Can Project Management Information Systems

(PMIS) Stop Project Fraud?

December 29, 2015/in PMWeb PMIS

The recent drop in oil prices is creating great pressure on project owners in both
public and private sectors in Saudi Arabia, UAE and other Gulf countries, to come up
with measures to improve efficiency and stopping waste when it comes to delivering
projects. Measures that will the focus on optimizing the selection of projects as well
as measures to improve the delivery of the selected projects.
Those measures should not be limited to improving the project management
practices and developing better project managers and team members but should
also focus on how to curb actions that are intended to harm a project. Those are the
actions as are usually labelled as Project Fraud actions which could include but not
limited to:

Unsubstantiated project decisions

Under-reported estimates of project cost

Over-reported estimates of project benefits

Unbalanced bids

Over-reported schedule performance to hide project delays

Wrong forecasting for cost to complete the remaining project scope

Unsubstantiated change orders

Over-estimated change orders

Over-reported quality progress

Acceptance of lower-quality deliverables that cannot be used as originally

thought

Delayed and/or improper approvals

Conflict of interest and kickbacks

Negligence in protecting clients interest

Non-compliance with the contracts terms and conditions

Creating unnecessary threats by failing to comply with best practices

Failing to report threats before they harm the project

Failing to report opportunities that could have benefited the project

Lost or misplaced project documents

Appointing unqualified project team members

Intended wrong actions or decisions

Fraud is very much a part of every business and projects are no different specially
when there is lack of governance and control. Actually, there are more chances in
project fraud than other type of frauds where usually corporate policies and
procedures are well enforced and internal or external audit is a requirement.
So how can Project Management Information System (PMIS) help project
owners in stopping project fraud?
First, let us define what is a PMIS? It is solution that will enable project centric
organizations to manage their portfolio of projects and programs following best
practices and recognized standards in project management. A PMIS provides a
collaboration platform that enables all project stakeholders and team members to
access needed projects data in a secure and authorized format. The PMIS should be
web-enabled to allow authorized access anytime, anywhere using any device. A
PMIS should have reporting and dashboard capabilities to enable data sharing and
visualization. A PMIS should allow storing all types of project documents and
records. A PMIS should be configurable to allow meeting the specific project
management requirements of the project stakeholders. Finally, a PMIS should
comply with the local requirements and regulations of where it will be used.
Accordingly, the PMIS will be used to help organizations to stop Project Fraud
through the implementation of the following functions and features that any capable
PMIS solution should provide as a minimum:
1.

Enforcing an effective and efficient implementation of the different project

management procedures that need to adopted on a project.

2.

Enforcing a reliable performance and financial reporting

3.

Enforcing an effective early warning system of all delayed actions and

approvals

4.

Enforcing a formal audit of ISO quality best practices

5.

Enforcing a legally-correct project communication

6.

Enforcing a formal appraisal of companies and project management team

members

7.

Enforcing a robust document management system

Enforcing an effective and efficient implementation of the different pro

ject management procedures

One of the key functions of a Project Management Information System (PMIS) is the
ability to map the different project management processes that need to be
implemented on a project. This will require either using the standard pre-defined
project management forms or customize new forms to capture the needed project
information. The quantity of Forms also known as Document Templates that are
used on a project can vary depending on the level of governance and control to be
exerted on the project. For example,
1.

Request for Information

2.

Meeting Minutes

3.

Daily Report

4.

Snag List

5.

Non Compliance Request

6.

Site Work Instruction

7.

Transmittal

8.

Material Approval Request

9.

Confirmation of Verbal Instruction

10.

Accident Report

11.

Site Inspection Form

12.

Permit

13.

No Objection Certificate

14.

Approved Project Budget

15.

Proposed Change Order

16.

Change Order

17.

Progress Invoice

18.

Risk Record

19.

Issue Form

20.

Lessons Learned

21.

Project Charter

22.

Deliverable Acceptance

23.

Stage Gate Review

24.

Lessons Learned

For each one of the project management document templates, there will be a
workflow to detail the steps and the sequence for submitting, reviewing and
approving the content of the document template. For some document template,
there could be multiple workflow options the depend on specific attributes of the
document template such as type of change, amount of change, project system type
among many others. The PMIS should enable developing those workflows
incorporating all different variables.

Enforcing a Reliable performance and financial reporting

No organization should allow the watermelon syndrome to be the basis for their
performance and financial reporting. Organizations who are still dependent on
having their team to capture and report project performance and financial reporting
using MS Excel or other solutions that depend on data fed by individuals must
accept the fact that is being reported on is what others want them to visualize
which could be far from the truth.
A Project Management Information System (PMIS) will enforce reliable performance
reporting as the content for those reports will be extracted from the data captured
in the document templates through the pre-defined workflows. In other words, the
reports are based on 100% true, correct and updated data that was not influenced
by any team member.
The PMIS can use to develop:
1.

Tabular and Graphical reports that will enable grouping, sorting, filtering and
summarizing captured data in the desired format. For example, those could
include RFI Log, Change Orders Log, Risk Register, Issues Log among others.

2.

Project Management Discipline Dashboards that will enable grouping data

from different interrelated data tables to provide the knowledge needed to
better manage this discipline. For example, those could include Cost
Management, Risk Management, Document Management, Schedule
Management among others.

3.

Project Dashboard that will enable having a single version of the truth of the
overall projects performance based on knowledge captured in the Project
Management Discipline Dashboard.

4.

Program, Portfolio and/or Enterprise Dashboards that will enable having an

overall view of how a specific program of projects or a portfolio of projects are
performing.

Enforcing an effective early warning system of all delayed actions and

approvals
Having the projects data captured in a Project Management Information System
(PMIS) will enable developing alerts that will be triggered when performance for any
specific project management process is unfavorable. The project owner need to
identify the Key performance indicators (KPIs) that will be used to ensure that
approvals and reviews are done in a timely manner to avoid causing delays that
could result in claims for time extension, additional finance cost among others.
The Key performance indicators (KPIs) will usually have pre-set limits on when to
trigger an alert. Those limits are usually set based on past experience as well as

best practices and industry trends. Therefore, if the performance values reported by
those KPIs are not correct or not valid because of the delay in reporting them, the
decision made will not only be of no value but could even harm the project.
Enforcing a formal audit of quality best practices
There is a growing trend among many organizations to adopt ISO International
Standards to ensure that products and services are safe, reliable and of good
quality. They look into ISO International Standards as strategic tools that reduce
costs by minimizing waste and errors, and increasing productivity. Some of those
standards used by Project Owners include ISO 9000 Quality management, ISO
14000 Environmental management, ISO 31000 Risk management, OHSAS 18001
Occupational Health and safety Assessment Series and ISO 10006:2003 Quality
management systems Guidelines for quality management in projects.
One of our clients have the PMWeb Project Management Information System to
create ISO compliance matrix where on monthly basis and for each ISO standard an
audit will be performed. A pre-defined weight factor as assigned to each item in the
ISO Audit Checklist. Based on the assessment done by the authorized project owner
representative, the total ISO compliance score will be calculated which has a high
value of 100%. The complete ISO audit will be submitted using the pre-defined
workflow to be reviewed and approved. The Audit score will appear immediately on
the ISO Audit Dashboard as well as the project dashboard. The PMIS ensure that all
ISO Audit forms for all project periods and for all projects is captured on a single
database repository.

Enforcing a legally-correct project communication

One has to admit that Project Managers are not always the right individuals who
might be entrusted in right legally-correct project communication. Projects and in
particular those for engineering and construction depends on outsourcing the
project execution to third parties such as consultants and contractors. This
outsourcing is the approach that project owners use to transfer some of the project
risks to those organizations. For each contract awarded, there are terms and
conditions that both parties of the contract should abide with the full. Whether the
conditions of contract are based on FIDIC, NEC3, AIA or any other form of contract,
the conditions of contracts sets notification notices that parties of the contract
should abide with. Those notifications are legal and need to comply with the specific
clauses that they relate to.
To eliminate the risk of drafting or failing the draft the legally-correct notifications
and communications, the project owner need to adopt the same best practice of
document templates. Some of the project owners are retaining the services of
qualified legal firms should they do not have this experience in-house to help in
drafting letter templates that are aligned with the contract clauses. This will ensure

that that the project manager will use the proper communications that will protect
the interest of their organization.

Enforcing a formal appraisal of companies and project management team

members
Without formal appraisals of how companies and project team members are
performing it will be hard to identify opportunities to improve as well as
communicate

the

message

that

High

Performing

Organizations

are

the

organizations want to continue to do business. The appraisal should be based on

objective goals that can be measured such as compliance with quality standards,
Health, Safety and Environment, Sustainability, being proactive in solving project
issues among others.
Similar to other document templates, the PMWeb PMIS was used to develop a form
for the appraisal of contractors and consultants as well as project team member.
The form lists the different areas that an appraisal needs to be carried on. This form
when completed will be formally submitted for review and approval. The frequency

of this appraisal process vary depending on the organizations policy but what is
important that all appraisals for all stakeholders for all projects and for all periods
are captured and stored on a single database repository. This will enable producing
reports and dashboards that would report on this database in the desired format.

Enforcing a robust document management system

During the project life cycle stages there are so many documents that get
exchanged between the different project stakeholders. Those documents come in
different formats. Some are scanned communications, others are electronic files of
different file formats while others could be videos and videos. Those documents
could be interrelated to each other, could be a different version of the same
document or could be attached to document templates generated in the Project
Management Information System (PMIS). Those documents need to be stored in a
folder based structure that is identical to the physical filing system that a project
has. The folder based structure not only helps in finding and reviewing related
documents but also help in setting access rights to those folders.

Today, many project owners use PMWeb Project Management Information System
(PMIS) as their projects filing and document management system. Many of those
project owners also have their own corporate electronic document management
systems (EDMS) nevertheless they do not want other stakeholders to access the
corporate EDMS. They want to completely separate the projects document
management repository from the corporate document management repository.
Having a complete storage of all project documents enable the project owner to
search and locate any specific communication or document. It will enable the
project owner to make better decisions as there is no missing documents that could
affect the outcome of their decision.

Therefore, if you are interested in putting an end to project fraud and have
committed to develop the policies and procedures as well as develop the qualified
project team to support this initiative, having an integrated Project Management
Information System (PMIS) is a must and not a choice.

ABOUT THE AUTHOR

Bassam Samman PMP PSP EVP GPM

Founder/CEO CMCS| Encouraging Accountability & Transparency While

Discouraging Ambiguity & Fraud in Delivering Projects
Bassam holds a Bachelors Degree in Civil Engineering from Kuwait University and a
Masters Degree in Engineering Administration from the George Washington
University. He has attended executive management programs at Harvard Business
School (HBS) and London Business School (LBS). He is a certified Project
Management Professional (PMP), a certified Planning and Scheduling Professional
(PSP), Earned Value Professional (EVP) and Green Project Management (GPM). He is
thoroughly experienced in Project Management including project control systems,
project collaboration and management information systems, risk management,
construction management, claims management, strategy execution among others.
Bassam has 35 years experience in Project Management Consultancy and he is the
CEO and Founder of CMCS.