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
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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
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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
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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
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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
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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
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Projects/programs as complex adaptive systems
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KSFs/Managerial Principles
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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
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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
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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
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Upstream
Phases
Downstream
Phases
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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
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Strategic
phases
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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
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Project performance assessment
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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
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Project Success vs. Enablers
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Best practice management
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Approach to project diagnostics
Assess managerial capabilities and approaches
Correlate results with the work achieved
Determine intervention (in order to reach the desired outcomes)
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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
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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
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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
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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
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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
Core Function Variables
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
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Core Function Variables
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
Core Function Variables
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
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Sample assessment matrix (indicator)
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Managing core functions to preset targetsAPIC’s Project Health Check (Sample Report)
Project Strategic & Business Management Assessment
Project Implementation Management Assessment
www.apicollege.edu.au Copyright: Prof. A. Jaafari
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
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www.apicollege.edu.au Copyright: Prof. A. Jaafari
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
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Similar performance
Below level 3 or 50%
Not adequate for large complex projects
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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
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The average performance was rated at 66 points
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The average performance was rated at 43 points
The average performance was rated at 47 points
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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