“I keep six
honest serving men (they taught me all I knew): Their names are What and
Why and When and How and Where and Who.” Rudyard Kipling
There are so many challenges
that the project managers are encountered during the period of the project life
cycling. I have brought here the most important ones that I had experienced
while I was working as project manager in EPC projects.
Before to proceed toward the
challenges which the project managers face today, let me start by using
guidelines of PMBOK book (Project Management Body of Knowledge) as the Bible of
the Project Management field. Here is the Project Management framework in
accordance with PMBOK.
Project
Management Framework
Regarding
to above chart, I am willing to divide all challenges to three parts which are
Stakeholders’ needs and expectations, 9 Knowledge Areas and Tools and
Techniques. In fact, I
can consider the challenges as External and Internal. You can see that we are
again speaking about External and Internal analysis. Therefore, let me tell you
that the first step to practice the Project Management by managers is to learn
the basic of Strategic Management as follows:
Why should the project managers learn about the
Comprehensive Strategic – Management Model? The reasons are as follows:
- To
issue the large tenders
- To
evaluate the bids and the quotations, purchase orders
- To
predict the strategies, mission and vision of the main contractors,
vendors
- Bid
meetings, negotiations
In fact, the
SWOT analysis of each main contractor or vendor will give good information to
the project managers to save the cost and time accompanied by quality of the
project.
At the first let
me have the debate about external challenges as follows:
- The first step is that the project manager as well as knows the
Stakeholders of project to familiar their needs and expectations.
Who are the Stakeholders of
the project? They are Customers, Consumers, Owners, Partners (Joint ventures),
Funder, Main contractor, Subcontractors, Society and Government, Internal
Personnel, Shareholders and Clients.
If you don’t know your stakeholders, you
won’t perceive what they expect. Then you are not able to have a good
communication among them. If Stakeholders have the conflicts all together you
cannot coordinate and integrate them and consequently your project will be
failed. In the other word, the project manger should know the real concepts of
the Expected Return rate and Risk.
- Your
client has uncertainty about the scope and specifications of project and
the client doesn’t really know what they want. One of the most important
problems that I had in my first project was the approval of the Layout of
the project in which the client should confirm their needs. It took so
long time for confirmation.
- Your
client has delay with your communications.
- Please
consider that you have been chosen as the project manager and the client
ask you to handle the project which had been already determined the Cost,
the Time and the Scope. What will be your action? Do you agree with the
quotation obtained by the client without to take your analysis? Here will
be the origin of the conflict between you and the client. Because if there
is not any balance among the scope the time and the cost, you have to decrease
the quality of the project in all sections such as procurement, low
standard in engineering, low quality in construction, the limited
communication, limited vendor list, high risk project and so on. On the
other hand, you see that the client inject some unskilled people in your
team project. Definitely if you do not accept the analysis of the client,
you should leave your job. This is the big challenge form the project
managers today.
- Another
challenge is a huge fluctuation on economic indicators such as inflation
rate, exchange currency and so on during the period of the project life
cycle. Sometimes the changes are affected on the cost and risk of the
project so that you have to stop the project because the project is not
feasible any more.
- One
of the most important external challenges for the project managers is the
authority. What kind of authority (if any) does the project manager
has or exercises?
In most cases the project manager has no
authority at all on the resources, and he's under the mercy of the functional
manager. However, the project manager through diplomacy, communications, and by
setting himself/herself as an example for the resources, he/she can impose his/her
authority (even without having formal authority). Of course, maybe it is logical issue because all responsibilities
which are associated to the penalty and lost in the project are assigned the
owners. There are two kinds of authority. The
authority on the people and staff that it doesn’t matter very much because even
the CEO uses his/her influences to push the skilled people to do their
obligations. The second kind of authority is decision – making authority. This
is a major problem for many project managers, especially when it comes to
decisions to spend money. When you are a project manager, you are not allowed
to spend the money more than for instance $50 without any approval. What will
be the outcomes? Definitely the outcomes will be approached to increase the
time of the project in which the balance of the scope, the cost and the quality
consequently will be changed. It is possible; the project will be failed
because of too much delay. For instance, sometimes the project manager has to
cross – check some documents, data sheets, DWG’s or invoices of subcontractors.
He/ she should spend money to get the consultant services outside of the
organization. To prevent of delay, the project manager should pass some
regulations rapidly. Therefore, he/she will be charged the additional cost. If
each issue should be approved by functional manager, the project manager
certainly needs to new overall time schedule every day. I don’t understand while the client has
project budgets of hundreds of thousands of dollars; do not trust the project
manager.
Now, let me bring some examples of
internal challenges in which the approach is 9 knowledge areas and tools and
techniques in project management.
- Project
Integration Management
- Approach of the project management
should be always help and cover the executive agents such as Consulting
Engineers, Main and Subcontractors, Project team in addition to coordinate
among them to reach his target. The project manager should know that only
someone does not take a mistake who does not work. Therefore, sometimes he
should shut one’s eyes on some negligible issues. In other words, he should be
flexible. Of course, the project manger should have the concern about balancing
of Time, the Cost, the Scope and Quality during the period of project life
cycle.
- The project manager should obtain
enough information from his sub-projects before to put out to the bid among the
subcontractors for instance, to estimate time and cost of the sub- projects
(Items price list or break down price list) in which there is a high return
rate accompanied by low risk. Therefore, he needs to have basic and details
engineering and details time schedule before the bid by coordinating Human
resources such as engineering department, commercial department and so on.
- In
Procurement (Sales contract)
- It is
suggested to the project manager that details time schedule presented by main
contractor is enclosed as an article of shipment documents included in Sales
contract so that main contractor could not supply any machinery at the site
before commencement date of civil work or erection work. Because main
contractors are not usually interested in doing their obligations in
Construction contract (“C” in EPC) and they will take the most their profits by
Procurement of equipment and Engineering (“P&E” in EPC) that these margins
are often more than P.B.G (Performance Bank Guarantee) presented by main
contractor.
-Break down
price lists should be checked exactly because it is possible that shipment of a
machine or equipment only absorbs 50% of L/C. In the result, the main
contractor, which has gained so much profit by shipping only one or two
equipment at the site, is not interested to doing his obligations included in
the construction contract. Because the civil and erection works are always
accompanied by high risk level.
-Details time
schedule should truly be designed so that it should be established a logical
relation among shipments of the equipment (procurement) and progress of civil
and erection works.
-When a new revision of the document ( contract,
appendix, DWG, data sheet and so on) is issued by Contractor, the project manager should check it out not only
the cases are depended on decisions of the meeting but also other parts of the
document should be controlled word to word and number to number. For instance, in
one of the projects, I remember that we had discussed about mechanical
specifications of machinery (App 3 from Sales contract) at the meeting. But I
saw that it had been deleted some civil work specifications in another part of
new revision APP (3) by Contractor so that total difference cost was more than
one million Euro. And So I remember that the basic elevation code (BM) had been
changed in new revision of DWG related to site plan and had send us for our approval while the real debate on the site plan map was about the layout no
BM code so that it was caused a subject of claim. The project manger should
teach to his team that they should compare all numbers and words on the
documents between previous and new document issued by the contractor.
- Communication
Management
The most important challenge of the communication is the negotiation
between the project manager and main contractor at the meetings. Here I have
brought some examples for good negotiation as follows:
- Each time we
become nervous, we have to pay the cost of it. In fact, it will be the goodwill
for the opponent (main contractor).
- At the meeting, when we are obliged to think, we will be at the
extreme of weakness and we have to
surrender and give up (in fact, this is the important principal of our life.
When we are thinking to solve of the problem, we are at the extreme of weakness
and the problem is at the extreme of the power). Therefore, we should quickly
say to the correspondent (at the meeting): “Let me check it and reply to you
ASAP” or “What’s your mean, I don’t understand it” and so on.
- The
best consequence of the meeting is to reach a Win-Win result. What are the
superiority conditions to this outcome?
Before the staring of the meeting, the
both parties should have a PEST, Industry and SOWT analysis as the initial
information from each other and the project. Because there are two states at
the meeting: 1) our opponent bluff 2)
our opponent shows us that he is very stupid. The second one is very dangerous
for us. Each time we bear in mind that the people do not understand and are
stupid, it is the starting time of losing our opportunities and benefits. In
fact, win – win approach is to reach the boundaries conditions. Who are we able to reach the boundaries conditions?
Definitely it will be done with the increase of our information.
- Human
resources Management
In the field of
Human resource management, I am willing to depict the challenges on two groups
of the project team which are engineering department and control project department as follows:
Ø
In
Engineering
-The most
important thing to present a new design in the field of Engineering is to
collect and select the exact basic data. In fact, the calculation note and
engineering software help us to increase the rate of analysis so that the
feedbacks show us the confirmation or non-confirmation of basic data.
Therefore, we should know that engineering tools (software and calculations) do
two works for us: 1) to analyze of basic data 2) to proceed toward the limits
(for saving of cost and time).
- The project manager should have the concern about a new design because
it brings for the project the new science production and the innovation.
Therefore, the project manger should cross - check the design of engineering
department by using of locally information, previous executed designs,
references, returning analysis, and using of other consultant engineers and
vice versa. It means, when engineers proceed to design and calculate of some
details in the fields of civil, mechanic, process, electric and so on, they
should guess the details of final design completely before starting of the
calculation by using of locally information, other projects just like to this
project, returning analysis, references, their experiences and etc.
An optimum
design will guide us toward the exact estimation and saving of money and time.
For example: I remember that I rejected basic and details engineering of
Electrical Substation Building in one of the projects so that the new revision
had been changed from 2500 m2( Area) to 750 m2 and total saving money was about
800000 Euro accompanied by 6 months saving time. In another project, I remember
that I warned to engineering department about some basic data for designing of
utilities system (Cooling Towers, Steam Generators, Electrical system etc) in
which engineering department had to changed the basic data logically in accordance
with the real consumptions and matched with
the contemporary percentages. And so, I rejected basic engineering of sewage
water (Domestic + foul water) and raw water treatment because of inlet volume
(basic data) so that finally it had been changed from 6 m3/day to 1.5 m3/day.
Therefore, when a project manager receives a new design from engineering
department, he should spend money to obtain other designs to be planned by other
consultant engineers outside of his company for comparing with this new design
because he is expected to find out the best way to reach the target of project
(saving the cost and the time). Of course, a project manager should care about
locally information, previous executed designs, references, returning analysis
too.
- Before final
approving of details engineering included DWGs, data sheets and so on, the
executive engineers and site manager should check them because a designing and
calculating engineer usually works in 2Dimentioal system but an executive
engineer always works in 3Dimentioal space. I mean that the site engineers should
also sign all of these documents before final approval.
Ø
In
Project Control:
- Since
preparing of a details time schedule (CPM) is the most important item in the projects,
if we increase the number of activities (WBS) accompanied by relationships
among them, we will be able to lead the project smoothly. In fact, a
significant CPM should present us details activities. Therefore, basic data are
very important just like to engineering field.
- A
good project controller should be able to have a good friendship with engineers
in engineering department, engineers at the site, financial department,
commercial department, and coordination among them. Because he/she is someone
who is supposed to establish a logical cash flow compatible with engineering
activities, civil and erection activities, procurement ( shipments) by tracking
of critical paths.
- I
think that it will be valuable that a project manager spend money to get
several details time schedule from different sources.
- A
good project controller should track compatibility between primary cost
estimating and cash flow in addition to other tracking every day (for
presenting warning to project manager).
- Engineering
department, site manager, financial department, and commercial department
should sign the details time schedule (CPM) before final approval.
Nowadays, one of
the most crucial things to consider is to monitor the project by using of new
technologies. In fact, the project manager should familiar to new technologies
of monitoring which will significantly help to the project manager for a better
control of the project.
Finally, I would
like to suggest you a very good reference book in the field of the Project
Management which is: “Plant Project Engineering Guidebook for Mechanical and
Civil Engineers” by Morley H. Selver, P. Eng.
