate education in business and project management

• APIC awards degrees in project management, the highest being MBA (Project and Program Management)

• APIC works closely with professional bodies, industry and government

• APIC’s mission is: to contribute to development of knowledge and promote the field

to offer postgraduate educational programs

to contribute to performance improvements in the field

to facilitate development of self-improving organisations


Scope of this Seminar

• A brief discussion of the underlying framework applied in our approach to project management

• Presentation of the Project Diagnostics design and application

• Discussion of the outcomes


Key Points in Management of Projects

Projects and programs as complex adaptive systems:

• Complexity management pivotal to success• Most important to have a competent team• Dynamic planning & management essential• Use objectives as criteria for evaluation of

outcomes: financial, performance & environment• Managers need to get an overall picture and

apply timely intervention• Focus on project selection and definition• Focus on the enabling factors• Needs tools to capture a broad picture fast and

see where intervention is necessary• And direct respective players to respond



Projects/programs as complex adaptive systems


KSFs/Managerial Principles



Project Objectives

Financial objectives- IRR, NPV/C, Payback, B/C, LCC etc. derived from the parent program/portfolio

Performance objectives- Operability, Functionality, Facility utilisation etc. derived from operational requirements and the parent program/portfolio

Environmental objectives (soft issues)- Environmental sustainability, customers’ satisfaction, community impacts, OH&S etc. due diligence and meeting of social/environmental expectations.

• Time, cost, scope, quality are not project objectives• There can be no project management objectives


Customers & MarketsStakeholdersTechnology Facility Design and Operational RequirementsSupply Chain SystemLearning & InnovationFinanceProject Delivery StrategyRisks and Due Diligence

Governance & LeadershipEngineering, Detailed Design & SpecificationsProcurement*, Transportation & WarehousingPlanning and Control*Team PerformanceInformation & Communications Management*Quality Management*Offsite ManagementRisk Management

Business & Strategic Management Implementation Management

* Functions covered by PMI in their PMBOK®

Core managerial functions


Project life cycle

Project Creation/Business planning

Project Definition and Implementation

Operations (Business Realisation)

• Focus is on whole of life management in an integrated fashion

• Project must deliver a business case as per the business plan

• Project management spans all upstream and downstream phases


Upstream

Phases

Downstream

Phases


Value Creation Potential

• Traditional PM was taken as embracing downstream phases• Up to 85% of project value is determined in the

selection/creation and development/definition phases • Strategic management of projects is vital• Leadership of the whole process is essential• External risks need critical attention: financing, negotiation,

competitor move and so on!• Business acumen determines value delivery


Strategic

phases


Core Function (Enabling Processes) ▼

No. of Variables/Processes

Project Creation

Project Development

Project Initiation

Project Planning & Documentation

Project Execution Commissioning and Hand over

Project Close out

Monitoring and Control

Customers & Markets 5

Stakeholders 4

Technology 4

Facility design & Operational Requirements

4

Supply Chain System 2

Learning & Innovation 4

Finance 4

Project Delivery 3

Risks & Due diligence 6

Governance & Leadership 5

Engineering & Specifications 3

Procurement, Transportation & Warehousing

3

Planning & Control 6

Team Performance 3

Information and Communication Management

3

Quality Management 4 Quality Goals

QM Strategy QM Master Plan

Construction & Manufacturing QM Plans

Implement QM Scope

Verification, Acceptance & Manuals

Lessons Learnt

Off site Management 2

Risk Management 2

Product and Process Integration

Integrated life cycle project management

Fun

ctio

nal

(M

anag

eri

al)

Inte

grat

ion


Project performance assessment


Summarising Approach & Framework

Management of Projects

• We need a shift in project management thinking and practice

• Objectives changed to:o Financialo Performance

o Environment

• The PM framework needs to: ⁻ Embrace whole of project life cycle⁻ Focus on strategic & front-end phases

• Enablers are 18 core functions (67 variables)• KSFs/managerial principles applied to guide

actions• Situational factors determine nature of action


Project Success vs. Enablers


Best practice management


Approach to project diagnostics

Assess managerial capabilities and approaches

Correlate results with the work achieved

Determine intervention (in order to reach the desired outcomes)


Conduct assessment at any time in the project life

Most beneficial during the early phase

Examine project health check results and project progress report to draw inferences for action

Measure improvements over time

There is usually a lag from the time of intervention to measurement of effects

Assessment points


Level of practice

Industry position

Typical characteristics

0 Below top 65%

Ad-hoc practice No prevailing pattern or systemic approach to the management of project variables is

discerned Neither the competency of the project team nor the tools applied are assessed and adjusted

1 Within top 65%

Recognition of the variables and their significance, tracking over project life applying simple devices such as check lists

Typically no goals and targets in place Periodic checks, guided by experience of individuals Checks operational requirements and legal compliance wrt health, safety and environment

2 Within top 50%

Has either goals and targets (KPIs) or can extract the same from project documents for the project variables to manage to

Undertakes regular reviews to identify significant variables on the project Assesses the quality of the actual management of the variables vs. KPIs, quantifies the

deviations from targets, reflects the results of the assessment on the project plan Has put in mechanisms to regularly monitor vs. KPIs Applies reviews of project facility or product concepts wrt operational and statutory

compliance3 Within

top 30% Has involved stakeholders and put in place a mechanism for regular review of goals and

targets (KPIs) for project variables Applies a known approach to involving and identifying significant variables Has applied modelling and other tools to evaluate the performance against KPIs Carries out individual evaluation, develops strategies to address deviations, adjusts plans and

practices accordingly Makes stakeholders aware of deviations and remedies wrt to critical targets and priorities Regularly monitors the performance and records deviations Systemic approach to management of operational and legal compliance, incl. informing

project team and stakeholders Demonstrates compliance with operational and legal requirements and applies exception

reporting

Generic definition of practice (maturity) levels


Level of practice

Industry position

Typical characteristics

4 Within top 15%

Applies a systems’ approach to management of goals and targets over project life, incl. team and stakeholder participation, as well as linking these to project outcomes

Involves team and stakeholders to continually review and adjust goals and priorities against project status Undertakes computer-based performance analysis incl. stochastic analysis Promotes shared responsibility for identification and tracking of significant variables over project life Applies a strategic framework to application of initiatives Applies criteria and guidelines to adjust project decisions and plans Leads team and stakeholders wrt application of initiatives and continuous improvement Applies a systems’ approach to implementation of initiatives to realign project practices Applies a system to link project performance to initiatives over project life Generally guided by feedback Systematically demonstrates operational and statutory compliance of resultant facility/products Applies trending and feedback for systematic review of operations and compliance

5 Within top 5%

Leads team and stakeholders to proactively manage/optimise goals and targets for value maximisation and risk minimisation

Applies a systems approach to balancing of the conflicting goals Leads stakeholders to track significant variables over project life Applies an integrated model of the project over life to manage value and risks Applies scenario planning to assess impacts of uncertainty Continuously adjusts all managerial approaches vs. goals and targets holistically Correlates project management assessment with project progress results Systematic project knowledge management to improve performance Continuously leads the stakeholders to refocus on project value and risks Applies systemic approaches to project performance measurement, linking management of individual

variables to plans and priorities Has an optimal/ proactive focus on operational and statutory requirements, incl. systematic tracking of

project performance operationally, as well as legal ramifications of changes Applies computer-based systems to manage compliance Generally optimises project decision processes, systems and communication/consultation processes in line

with continuous feedback and improvement philosophy

Generic definition of practice (maturity) levels


Project health check framework

Two sets of interrelated criteria:

− For assessing the project’s performance on business & strategic front (fitness of the purpose, ‘value’ and fitness for the purpose)

− For assessing the project implementation efficiency and effectiveness

Measure how well project performs relative to its class


Core Function Variables

Customers & Markets business priorities, innovation and branding

alignment with sponsor organisation's strategy

building of distinctive capabilities

customers vision, values & culture

existing operational support

Stakeholders operators support

customers experience

suppliers and partners experience

external stakeholders

Technology process or conversion technologies

schematic or concept design

operability and functionality requirements

product or users specification

Facility Design and Operational Requirements

process alignment & integration

cycle time reduction

waste minimisation

internal efficiencies & benefits


Supply Chain System project supplies

warehousing & inventory management

Learning & Innovation competency acquisition

new work methods

knowledge support for project teams

distributed teamwork

Finance project finance including currency hedging

cost estimation, budgeting & cash flow forecasting

(contingencies)

business case & portfolio management

accounting and financial administration

Project Delivery project delivery strategy & policies

contractor pre-qualification rules and selection process

contracts administration model (conflict resolution)

Risks and Due Diligence HSE & statutory risks

management competence

process and operational risks

procurement and transportation risks

manufacturing and construction risks

natural disasters & force majeure risks (insurance)

Business and Strategic Assessment


www.apicollege.ed

u.au


Governance & Leadership leadership & top management support

governance structure

timely actions or decisions

team culture & commitment to project goals

maintenance of high morale

Engineering, Detailed Design &

Specifications

basic design (including part/product breakdown

structure & configuration management)

detailed design & integration

parts specifications and documentation

Procurement, Transportation &

Warehousing

procurement policies, strategy & plan

execution and control of procurement

handling, shipping & local transportation

Planning and Control implementation master plan (scope, WBS and

integration)

scope and change management

scheduling and time management

cost and financial management


Planning and Control HSE and statutory requirements

performance assessment, forecasting & reporting

Team Performance project human resources

skills assessment and training

teamwork performance

Information & Communications

Management

project and internal communications

public relations and external communications

information and documentation management

Quality Management quality management master plan

construction and manufacturing quality assurance

administration and conflict resolution

knowledge management

Offsite Management utilities and support projects

training and induction of users/operators

Risk Management risk management master plan

ongoing risk management and closure

Implementation Management Assessment


Sample assessment matrix (indicator)


Managing core functions to preset targetsAPIC’s Project Health Check (Sample Report)

Project Strategic & Business Management Assessment

Project Implementation Management Assessment


Case Project Description

A Major Infrastructure Project in Australia

Managing contractor (GMP) contract

Project manager appointed as the principal’s representative

Approximately one third was completed

APIC was asked to conduct a Health Check

And provide strategic advice and directions for improvement



Method of Approach

Data collected from 27 individuals

Divided into 3 groups:

Client team and their advisers (15)

PM team (9)

MC team (3)

Results grouped together and compared

A report provided to the client

And a presentation was made to discuss the findings and recommendations



Similar performance

Below level 3 or 50%

Not adequate for large complex projects


Validation of Results

Results validated using chi-squared technique

2 = 37.40369; = 34

Tabulated 2 =56.06 at = 0.01

Differences in 3 samples are insignificant

Average results are probably closer to the true performance values measured



The average performance was rated at 66 points





Overall performance low (risky)

Whole of project operational improvement focus missing

Investment (Capex) not linked to business case & portfolio

Governance is diffused

Understanding of project and its managerial approaches not aligned

Project decisions not linked to strategic objectives

Contractual inconsistency (MC vs. GMP contract)

Procurement management not informed by risk management

Quality management confined to contractor (not used strategically)

Confusion on risks & due diligence

Informal risk & due diligence approach

Ongoing risk management not strong enough

Supply chain management approach is not clear

Team performance is low & in need of improvement

Skills assessment & development?

Role of technology in automating many project functions or improving operations not clear

Actual Findings from the Last Case Study

Documents

Project Diagnostics: The Key to Successful Delivery of Projects … · 2019. 3. 6. · Checks operational requirements and legal compliance wrt health, safety and environment 2 Within