Project Management Strategic Issues (D39PS)

Lecture 2: Evaluating Project Management Success

Dr A W Brown
Room 2.15EC
 Assessing Project
Management Success

Area’s for Discussion

What do we ‘really’ mean by Project Management?

Does PM work?

How do we decide?

Does PM add value to the construction process?

Is PM flawed?

Can PM deliver?
Project Management Success

What do we really mean by Project Management in Construction?

Study Task
Work individually, or split into groups of approximately 5 where you sit.

Prepare a single sentence which you believe fully defines what

is meant by the term ‘construction project management’.

Also, summarise when you would consider a construction

project to have been ‘project managed’.
What do we really mean by Project Management?

To develop a satisfactory understanding of project management, we

first need to define a project:-

BS6079:2000: “A unique set of co-ordinated activities with defined

starting and finishing points, undertaken by an individual or an
organisation to meet specific objectives within defined
schedule, cost and performance parameters”

FEWINGS: “Features of a project include non- repetitive, goal orientated,

holding a particular set of constraints, measurable output and
changes something through the project being carried out”

KERZNER: “A project can be considered to be any series of activities and

tasks that:

• Have a specified objective to be completed within certain

specifications.
• Have defined start and end dates
• Have funding limits (if applicable)
• Consume resources.
What do we really mean by Project Management?

‘Project Management’ itself is both a confusing,

misused and very much abused term!!

KERZNER described project management as:

“Project Management is the art of creating the illusion that any

outcome is the result of a series of predetermined, deliberate
acts when, in fact, it was dumb luck” !!!!
What do we really mean by Project Management?

Modern Definitions of Project Management (Probably familiar to everyone here!)

CIOB: “The overall planning, co-ordination and control of a project from

inception to completion, aimed at meeting a clients requirements in order
to produce a functionally and financially viable project that will be
completed on time, within authorised cost and to the required quality
standards”

MEREDITH & MANTEL:

“…the project manager is expected to integrate all aspects of the project,
ensure that the proper knowledge and resources are available when and
where needed, and above all, ensure that the expected results are
produced in a timely and cost effective manner……….we often refer to
the project manager as a ‘super-manager’

SHTUB et al:
“…project management deals with a one-time effort to achieve a focused
objective”

KERZNER:
“Project Management is the planning, organising, directing, and
controlling of company resources for a relatively short term objective that
has been established to complete specific goals and objectives…”
What do we really mean by project management

Project Managements origins and subsequent

development reveals that it depends on two main
areas of expertise;

These are:-

Organisational Design: originally focused on horizontal or matrix

management structures as opposed to hierarchical or vertical
management structures.

Systems Management, Planning and Control: developed slightly

after organisational design focusing on the effective use of objective
orientated tools.
What do we really mean by project management

The ISO 10006 PM model divides the project management

processes into ten sub
processes :–

strategic processes,

interdependence processes,

scope related processes,

time related processes,

cost related processes,

resource related processes,

personnel related processes,

communication processes,

risk management processes, and

purchasing processes.
What do we really mean by project management

Project Management is Project Management is

concerned with Organisation concerned with systems for
and Integration planning, monitoring and
Control

Matrix Organisation The Project Evaluation and Review

Integration Technique (PERT)
Differentiation Critical Path Management (CPM)
Leadership Work Breakdown Structures (WBS)
Team Building Planning, Programming, Budgeting
Coalition Management System (PPBS)
Mobilisation of resources Earned Value Analysis (EVA)
Quality Assurance (QA)
Value Engineering (VE)
Technical Data Management (TDM)
Risk Assessment/ Management
Resource Mapping and Levelling
Integrated Logistic Support (ILS);
Graphical Evaluation and Review
Technique (GERT).

Strategic Operational
Does Project Management add ‘value’.

For construction clients, the PM consultant or organisation (whether

internal or external) represents an additional transaction cost.

To be worthwhile, PM must demonstrate net additionality

Does PM succeed in this goal?
Does PM add value?

What do you think? Does PM in the construction

sector deliver net additionality (enhanced value)?

Study Task
Once again, work individually, or split into groups of approximately 5
where you sit.
Does a project management organisation add value to a construction project
when engaged by a client organisation and what criteria are you adopting to
base your assessment on?
Does PM add value- How do we know?

What criteria should we use to determine whether or not PM adds

value?

The end result of the construction process is a physical product.

The performance of the construction process can be measured a
number of ways that include assessing both the product and the
process.
Performance criteria
What criteria should we adopt in assessing whether PM adds value

This is a subject of considerable construction management

research:-

Bennett, J. Input/output model.

Meredith & Mantel. Qualitative + Quantitative.

BIC Process + Product

Brensen Soft data + Hard data

Sink Seven separate performance criteria

Ogelsby Four separate performance criteria

Alercon Gardenes Single multi-attribute performance
model.
Performance criteria
What criteria should we adopt in assessing whether PM adds value

Time objectives Costs in use

Cost objectives Maintenance needs
Quality objectives Commercial Profitability
Efficiency Value
Productivity
Effectiveness
Innovation Holistic (Multi-criteria)
Aesthetics Measure?
Quality of work life
Quality of product
Technical Standards
Functional performance
Achievement of Health and Safety
requirements
Performance criteria
What criteria should we adopt in assessing whether PM adds value

Research indicates that:-

• There are often good reasons for adopting a less than

comprehensive measure of performance. (Bennett, J.)
BUT:-
• Performance evaluations based on single attribute
performance criteria must be very carefully designed to
make sure the criteria used are appropriate to the
purpose of the evaluation.
Evaluating PM success

To decide which of these many performance criteria are appropriate

when measuring project management’s influence on project success,
we need to address three main issues:-

What does the client expect when they commission the services
of the Project Manager? (Satisfaction = perception –
expectation)

What can the PM be reasonably expected to to deliver?

(PMBoK + earlier definitions)

What are the contractual/ professional standards applied to

PM’s when engaged to manage projects on the behalf of
clients? (Obligations and contractual liabilities).
Performance criteria
What criteria should we adopt in assessing whether PM adds value- Clients perception

Time objectives Costs in use

Cost objectives Maintenance needs
Quality objectives Commercial Profitability
Efficiency Value
Productivity
Effectiveness Holistic (Multi-criteria)
Innovation Measure?
Aesthetics
Quality of work life
Quality of product
Technical Standards
Functional performance
Achievement of Health and Safety
requirements
What can the PM reasonably be expected to deliver?
Earlier Definitions of Project Management:-

CIOB: “The overall planning, co-ordination and control of a project from inception to
completion, aimed at meeting a clients requirements in order to produce a
functionally and financially viable project that will be completed on time, within
authorised cost and to the required quality standards”

MEREDITH & MANTEL:

“…the project manager is expected to integrate all aspects of the project,
ensure that the proper knowledge and resources are available when and where
needed, and above all, ensure that the expected results are produced in a
timely and cost effective manner……….we often refer to the project manager
as a ‘super-manager’

SHTUB et al:
“…project management deals with a one-time effort to achieve a focused
objective”

KERZNER:
“Project Management is the planning, organising, directing, and controlling of
company resources for a relatively short term objective that has been
established to complete specific goals and objectives…”
The most appropriate criteria

From our analysis of what PM is and how it is defined we have already seen
that PM is fundamentally (and inescapably) concerned with the delivery of
time, cost and quality targets.

Therefore, we can justify the position that the most appropriate

criteria for measuring whether PM is successful are:-

Does PM deliver projects on time?

Does PM deliver projects within budget?

Does PM deliver projects without defects (Quality from a management

process perspective)?

Gowan and Mathieu (2005); Lord Fraser (Fraser 2004); Cook-Davies (2002);
Kerzner (1998); Egan (Rethinking Construction, 1998); Wright (1997); Turner
(1997); Pockock et al (1996).
Considering the general performance of construction projects….

Think back to the industry performance data

that we studied last week.
The answer to our question.

Based on the performance figures that we

studied last week, sadly, the answer to our
question of whether or not PM adds value would
appear to be NO!
What If?....

Maybe things would be even worse if it weren’t for the PM!

We need a study that compares projects that had PM with projects

that didn’t so we can be sure that it is PM that fails to add value.
A path model which measures the results for Consultant Led PM projects and compares
these with traditionally managed (non-PM Projects)

E1
0.859 0.830 E3
RK E2 0.743 E6
0.899

TC VA QE
+0.899 -0.372
-0.500

0.816 E4

+0.478

PM PR TE
+0.648 +0.691

RK Risk PR Procurement
TC Technical Complexity TE Time Effectiveness
PM Project Management QE Quality Effectiveness
VA Variations to Contract 0.865 E7
Where does this leave us?

The evidence that PM does not appear to make a significant

difference to the outcomes of UK construction projects (other
than in terms of time), must be of just a little concern to us!!

The model used earlier suggests that unless time is the primary
performance criteria used by a client to represent value, PM is
simply another additional consultant cost that offers no material
benefits…….

What is the problem and what can we do about it?

Possible explanations

There are four:-

The BOK concerning PM is not sufficient to permit project

managers to deliver projects on time, to the required cost,
without defects.

The tools and systems developed to help PM achieve its

primary goals are lacking in some way and are not equal to
the task.

Project Managers are, on average, incompetent!

There are frequent failures (either at project level, or at

industry level) to implement Project Management in a way
that allows it to perform as could reasonably be expected.
Possible explanations

There are four:-

The BOK concerning PM is not sufficient to permit project

managers to deliver projects on time, to the required cost,
without defects.

The tools and systems developed to help PM achieve its

primary goals are lacking in some way and are not equal to
the task.

Project Managers are, on average, incompetent!

There are frequent failures (either at project level, or at

industry level) to implement Project Management in a way
that allows it to perform as could reasonably be expected.
Solutions to PM performance difficulties

Are likely to be drawn from understanding and learning from

Project Failures.

Numerous studies have been undertaken, both academic

and practitioner based.

Emerson, Banwell, Latham, Egan…..Construction Clients

Forum, Accelerating Construction….

We discussed this last week.

Commonly cited reasons for PM Failure

Operational focus with lack of appropriate attention to strategy, organisation

and leadership.

Failure to manage the external environment.

Lack of a clear link between project and organisations priorities.

Lack of integration.

Lack of clear senior management leadership and support from the client.

Lack of effective engagement with stakeholders.

Lack of understanding, contact, management and leadership of the supply

industry.

Lack of skills in Project Management or Risk Management.

Lack of effective project team integration and organisation.

Ending on a positive note…

When Project Management pays proper attention to known strategic

issues that were key in its original evolution, such as leadership,
team building and integration, and organisational control, it works!!

Numerous examples of successful projects demonstrate the

ingredients necessary for successful project management.

The construction industry is changing. Best Practice

Demonstration Projects set up after Egan perform considerably
better than industry average and leave 81-91% of clients satisfied
with the product of the project and 76-86% satisfied with service.

BUT, the evidence is abundant that if we do not pay appropriate

attention to strategy, projects are likely to fail in one or more ways.