Project Value Delivery Updates

New PVD Interventions Around Cost Optimization

Apr 19, 2015PVD adminUncategorized

To respond to our Client’s needs in the current economy we have developed two new intervention products:

the Project Cost Review and Optimization (at individual Project or Portfolio level)
the Project Procurement Upgrade

Project Cost Optimization

Project Value Delivery has the expertise and proprietary tools to create substantial cost reduction in your projects, in particular by reviewing your cost basis and your procurement approach, either at a single Project or at an entire organization’s level. In particular we can implement hands-on interventions for negotiation / re-negotiation of procurement contracts for equipment or services, review of the procurement strategy at Project or organizational level. We will also recommend how to optimize internal costs in Projects.

As always in our interventions we place a particular emphasis in providing you with practical recommendations that are directly actionable, and we prioritize them so that you can focus your energy on the 2 or 3 actions that will really create significant short term savings at Project or Portfolio level. Download our specific Cost Review flyer.

Project Procurement Upgrading

We can setup or enhance significantly your Procurement organization and processes, either at a single Project level or at an organizational level:

Development of Procurement process and procedures, with a particular highlight on the procurement of services,
Development of commodity management
Organization and development of supplier panel / supplier base

How to Be More Cost-Effective in Project Execution

Apr 12, 2015PVD admin1 CommentWhite Papers

In those days of low commodity prices, it is essential for Contractors to propose cost-saving approaches so as to help make developments economically feasible – and become more competitive on their market. The solutions to be deployed will be very different depending on the type of projects, in particular regarding size and complexity. Our new White Paper 2014-18 ‘How to Be More Cost-Effective in Project Execution’ explains the steps that can be taken, depending on project type.

Two very different approaches need to be implemented, one for small projects and one for large projects, because the drivers of effectiveness are significantly different.

For smaller projects of low complexity, a number of processes that are currently implemented repetitively in each project can be usefully transferred to the portfolio level; that will save cost, limit the supporting resources required and at the same time make those processes more effective.

For large projects, cost effectiveness needs to be sought in those activities that are not part of the critical chain, and on leveraging procurement savings.

It is as always critical to deal with small and large projects in different ways because their drivers are very distinct.

Every downturn is the occasion to review the work processes and seek more effectiveness. Small & simple projects need to be dealt with differently from large & complex projects, and the drivers for improving effectiveness will be notably different. It will go through the establishment of differentiated process – an additional complication that is warranted to make the organization more adapted to its markets. Find more about this topic in our new White Paper 2014-18 ‘How to Be More Cost-Effective in Project Execution’.

How to Be Successful in Enterprise Transformation Projects: A Framework

Mar 29, 2015PVD admin1 CommentWhite Papers

Ambitious Enterprise Transformation program or projects are often launched without a proper Program/Project Management framework. This often results in poor control and coordination of the overall initiative, budget and schedule overruns and delivery of less value than potentially expected. Our new White Paper GP2015-01 ‘A Project Management Framework for Enterprise Transformation Projects’ has been written in collaboration with GiDuMo, a consulting network specialized in Enterprise Transformation.

Due to the particulars of Enterprise Transformation, the application of a single type of Project Management method is not adequate. A hybrid approach is required to cover the entire cycle from a very open, fuzzy first phase to determine where the emphasis should be, to the actual delivery of very well defined scopes of work, all taking into account numerous inter-dependencies and numerous parallel changes in the organization. Enterprise Transformation projects are complex projects and in today’s fast changing environment, companies need more agility to transform themselves and adapt to new sustainability challenges and new strategies.

This paper describes a comprehensive framework for Enterprise Transformation, based on the most proven methods of project management. The framework leverages on the advantages of those methods to fit the most adapted method to each successive phase of the Transformation Project. Implementing a sound project management framework integrated with a proper Enterprise Architecture framework is the only way to keep such Transformation projects’ hearts beating at the right pace to deliver the value sought by the organization. Transformation Projects are very significant investments for organizations; they are also tough, ever-changing endeavors that require a suitable framework to fully deliver their value. Our framework, by merging the best of Agile and conventional project management, Enterprise Architecture together with specific tools to tackle complexity, gives a greater assurance of being successful. Read our new White Paper GP2015-01 ‘A Project Management Framework for Enterprise Transformation Projects’!

What is ORSIPARM, our new Acronym for the Project Risk Process?

Mar 15, 2015PVD adminWhite Papers

In order to give Project Opportunity and Risk practitioners an easy-to-remember acronym to describe the most salient features of an effective process, we have devised the mnemonics ORSIPARM, for Opportunities & Risks – Scanning – Identification – Prioritization – Action – Reserves – Monitoring. Our new White Paper 2015-01 ‘ORSIPARM An Easy-to-Remember Acronym for Project Opportunity and Risk Management’ explains in detail the significance of this acronym.

ORSIPARM is a powerful mnemonics of the different steps that need to be followed when it comes to Project Opportunity and Risk management. It can be used to remember to cover all the necessary aspects, in particular some that might be overseen sometimes in the dynamics of project execution.

For example we introduce the concept of Scanning for new opportunities or risks, which is different from monitoring those that have already been identified.

We will develop further a number of aspects covered by this acronym in a series of White Papers over the next few weeks:

Why Opportunities before Risks?
Why such emphasis on prioritization?
How to size and manage reserves properly?
Why and how to monitor opportunities and risks?
Etc.

Get a full explanation of the concepts behind ORSIPARM in our new White Paper 2015-01 ‘ORSIPARM An Easy-to-Remember Acronym for Project Opportunity and Risk Management’ .

Find all these principles of Project Risk Management exposed in a comprehensive manner in our new Handbook, Practical Project Risk Management for Project Managers (now published – click on the link to see it on Amazon!)

How Industrial Infrastructure Contracting’s Business Model Will Change with the Current Crisis

Mar 1, 2015PVD adminWhite Papers

The current crisis related to commodity prices, if it lasts, might lead the contracting industry to review its industrial model, such as what happened in the 1980s’ and 90s’ during the previous counter-shock. Of course it is always difficult to predict the future, still in our new White Paper 2014-17 ‘How the Current Crisis Could Redefine the Business Model for Industrial Infrastructure Contracting’, we explore what are probable trends, based on the analysis of some precursors and of trends already existing in other industries.

Ready for some review of the contracting’s business plans?

When the last commodity price crisis stroke in the 1980s’ and 90s’, most Owners moved away from directly managing projects and coordinating a large number of specialized Contractors, effectively fostering the development of general EPC Contractors that took responsibility for project performance under lump sum contracts. Owners’ team became much leaner and focused on managing a very limited number of large EPC contracts for each project, and coordinating the interfaces between these few contracts if needed.
Following history and trends in other industries, we can expect the following trends to develop in the next few years in the contracting industry:

Increased vertical integration of Contractors to cover the entire infrastructure development cycle and remove interface management from the Owner’s scope,
Contractors taking a financing and operating role in the infrastructure, effectively financing it, owning it and leasing it back to the Owner, even possibly operating it – with the effect of changing significantly the Owner’s cash flow and financing requirements.

This would result in the Owners further concentrating on their core businesses (ownership of concessions and operating model, stakeholder management, sales of products).

These changes if they happen will alter substantially the contracting landscape and require the development of innovative and sound contracting, financing and accounting approaches. There will certainly be some trial and error, still those that will move in that direction and experiment earlier will certainly be those that will prevail at the end. Proactive experiments of these new approaches, if possible on infrastructures of limited size and ambition, would be required in the next few months and years to establish this new model. Discover in detail those trends in our new White Paper 2014-17 ‘How the Current Crisis Could Redefine the Business Model for Industrial Infrastructure Contracting’.

Our New Practical Handbook on Project Risk is Published!

Feb 22, 2015PVD adminbooks

We are pleased to announce that our new book ‘Practical Project Risk Handbook for Project Managers (a Guide to Enhance Opportunities and Manage Risks on Large, Complex Projects)‘ is now published and available worldwide!

In this new book we unravel the Opportunity and Risk management process. We also suggest some contrarian ideas on how to make this process significantly more effective.

“If this unprecedented little book had to be condensed in a single sentence it could be: ‘when managing a project you have to expect the unexpected and this is the way to be prepared for it’. Page after page it is filled with practical recommendations directly drawn from the author’s involvement in contracting activities and the day to day management of large industrial projects.” – Jean-Pierre Capron.

In exclusivity for you, faithful followers of Project Value Delivery, here is a link to the Table of Contents, Index and Introduction; and another link to the Chapter 1 & 2 – all accessible to you as downloads for free (pdf format)!

In the next few weeks we will share with you in the form of White Papers some insights from the book – stay tuned!

If you are interested by the book here below are the links to some Amazon stores; it is also available on Kindle if you prefer the e-book format. Enjoy!

How to specify a Project Document Control System for your Needs

Feb 15, 2015PVD admin1 CommentWhite Papers

While all agree on what a proper Document Control System should do in general, there are many parameters to consider when defining the functional specifications of the tool prior to its implementation. Our new White Paper 2014-16 “What the Key Parameters to Consider in the Specifications of a Document Control System Are” explains in detail the issues that need to be considered.

In larger projects you need to automatize your document control system. But be careful to fit your requirements to your needs!

Depending on the organizational context, the types of projects involved and their size, the specific business challenges, focus and priorities will differ. The organization’s culture and maturity may also influence the requirements. The expectations and specifications for a document control tool shall be carefully documented to allow the selection of the solution best adapted to one’s business.

The more the system can do and the more automated it is, the more complex it will be to implement and roll-out. So keep the right balance and focus on YOUR business priorities.

Your systems specifications must fit your needs. Find how with the detailed checklists contained in our new White Paper 2014-16 “What the Key Parameters to Consider in the Specifications of a Document Control System Are”!

How to Run Forensic Analysis of Project Cost Control

Feb 8, 2015PVD adminWhite Papers

It is essential to understand surprises in Project Forecast results. While the causes for such surprises are often attributed by the Project team to external factors, quite regularly, internal control issues contribute to unexpected variances. Our new White Paper 2014-15 ‘How to Run Forensic Analysis of Project Cost Control’ describes the basis of a framework to implement a structured approach to forensic analysis of Project Cost Control (a more detailed development and relevant checklists are available in our Practical Cost Control Handbook).

The framework we propose follows the “Key Navigation Questions” (ref White Paper 2014-14 ‘Why the Four Key Navigation Questions Are So Essential for Project
Management’):

Level 1 – Do we know where we are? Does Cost Control reflect accurately Committed and Actual costs?
Level 2 – Do we know where are we heading based on the latest knowledge if we continue
according to the current trends? Does Cost Control produce a Forecast for the project completion that is relevant and resilient?
Level 3 – Can we figure out what needs to be done to come back on track? – is Cost Control (and Project Controls) able to run scenario analysis, root cause analysis?

In our consulting experience about half of the organizations will fail in a way in the level 1 checks, and most of the other organizations will fail some level 2 checks. The full detail of this framework, together with relevant checklists, is available in Chapter 10 of our Practical Cost Control Handbook.

Cost Control forensics sometimes requires significant persistence to really understand the underlying issues. Organizational psychology needs to be assessed for potential for denial and self-delusion. It can be difficult to review independently the Cost Control of a Project in particular when the organization is in self-denial. High level management support is essential in these instances for successful reviews to unfold.

If the Cost Control process has been implemented poorly it can be a major endeavor to reconstitute the actual spent and forecast of a project, and it can have a significant impact on the organization’s financial results. The confidence of the market in the ability of company management to control its operations could also be jeopardized, with direct implications for the share price. It is thus essential to implement these reviews early and decisively, with reviews undertaken by personnel experienced in Project Controls knowing the particular business and that act independently of the Project.

Read our new White Paper 2014-15 ‘How to Run Forensic Analysis of Project Cost Control’ on what it takes to run forensics of Project Cost Control!

Find all these principles of Project Cost Control exposed in a comprehensive manner in our new Handbook, Practical Project Cost Control for Project Managers (now published – click on the link to see it on Amazon!)

Why Contract Management is Indispensable in EPC Project Management

Feb 1, 2015PVD admin1 CommentExperts' Corner papers

Many project organizations underestimate the importance of proper Contract Management when executing projects, and in particular, EPC (integrated Engineering-Procurement-Construction) projects. Kamlesh Narwani in our latest Expert Corner’s paper briefly discusses about the application of Contract Management in different phases of EPC project management, why this role is indispensable, and the role profile of a Contract Manager.

First of all, Contract Management is generally an action-oriented activity that aims to administer and optimize the project contractual and commercial position. It is different from the focus of Legal department.

The paper exposes what are the qualities of good Contract Managers and what role Contract Management has in the different project steps, from bidding to close-out.

All EPC projects can benefit from Contract Management. Contract Management as a function is sometimes misunderstood or undervalued. It is important for EPC project-driven companies to recognize its value and foster the development of successful Contract managers. Read our latest Expert Corner’s paper “Why Contract Management is Indispensable in EPC Project Management”!

Why the Four Key Navigation Questions Are So Essential for Project Managers

Jan 25, 2015PVD adminWhite Papers

In our consulting and training practice we have found that going back to fundamentals is sometimes the most effective way of making Project practitioners realize how their current processes are lacking. In the field of project management in general, we have found that four basic navigation questions were extremely effective in dealing with many processes including scope management, cost control and schedule management. Our new White Paper 2014-14 ‘Why the Four Key Navigation Questions Are So Essential for Project Management’ describes how these questions apply to Project Management.

The four basic navigation questions come from the basics of naval or air navigation:

Where do we intend to go?
Where are we currently?
Where are we going right now if we continue the current trends?
What do we need to do to go back on track and reach our expected destination?

How organizations are able to answer these questions is an indicator of their maturity in the field of Project Controls. Sometimes we encounter organizations that for historical
reasons might be excellent at forecasting or scenario planning, but lack the first fundamentals of adequate project objectives and fail at knowing the actual current
situation of the project. These organizations are doomed because not knowing where they
intend to go and what their actual position is renders more elaborate skills in forecasting and scenario planning totally unhelpful. Hence the four questions can be used as a simple measure of increasing maturity of organizations and processes.

The four navigation questions always look very basic when we expose them. Still as we demonstrate in our new White Paper 2014-14 ‘Why the Four Key Navigation Questions Are So Essential for Project Management’, they have a wide reach when it comes to actual Project management. They can also serve to gauge the actual maturity of specific organizations by assessing how they fare against the different questions – in the right order because that is the way they need to be assessed for effectiveness.