How to Develop Information Systems in an Effective Manner for Project-Driven Businesses

In a series of White Papers, based on our extensive experience in this area, we cover challenges of Information Systems in project-driven organisations: from the overall architecture to systems implementation, development and ongoing management. In this third White Paper 2018-05 ‘How to Develop Information Systems in an Effective Manner for Project-Driven Businesses’ we cover the specific challenges of developing bespoke Information Systems (refer to White Paper 2018-04 ‘How to Implement Information Systems in an Effective Manner in Project-Driven Organisations’ for the case of implementing a commercially available software). After a first discussion on the choice between customising a commercial software and developing one’s own, the key success factors of successful developments are investigated.

While developing systems in-house may be an adequate solution in some cases, it is generally not recommended except in specific cases.

If this solution is chosen, the consequences in terms of additional cost for maintenance and upgrades must be understood. It is also essential to ensure that there is an ongoing and viable relationship with the developer to make sure that continuous improvements can be implemented as required by the business and to keep the underlying technological up to as technology evolves.

Key best practices include:

• Have the project driven by the business
• Choose a local provider to enhance communication
• Ensure the developer has a robust development framework
• Be aware that the productivity of a developer can vary by orders of magnitude
• Ensure that non-regression checks are properly performed for upgrades.

Find more about those best practices and more in our new White Paper 2018-05 ‘How to Develop Information Systems in an Effective Manner for Project-Driven Businesses’ .

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2018-05_Systems_Development_v0b.pdf

Why Custom Indicators and Visual Dashboards Are So Important for the Success of Large Complex Projects

In a Large and Complex Project it is essential to make sense of the large amount of information that flows back to the Project Manager. Devising proper indicators and developing Visual Management Tools (to the extreme of setting up a Project War-Room) is an essential skill of the Project Control Manager. In our new White Paper 2017-09 ‘Why Custom Indicators and Visual Dashboards Are So Important for the Success of Large Complex Projects’ we describe the different steps that need to be taken in that respect.

At the end of the day, all the work done by the Project Control Manager aims at allowing the Project Manager and its management team take the right decisions at the right moment.

In a Project, the role of the Project Control Manager is quite similar to a cockpit’s engineer. The challenge of dealing with very large number of information sensors is also a reality for large Projects. Beyond the ‘usual’ Project indicators, the Project Control Manager must make sense of all the incoming information. What needs to be displayed will change with the Project phase and condition. During the Project course the Project Control Manager must also be ready to develop specific temporary, custom indicators to help the Project Manager take the right decisions.

At any given time, these custom indicators must be in limited number and aligned with the priorities of the Project Manager. They thus need to be carefully chosen and possibly renewed regularly. Some will be used for a large part of the Project duration, while some might be devised and used only for a few weeks during a critical phase.

Experience also shows that communicating with the Project team through visual indicators is a great way to foster continuous alignment. This has been recognized also by the early practitioners of Total Quality Management such as Toyota, to enhance teamwork: Kanban boards or Heijunka boxes are in fact visual dashboards on the workplace, to which the workers are to refer regularly.

A relatively new trend in the Project industry is to systematically implement ‘war-rooms’ where lots of indicators are displayed graphically on the walls. This room normally serves also as the main meeting room for the Project Management Team. This is not a new concept – again, the Toyota Way promotes the concept of ‘Obeya’, the “great room” of Lean Management where the management gathers to undertake a higher level of effectiveness in communication and decision-making.

Leveraging on new technology, modern war-rooms not only have static displays of visual dashboards. They should also provide data-mining tools and interface to allow for further data analysis.

Read our new White Paper 2017-09 ‘Why Custom Indicators and Visual Dashboards Are So Important for the Success of Large Complex Projects’ to understand better the power of custom indicators and dashboards for Large Complex Projects.

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2017-09_Visual_Dashboards_Warrooms_v0.pdf

How to Implement Information Systems in an Effective Manner in Project-Driven Organisations

In a series of White Papers, based on our extensive experience in this area, we cover challenges of Information Systems in project-driven organisations: from the overall architecture to systems implementation, development and ongoing management. In this second White Paper 2018-04 ‘How to Implement Information Systems in an Effective Manner in Project-Driven Organisations’ we cover the specific challenges of implementing commercial Information Systems. Implementation projects can be disruptive and even sometimes fail to bring value to the business. Key success factors of those implementation projects are described in the paper.

High level best practices include:

• Implement first the most standard version of the software
• Design an implementation team driven by the business
• Do not force functionalities upon a software that is not initially designed for. Prefer niche software
• Avoid too much customisation that will impede version update
• Be careful with automated interfaces – and specifically if they are bi-directional

Proper leadership of such projects is required, insisting on minimum customisation, selection of proper solutions that fit the business needs and the overall Systems Architecture. This is the role of strong Information Systems management resources, which are too often lacking in organisations.

Implementing new software systems is a major cost for organizations. It often carries substantial risk and requires substantial involvement of the business. Our new White Paper 2018-04 ‘How to Implement Information Systems in an Effective Manner in Project-Driven Organisations’ describes best practices which we believe carry substantial opportunities for organisations.

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2018-04_Systems_Implementation_v0b.pdf

How to use Blended Rates appropriately in Project Contracts

Engineering and Construction contracts have been using ‘blended rates’ for a very long time. The recent trend of the usage of this term is disruptive in terms of terminology: new acronyms or new words are used to change the old concept.

The new concept of an all-encompassing blended rate appears to be simplifying contract management, but this new approach requires strict estimating protocols to make sure that they reflect the actual costs. In our new Expert paper 2018-01 “How to use Blended Rates appropriately in Project Contracts” by Saty Satyamurti we describe the content of Blended Rates and in which contact their usage should be restricted.

Recently Consulting Engineers and Construction Contractors have opted to use one single rate, which is called the “Blended Rate” for all the work performed under a single project. This approach is also favored by government as a simplifying approach. In other words the billing is easy, just compute the number of hours spent by all personnel working on the design, drawing, checking, approving and releasing the final product for construction and multiply by ‘one single rate’ to forward to the Client for payment.

The “Blended Rate” application is a worthwhile simplifying move on small short-term project like Software Developments, initial Viability and Feasibility Study, Computer Modeling, Visualization of a large project and low cost short term projects.

However, on large and long multimillion and billion dollars contracts, Consulting Engineers and Construction Contractors should sign contract in the old-fashioned way where talented people have each an adapted applicable rate. Every project needs a careful evaluation as to the benefit of using blended rate and the advantages.

Read more about Blended Rates in our new Expert paper 2018-01 “How to use Blended Rates appropriately in Project Contracts”

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/expert/PVD_Expert_2018-01_Blended_Rates_v0b.pdf

How The Threshold for Capex Projects To Report to the CEO Should be Lower

In our interventions, we encounter too often Owner organizations that do not grasp the economic importance of some Capital Expenditure (Capex) projects that they execute, and the risks associated for the business. In this new White Paper ‘How most Owner organizations underestimate the importance of Capital (Capex) Projects: PVD rule of thumb of Capex project criticality’ we share in particular some orders of magnitude of the thresholds for Capex projects that should get the attention of CXO level executive teams.

Capex projects that create the means of production of the company might be rare and far in-between, in most industries they will decide the economics of production for years, be there factories, mining plants, power plants, oil or gas production facilities. Therefore, their success in terms of cost and delay is of utmost importance for the sustainability of the organization – and probably more so than most executive realize.
The failure of a single large Capex project may jeopardize the survival of the organization or make it so weak financially it cannot resist being taken over. Often one failed project will require substantial re-financing. This is valid for Contractors and Owners alike, with the emphasis being on either side depending on the split of risk agreed contractually. There are many examples of this effect in many industries and it is sometimes amazing that Board do not learn sufficiently from these failures.

It is our opinion in terms of rule of thumb that:

• any total Capex higher than 5% of the annual organization revenue should report at the CXO level
• those Capex projects higher than 15-20% of the annual revenue should have a direct line to the CEO, because issues in these projects might jeopardize the business

Read our new White Paper ‘How most Owner organizations underestimate the importance of Capital (Capex) Projects: PVD rule of thumb of Capex project criticality’ to understand our rationale behind this rule of thumb and why it is so important.

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2018-02_Capex_project_criticality_v0.pdf

How to Build the Systems Architecture Project-Driven Organisations Need

A proper Information Systems setup and architecture is increasingly a major differentiating factor for organizations dealing with the execution of Large Complex Projects. The challenges of digitization increase the strategic importance of Information Systems. In a series of White Papers, based on our extensive experience in this area, we will cover challenges of Information Systems in project-driven organisations: from the overall architecture to systems implementation, development and ongoing management. In this first White Paper 2018-03 ‘How to Build the Systems Architecture Project-Driven Organisations Need’, we cover the overarching systems architecture.

Proper mapping the overall Information Systems architecture is needed to ensure that all the needs of project-driven businesses are satisfied. Specific aspects must be accounted for in the project business such as access from remote, less connected sites and interfaces with many third parties through secure gateways.
Standard data coding is an essential piece of the overall Systems architecture and often requires substantial effort to be developed.

Appropriate governance must then be setup to ensure that the Information Architecture evolves according to the expected roadmap.

For organizations that have not dealt previously with Large, Complex Projects, the investment to setup those systems properly is substantial. It needs to be anticipated several months prior to the start of the project. Setting up the right architecture to suit the project needs from the start is an essential part of the setup. Read our new White Paper 2018-03 ‘How to Build the Systems Architecture Project-Driven Organisations Need’ to get advice on the specific tricks and traps of project-driven systems architecture.

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2018-03_Systems_Architecture_v0b.pdf

How Project Governance Can Make or Break a Project

Through our numerous interventions we often find that Project Governance is decisive factor for Large, Complex Projects success or failure. Whatever the talent or level of effort of the project team, poor governance will often break a project. In our new White Paper 2018-01 ‘How Project Governance Can Make or Break a Project’ we detail what are the key success factor for project governance. In a second White Paper we will investigate more precisely specific governance issues in Owner organizations.

Project governance addresses those issues that cannot be tackled by the Project Manager. The absence of proper governance even in the case of a sound project will almost always lead to substantial failures. The only exceptions are often where the seniority and the leadership capability of the Project Manager or Project Director allows him or her to step in and compensate. A number of failure modes are listed in the paper.

Our research shows that Project Governance success factors can be grouped in four main success factors:

• Sufficient understanding of Project Management specifics needs to exist within the organization,
• The organization of Project Governance needs to be effective,
• The decision-making framework for governance needs to be effective and timely,
• The information reported from the Project needs to be accurate and relevant for proper decision-making.

Those success factors are developed in detail in our new White Paper 2018-01 ‘How Project Governance Can Make or Break a Project’.

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2018-01_governance_project_success_v0.pdf

Why Project Close-Out is a Process, and not a Time Period

Project Close-Out is actually a process that needs to start from the beginning of a Project. It is not something to bother only at demobilization stage. Successful close-out requires forethought and preparation, as well as continuous work throughout the Project. Unfortunately too many organizations don’t appreciate this approach, which leads to painful and costly closures of Projects and retention of moneys from the Clients. Our new White Paper 2017-08 ‘Why Project Close-Out is a Process, and not a Time Period’ explains in detail how Project Close-Out should be organized as a process.

A successful Project Close-Out is a process that needs to start at the beginning of the Project.
Project Close-Out importance is often too disregarded. We believe that a properly organized and driven close-out can be a substantial source of savings and can avoid substantial liabilities to the organization. It therefore needs to be executed properly and with the right level of urgency and focus.

In particular, some essential close-out planning and requirements are to be incorporated from the Project Start-up:

• Requirements to suppliers and contractors regarding format and timing of as-built drawings and provision of quality records,
• Policy regarding retention on suppliers’ and contractors’ payment linked to the provision of final documents,
• Organization of the archiving of the Quality Control certificates and activities in particular when activities happen in remote areas,
• Agreement with the Client on the as-built and final documentation lay-out, formatting and referencing,
• Organization of a separate document archiving centre according to the final documentation format.

The Project Close-Out phase itself is an important moment for Project Control. It is the moment where all the good work carried out during Project execution should bear fruit, in particular in the area of contract management (Claims and Change Orders final negotiation), cost control (cost close-out and final reconciliations) and documentation preparation (as-built and quality records).

Do not forget also the soft power side and organize a proper celebration and community building event so that people keep fond memories of the Project!

Read our new White Paper 2017-08 ‘Why Project Close-Out is a Process, and not a Time Period’

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2017-08_Project-CloseOut_v0.pdf

How to Organize Supply Chain Processes in Project-Driven companies

In our consulting activities, we are often requested for advice regarding the organization of the Supply Chain processes, the development of associated systems and of the Supply Chain department in project-driven organizations. The proper approach to support projects is always quite different from other industries such as manufacturing organizations. In our new White Paper 2017-16 ‘How to Organize Supply Chain Processes in Project-Driven companies’ we examine what are the key processes for project-driven organizations, why they are distinct, and how to best segregate supply chain activities.

Supply-Chain in project-driven companies requires a different structuring from manufacturing or operating businesses. It is important to recognize  three distinct categories of procurement and have identify distinct processes and organization to address them properly. The systems used by the organization to track these during the supply chain cycle also need to be adapted to each type of procurement.

Those three categories are:

• Standard material and equipment
• Engineered equipment
• Services (contracting)

Too many project-driven organizations do not distinguish properly between the different procurement types. This leads to dramatic consequences. The structure we propose is pragmatic and proven and should be more widely implemented.

Our new White Paper 2017-16 ‘How to Organize Supply Chain Processes in Project-Driven companies’ describes in minute details the reasons for this split and why those categories of procurement are so distinct. They even often warrant different departments.

If you can’t access the link to the white paper, copy and paste the following link in your browser: http://www.projectvaluedelivery.com/_library/2017-16_SCM_suppliers_contractors_v0.pdf