What is Project Control? Coverage, Reach and Project Control Manager Role

Project Control as a stand-alone discipline is often only formalized on large Projects. On smaller Projects, it is generally the Project Manager himself that effectively performs its duties. Still even when it is identified as a role its coverage and reach varies between organisations. In our new White Paper 2016-12 ‘What is a Project Control Manager? Coverage, Reach and Roles’ we take position on what the Project Control Manager should cover to be successful in effectively supporting the Project Manager during the Project’s execution.

In particular, we believe that the following areas should be included systematically in the remit of the Project Control Manager:

• Cost Control,
• Schedule Management,
• Project Risk Management,
• Main Contract Management (for Contractors),
• Document Management.

We consider that the following should be excluded:

• Procurement, because it is a major discipline by itself in EPC projects
• Accounting & Finance, to keep independence with respect to Cost Control

In terms of terminology, we prefer to use ‘Project Control’ in the singular rather than ‘Project Controls’ because we want to highlight the fact that control overall needs to be exercised on Project execution, and not just the implementation of a series of juxtaposed controls. Control needs to be comprehensive.
‘Project Services’ is often used when Procurement is part of the scope. It is also sometimes used when just Contract Management is added to Cost, Schedule and Risk. To avoid misunderstandings with organizations that use ‘Project Services’ in a very broad sense, we prefer to use ‘Project Control’.

Read our new White Paper 2016-12 ‘What is a Project Control Manager? Coverage, Reach and Roles’ to understand better the remit of Project Control and discover the details of the role coverage.

How to Produce and Update a Convergence Plan

The Convergence Plan is our recommended strategic planning tool for Large, Complex Projects. It is also an essential tool for Visual Management in the modern Project Office. In our new White Paper 2015-17 ‘How to Produce and Update a Convergence Plan’ we explain some basics for its preparation and update. The essential consideration is the level of discipline which is required when updating it. Because it uses fixed dates and deliverables it can be an extremely powerful tool when used properly.

A convergence plan can be used as part of visual management

When you are leading a Complex Project where many different interdependent contributors need to deliver in a coordinated manner, focus on convergence and be disciplined about it. Identify problems early by monitoring your buffers for convergence deliverables. Be relentless in ensuring that temporary additional resources get thrown in early if needed.

The Convergence Plan as a tool gives a high level view of the Project that can be easily communicated to the Project team, and allows the Project Manager to focus on those key high value deliverables which timeliness is essential to the success of the Project.
The most difficult part of its effective application is to have the discipline not to change the dates of the Convergence Plan gates once the Project is under way (unless there is a significant schedule rebaseline due to a change of scope or a major change in a Project milestone).

The Convergence Plan does not replace the Integrated Project Schedule which still needs to be designed, updated and forecast. Data from the Integrated Project Schedule will be used to monitor Convergence Plan deliverables.

Properly applied, the Convergence Plan provides the Project Manager with an uncluttered view of Project progress and enables the function to watch progress relative to the initial intent. It is also an outstanding communication tool within the Project team in terms of visual management.

Discover more about convergence plans in our new White Paper 2015-17 ‘How to Produce and Update a Convergence Plan’.

How to Use Different Schedules for Different Purposes in Large Projects

Like a map atlas, to navigate successfully in a Project we need to have various schedules of various detail for different purpose. We explore in our new White Paper 2015-16 ‘How to Use Different Schedules for Different Purposes’ what are the different usage of different schedule detail levels in a Project.

Like map atlases, you need to have the right level of detail for your purpose

This Paper is in continuity of our White Paper 2015-14 ‘How to Build a Proper Project Schedule Hierarchy’ where we detail how to build a comprehensive and usable hierarchy of schedules in Large Complex Projects.

Like in many instances in life, for effectiveness, it is essential to understand which tool to use for which usage. The schedule toolbox created by the schedule hierarchy gives flexibility and focus. While it is essential to maintain consistency throughout, it is also essential to make sure that Project contributors use the right schedule for the right usage. Strategic, Project coordination and Operational needs are all addressed in a properly setup Schedule Hierarchy.

Read our new White Paper 2015-16 ‘How to Use Different Schedules for Different Purposes’ to understand better which schedule to use for which purpose!

How to Relate Schedule Hierarchy Levels and Work Breakdown Structure

Schedule breakdown and Work Breakdown Structures (WBS) need to be consistent. This consistency between both structures is particularly important when designing the finer grained schedule breakdown. Our new White Paper 2015-15 ‘How to Relate Schedule Hierarchy Levels and Work Breakdown Structure’ explains this issue in detail.

This White Paper completes White Paper 2015-14 ‘How to Build a Proper Project Schedule Hierarchy’ by relating the different schedule levels with the different levels of the Work Breakdown Structure. 

For levels 0 through 3, a rule of definition is that the level of the schedule is representative of the same number of WBS levels plus one, and an additional level of detail for the represented tasks:

Level (Schedule) + 1 = Level (WBS)

Notwithstanding the formal constraints on schedule hierarchy it is always possible to create a meaningful set of schedules. A key driver is to be consistent with the WBS when building that hierarchy, and keep the level 3 Integrated Project Schedule within a reasonable level of detail.

The details of these issues and how they can be addressed practically is available in our  new White Paper 2015-15 ‘How to Relate Schedule Hierarchy Levels and Work Breakdown Structure’.

How to Overcome the Psychology of Project Failure

One of the most surprising observations one can make in the Project industry is the propensity of organizations to persist on Projects that are obviously failing. This psychological trait is observable in many human endeavors, still project-driven organizations could be expected to have a more professional approach on this effect. Our new White Paper 2015-12 ‘How to Overcome the Psychology of Project Failure and Know When to Cut Losses’ explores the psychology of project failure and gives a framework to overcome the risk of persistence on obviously failing projects.

The psychological effect of perseverance in the face of failure is in fact very widespread in many human pursuits and has been described under the terminology of ‘prospect theory’: “Many unfortunate human situations unfold […] where people who face very bad options take desperate gambles, accepting a high probability of making things worse in exchange for a small hope of avoiding a large loss. Risk taking of this kind often turns manageable failures into disasters” – as explained by Daniel Kahneman in the book ‘Thinking, Fast and Slow’.
And the more an organization has an emotional commitment with the Project, the more there is sunk cost in the endeavor, the more this effect is visible, often with dire consequences for the organization from the short to the long term.

We are all subject to this psychological tendency: it is extremely difficult to cut our losses in an endeavor in which we are emotionally involved. It is only with experience and practice that we develop the ability to overcome this natural tendency. Project-driven organizations could be expected to put in place a process framework designed to overcome this effect, for the sake of the organization.

We recommend to:

• implement a loss cutting rule with a fixed threshold (for example when projects overrun by more than 15%),
• setting up the organization to avoid persisting on a failing project, by relying on the view of people that are not emotionally involved in the endeavor.

It is essential for organizations to be organized in a way that project failure is recognized, managed by people that are not emotionally connected with the endeavor. We recommend to most of our clients to implement strict loss cutting rules and processes to avoid situations that can turn to be dramatic up to putting the entire organization in jeopardy. Discover more details in our new White Paper 2015-12 ‘How to Overcome the Psychology of Project Failure and Know When to Cut Losses’.

Project Value Delivery’s 20 Golden Rules for Project Scheduling

It is easy to implement scheduling processes without making them really useful and effective for the Project Manager. We have distilled a number of key principles for Project Scheduling in 20 principles – Golden Rules in our new White Paper 2015-13. They can easily be used as a reference to check if your scheduling process indeed responds to these basic requirements that will ensure that the Project will remain under control schedule-wise.

1. Accountability
2. Project Scope, Cost & Schedule consistency:
3. Align with the Project strategy
4. Develop schedules from the top down
5. Reflect reality candidly
6. Keep true to the Immediacy principle
7. Implement a Proper Schedule hierarchy and formats
8. Limit detail and complication of the Integrated Project Schedule
9. Increase the schedule robustness and resilience instead of minimizing the Critical Path
10. Float and Buffers are to be owned by the Project Manager
11. Fight the ‘virtual’ float creation
12. Be disciplined in updating the Convergence Plan
13. Update the schedule bottom-up
14. Check regularly the quality of the schedule update
15. Base the schedule re-forecast on a root cause analysis
16. Reforecast future activities based on the knowledge acquired from ongoing and past activities
17. Accuracy over precision
18. Ensure full traceability of all schedule logic changes
19. Raise Extension of Time requests as soon as they are known
20. Understand and compensate for the known psychological biases

These rules will be further explained and expanded in the next White Papers and they also form the basis of our new Advanced Scheduling Handbook. Read our new White Paper 2015-13 ‘Project Value Delivery’s 20 Golden Rules for Project Scheduling‘ for more details on these 20 Golden Rules!

How to Achieve Sustainable Cost Reductions in Projects from an Owner Perspective

Owners devote a lot of thought to findings ways to do more for less in the current commodity market. They aim to ensure that their developments will be less costly, less capital intensive and less risky for them. Sometimes this translates into simply shifting risks to Contractors who are forced to take them in the current market. In our new White Paper ‘How to Achieve Sustainable Cost Reductions in Projects from an Owner Perspective, or How to Overcome the Fallacy of Short-Term Risk Transfer’, we explain how transferring risks to Contractors is in a large measure an illusion on the medium term; the sustainable solution lies in making project execution more reliable overall, and requires Contractor development.

Ways to achieve these objectives are discussed in a systematic manner and can form the basis for an action plan from the Owner perspective. This new paper complements White Paper 2014-18 ‘How to Be more Cost-Effective in Project Execution’ which was written from the Contractor perspective.

Sustainable long-term solutions include:

• Making sure that Contractors minimize Cost of Non Quality, increase productivity and resolve all dysfunctions that adversely affects their delivery,
• Implementing a series effect on Owner developments,
• Simplifying Owner’s technical specifications (refer to our White Paper 2015-06 ‘How to Overcome the Curse of Excessively Detailed Specifications Leading to Uneconomic Infrastructure Projects’),
• Minimizing the complexity managed by the Owner, in particular the interface between Contractors,
• In general, ensuring that the Contractor properly implements the best practices of project delivery to maximize the odds of success,
• Implementing where possible standardization of requirements across Owners,
• Finding new project financing approaches that allow to transfer Capex to Opex and shifting the financing setup to the contractor.

The paper explains in detail the challenges of seeking a series effect, and how the contracting landscape might change in the energy and commodity development market.

Limiting the cost and risk of large complex projects to respond to the expectations of Owners is a long term effort that requires a lot of advance preparation and strategizing. Transferring risks on the short term to contractors is not sustainable for an industry.
Achieving a series effect is a well proven solution to minimize cost and increase reliability of delivery. Owners should aim resolutely at this objective. At the same time, the entire contracting strategy should be reviewed and new approaches implemented consistently to allow the emergence of new Contractors that will be able to better respond to the upgraded needs of Owners.

Read our  new White Paper ‘How to Achieve Sustainable Cost Reductions in Projects from an Owner Perspective, or How to Overcome the Fallacy of Short-Term Risk Transfer’!

How to Manage Project Low Probability, Catastrophic Risks

Low probability, high consequence risks (called in this White Paper ‘catastrophic risks’) are very significant when one looks at the history of major project-driven organizations. At the single project and at the portfolio level, a single occurrence can change the fate of entire organizations and even industries. Yet these risks are not properly covered by conventional Project Opportunity and Risk management process. In our new White Paper 2015-11 ‘How to Manage Low Probability, Catastrophic Risks: Industrial Risk Management’ we describe some adequate approaches and methods that have been proven to be particularly effective to prevent these risks.

Avoiding catastrophic events is, on the long term, a key competitive advantage for individual Project organizations; and for the industry as a whole. Insurance can only cover very limited direct impacts and cannot be relied upon to protect the organization from the actual consequential effects of a catastrophic event.

We call ‘Industrial Risk Management’ the discipline that seeks to prevent catastrophic risks. This discipline is not commonly placed under the same organizational umbrella than general ‘Project Opportunity and Risk’; it is sometimes managed by the Engineering function, or the Health & Safety function. However because catastrophic events can have a huge impact on Projects as well as entire organizations, even if their probability is relatively low, Project Managers must make sure that the subject is addressed within their Project.

Common methods to analyse possible events (such as FMEA and HAZOP) have limits, and the most dramatic is that they don’t allow considering the combination of independent faults, which is almost always at the root of all catastrophes. Other methods such as Fault Tree Analysis do exist in high reliability industrial organizations that can be used in Project execution environments to prevent the most catastrophic events to happen. These methods need to be supplemented by a robust and transparent Lessons Learned and root cause analysis process.

Catastrophic event prevention methods have been successfully used by Project Value Delivery in a number of instances in Project execution contexts, leading to structural changes in the way some construction activities were undertaken. Read our new White Paper 2015-11 ‘How to Manage Low Probability, Catastrophic Risks: Industrial Risk Management’ to understand what approaches you can use.

How to Build a Proper Project Schedule Hierarchy in Large Complex Projects

While having a single integrated schedule that includes all Project information is a good practice for very small, simple Projects, this is not a sustainable practice for Large, Complex Projects. In this instance, a Schedule Hierarchy must be built that will allow to track information at the right level. In particular, the Integrated Project Schedule that will be the prime tool of the Project Manager needs to avoid unnecessary congestion. This simple setup is not always understood or executed properly. In our new White Paper 2015-14 ‘How to Build a Proper Project Schedule Hierarchy’ we develop the practical concept of Schedule Hierarchy with the intent to make it a standard for Large Complex Projects.

The schedule hierarchy has to cover 3 main schedule levels:

• strategic level
• project coordination level
• operational level

To clarify usual scheduling hierarchies we propose a more specific breakdown, with:

• convergence planning for the strategic level
• Integrated Project Schedule at the project coordination level, with a limited level of detail
• Detailed Functional Schedules for the operational level

A proper schedule hierarchy with schedules of adequate levels of detail for each usage is a key concept that needs to be applied more systematically in Large Complex Projects. Discover more about Project Value Delivery’s recommended schedule hierarchy in our new White Paper 2015-14 ‘How to Build a Proper Project Schedule Hierarchy’.