Everything about Project Management and Microsoft EPM

It is very common to be told that executing contracts in India is a complex matter and hence text book theories of project and construction management can seldom be applied and are not practical!!.

This article examines the validity of such a statement and also the various options available to those in the construction and contracting business who wish to improve their efficiency and scale up their operations.

All projects revolve around an owner or promoter who initiates a plan or proposal to set up an asset to fulfill a particular purpose. Although most often their own teams are set to work on such projects, it is not unusual to invite specialist project management consultants to step in and provide the complete project plan commencing from obtaining licenses, government clearances, project funding and the most important financial closure of the project. Thereafter the engineering detailing, identification of sub vendors for procurement and construction is finalized and contracts are awarded according to a set procedure.

To a casual observer all these activities may appear to be fairly straightforward and easily achieved. However beneath the surface of any project, its survival is dependent on various issues and factors of all the stakeholders involved and their expectations. Many projects are thus not meant to exist or are destined to fail by design during the initiation stage. Numerous examples can be cited to illustrate such cases in both the private and the public sector domain. A classic case of the 2^nd World War involved a construction of a bridge which was made into a successful movie and was titled “The bridge on the river Kwai”. Thus it is of great importance for a contractor to carry out a background check of the project prior to accepting a contract or bidding for it by planning for the necessary risk mitigation required.

Project planning is a popular expression being used by all those involved with projects. Many organizations create such a department with limited capability of skill sets needed to use the Project Management tools effectively. Essentially they limit its function only to pay lip service to the demands of some of their stakeholders. Most often, the extent of diligence needed to track the plans and schedules is far from sufficient although there are an equally large number of projects which are successfully managed till their formal closure. The difference lies in the professional approach of the promoters and the project managers employed to oversee the project development besides the methods and processes being used for monitoring the project activity.

Most contractors and managers tend to believe in management by crisis where attention is given to problem areas as they crop up rather than preventing them in the first place through structured planning and scheduling. The additional effort required is considered more fulfilling and purposeful despite the overwhelming wastage of resources that it entails. Project management is therefore sacrificed since it requires adherence to discipline and processes with methodology which is essentially a culture that every organization has to evolve. As a result, erosion of planned margin and poor cash flow management, the contract suffers. This is one of the major reasons for the failure of many contracting companies who are either unable to cope with their financial needs and wind up or are unable to grow in a structured manner.

This brings out a another paradox. With the best of breed IT and communication systems that are available and used by all, most contractors seldom use it for tracking their plans and schedules to improve their efficiencies. On the contrary greater faith is vested on installing ERP systems, ISO and Six Sigma processes which in reality cannot substitute project planning and scheduling. In most cases such systems only serve to be displayed and advertised as an organizations list of achievements.

HR issues are largely overlooked by most contracting organizations due to lack of performance metrics and its recognition as a career enhancer. This in turn leads to non- conformance to discipline or a mismatch in features of any new initiative with the organizations culture. It is therefore fairly common where organizations have reluctantly admitted that such investments have yielded low to medium satisfaction if not complete failures. Most often, such initiatives are rejected by the organization due to lack of buy in from the interested groups when consensus driven decisions are not encouraged.

Another unique situation in the construction industry is for promoters to turn to contractors for funding their projects. This is more often outside the scope of the original contract and usually informal in nature. Payments are therefore exchanged for part of the project assets or are deferred indefinitely. In both cases if the situation is unplanned and has to be accepted under duress, it impacts the cash flow of the contractor concerned. In such situations the relationship dynamics between the various stake holders is held to ransom for future opportunities.

The challenge therefore is how does an organization develop its contract management capabilities, methods and processes and perform as an island of efficiency?

The answer lies in encouraging the use of Planning and Scheduling for efficient resource utilization. Risk management and mitigation plans and also an issue register helps control the project development track to plan. Also deploying Enterprise Project Management systems help and assist collaboration and communication among the various stake holders of the project. It also enables innovation and transparency within the project teams. The benefits of informed decisions are best demonstrated and experienced for others to emulate. Imitation is therefore considered a better form of flattery and thus leadership positions can be easily established to capture growth opportunities.