Strategic project planning

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A new role of the project Owner

The “new” Project’s Owner must play a different role, by leading the strategic project planning to design and implement the project management system.

The next future shall be characterized by projects Owners (Clients) even more sophisticated, who need to become effective project management “strategists” to drive success in their capital projects. This will lead to new models of project management organization and a re-thinking of the role of Project Management Consultancy, which should be able to extend the services provided, acquiring competences and specific skills.

Latest researches confirm that Owners are not satisfied of the project’s performance:

(Read this: here )

Strategic project planning versus project failure: Strategic project planning of a complex project is a critical phase, during which the project ‘Owner operates the strategic choices that will shape the entire life cycle of the project. The strategic project planning phase, from Owner view point, covers three sub-phases:

  • Pre-contractual phase (strategic phase): Provide support to the Owner in the chosen of overall program organization (model of project management, project procurement methods (i.e. project delivery methods), risk and quality polices.
  • Contractual phase: Lead the contracts development and project management system set up, by collaborating with legal advisors to guarantee the development of the whole set of contract‘s framework: project management procedures and relevant contractual specifications, governing risks and strategies defined in the previous phase.
  • Pre-planning phase: Verify Scope definitions and general contractor’s organization alignments, in order to drive the right implementation of the contractor of the Contractual project control system (i.e. alignment).

The strategic phase is the real critical period when the project’Owner has to:

  1. develop of the project procurement strategy (i.e. select the project delivery method), and
  2. define the project management model through which the project’s Owner wishes (or can) operate.
  • Project Management Advisor (PMA) The advisor intervenes when it is requested by the Owner, by limiting the intervention to the issue of “recommendations” and “advises” on specific issues and / or ongoing activities, which however may require considerable expertise and experience.
  • Project Control Consultant (PCC) A PCC is responsible for the design and setup of the system of project control (requirements and procedures of cost control, scheduling, progress measurement and control and accounting, coordination procedures-communication and reporting.) The PCC usually manages the system for the duration of the project, elaborating periodically progress data provided by the Owner.
  • Project Management Consultant (PMC) The PMC acts as a direct extension of the Owner, which assigns (contractual liability) to the PMC the project management of the whole project-cycle life. PMC typically administer and manage all activities of the project, with the exception (usually) of the issue of payments.
  • Project Management Team (PMT) In this situation, the staff of the consultant is functionally integrated with the staff of project management of the Owner. In other words the Owner integrates its staff with the resources provided by the Consultant that provides the skills required, in number and level of expertise. PMT has fewer responsibilities than PMC.

Project procurement strategy: choices of project delivery methods 

Project management model: In the case of huge and complex capital investment, which are strategic to the core business of the organization, (as for example a new Metro program, a new pharmaceutical production plant), the Company needs to get organized to perform complex program/project management. In this case the most probable choose regarding the project delivery method will be the Design-Build model but this entails some implications in terms of competences (i.e. knowledge) and organizational set up. One of the key choice is the type of project management assistance. Basically there are the following models:

Conclusions:  few project management consultancy firms are capable to offer a comprehensive support during the strategic project phase, but there could be also a conflict of interest, as the “consultancy” which supports the project’s Owner during the strategic project planning, might be leaded by own interests and strive expensive but ineffective solutions to the project’s Owner.

These two strategic choices are interrelated, rather than two separate phases, as the model of project management (in terms of organization, processes and tools) depends upon the project delivery methods, and this depends upon the permanent type of the Company, its strategy and the importance of the specific program (i.e. the capital investment project) 

Commitment of the Project’s Owner: the choice of the right type of project management assistance is responsibility of the Owner, and the choice depends upon the nature of the business and the type of organization. In particular, the selection between PMC vs. PMT is critical and the wrong interpretation of the role and scope of work of the “consultant” might create serious problems to the management of programs/projects. From the other side, I believe that project management consultancy firms should therefore rethink their role, by acquiring competences and skills to be able in supporting the project’s Owner during the strategic project planning phase, but in the mean time, there could be a conflict of interest, because the Consultant might be leaded by own interests and strive expensive but ineffective solutions to the project’s Owner.

Conclusions: a new role of the project’s Owner

The strategic project planning phase entails the selection of the project procurement model ( i.e. project delivery method), the development of the contract strategy and the definition of the project management model (with the choice of the proper form of the project management assistance). The project management strategy must be therefore transferred in the design of Contracts and translated into the right contract terms. The project’s Owner need to become an effective “project management development agent” to drive success in their capital projects, and maintain the full commitment during the whole life cycle of the Program.

Thank you,


wp_9719364

I am a chartered civil engineer and certified CCP (cost engineering and total cost management) at AACE International, with thirty years of experience in project management of the construction sector. I deliver expert planning, programme management and project controls on multibillions-Euro infrastructure programmes, including highways and railways, metro, air terminals and complex buildings (commercial, residential, schools), with some experience in oil & gas and power. I worked in advanced contexts of project management (from matrix organizations of EPC contractors to large employers organized to manage complex capital projects), by undertaking various roles in the field of project management / controls and contract management; this diverse range of experiences allowed me to gain knowledge on the various components of project controls (schedule, cost estimating, budgeting and cost control, progress and performance measurement, risk and claim management). I am an Italian citizen, currently in Italy.

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