Managing Changes in Construction Projects

Scope management is responsible for the majority of project failures. In construction project, scope management deals with the analysis and approval of changes. D.M. Dillts & K.R. Pence (2006) found out critical factors in project failure related to changes, as follows:

• Change in initial project expectations
• Change in overall project importance to the organization
• Change in need for the project (by the organization)
• Change in overall complexity
• Change in overall time to completion
• Change in user needs
• Change in overall project resources (people, material, funds)
• Change in technical difficulties
• Change in funding source
• Change in regulatory problems
• Internal politics (within the organization)
• External politics to the organization
• Change in commitment by project champion

Based on several researches, the main cause of construction changes are investor's requirements for higher standards in relation to those planned.  The investor usually adds additional needs for a project. The second cause is partially incomplete project documentation, followed by change of technology caused by lack availability of designed technology in the market. Lack of concrete construction material in region caused by high or low current demand and lack of financing for the timely completion of a project are next causes. The other causes are: Contractor's change requests for easier operations, higher income, within the allowable limits for the project; Project documentation alignment with new regulations adopted in the period between project design and realization. 

Scope management is one of the angles of the project management triangle (cost, time, scope), which means that together time and cost it represents one of the most significant constraints and focuses on the project. There can be no project success without a systematically and professionally appointed system for managing the scope

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Project's Scope Change

In project management concept, scope management is directly connected with managing the changes required during the execution of projects, arises from the need for efficient and effective control over projects. Several researches on scope and change management showed the common causes of project's scope change, as follows:

1. Poor scope statement - incomplete and ambiguous scope statement, inconsistent with project assumptions, deliverables does not address the customer required (missing, unnecessary or inaccurate deliverables) will cause project scope changes. 

2. Poor requirements definition - Deliverables are correct, but the project was incorrectly defined in the first place will cause the scope changes. Because the more gaps that you have in your requirements, the more scope changes you are likely to have. Please be noticed that requirements definition and requirements management play important roles on project success. There are several causes of poorly defined requirements, i.e. ineffective or wrong techniques used to gather requirements, communication breakdowns between analyst and stakeholders, requirements are not aligned with project scope, requirements do not address complete process work flow, documented requirements are not meaningful to targeted audience, requirements not reviewed for inconsistencies, requirements not verified for correctness and completeness, missing stakeholders and users sign-off without a "real" understanding of what the documented requirements mean.

3. Customer or stakeholder request - due to the dynamic nature of business world today, things can change quickly. Change in business will cause customer or stakeholder request change to the project. Example of business change that can alter a project's scope include: available budget/funding for the project, new government regulations, changing target market for the product, time-to-market pressures, new business opportunities, changing customer priorities, unexpected market or world events. In order to minimize unnecessary changes in project scope, early in the project, you should define and publish the criteria and the timeline for accepting discretionary project scope changes.

4. Value added change  - For example, a team member may find a better, faster, less expensive way to do the work and still meet the project deliverables.

5. External condition - For example changes in regulatory requirements, changes in the organization's priorities, or changes in the market or technology - are outside of the project's manager control but must still be accommodated.  For instance, there is new technology available during a project that will significantly meet the needs of the customer much better than what is currently planned.

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Pass PMP Exam on First Try

As a trainer, one of a good news for me when one of your training participant texting and inform you that she/he passed the PMP exam. Yes, yesterday I've got a very good news, because Mba Trisni Sophiwati has passed PMP exam on her first try. I thought she is the first Indonesian that passed PMP exam using PMBOK 5th edition since it launched and the exam is using it on August 1st, 2013.

Here is her testimonial that already published to in PMI Indonesia Chapter newsletter Excellentia, since she is also a member of PMI Indonesia Chapter.

"First of all I would like to thank my previous trainer Mbak Alin, for making learning and training much easier. First day with two thick books seemed worrying to see and to learn, since both books looked better beng a pillow hahahhaa. Alhamdulillah I passed the PMP test on November 21^st, 2013. During the exam, I noticed that none of the questions came the same as the practical questions so far. However, the practices also helped to understand wordings, cases and tricks as they may arise. Many questions came on RISK and CHANGE Request. Process steps, method (monte carlo), risk register, even I noticed all risks treatments case were there on the exam (avoid, enhance, transfer, accept, mitigate, exploit, and share). Inputs and Outputs from single process also were there but not much questions, thanks GOD! But it’s true during the entire life of the project, we must deal with changes either scope, schedule, resources and everything are related to risks.

I understand that every single person taking the test may have different questions and case, but it really helps during the first 3-5 minutes to jot down all processes, EVM formula, or words that sounds strange and you already found out what those words functions are, like Delphi technique, Monte Carlo, RACI, Herzberg, etc., only the words that catch your attention. And if I may give tips or tricks, the exam is not only testing our PMBOK understanding but also endurance and concentration, so focus on question and read all available choices. Sometimes we found the answer is B, and we never look at C and D. If we look once again, D actually better and best compare to B. So read all available choices. If we found it difficult and takes more times, marked it, pass to next question. We can go back anytime when we were finished. I started to extensively studying each knowledge one week before the exam, during working hours, since it’s hard to study at home, but one day before exam, don’t study too much, only focus on the points. Above all relax and leave it to GOD as we already study our best"

Let's make Indonesia better. Be a professional and certified yourself, because the world needs more skills not only knowledge.....

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The Benefits of Professional Certification

Is it your organization required you to hold international professional certification? Have you ever considered increasing your value by holding the various certifications? Generally speaking, professional certification has a significant importance in the project management (PM) industry, especially for projects where large amounts of cash (or risks) are involved. Certification refers to the recognition of the skills, knowledge, and/or competence of a practitioner working in the field. Currently, in Indonesia in some industries, there is a regulation that a project manager has to hold the international certification. Besides IT and Telecommunication industry that already encouraged project managers to hold professional certification, Oil and Gas industry and Construction Industry in particular for companies that are running EPC (Engineering Procurement Construction) projects, tends to have a project manager that hold professional certification in project management.

Project management certifications come in a variety of essences. Three of the most internationally recognized are:

•         Project Management Professional (PMP) that is the most popular certification in Indonesia that is offered by the Project Management Institute (PMI). Starting to be popular in North-America, it is gaining more and more recognition around the globe. 
•           PRINCE2: stands for PRojects IN Controlled Environments, and is extensively used by the UK Government. It is also widely recognized and used in the private sector, both in the UK and internationally. The PRINCE2 method is in the public domain, and offers non-proprietorial best practice guidance on project management. 
•          IPMA : stands for the International Project Management Association, a leading not-for-profit project management association based in Europe, and is one of the thought leaders in project, program, and portfolio performance competence. The IPMA certification system offers benefits both for the organization and the individual project manager. 

What are the benefits of obtaining a Project Management Certification? Here are some benefits that you can gain once you are certified:

1-    Competitive Advantage and Opens Doors to New Clients

Having the certification is a great asset to your resume. It sets you apart and differentiates you from others in your field and other job applicants when competing for a promotion or new position. This competitive advantage is especially beneficial in today’s extremely competitive and tough economic marketplace. According to the PMI, project management jobs have also proven to be more resistant to the up & downs of the global economy. The number of certified project managers is increasing year over year with membership in the Project Management Institute (PMI) reaching nearly 583,806 in 2013. As these numbers continue to rise so do the number of companies who recognize the value of working with certified professionals. Having a certification from the PMI, or other type of project management certification often makes the difference in whether or not a prospective client is willing to meet with you. It can also be an influential factor in a client deciding whether or not to hire you over another consultant or freelancer.

2-    Expertise

Certifications provide a solid foundation. The information and knowledge gained from the coursework and case studies provides you with the most up-to-date industry knowledge and technical strategies from which to help guide and support you in your projects and allow you manage all aspects and risks more effectively.

3-    Increased Earning

The time and energy you invest in becoming certified will financially pay you back many times over with higher paychecks. According to PMI’s Project Management annual salary surveys, project managers with certification tend to earn thousands of dollars per year more than their project manager counterparts who have not obtained their certification.

4-    Offers International Recognition

If you work with international clients or companies who have a global presence, a PMI certification is now recognized as meeting international standards and requirements. In early 2007, the PMI was the first project management association in the world to earn ISO/IEC 17024 accreditation for its Project Management Professional (PMP) accreditation program from the International Organization for Standardization (ISO). The ISO was launched in 2002 but is now recognized and endorsed by more than 85 countries and ISO is considered an important benchmark in the international business community. Hiring PMP-certified consultants is now especially beneficial to global organizations because they can reference the ISO 17024 certification.

5-    Correcting Bad Habits

Learning updated Knowledge Areas and techniques will help correct any bad habits you may have picked up over the years working in a non-structured environment and increase your competencies, especially for those working in organizations which have not focused their efforts on having a PMO in the past. You will become a more valuable employee and be seen as a leader within your organization. It will also allow you a great opportunity to establish the groundwork to implement a more sophisticated project management-working environment within your organization.

6-    Credibility

Obtaining a Project Manager Professional (PMP) certification requires that you meet specific, stringent guidelines that measure your experience, education and professional knowledge. In addition to taking a test, you must also have three to five years of experience (depending on your educational background) as a project manager and have accumulated 4,500 to 7,500 hours leading and managing projects. Certified professionals also agree to abide by an industry-accepted code of ethics and professional conduct. Becoming PMP certified is not simple, but the designation represents a high-level of professionalism and experience, which immediately boosts your credibility as consultant.

There are more and more government organizations around the world expecting their projects to be managed by professional project managers who have a certification from a recognized institution. Certification demonstrates your commitment to a high level of professionalism, your dedication to quality project management standards, and a commitment to continued learning. These outstanding merits aid in boosting your credibility and prestige within your organization, with existing clients, and become great assets when bidding on new prospective projects.

Visit our website www.avenew-indonesia.com for the information about project management certification

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Project Leadership

What is project leadership? Project Managers manage project and people. This role requires management and leadership skills where the emphasize lies on managing the project data and leading the project team.

Couple days ago, I attended the Project Management Symposium in Philippines and I listened to a very interesting presentation about Project Leadership by Dr. Shaligram Pokharel and I learned many valuable things from him. He said that as a leader, you have to create the value and as a PM, you have to create a group leader. To be a great leader you should have respect, trust and commitment. Leaders should set themselves by example and you need to show your team that you can do it. Yes, that is right. It’s a leader not a boss.

Remember the difference between a boss and a leader; a boss says GO! and the leader says LET’S GO! –E.M. Kelly-

As a leader, in order your team follow your direction, you have to show to them that you already did the right things. You also have to be a visionary and help people to reach their goal. You cannot only direct them to do their task, but you have to support and facilitate them. Shaligram also said that leaders have to prepare, do hard work and learn from failure. I am not saying that I am good leader, but when I was assigned as a project leader, I did harder than my team, I also learned from the previous leader failures of similar project. Because the previous leader did not set her self as an example, she was lucky enough that most of her team is creative, responsible and hard working that did not need to be supervised. She failed to lead us her team member, she even had a light conflict with her team. So, what I learned from this failure, I was trying to make sure my team members work together in different side. I was not worry about the fail but I prevented that it won’t happen again.

 

That’s only a story about one of my experience. Now let’s talk about common leadership styles. Management and leadership style can vary. Some of them are:

Charismatic: Charismatic Leaders posses a very persuasive personality that attracts followers through charm. These leaders show great confidence in their followers and create a group image that is far superior to all others.

Participative: Participative Leaders seek to involve other people in the decision process, possibly including subordinates, peers, superiors and other stakeholders.

Situational: Situational Leaders do not just have a single preferred leadership style. Factors that affect situational decisions include motivation and capability of followers.

Transactional: Transactional leaders create clear structures that make clear what is required of their subordinates. These leaders reward subordinates who following orders. When things go wrong, then the subordinates are considered to be personally at fault, and are punished for their failure.

Transformational: Transformational leaders have a vision for the future that will excite and convert potential followers. These leaders try to convince others of their vision. They are always visible and act as role model. They also make continued efforts to motivate and rally their followers, constantly doing the rounds, listening, soothing and enthusing.

Autocratic: Autocratic leaders make decisions without consulting with others or considering any other view.

Democratic: Democratic leaders involve all people in the decision-making, although the process for the final decision may vary from the leader having the final say to them facilitating consensus in the group.

Laissez Faire: Leaders with a Laissez Faire leadership style minimize their involvement in decision-making, and hence allowing people to make their own decisions, although they may still be responsible for the outcome.

Leaders can adapt to different styles but need to make sure to stay their true self. So which one are you? Kippenberger states “how we lead is a reflection of our own character, personally and experience.” Leaders need to understand who they are in order to be able to adapt to different leadership styles. Projects with their unpredictable nature require leaders that are able to adapt to different leadership styles.

Project management is a team-based approach. Hence the project scope and project plan cannot be defined and developed in isolation. Autocratic leaders would come up with a plan for the team without consulting the team members. Leaders with a laissez faire leadership style would let the team figure out how to respond to the challenges of a project without providing any guidelines. Although leadership styles like the autocratic or laissez faire leadership behaviour can be observed in some organization they are not well suited for leading projects and project team members.

Democratic leaders go through an elaborate decision finding process that involves several stakeholders of different organizational background and levels. As a result democratic leadership behaviour often leads to extreme delays in large projects, because all team members get involved in every decision process of a project. The more people are part of a project team the longer it takes until a decision is made.

Charismatic leadership works often well at the beginning of a project when it is important to get support from the overall organization. Charismatic leaders are driven by their believe that their vision is correct. Hence Charismatic leadership works as long as the leader’s vision is aligned with the project and organizational goals.

Participative, situational, transactional and transformational leadership styles seem to work most effective when managing projects and leading people. Participative leaders typically seek other people views and opinions in order to form their own opinion about a situation and then make their decision. Project sponsors, for example, often make their decision after listening to multiple people in the organization. Blanchard describes the situational leadership model which includes four different leadership behaviours that are dependent on the maturity and knowledge of the employee. These are telling, coaching, supporting, and delegating. Project teams include members of different backgrounds and experiences requiring different management styles. Situational leadership seems to fit the changing nature of a project very well. Burns differentiates between transactional and transformational leadership behaviours. Transactional leaders communicate clear goals to their subordinates. This leadership style relies on organizational structures and processes to help resolve problems. Well organized projects have a structure in place that allows the project teams to solve problems. Transactional leadership works well for some aspects of a project such as e.g.: managing changes through a change management committee. Transformational leadership style empowers people to do their work. Transformational leaders facilitate the process of people to learn and to seek change and improvement [6]. In general this leadership style is most applicable for organizations that manage projects through self-managed teams.

References:

1.    InterGlobe Consulting contact: info@interglobeconsulting.com

2. KOPPENSTEINER S., Leadership concepts in software project management, proceedings of IDIMT 2008, Czech Republic.

3.    CHANGINGMINDS.ORG, website http://changingminds.org/disciplines/leadership/styles/leadership_styles.htm, 2008.

4.    GOLEMAN, website http://www.valuebasedmanagement.net/methods_goleman_leadership_styles.html , 2008.

5.    KIPPENBERGER T., Leadership Styles, Capstone Publishing, Oxford, United Kingdom, 2002.

6.    BLANCHARD K., Management of Organizational Behavior: Leading Human Resources, Prentice Hall, New Jersey, USA, 2000.

7.    MACGREGOR BURNS J., Leadership, Harpercollins, New York, USA, 1979.

8.    BYHAM W.C., ZAPP The lightening of Empowerment, Ballantine Publishing Group, Toronto, Canada, 1998.

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Risk Management Series (2)

In the previous post, I already described the certification of Risk Management Professional (PMI-RMP) and certification requirement. On this edition, I will share brief knowledge of risk management.

Basic Concept of Risk Management Process

Basically, risk management process is aiming to help control projects by reducing uncertainty events. There are two key areas that cause risks, assumptions and estimates. I highly recommend to trying identifying as many risks as possible. In risk management, there are two types of risks – known risks and unknown risks. As project manager, you can manage risks you are aware of. However, unknown risks are not easily identified and often occur at the most inopportune times. So, find all the risk – or they will find you!

Risk management identifies and analyzes individual risks and overall project risk. And risk management should be conducted in accordance with existing corporate policies and procedures. The objectives or risk management are to increase the probability and impact of positive events and decrease the probability and impact of negative events. The aim is to identify and prioritize risks before they occur, and provide action oriented information concerning risk to all key stakeholders.

You have to remember that Project Risk Management is NOT an optional activity, but MUST be applied to every project!

Risk management is not a one-time-event. It is iterative. It must be repeated throughout the life of a project. You will identify new risks as the project progresses. Emergent risks are defined as risks not identified initially. There are risks discovered after the project begins. In addition, risks initially identified may become candidates for closure and deletion from the Risk Register.

Key to Success

The following are key success factors that impact the success of risk management program:

§  Value of Risk Management: It is imperative to ensure all stakeholders understand the value of an effective Project Risk Management program and the return on investment from a stakeholder’s level of effort. If this objective is not met, resistance from stakeholders can be expected. The Project Manager is responsible to ensure stakeholder buy-in.

§  Stakeholder and Organizational Commitment: All stakeholders must be committed to perform their roles and responsibilities supporting effective risk management. The organization must be committed to risk management as a whole.

§  Communication: Open and honest communication is key to success. Include all key stakeholders in the Project Communication Plan to ensure maximum risk management effectiveness,

§  Integration: Risk management must be integrated with all project management activities to be successful. Risk management cannot be an isolated event.

Project Manager’s Role in Risk Management

As a project manager, s/he has to ensure project risk management is accomplished at an appropriate level to ensure project success. Project Managers are responsible to manage risk on a daily basis in whole process groups, to ensure a risk management plan is developed and approved, to communicate effectively all risk status to all key stakeholders, to encourage senior management to support the Risk Management Process, to understand stakeholder attitudes, tolerances, and thresholds, and to approve risk responses then to ensure those responses are approved and incorporated into the Project Management Plan.

Some Potential Project Risks in Construction

Since my background is civil engineering, I would like to highlight some potential project risks in construction. There are typical risks on construction project include:

§  Failure to complete within the stipulated design and construction time;

§  Failure to obtain the expected outline planning, detailed planning or building code/regulation approvals within the time allowed in the design programme;

§  Unforeseen adverse ground conditions delaying the project;

§  Exceptionally inclement weather delaying the project;

§  Strike by the labour force;

§  Unexpected price rises for labour and materials;

§  Failure to let to a tenant upon completion;

§  An accident to an operative on site causing physical injury;

§  Latent defects occurring in the structure through poor workmanship

§  Force majeure (flood, earthquake, etc);

§  A claim from the contractor for loss and expense caused by the late production of design details by the design team;

§  Failure to complete the project within the client’s budget allowance

It is important to distinguish the sources of risks from their effects. Ultimately, all risk encountered on a project is related to one or more of the following:

§  Failure to keep within the cost budget/forecast/estimate/tender;

§  Failure to keep within the time stipulated for the approvals, design, construction and occupancy;

§  Failure to meet the required technical standards for quality, function, fitness for purpose, safety and environment preservation.

In the construction industry the euphoria, optimism and excitement of a new project often leads to the All Goes According to Plan attitude. We tend to give budgets, estimates, and completion dates based upon all going according to plan. Construction has many unknowns and things rarely go according to plan. We need to be more aware of What Happens If analysis. People should be encouraged to have ‘brainstorms of destructive thinking’ where wild ideas can be thrown up about things which might go wrong, even though there is no precedent. The ideas need to be collected into a risk management process where analysis and response can be undertaken.

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