Project Value Delivery Updates

How to easily estimate the duration of an Oil & Gas EPC Project

Jun 16, 2013PVD adminExperts' Corner papers

Did you know that Oil&Gas facilities projects have all the same critical path? Well, if you think about it, you will easily realize that what takes the most time in their completion is their piping.

Did you know that Piping is generally the critical path and that simple rules of thumb allow you to determine the duration of your project?

Thanks to a number of rule-of-thumb estimates that can be added to this observation, it is easy to deduct what is the duration of an EPC project in the Oil & Gas field, and what are the parameters that actually drive this duration. In the new, unique groundbreaking expert paper 2013-02, Hervé Baron reveals key fundamentals that will be useful to any Project Manager in Oil & Gas EPC projects.

Project managers and project planners too often dwell in too complicated approaches when it comes to determine project duration. The key is always to understand what is the chain of activities that actually will drive the project delivery. The paper proposes a uniquely elegant approach to project management for oil-and-gas projects using piping as the critical chain, and a number of extremely useful rules-of-thumb to determine the expected project duration.
The paper also includes a very well thought graphic illustration of the drivers of the project schedule and how they relate together on a timeline. Don’t miss our new expert paper 2013-02!

Hervé Baron is the author of “The Oil & Gas Engineering Guide” (Editions Technip). He conducts training in Engineering, Contract Management and Project Control. For more information and a number of additional useful resources please consult his blog: http://www.toblog.fr/fr/baron.html.

How to Implement Due Diligence for Project-Driven Organizations

Jun 2, 2013PVD adminWhite Papers

Due diligence to appreciate the value of an organization (before an acquisition, for example) is a specialty generally driven by finance specialists. However in the case of project-driven organizations, conventional financial analysis cannot easily reflect the actual situation of the organization and what can be expected to happen. Project Value Delivery’s unique expertise and experience is shared in the new White Paper 2013-07 which includes practices and tools to improve the reliability of these due diligence.

We recommend a five step approach:

Check the adequateness of the Cost Control approach
Check the quality of the Project Controls processes
Check the actual project performance and extrapolate the possible outcome
Evaluate actual expected cash flow of current projects
Add-on the treatment of assets

Because of the fact that projects are one-off endeavors, usual approaches used for manufacturing companies cannot be used for due diligence of project organizations. The insights of experienced specialists in project management and project controls are needed to give the right understanding of the opportunities and risks of the organization being analysed, which often can be extremely significant both ways, changing fundamentally the perceived and actual value of the organization under scrutiny.

Proper due diligence of project-driven organizations should not be underestimated. There are many examples of poor decision-making in the area of project-driven organizations’ acquisitions conducted without a proper understanding of the issues at stake – and the actual final valuation can be quite different from the rosy picture shown by conventional accounting!

Read our latest White Paper 2013-07 to understand what it takes to do successfully the due diligence of project-driven organization!

Improve Communication and Synergy between Disciplines to Reach Project Excellence

May 19, 2013PVD adminWhite Papers

In several of our consulting assignments we have found that project organizations were too focused on discipline and specialty excellence and did not put enough emphasis on the inter-discipline communication for project delivery – albeit obviously the most effective improvement would have been found there. This new White Paper 2013-05 “Improving Communication and Synergy between Disciplines: the Way to Project Delivery Excellence” explores the topic from the perspective of where the emphasis needs to be in terms of organizational development.

The result of non-communicating disciplines

Organizations often tend to focus on improving each discipline with the hope of getting each discipline to deliver more reliably. It does not work, or at best produces only marginal improvements. In particular for complex projects, the key is not in improving each step of the process. It is in improving the communication between all the steps. Even if each discipline is super-efficient, but they don’t communicate, the overall effectiveness will be very limited!

Investing to improve single disciplines is easy. Specialists will know what to do to improve the efficiency of their discipline. Improving all disciplines to the point where they follow the world-class processes of their discipline will be expensive as there are many disciplines involved – but it can be done.
Investing to improve communication between disciplines during project execution is hard. It takes creativity to find the right way, and it requires customized tools and changes to the arrangement of office space and behaviors.
What should you invest in? If your project-oriented organization is executing complex projects and is plagued by a lack of communication, invest in communication first. For the same effort and cost the result will be incomparably more effective, bringing your organization to the next level in terms of project success.

Read our new White Paper 2013-05 “Improving Communication and Synergy between Disciplines: the Way to Project Delivery Excellence” to understand better this key insight into the workings of project organizations.

How Proper Project Risk Management Goes Against Common Management Thinking

May 5, 2013PVD admin1 CommentWhite Papers

Low probability, high consequence risks happen more often than we usually think and they are the ones that ultimately, shape a company or even an industry. Because they do not happen often, their prevention is easily overlooked and left to the next project. Yet, high risk industries like the nuclear or the aeronautics industry can teach us basic techniques and mindsets we can use to easily diminish the probability and the impact these risk. The project organizations that will implement these simple techniques will gain significantly in consistency of delivery and protect themselves against catastrophic events.

Our new White Paper 2013-04 “Project Risk Management Reloaded: How Proper Risk Management in Project Organizations Goes Against Common Management Thinking” tackles this important issue.

It is a basic property of complex systems to make high consequence events happen much more often than we would normally expect. High risk industries implement comprehensive frameworks that develop prevention principles into strict guidelines. They are developed in the White Paper.

In project organizations, the worst that can happen is an organizational common cause of failure. The biggest challenge organizations face is how to effectively diversify their ways of doing things to avoid common causes of process failures. This goes against the tendency to seek maximum efficiency through standardization of tools and processes.

The point is that in today’s world in general, and even more in project organizations, efficiency of repeated production is not the key to success. Resilience to chaos or adaptation capability are the keys to success. If that goes with some loss of efficiency, so be it.
The biggest challenge organizations face is how to effectively diversify their ways of doing things to avoid common causes of process failures. This means, letting individual projects experiment with new ways of doing things, within certain limits; accept small failures to avoid a larger one that would wipe out the organization; and accept small failures to find better ways of doing things. Are you ready for that?

Read our White Paper 2013-04 “Project Risk Management Reloaded: How Proper Risk Management in Project Organizations Goes Against Common Management Thinking” why you need to change your approach to risk management today!

New Expert’s Corner Paper: Time at Large and Extension of Time

Apr 21, 2013PVD adminCompany updates, Experts' Corner papers, Website Updates, White Papers

If you come often to visit Project Value Delivery’s website you might have noticed our new ‘Experts’ Corner’. In alignment with our mission to make Large, Complex Projects’ execution more reliable, we make freely available cutting edge knowledge from world-class experts.

This new section has been opened by a detailed paper on Time at Large and Extension of Time Principles, by Thierry Linares. This excellent paper exposes very clearly the benefits of the new standard forms of contract and why the issue is to important to project execution practitioners. Treatment of time in the contract is an issue for both the Employer and the Contractor and both need to be careful otherwise difficult situations may arise.

This paper has been written by a contract expert and is very readable for all project practitioners of large, complex projects. Don’t miss Time at Large and Extension of Time Principles, by Thierry Linares!

We encourage experts and practitioners to submit a paper for PVD’s Experts’ Corner, to enhance the knowledge in our community. You’ll find the submission instructions here. If you ever wanted to publish but were apprehensive to do so, you will benefit from our help and support to edit your paper and improve its readability to match our quality criteria (of course, papers must be specifically applicable to large, complex projects execution).

How to Develop the Leaders you Need for your Large, Complex Projects

Apr 14, 2013PVD adminWhite Papers

Throughout the industry, talents are lacking for leading Large, Complex Projects, even more so as a generation of project leaders is retiring. Developing the leaders you need for the upcoming wave of Large, Complex Projects is a necessity. And at the same time we need to give them a structured education to increase the success probability of those projects. How can we develop these talents? What education do they really need? Is your current project manager development program adequate?

These are the essential issues addressed in our new White Paper 2013-03 “How to Develop the Leaders you Need for your Large, Complex Project”.

Project management classroom training is not sufficient to develop your future project leaders!

Growing voluntarily a new generation of effective project leadership talent is unavoidable and the most advanced project-oriented organizations have started creating specific development programs.

For Large, Complex Projects, classical project management educational programs are not effective. Successful project leaders’ development programs must involve Education first – and Training second. We are firm believers that it is first important to develop the soft skills, self-awareness and in general, the mindset of the upcoming project leaders (as it is the key to facing successfully the inevitable issues of project execution). On the other hand, process-related knowledge or even technical-related knowledge is relatively easy to learn, in particular by people that have the right mindset, discipline, humility and self-esteem.

Developing your future project leaders for large, complex projects is not easy. It does not take just one week of training here and there. It needs to be a comprehensive, long term approach focused on developing the person’s character and behaviour in facing those types of unexpected events that are part and parcel of project leadership.

Read our new White Paper 2013-03 “How to Develop the Leaders you Need for your Large, Complex Project” for the detail of our recommendations on the content of development programs for your future project leaders for Large, Complex projects.

Stop Taking Change as an Exception: The Need for Agile Project Planning

Mar 31, 2013PVD admin2 CommentsWhite Papers

In project delivery, in particular for complex projects, change is not an exception. It is rather the rule. Most of the project management effort is actually spent in managing deviations and change to the initial plan. How come, then, that project delivery processes are usually designed to manage change as an exception? Would it not be more effective and powerful to design project delivery processes around change and agility as a core component?

Our White Paper 2013-02 “Stop Taking Change as an Exception: The Need for Agile Project Planning” covers this astonishing problem in detail.

What makes the difference when it comes to project success is often more how agile the organization was to account for changes and review its project execution strategy and tactics; and not whether it forcefully managed to bring the situation back to the baseline plan.

In fact, isn’t the main scope of project management is actually to manage change and deviations to the plan? Why not, then, design the project delivery process around agility rather than around trying to stick by all means to a set baseline?

Stop moaning about changes to the plan! All experienced project practitioners know that it is the thrill of finding solutions to the most unexpected and intricate situations that make the thrill of the profession – and why they have chosen it. Change is part and parcel of the fun of project leadership. Let us recognize it as such, as the daily challenge of any project practitioner, and build our processes around it.

Read White Paper 2013-02 “Stop Taking Change as an Exception: The Need for Agile Project Planning” to better understand this change of viewpoint on change during project execution!

Projects are First of All a Human Adventure: A Manifesto

Mar 17, 2013PVD admin1 CommentWhite Papers

In particular for Large, Complex Projects involving hundreds of millions of dollars and thousands of people, organizations tend to rely excessively on processes and ‘sound principles of management’. They forget how these endeavors remain human adventures, where leadership, emotions, suffering and team spirit have also their part to shape the success of the adventure. These factors actually will often make the success – or the failure – of these projects.

This is why to celebrate our first year of operation at Project Value Delivery we have decided to write a Manifesto: Projects are First of All a Human Adventure: Why You Can’t Manufacture Projects on a Standardized Assembly Line (White Paper 2013-01).

Projects are a Human Adventure. Not less, not more. This has consequences!

Those successful project companies will be those that overcome the Industrial Age mindset of conformity and standard processes to leverage on what makes the world of project execution so attractive to today’s adventurers: it remains one of those areas where the term ‘human adventure’ has a true meaning. It remains one of those areas where individuals can easily make a difference.

What makes projects successful are people who take initiative, who lead; teams that work together to realize incredible feats.

In project-based organizations, systems and process standardization should be primarily about knowledge management and communication, not compliance. Those project organizations that will be successful will be those that will leverage on the human adventure concept.

Project organizations that will be successful on the longer term will be leveraging the human and the emotional connections, create a dense network of communication and knowledge sharing, letting a collection of adventurers successfully deliver the most amazing realizations that we need.

Read our Manifesto: Projects are First of All a Human Adventure: Why You Can’t Manufacture Projects on a Standardized Assembly Line (White Paper 2013-01). And change forever your understanding of what projects are all about!

How too much Detailed Planning often Kills Project Success

Mar 3, 2013PVD adminWhite Papers

Throughout our consulting assignments on Large, Complex Projects in execution phase we’ve encountered too often an astonishing phenomenon: excessively detailed planning, impeding proper update, control and decision-making in the project. In the White Paper: How too much Detailed Planning often Kills Project Success (Why the Budgeting Plan Cannot be Used for Project Execution) [2012-28], we investigate the causes of this phenomenon, why it is so much of a concern and how to overcome this issue.

The planning conundrum: balance required!

Beyond the initial input into resourcing and budgeting, the project plan during project execution ultimately serves to take decisions. To achieve this, it needs to:

represent effectively, at any time, the execution plan of the project, taking into account any decision regarding changes of plans, new or changed activities or logic,
and be rigorously updated as to the actual progress of the project tasks.

The scope of work to be done during each reporting period needs thus to be commensurate with the resources available to carry them out. We believe that a maximum of 1,000-2,000 activities for the integrated project schedule is often a maximum even for large projects (this does not preclude to have more detailed schedules for particular departments and activities).

The main issue is often that the very detailed plan done before the start of the execution of the project to cover resourcing and budgeting is not the plan that the project needs for execution. At the beginning of project execution you need to take the time to re-develop your schedule to make it fit for future monitoring and decision-making.

Excessive simplification is the enemy of success. So is excessive complication. Strike the right balance. It is something of an art. Take the time to get the right balance at the beginning of project execution. It is necessary for the success of your project.

Read the White Paper: How too much Detailed Planning often Kills Project Success (Why the Budgeting Plan Cannot be Used for Project Execution) [2012-28], to understand more about this issue which pervades many project organizations.

Listen to the People! The Real Health Check of Updating Cost Models and Schedules of Large, Complex Projects

Feb 17, 2013PVD adminWhite Papers

One of the basic tenets of project management is to have at all times a reliable view of the current situation – a reliable project cost model and schedule update. Alas, we realize in our consulting work that it is not so easy to do in particular for large, complex projects – and this makes any subsequent decision-making process highly unreliable. What are the basic health recommendations that need to be followed for getting a truthful picture of the project condition? Our new White Paper “Listen to the People! The Real Health Check of Updating Cost Models and Schedules of Large, Complex Projects” [2012-27] addresses this important issue for project organizations.

How reliable is your schedule update?

Updating a project schedule and cost forecast is not a solitary exercise; it requires to mobilize the knowledge of the project, which is spread among its members. Because large, complex projects involve large teams that can be spread over several locations it is not necessarily an easy thing to do. Still the underlying process is one of the rare processes that aims at collecting information spread in the organization, structure it in a consistent way and roll it up to give a clear information about the project status.

The main stumbling block for large, complex projects is the information collection process. It comes down to the challenge of formalizing the team’s informal knowledge.

It is not sustainable to drive a project with an inaccurate schedule and cost model. Project managers need to be particularly watchful to avoid this to happen. Read our new White Paper “Listen to the People! The Real Health Check of Updating Cost Models and Schedules of Large, Complex Projects” [2012-27] to know how.