Proceedings of the Institution ofCivil EngineersManagement, Procurement and Law000Month 2008 Issue MP0Pages 1–2doi: 10.1680/mpal.2008.000.0.1

Paper 800038

Management, procurement and law: overviews

Members of the Management, Procurement and Laweditorial advisory panel provide overviews of their areas ofexpertise, highlighting recent and forthcomingdevelopments likely to affect engineers and othersworking in the fields of management, procurement andlaw.

1. DONNIE MACNICOL1.1. Overview of developments in project managementProject, programme and portfolio management have become

mainstream disciplines adopted by organisations outside of the

traditional industries such as defence and construction. They are

being adopted not only for delivering change within organisations

but also as a means of improving product and service delivery to

clients. This blurring of the boundaries between business as usual

and projects has in part been driven by the continuous need for

adaptation and evolution within business, and also acceptance of

the value the underlying approaches and processes can add.

Programme management is a distinct discipline with its own

methodologies and training. The word programme is often

misused to refer to large or complex projects. Portfolio

management is increasingly seen as a highly effective way of

aligning projects with business objectives and resources, typically

through a proprietary system. A range of enterprise-wide systems

exist to bring project, programme and portfolio disciplines

together to align them better with the business and the business

support infrastructure.

There is a growing distinction between project management and

the management of projects: project management is defined

through the numerous approaches, methodologies and

processes; the management of projects is the social interaction

between the project manager, team, client and stakeholders

together with the application of project management in an

intelligent and designed manner for the particular context. This

distinction is leading to greater realisation about the true nature

of projects, in particular change projects where there is no

physical product. This includes the importance of social

interaction, modelling and accepting complexity, multiple

perceptions of a project and what constitutes success, delivery

of value rather than outputs, the inadequacy of traditional fixed

life-cycles and the need to work with different cultures through

globalisation and the increased used of alliancing as a means of

gaining competitive advantage.

Many companies now have their own methodologies defining

what project management is and how it should be used. These

range from fully comprehensive mandatory procedures through to

frameworks that provide only guidance and support. Compliance

is monitored through health checks and peer review. Centralised

project/programme support offices where practices are developed,

competency support programmes (training, systems, processes)

established, collaborative and control systems maintained, best

practice and metrics captured, and performance measured are

becoming the norm. Centres of excellence, which may or may not

be aligned to the support office, are where the focus is more on the

process and knowledge gained to help performance than the

projects themselves. These are typically the home or centre of

gravity for the project management community of practice.

The role of the project manager has become more universally

accepted and adopted along with the realisation that the skills are

portable across industries. Demand for project managers is now

outstripping supply, especially for experienced individuals who

can lead and ensure delivery of large and complex projects. This is

particularly acute in the construction industry. Classifying the

project manager’s knowledge, skills and behaviours needed to

accomplish specified roles is becoming increasingly common

through tools such as competency baselines. Certification is

increasingly becoming accepted as a good way of building that

competence through professional bodies such as the Association

for Project Management. Training is provided through a range of

methods while mainly providing delegates with knowledge of

what project management is rather than the complexities and

nuances of managing a project. There are a range of further

developmental opportunities including higher education where

MSc’s and MBA’s are on offer in project management,

conferences, specialised user groups or networking organisations.

Project management is maturing away from the pure

identification and control of requirements, scope, resources, costs

and time through the widespread adoption of risk management,

value management, earned value, governance, benefits

management and whole-life costing and planning.

Other approaches such as systems approach, agile, critical

chain/theory of constraints, six sigma, uncertainty, complexity

theory and systems dynamics are now being used in conjunction

with project management to provide greater value.

Formal comparison of performance and practice between

companies is becoming increasingly accepted through

benchmarking. Maturity models are becoming popular as a means

of assessing and monitoring the optimisation and application of

project management practices and processes.

Management, Procurement and Law 000 Issue MP0 Management, procurement and law: overviews 1

In summary, project management is vibrant, maturing and now

the standard approach for teams and organisations to improve

performance in projects.

2. NIGEL J. SMITH2.1. Private finance and risk managementSince the inflationary pressures of the oil price rises in the 1970’s

rekindled interested in utilising private finance for public

infrastructure, procurement systems have contained public,

private, and hybrid business models. Known as the Ozal formula

or BOT (build-operate-transfer), early procurement systems were

introduced in the UK subject to satisfying the Ryrie rules on value

for money and risk sharing. The public–private business models

have continued to evolve in the UK and today, whilst not a

panacea, are the preferred procurement route for most civil

engineering infrastructure projects.

One of the main concepts of these private finance, or concession,

contracts is that there should be an equitable sharing of risk rather

than an equal sharing of risk. Risks are allocated to the party best

able to manage or control the risk. In most concession contracts

the principal is allocated responsibility for much of the global risks

(legal, political, environmental and commercial), whilst the

promoter SPQ3 V is allocated responsibility for much of the elemental

risk (technical, operational, financial and revenue). Increasing

complexity and reduced durations put pressure on existing risk-

management methods.

It is unlikely that large increases in public sector spending will

occur in the short-to-medium term and so private finance

concessions are likely to be utilised for many years. The culture

change to the management of these investment projects which

involve infrastructure is profound. Private finance is not just

another type of bank; it involves the utilisation of private sector

commercial skills and entrepreneurship in project delivery and

banking.

REF Q1ERENCES1. Issues that matter—round table discussion. Project, 2007,

Apr Q2il, 10–14.

2. MORRIS P. W. G. Current trends in project and programme

management. In The Association for Project Management

Yearbook 2004/5. Association of Project Management, High

Wycombe, pp. 105–107, Future Trends.

3. WINTER M., SMITH C., MORRIS P. and CICMIL S. Directions for

future research in project management: the main findings of

a UK government-funded research network. International

Journal of Project Management, 2006, 24, No. 8, 638–649.

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