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MAY 2005 ISSUE

PROFESSIONAL DEVELOPMENT

Owner’s Role is Critical to a Project’s Success

 

To make your project a winner, you need a proven, sound plan and the wherewithal to follow it through. This step-by-step guide will help you put the planning process into motion in a manageable and logical way.

BY DR. GEORGE JERGEAS, P.ENG.
Department of Civil Engineering
University of Calgary

(First of two parts)

All projects need a degree of planning and effort from an owner and its agents. The owner is the most important participant in any project, and inevitably faces ongoing requirements and responsibilities.

This article — running in two parts, in this month’s and next month’s editions of The PEGG — provides a simplified summary of best practices in the U.K. and Canada. It is intended as a reminder of some of the key issues and concepts necessary for the successful implementation of any projects.

The article follows a five-step approach for delivering projects

1. Get started

2. Define the project

3. Assemble the team

4. Implement the project: design and construction

5. Close-out.

Each of these steps requires a number of key activities. The steps and activities are presented in a logical progression.

 

Get Started

 

Set up an Executive Project Leadership Team

This team, represented by the senior project stakeholders, would generally have the owner’s senior executive as chair. It would

  • Monitor overall project risk

  • Make decisions on major changes to the project

  • Meet at pre-scheduled times (generally once every six weeks to two months)

  • Vote on readiness for milestones and completeness of deliverables.

Designate the Project Sponsor

A project sponsor would take responsibility as the executive project team’s spokesperson and work directly with the project manager. The project sponsor would

  • Possess the skills needed to manage the owner’s role in the project

  • Maintain direct access to the people making key decisions

  • Be vested with authority to take day-to-day executive action

  • See the project through to completion.

The project sponsor must be prepared to take action in the face of unforeseen events. Issues that are the responsibility of the owner must be dealt with vigorously and effectively.

Obtain Professional Advice

The project sponsor will occasionally require professional advice throughout the project, specifically for

  • Strategy for project design and construction including risk allocation and contracting strategies — what risks is the project willing and able to bear?

  • Strategy for project monitoring and proactive approach to avoid, minimize and deal with risks and disputes

  • Strategy for teamwork and partnering

  • Appraise options, cost comparisons, benefits and risks — due diligence reports, value management and constructability techniques that would add significant value.

To fulfill the role, the project sponsor may need the services of an adviser who must

  • Know the construction process

  • Understand the owner’s business, and the part the project will play in it

  • Be free from vested interest.

The owner’s attitude to risk is particularly important, as different procurement strategies allocate risk in different ways. The more control the owner wishes to have over aspects of the project, the more risk the owner should be willing to bear. Also, while risk can be transferred to others, this will be reflected in their prices. Systematic risk management should be part of the strategy for executing any project.

Select a Project Manager

Selecting the right project manager is a key to success on projects. The project manager must

  • Understand purpose of the project

  • Have the necessary background and experience

  • Be an effective leader with proven managerial ability

  • Communicate well

  • Be consistent

  • Have credibility with team and client

  • Be sensitive to project and corporate politics

  • Be an excellent facilitator — not a dictator.

Among the project manager’s responsibilities are

  • Determining resources and skills needed, consistent with the chosen contracting strategy

  • Recommending appropriate contracts and procuring skills and resources

  • Managing and controlling resources throughout the project

  • Liaising with, and reporting to, the project sponsor on all issues.

Define the Project

Develop the Strategic Plan

As soon as practical, the project manager should secure the project sponsor’s formal agreement to the strategic conceptual plan for the project, confirming key objectives and constraints including

  • Overall scope and its constraints and purpose of project

  • Functions to be provided or accommodated

  • Quality of design, materials and construction

  • Time schedules

  • Global capital expenditure budget and cash flow constraints

  • Targets and constraints on operating expenditure and other lifecycle costs

  • Technology to be incorporated or accommodated, including equipment, services, information technology

  • Internal and external environmental requirements

  • Statutory requirements with emphasis on health and safety

  • Financial constraints and economic feasibility

  • Due diligence reports, including risk analyses and benchmarking.

Develop the Project Execution Plan

When preparing the project budget, the project sponsor should be satisfied that it contains realistic contingency sums as part of a systematic approach to analyzing and managing risk.

The plan should develop progressively, but it should be formalized and agreed upon as a project execution plan prior to major expenditure on design and construction. This will cover the

  • Contractual arrangements

  • Organizational structures

  • Arrangements for decision- making and communication

  • Health and safety plan

  • Quality plan

  • Risk management plan

  • Value management plan

  • Schedule, including all milestones and phasing requirements

  • Detailed budget and cash flow forecast

  • Project alignment and teambuilding plan

  • Procedures for stakeholder management including PR and community relations.

Dr. Jergeas has a bachelor of science degree in civil engineering from Baghdad Technical University, and he earned his master’s and PhD at Loughborough University of Technology in the U.K.

His major areas of expertise are in project management, claims and disputes, dispute resolution and team-building. He gained this experience while working in infrastructure civil engineering and building projects.

Dr. Jergeas presented on project management during the 2005 APEGGA Annual Conference Professional Development Program.

Next Month: Assembling the team, implementation and closing out.

FURTHER READING:

Construction Success: The U.K. Construction Industry Board Published by Thomas Telford, April 1997.