The traditional approach

A traditional phased approach identifies a sequence of steps to be completed. In the "traditional approach", we can distinguish 5 components of a project (4 stages plus control) in the development of a project:

Typical development phases of a project

Project initiation stage; Project planning or design stage; Project execution or production stage; Project monitoring and controlling systems; Project completion stage.

Not all the projects will visit every stage as projects can be terminated before they reach completion. Some projects do not follow a structured planning and/or monitoring stages. Some projects will go through steps 2, 3 and 4 multiple times.

Many industries use variations on these project stages. For example, when working on a brick and mortar design and construction, projects will typically progress through stages like Pre-Planning, Conceptual Design, Schematic Design, Design Development, Construction Drawings (or Contract Documents), and Construction Administration. In software development, this approach is often known as the waterfall model [16] , i.e., one series of tasks after another in linear sequence. In software development many organizations have adapted the Rational Unified Process (RUP) to fit this methodology, although RUP does not require or explicitly recommend this practice. Waterfall development works well for small, well defined projects, but often fails in larger projects of undefined and ambiguous nature. The Cone of Uncertainty explains some of this as the planning made on the initial phase of the project suffers from a high degree of uncertainty. This becomes especially true as software development is often the realization of a new or novel product. In projects where requirements have not been finalized and can change, requirements management is used to develop an accurate and complete definition of the behavior of software that can serve as the basis for software development[17]. While the terms may differ from industry to industry, the actual stages typically follow common steps to problem solving — "defining the problem, weighing options, choosing a path, implementation and evaluation."

[edit] Critical Chain Project Management

Critical Chain Project Management (CCPM) is a method of planning and managing projects that puts more emphasis on the resources (physical and human) needed in order to execute project

tasks. It is an application of the Theory of Constraints (TOC) to projects. The goal is to increase the rate of throughput (or completion rates) of projects in an organization. Applying the first three of the five focusing steps of TOC, the system constraint for all projects is identified as are the resources. To exploit the constraint, tasks on the critical chain are given priority over all other activities. Finally, projects are planned and managed to ensure that the resources are ready when the critical chain tasks must start, subordinating all other resources to the critical chain.

Regardless of project type, the project plan should undergo Resource Leveling, and the longest sequence of resource-constrained tasks should be identified as the critical chain. In multi-project environments, resource leveling should be performed across projects. However, it is often enough to identify (or simply select) a single "drum" resource—a resource that acts as a constraint across projects—and stagger projects based on the availability of that single resource.

Planning and feedback loops in Extreme Programming (XP) with the time frames of the multiple loops.

[edit] Extreme Project Management

In critical studies of Project Management, it has been noted that several of these fundamentally PERT-based models are not well suited for the multi-project company environment of today.[citation needed] Most of them are aimed at very large-scale, one-time, non-routine projects, and nowadays all kinds of management are expressed in terms of projects.

Using complex models for "projects" (or rather "tasks") spanning a few weeks has been proven to cause unnecessary costs and low maneuverability in several cases. Instead, project management experts try to identify different "lightweight" models, such as Agile Project Management methods including Extreme Programming for software development and Scrum techniques.

The generalization of Extreme Programming to other kinds of projects is extreme project management, which may be used in combination with the process modeling and management principles of human interaction management.

[edit] Event chain methodology

Event chain methodology is another method that complements critical path method and critical chain project management methodologies.

Event chain methodology is an uncertainty modeling and schedule network analysis technique that is focused on identifying and managing events and event chains that affect project schedules. Event chain methodology helps to mitigate the negative impact of psychological heuristics and biases, as well as to allow for easy modeling of uncertainties in the project schedules. Event chain methodology is based on the following principles.

Probabilistic moment of risk: An activity (task) in most real life processes is not a continuous uniform process. Tasks are affected by external events, which can occur at some point in the middle of the task.

Event chains: Events can cause other events, which will create event chains. These event chains can significantly affect the course of the project. Quantitative analysis is used to determine a cumulative effect of these event chains on the project schedule.

Critical events or event chains: The single events or the event chains that have the most potential to affect the projects are the “critical events” or “critical chains of events.” They can be determined by the analysis.

Project tracking with events: Even if a project is partially completed and data about the project duration, cost, and events occurred is available, it is still possible to refine information about future potential events and helps to forecast future project performance.

Event chain visualization: Events and event chains can be visualized using event chain diagrams on a Gantt chart.

[edit] PRINCE2

The PRINCE2 process model

PRINCE2 is a structured approach to project management, released in 1996 as a generic project management method.[18] It combined the original PRINCE methodology with IBM's MITP (managing the implementation of the total project) methodology. PRINCE2 provides a method for managing projects within a clearly defined framework. PRINCE2 describes procedures to coordinate people and activities in a project, how to design and supervise the project, and what to do if the project has to be adjusted if it does not develop as planned.

In the method, each process is specified with its key inputs and outputs and with specific goals and activities to be carried out. This allows for automatic control of any deviations from the plan. Divided into manageable stages, the method enables an efficient control of resources. On the basis of close monitoring, the project can be carried out in a controlled and organized way.

PRINCE2 provides a common language for all participants in the project. The various management roles and responsibilities involved in a project are fully described and are adaptable to suit the complexity of the project and skills of the organization.

[edit] Process-based management

Capability Maturity Model, predecessor of the CMMI Model

Also furthering the concept of project control is the incorporation of process-based management. This area has been driven by the use of Maturity models such as the CMMI (Capability Maturity Model Integration) and ISO/IEC15504 (SPICE - Software Process Improvement and Capability Estimation).

Agile Project Management approaches based on the principles of human interaction management are founded on a process view of human collaboration. This contrasts sharply with the traditional approach. In the agile software development or flexible product development approach, the project is seen as a series of relatively small tasks conceived and executed as the situation demands in an adaptive manner, rather than as a completely pre-planned process.

[edit] Project Management Processes

Traditionally, project management includes a number of elements: four to five process groups, and a control system. Regardless of the methodology or terminology used, the same basic project management processes will be used.

The project development stages[19]

Major process groups generally include:

Initiation Planning or development Production or execution Monitoring and controlling Closing

In project environments with a significant exploratory element (e.g., Research and development), these stages may be supplemented with decision points (go/no go decisions) at which the project's continuation is debated and decided. An example is the Stage-Gate model.

[edit] Initiation

Initiating Process Group Processes[19]

The initiation processes determine the nature and scope of the project. If this stage is not performed well, it is unlikely that the project will be successful in meeting the business’ needs. The key project controls needed here are an understanding of the business environment and making sure that all necessary controls are incorporated into the project. Any deficiencies should be reported and a recommendation should be made to fix them.

The initiation stage should include a plan that encompasses the following areas:

Analyzing the business needs/requirements in measurable goals Reviewing of the current operations Financial analysis of the costs and benefits including a budget Stakeholder analysis , including users, and support personnel for the project Project charter including costs, tasks, deliverables, and schedule

[edit] Planning and design

Planning Process Group Activities[19]

After the initiation stage, the project is planned to an appropriate level of detail. The main purpose is to plan time, cost and resources adequately to estimate the work needed and to effectively manage risk during project execution. As with the Initiation process group, a failure to adequately plan greatly reduces the project's chances of successfully accomplishing its goals.

Project planning generally consists of

determining how to plan (e.g. by level of detail or rolling wave); developing the scope statement; selecting the planning team; identifying deliverables and creating the work breakdown structure; identifying the activities needed to complete those deliverables and networking the

activities in their logical sequence; estimating the resource requirements for the activities; estimating time and cost for activities; developing the schedule; developing the budget; risk planning; gaining formal approval to begin work.

Additional processes, such as planning for communications and for scope management, identifying roles and responsibilities, determining what to purchase for the project and holding a kick-off meeting are also generally advisable.

For new product development projects, conceptual design of the operation of the final product is may be performed concurrent with the project planning activities, and may help to inform the planning team when identifying deliverables and planning activities.

[edit] Executing

Executing Process Group Processes[19]

Executing consists of the processes used to complete the work defined in the project management plan to accomplish the project's requirements. Execution process involves coordinating people and resources, as well as integrating and performing the activities of the project in accordance with the project management plan. The deliverables are produced as outputs from the processes performed as defined in the project management plan.

[edit] Monitoring and Controlling

Monitoring and Controlling consists of those processes performed to observe project execution so that potential problems can be identified in a timely manner and corrective action can be taken, when necessary, to control the execution of the project. The key benefit is that project performance is observed and measured regularly to identify variances from the project management plan.

Monitoring and Controlling Process Group Processes[19]

Monitoring and Controlling includes:

Measuring the ongoing project activities (where we are); Monitoring the project variables (cost, effort, scope, etc.) against the project management

plan and the project performance baseline (where we should be); Identify corrective actions to address issues and risks properly (How can we get on track

again); Influencing the factors that could circumvent integrated change control so only approved

changes are implemented

In multi-phase projects, the Monitoring and Controlling process also provides feedback between project phases, in order to implement corrective or preventive actions to bring the project into compliance with the project management plan.

Project Maintenance is an ongoing process, and it includes:

Continuing support of end users Correction of errors Updates of the software over time

Monitoring and Controlling cycle

In this stage, auditors should pay attention to how effectively and quickly user problems are resolved.

Over the course of any construction project, the work scope may change. Change is a normal and expected part of the construction process. Changes can be the result of necessary design modifications, differing site conditions, material availability, contractor-requested changes, value engineering and impacts from third parties, to name a few. Beyond executing the change in the field, the change normally needs to be documented to show what was actually constructed. This is referred to as Change Management. Hence, the owner usually requires a final record to show all changes or, more specifically, any change that modifies the tangible portions of the finished work. The record is made on the contract documents – usually, but not necessarily limited to, the design drawings. The end product of this effort is what the industry terms as-built drawings, or more simply, “as built.” The requirement for providing them is a norm in construction contracts.

When changes are introduced to the project, the viability of the project has to be re-assessed. It is important not to lose sight of the initial goals and targets of the projects. When the changes accumulate, the forecasted result may not justify the original proposed investment in the project.

[edit] Closing

Closing Process Group Processes.[19]

Closing includes the formal acceptance of the project and the ending thereof. Administrative activities include the archiving of the files and documenting lessons learned.

This phase consists of:

Project close: Finalize all activities across all of the process groups to formally close the project or a project phase

Contract closure: Complete and settle each contract (including the resolution of any open items) and close each contract applicable to the project or project phase

[edit] Project control systems

Project control is that element of a project that keeps it on-track, on-time and within budget. Project control begins early in the project with planning and ends late in the project with post-implementation review, having a thorough involvement of each step in the process. Each project should be assessed for the appropriate level of control needed: too much control is too time consuming, too little control is very risky. If project control is not implemented correctly, the cost to the business should be clarified in terms of errors, fixes, and additional audit fees.

Control systems are needed for cost, risk, quality, communication, time, change, procurement, and human resources. In addition, auditors should consider how important the projects are to the financial statements, how reliant the stakeholders are on controls, and how many controls exist. Auditors should review the development process and procedures for how they are implemented. The process of development and the quality of the final product may also be assessed if needed or requested. A business may want the auditing firm to be involved throughout the process to catch problems earlier on so that they can be fixed more easily. An auditor can serve as a controls consultant as part of the development team or as an independent auditor as part of an audit.

Businesses sometimes use formal systems development processes. These help assure that systems are developed successfully. A formal process is more effective in creating strong controls, and auditors should review this process to confirm that it is well designed and is followed in practice. A good formal systems development plan outlines:

A strategy to align development with the organization’s broader objectives Standards for new systems Project management policies for timing and budgeting Procedures describing the process Evaluation of quality of change

[edit] Project management topics

[edit] Project managers

A project manager is a professional in the field of project management. Project managers can have the responsibility of the planning, execution, and closing of any project, typically relating to

construction industry, architecture, computer networking, telecommunications or software development. Many other fields in the production, design and service industries also have project managers.

A project manager is the person accountable for accomplishing the stated project objectives. Key project management responsibilities include creating clear and attainable project objectives, building the project requirements, and managing the triple constraint for projects, which is cost, time, and scope.

A project manager is often a client representative and has to determine and implement the exact needs of the client, based on knowledge of the firm they are representing. The ability to adapt to the various internal procedures of the contracting party, and to form close links with the nominated representatives, is essential in ensuring that the key issues of cost, time, quality and above all, client satisfaction, can be realized.

[edit] Project Management Triangle

The Project Management Triangle.

Like any human undertaking, projects need to be performed and delivered under certain constraints. Traditionally, these constraints have been listed as "scope," "time," and "cost".[1] These are also referred to as the "Project Management Triangle," where each side represents a constraint. One side of the triangle cannot be changed without affecting the others. A further refinement of the constraints separates product "quality" or "performance" from scope, and turns quality into a fourth constraint.

The time constraint refers to the amount of time available to complete a project. The cost constraint refers to the budgeted amount available for the project. The scope constraint refers to what must be done to produce the project's end result. These three constraints are often competing constraints: increased scope typically means increased time and increased cost, a tight time constraint could mean increased costs and reduced scope, and a tight budget could mean increased time and reduced scope.

The discipline of Project Management is about providing the tools and techniques that enable the project team (not just the project manager) to organize their work to meet these constraints.

[edit] Work Breakdown Structure

Example of a Work breakdown structure applied in a NASA reporting structure.[20]

The Work Breakdown Structure (WBS) is a tree structure, which shows a subdivision of effort required to achieve an objective; for example a program, project, and contract. The WBS may be hardware, product, service, or process oriented.

A WBS can be developed by starting with the end objective and successively subdividing it into manageable components in terms of size, duration, and responsibility (e.g., systems, subsystems, components, tasks, subtasks, and work packages), which include all steps necessary to achieve the objective.[17]

The Work Breakdown Structure provides a common framework for the natural development of the overall planning and control of a contract and is the basis for dividing work into definable increments from which the statement of work can be developed and technical, schedule, cost, and labor hour reporting can be established.[20]

[edit] Project Management Framework

Example of an IT Project Management Framework.[19]

The Program (Investment) Life Cycle integrates the project management and system development life cycles with the activities directly associated with system deployment and operation. By design, system operation management and related activities occur after the project is complete and are not documented within this guide.[19]

For example, see figure, in the US United States Department of Veterans Affairs (VA) the program management life cycle is depicted and describe in the overall VA IT Project Management Framework to address the integration of OMB Exhibit 300 project (investment) management activities and the overall project budgeting process. The VA IT Project Management Framework diagram illustrates Milestone 4 which occurs following the deployment of a system and the closing of the project. The project closing phase activities at the VA continues through system deployment and into system operation for the purpose of illustrating and describing the system activities the VA considers part of the project. The figure illustrates the actions and associated artifacts of the VA IT Project and Program Management process.[19]

[edit] International standards

There have been several attempts to develop Project Management standards, such as:

Capability Maturity Model from the Software Engineering Institute. GAPPS, Global Alliance for Project Performance Standards- an open source standard

describing COMPETENCIES for project and program managers. A Guide to the Project Management Body of Knowledge HERMES method , Swiss general project management method, selected for use in

Luxembourg and international organisations. The ISO standards ISO 9000, a family of standards for quality management systems, and

the ISO 10006:2003, for Quality management systems and guidelines for quality management in projects.

PRINCE2 , PRojects IN Controlled Environments. Team Software Process (TSP) from the Software Engineering Institute. Total Cost Management Framework, AACE International's Methodology for Integrated

Portfolio, Program and Project Management) V-Modell , an original systems development method. The Logical framework approach, which is popular in international development

organisations.

[edit] Project portfolio management

An increasing number of organisations are using, what is referred to as, project portfolio management (PPM) as a means of selecting the right projects and then using project management techniques[21] as the means for delivering the outcomes in the form of benefits to the performing private or not-for-profit organisation.

Project management methods are used 'to do projects right' and the methods used in PPM are used 'to do the right projects'. In effect PPM is becoming the method of choice for selection and prioritising among resource inter-related projects in many industries and sectors.

Terminology

Construction management (CM): UK: 1. management of the site. 2. form of delivery (see presentation Hammond, p. 10) USA: form of delivery (compare above)

Real estate management (REM): professional property advice (as opposed to a project, REM is an everlasting process with no start and no finish)

Corporate real estate management (CREM): REM focused on a company’s property Management contracting (MC): UK: form of delivery (see presentation Hammond, p. 11; “Generalübernehmer”) USA: CM at risk

Programme management (ProgM): UK: 1. programme management is concerned with managing time in a project and is thereby part of the CPM function. 2. management of a client’s portfolio (client’s programme in this sense is equivalent to a client’s brief) USA: management of a client’s portfolio (compare above)

Project control (PC): The PC function is concerned with gathering data regarding project progress, producing progress reports, monitoring time, cost, and quality. Compared to the CPM function, the PC function can be characterised to be passive, whereas a construction project manager needs to take action.

Project leader (PL): The PL is responsible for achieving the project’s objectives. He is the manager “in line”.

Project director (PD): The PD is the leader of a big project that can be broken down in sub-projects (e.g. Channel tunnel). He can also be the head of a PM organisation. OR: The OR is the representative of the owner. This function can be provided either internally or externally.

DC: Document Control - A key function of a Project Manager - One not best to leave with a humble QS

FBOT: finance build operate transfer

BOT: build operate transfer

DBOT: design build operate transfer

BOO: build own operate

EPC: engineering procurement construction

PFI: private finance initiative

GC: general contractor

MPC: multiple prime contracts: UK: one contractor takes responsibility for the development (package deal) USA: a client may have 5 or 6 prime contractors

[edit] Study and practice

Construction management education comes in a variety of formats: formal degree programs (one-year associate degree; four-year baccalaureate degree, masters degree, project management, operations management engineer degree, doctor of philosophy degree, postdoctoral researcher); on-job-training; and continuing education / professional development. For information on degree programs, reference ACCE, the American Council for Construction Education, or ASC, the Associated Schools of Construction.The recognized institute for construction management in Great Britain is The Chartered Institute of Building in Ascot.

According to the American Council for Construction Education (the academic accrediting body of construction management educational programs in the U.S.), the academic field of construction management encompasses a wide range of topics. These range from general management skills, to management skills specifically related to construction, to technical knowledge of construction methods and practices. There are many schools offering Construction Management programs, including some that offer a Masters degree.[1][2]

[edit] Business model

Typically the construction industry includes three parties: an owner,a designer (architect or engineer), the builder (usually called the general contractor). Traditionally, there are two contracts between these parties as they work together to plan, design, and construct the project. The first contract is the owner-designer contract, which involves planning, design, and construction administration. The second contract is the owner-contractor contract, which involves construction. An indirect, third-party relationship exist between the designer and the contractor due to these two contracts.

An alternate contract or business model replaces the two traditional contracts with three contracts: owner-designer, owner-construction project manager, and owner-builder. The construction project management company becomes an additional party engaged in the project to act as an advisor to the owner, to which they are contractually tied. The construction manager's role is to provide construction advice to the designer, on the owner's behalf, design advice to the constructor, again on the owner's behalf, and other advice as necessary.

[edit] Design Build Contracts

Main article: Design-build

Recently a different business model has become more popular. Many owners - particularly government agencies have let out contracts which are known as Design-Build contracts. In this type of contract, the construction team is known as the design-builder. They are responsible for

taking a concept developed by the owner, completing the detailed design, and then pending the owner's approval on the design, they can proceed with construction. Virtual Design and Construction technology has enabled much of the ability of contractors to maintain tight construction time

There are two main advantages to using a design-build contract. First, the construction team is motivated to work with the design team to develop a design with constructability in mind. In that way it is possible for the team to creatively find ways to reduce construction costs without reducing the function of the final product. The owner can expect a reduced price due to the increased constructability of the design.

The other major advantage involves the schedule. Many projects are given out with an extremely tight time frame. By letting out the contract as a design-build contract, the contractor is established, and early mobilization and construction activities are able to proceed concurrently with the design. Under a traditional contract, construction cannot begin until after the design is finished, the project is bid and awarded, and the team can mobilize. This type of contract can take months off the finish date of a project.

[edit] Agency CM

Construction Cost Management is a fee-based service in which the Construction Manager (C.M) is responsible exclusively to the owner and acts in the owner's interests at every stage of the project. The construction manager offers advice, uncolored by any conflicting interest, on matters such as:

Optimum use of available funds; Control of the scope of the work; Project scheduling; Optimum use of design and construction firms' skills and talents; Avoidance of delays, changes and disputes; Enhancing project design and construction quality; Optimum flexibility in contracting and procurement. Cash flow Management.

Comprehensive management of every stage of the project, beginning with the original concept and project definition, yields the greatest possible benefit to owners from Construction Management. As time progresses beyond the pre-design phase the CM's ability to effect cost savings diminishes. The Agency CM can represent the owner by helping to select the design team as well as the construction team and manage the design preventing scope creep, helping the owner stay within a pre-determined budget by performing Value Engineering, Cost/Benefit Analysis and Best Value Comparisons. The Agency CM can even provide oversight services for a CM At-Risk contract.

[edit] CM At-Risk

CM at-Risk is a delivery method which entails a commitment by the construction manager to deliver the project within a Guaranteed Maximum Price (GMP), in most cases. The construction manager acts as consultant to the owner in the development and design phases, (often referred to as "Preconstruction Services"), but as the equivalent of a general contractor during the construction phase. When a construction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner's interest, the construction manager must manage and control construction costs to not exceed the GMP, which would be a financial hit to the CM company.

CM "At Risk" is a global term referring to a business relationship of Construction contractor, Owner and Architect / Designer. Typically, a CM At Risk arrangement eliminates a "Low Bid" construction project. A GMP agreement is a typical part of the CM and Owner agreement somewhat comparable to a "Low Bid" contract, but with a number of adjustments in responsibilities required by the CM. Aspects of GMP agreements will be elaborated below. The following are some primary aspects of the most potential benefits of a CM At Risk arrangement:

Budget management: Before design of a project is completed ( 6 months to 1-1/2 years of coordination between Designer and Owner), the CM is involved with estimating cost of constructing a project based on hearing from the designer and Owner (design concept) what is going / desired to be built. Upon some aspect of desired design raising the cost estimate over the budget the Owner wants to maintain, a decision can be made to modify the design concept instead of having to spend a considerable amount of time, effort and money re-designing and/or modifying completed construction documents, OR, the Owner decides to spend more money or obtain higher financial support for the project. To manage the budget before design is done, construction crews are mobilized, CM is spending tens of thousands per week just having onsite management, major items are purchased, etc, etc,...is an extremely more efficient use of everyone's time, effort, Architect / Designer's costs, and the CM's General Conditions costs, AND delivering to the Owner a design within his budget.

Selecting constructor: ( to be elaborated )

Maintaining positive working relationships among the Owner, Architect / Designer and Constructor: ( to be elaborated )

Maximizes the awareness among Owner, Architect / Designer and CM of all parties needs, expectations in order to perform their part of the project in the most efficient manner. ( to be elaborated )

Business model

Typically the construction industry includes three parties: an owner,a designer (architect or engineer), the builder (usually called the general contractor). Traditionally, there are two contracts between these parties as they work together to plan, design, and construct the project. The first contract is the owner-designer contract, which involves planning, design, and construction administration. The second contract is the owner-contractor contract, which

involves construction. An indirect, third-party relationship exist between the designer and the contractor due to these two contracts.

An alternate contract or business model replaces the two traditional contracts with three contracts: owner-designer, owner-construction project manager, and owner-builder. The construction project management company becomes an additional party engaged in the project to act as an advisor to the owner, to which they are contractually tied. The construction manager's role is to provide construction advice to the designer, on the owner's behalf, design advice to the constructor, again on the owner's behalf, and other advice as necessary.

[edit] Design Build Contracts

Main article: Design-build

Recently a different business model has become more popular. Many owners - particularly government agencies have let out contracts which are known as Design-Build contracts. In this type of contract, the construction team is known as the design-builder. They are responsible for taking a concept developed by the owner, completing the detailed design, and then pending the owner's approval on the design, they can proceed with construction. Virtual Design and Construction technology has enabled much of the ability of contractors to maintain tight construction time

There are two main advantages to using a design-build contract. First, the construction team is motivated to work with the design team to develop a design with constructability in mind. In that way it is possible for the team to creatively find ways to reduce construction costs without reducing the function of the final product. The owner can expect a reduced price due to the increased constructability of the design.

The other major advantage involves the schedule. Many projects are given out with an extremely tight time frame. By letting out the contract as a design-build contract, the contractor is established, and early mobilization and construction activities are able to proceed concurrently with the design. Under a traditional contract, construction cannot begin until after the design is finished, the project is bid and awarded, and the team can mobilize. This type of contract can take months off the finish date of a project.

[edit] Agency CM

Construction Cost Management is a fee-based service in which the Construction Manager (C.M) is responsible exclusively to the owner and acts in the owner's interests at every stage of the project. The construction manager offers advice, uncolored by any conflicting interest, on matters such as:

Optimum use of available funds; Control of the scope of the work; Project scheduling; Optimum use of design and construction firms' skills and talents;

Avoidance of delays, changes and disputes; Enhancing project design and construction quality; Optimum flexibility in contracting and procurement. Cash flow Management.

Comprehensive management of every stage of the project, beginning with the original concept and project definition, yields the greatest possible benefit to owners from Construction Management. As time progresses beyond the pre-design phase the CM's ability to effect cost savings diminishes. The Agency CM can represent the owner by helping to select the design team as well as the construction team and manage the design preventing scope creep, helping the owner stay within a pre-determined budget by performing Value Engineering, Cost/Benefit Analysis and Best Value Comparisons. The Agency CM can even provide oversight services for a CM At-Risk contract.

1. Define the ScopeThe first, and most important, step in any project is defining the scope of the project. What is it you are supposed to accomplish by managing this project? What is the project objective? Equally important is defining what is not included in the scope of your project. If you don't get enough definition from your boss, clarify the scope yourself and send it back upstairs for confirmation.

2. Determine Available ResourcesWhat people, equipment, and money will you have available to you to achieve the project objectives? As a project manager, you usually will not have direct control of these resources, but will have to manage them through matrix management. Find out how easy or difficult that will be to do.

3. Check the TimelineWhen does the project have to be completed? As you develop your project plan you may have some flexibility in how you use time during the project, but deadlines usually are fixed. If you decide to use overtime hours to meet the schedule, you must weigh that against the limitations of your budget.

4. Assemble Your Project TeamGet the people on your team together and start a dialog. They are the technical experts. That's why their functional supervisor assigned them to the project. Your job is to manage the team.

5. List the Big StepsWhat are the major pieces of the project? If you don't know, start by asking your team. It is a good idea to list the steps in chronological order but don't obsess about it; you can always change the order later.

6. List the Smaller StepsList the smaller steps in each of the larger steps. Again, it usually helps you remember all the steps if you list them in chronological order. How many levels deep you go of more and more detailed steps depends on the size and complexity of your project.

7. Develop a Preliminary PlanAssemble all your steps into a plan. What happens first? What is the next step? Which steps can go on at the same time with different resources? Who is going to do each step? How long will it take? There are many excellent software packages available that can automate a lot of this detail for you. Ask others in similar positions what they use.

8. Create Your Baseline PlanGet feedback on your preliminary plan from your team and from any other stakeholders. Adjust your timelines and work schedules to fit the project into the available time. Make any necessary adjustments to the preliminary plan to produce a baseline plan.

9. Request Project AdjustmentsThere is almost never enough time, money or talent assigned to a project. Your job is to do more with the limited resources than people expect. However, there are often limits placed on a project that are simply unrealistic. You need to make your case and present it to your boss and request these unrealistic limits be changed. Ask for the changes at the beginning of the project. Don't wait until it's in trouble to ask for the changes you need.

10. Work Your Plan, But Don't Die For ItMaking the plan is important, but the plan can be changed. You have a plan for driving to work every morning. If one intersection is blocked by an accident, you change your plan and go a different way. Do the same with your project plans. Change them as needed, but always keep the scope and resources in mind.

11. Monitor Your Team's ProgressYou will make little progress at the beginning of the project, but start then to monitor what everyone is doing anyway. That will make it easier to catch issues before they become problems.

12. Document EverythingKeep records. Every time you change from your baseline plan, write down what the change was and why it was necessary. Every time a new requirement is added to the project write down where the requirement came from and how the timeline or budget was adjusted because of it. You can't remember everything, so write them down so you'll be able to look them up at the end-of-project review and learn from them.

13. Keep Everyone InformedKeep all the project stakeholders informed of progress all along. Let them know of your success as you complete each milestone, but also inform them of problems as soon as they come up. Also keep you team informed. If changes are being considered, tell the team about them as far ahead as you can. Make sure everyone on the team is aware of what everyone else is doing.

14. ScopeProject size, goals, requirements

Most literature on project management speaks of the need to manage and balance three elements: people, time, and money. However, the fourth element is the most important and it is the first and last task for a successful project manager. First and foremost you have to manage the project scope.

The project scope is the definition of what the project is supposed to accomplish and the budget (of time and money) that has been created to achieve these objectives. It is absolutely imperative that any change to the scope of the project have a matching change in budget, either time or resources. If the project scope is to build a building to house three widgets with a budget of $100,000 the project manager is expected to do that. However, if the scope is changed to a building for four widgets, the project manager must obtain an appropriate change in budgeted resources. If the budget is not adjusted, the smart project manager will avoid the change in scope.

Usually, scope changes occur in the form of "scope creep". Scope creep is the piling up of small changes that by themselves are manageable, but in agregate are significant. For example, the project callls for a building to be 80,000 square feet in size. The client wants to add a ten foot long, 4 foot wide awning over one bay door. That's a pretty minor change. Later the client wants to extend the awing 8 feet to cover the adjacent bay. Another minor change. Then it's a change to block the upwind side to

the covered area to keep out the wind. Later, it's a request to block the other end to make the addition more symetrical. Eventually, the client asks for a ceiling under the awning, lights in the ceiling, electrical outlets, a water faucet for the workers, some sound-proofing, and a security camera. By now, the minor change has become a major addition. Make sure any requested change, no matter how small, is accompanied by approval for a change in budget or schedule or both.

You can not effectively manage the resources, time and money in a project unless you actively manage the project scope.

When you have the project scope clearly identified and associated to the timeline and budget, you can begin to manage the project resources. These include the people, equipment, and material needed to complete the project.

A successful Project Manager must effectively manage the resources assigned to the project. This includes the labor hours of the designers, the builders, the testers and the inspectors on the project team. It also include managing any labor subcontracts. However, managing project resources frequently involves more than people management. The project manager must also manage the equipment used for the project and the material needed by the people and equipment assigned to the project.

PeopleProject employees, vendor staff, subcontract labor

EquipmentCranes, trucks, backhoes, other heavy equipment or Development, test, and staging servers, CD burners or Recording studio, tape decks, mixers, microphones and speakers

MaterialConcrete, pipe, rebar, insulation or CD blanks, computers, jewel cases, instruction manuals

Managing the people resources means having the right people, with the right skills and the proper tools, in the right quantity at the right time. It also means ensuring that they know what needs to be done, when, and how. And it means motivating them to take ownership in the project too.

Managing direct employees normally means managing the senior person in each group of employees assigned to your project. Remember that these employees also have a line manager to whom they report and from whom the usually take technical direction. In a matrix management situation, like a project team, your job is to provide project direction to them. Managing labor subcontracts usually means managing the team lead for the subcontracted workers, who in turn manages the workers.

The equipment you have to manage as part of your project depends on the nature of the project. A project to construct a frozen food warehouse would need earth moving equipment, cranes, and cement trucks. For a project to release a new version of a computer game, the equipment would include computers, test equipment, and duplication and packaging machinery. The project management key for equipment is much like for people resources. You have to make sure you have the right equipment in the right place at the right time and that it has the supplies it needs to operate properly.

Most projects involve the purchase of material. For a frozen food warehouse, this would be freezers, the building HVAC machinery and the material handling equipment. For a project to release a music CD by a hot new artist, it would include the CD blanks, artwork for the jewel case, and press releases to be sent to deejays. The project management issue with supplies is to make sure the right supplies arrive at the right time (we'll talk about the right price later).

All your skill in managing resources won't help, however, unless you can stick to the project schedule. Time management is critical in successful project management

Time management is a critically important skill for any successful project manager. I have observed that Project Managers who succeed in meeting their project schedule have a good chance of staying within their project budget. The most common cause of blown project budgets is lack of schedule management. Fortunately there is a lot of software on the market today to help you manage your project schedule or timeline.

TasksDuration, resources, dependencies

ScheduleTasks, predecessors, successors

Critical PathChangeable, often multiple, float

Any project can be broken down into a number of tasks that have to be performed. To prepare the project schedule, the project manager has to figure out what the tasks are, how long they will take, what resources they require, and in what order they should be done. Each of these elements has a direct bearing on the schedule.

If you omit a task, the project won't be completed. If you underestimate the length of time or the amount of resources required for the task, you may miss your schedule. The schedule can also be blown if you make a mistake in the sequencing of the tasks.

Build the project schedule by listing, in order, all the tasks that need to be completed. Assign a duration to each task. Allocate the required resources. Determine predecessors (what tasks must be completed before) and successors (tasks that can't start until after) each task. It's pretty simple and straightforward. For instance, think of a project called "Getting Dressed In The Morning". The task "put on shirt" may have a longer duration if it is a buttoned dress shirt than if it's a pullover. It doesn't matter which order you complete the tasks "put on right shoe" and "put on left shoe", but it is important to complete the "put on pants" task before starting the "put on shoes" task.

The difficulty in managing a project schedule is that there are seldom enough resources and enough time to complete the tasks sequentially. Therefore, tasks have to be overlapped so several happen at the same time. Project management software (see sidebar) greatly simplifies the task of creating and managing the project schedule by handling the iterations in the schedule logic for you.

When all tasks have been listed, resourced, and sequenced, you will see that some tasks have a little flexibility in their required start and finish date. This is called float. Other tasks have no flexibility, zero float. A line through all the tasks with zero float is called the critical path. All tasks on this path, and there can be multiple, parallel paths, must be completed on time if the project is to be completed on time. The Project Manager's key time management task is to manage the critical path.

Be aware, that items can be added to or removed from the critical path as circumstances change during the execution of the project. Installation of security cameras may not be on the critical path, but if the shipment is delayed, it may become part of the critical path. Conversely, pouring the concrete foundation may be on the critical path, but if the project manager obtains an addition crew and the pour is completed early it could come off the critical path (or reduce the length of the critical path).

Regardless of how well you manage the schedule and the resources, there is one more critical element - managing the budget.

Often a Project Manager is evaluated on his or her ability to complete a project within budget. If you have effectively managed the project resources and project schedule, this should not be a problem. It is, however, a task that requires the project manager's careful attention. You can only manage effectively a limited number of cost items, so focus on the critical ones (see the 80-20 Rule in the sidebar).

CostsEstimated, actual, variability

ContingenciesWeather, suppliers, design allowance

ProfitCost, contingencies, remainder

Each project task will have a cost, whether it is the cost of the labor hours of a computer programmer or the purchase price of a cubic yard of concrete. In preparing the project budget, each of these costs is estimated and then totaled. Some of these estimates will be more accurate than others. A company knows what it will charge each of its projects for different classifications of labor. Commodities like concrete are priced in a very competitive market so prices are fairly predictable. Other estimates are less accurate. For instance, the cost of a conveyor system with higher performance specifications that normal can be estimated to be more expensive, but it is hard to determine whether it will be 10% more or 15% more. For an expensive item, that can be a significant amount.

When the estimated cost of an item is uncertain, the project budget often includes a design allowance. This is money that is set aside in the budget "just in case" the actual cost of the item is wildly different than the estimate.

Unusual weather or problems with suppliers are always a possibility on large projects. Companies usually include a contingency amount in the project budget to cover these kinds of things.

So a project budget is composed of the estimated cost, plus the contingency and design allowance, plus any profit. The project manager's job is to keep the actual cost at or below the estimated cost, to use as little of the design allowance and contingency as possible, and to maximize the profit the company earns on the project.

To maximize your chances of meeting your project budget, meet your project schedule. The most common cause of blown budgets is blown schedules. Meeting the project schedule won't guarantee you will meet the project budget, but it significantly increases your chances. And above all, manage the project scope. Don't allow the project scope to "creep" upward without getting budget and/or schedule adjustments to match.

Successful project management is an art and a science that takes practice. The ideas presented above can give you a basic understanding of project management, but consider it only a beginning. If your job or career path includes project management, and you want to improve your skills, talk to successful project managers, read, and practice. Project management can be a very rewarding career.