1: The Concept of Project Management

Contents 1.1 Introduction 1.2 The history of project management 1.3 The nature of project management 1.4 The project management standards 1.5 BS 6079 Guide to project management 1.6 The role of the construction related project manager 1.7 Summary

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1.1 Introduction
Learning outcomes from this unit This unit is intended to introduce you to the main concept and philosophy of project management, the use and purpose of the main project management standards, the role and contribution of a construction clients professional project manager. By the time you have finished Unit 1, you should be familiar with: 1. 2. The concept of project management in the context of construction projects The project management standards (APM, PMI, RICS, CIOB) and BS6079, their uses and purposes and the role of the construction related project manager The role and contribution of a construction clients professional project manager in typical construction project teams How construction related project management differs from normal management processes

3. 4.

Recommended text for Unit 1 The reading from the recommended texts for Unit 1 is: Winch GM - Managing Construction Projects, An Information Processing Approach 2nd Edition. Wiley-Blackwell, ISBN 1-4051-8457-1 Ch 1 p. 3-19. Kerzner, H (2013) - A Systems Approach to Planning, Scheduling and Controlling, John Wiley, 11th Edn. ISBN 978-1-118-02227-6, Select relevant sections in Ch 1 and Ch 2 Burke, R - Project Management Techniques, 5th Reprint, Burke Publishing ISBN-13: 978-0-9582-7334-3, Ch 1, Ch 2, pages 1-38, (2010). BS6079: A Guide to Project Management Practice, and ISO 10006: Guidelines to quality in project management via Customer Services, British Standards Institution 389 Chiswick High Road, London W4 4AL, Phone: +00 44 020 8996 9001 PD 6079-4 Project Management Part 4: Guide to project management in the construction industry, British Standards Institution 389 Chiswick High Road, London W4 4AL (2006). ISBN: 0-580-48144-1. The reading from the recommended background texts for Unit 1 is any of the following: Smith N J - Engineering Project Management, Blackwell Publishing, 3rd Edn., ISBN 978-1-4051-6802-1, Select relevant sections in Ch 1. RICS (1999) Conditions of Engagement for Consultant Project Management Services, Surveyor Court: Coventry. Gray, CF and Larson EW - Project Management: The Managerial Process. 5th Edn. McGraw Hill, Boston, 2008 Ch1, p.3-21. Meredith JR and Mantel SJ Project Management: A Managerial Approach. 7th Edn. J Wiley & Sons, Inc. Ch. 1, p. 1-34. CIOB (2010) Code of practice for Project Management for Construction and Development, 4th Edn. Wiley-Blackwell, ISBN: 978-1-4051-9420-4

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1.2 The history of project management

Construction projects have been managed since societies first developed the skills required to construct. Conventionally, in Europe this was the responsibility of the master of the works. However, the emergence of a concept of project management is a phenomenon of the twentieth century. Project management, as a discipline was essentially a spin off from the atomic bomb development program, Project Alamos, in the 1940s. This was the first really complex, high technology project to be operated by mankind. It was seen that there was a need for a highly dedicated and well-developed team to work together on such projects, in order that the required standards could be delivered on time and within cost. This requirement was reinforced with the development of several major military projects through the 1950s. Examples included the design and construction of the Polaris nuclear submarine fleet for the US Navy. The discipline developed until the Project Management International (PMI) in the US and the Association for Project Management (APM) in the UK were formally instituted in the 1960s. However, it became associated with a particular set of project control tools and techniques most notably critical path analysis which held back its further development and application to construction. Gradually the concepts of project management emerged and became diffused into the construction industry so that today it is seen as being associated with the management of the total project throughout its lifecycle. The APM produced its Body of Knowledge in 1988 (regularly updated now 5th Edition in 2009), and assisted greatly in the preparation of BS6079 in 1996 and ISO 10006 in 1997 (The current version of ISO 10006 is the 2003 version). These documents are British and European standards for project management practice and in many ways mark the frontiers of the development of the discipline as a profession today. APM also certifies professional project managers. In the USA, the Project Management Institute (PMI) has developed a similar publication. Their guide document on project management PMBOK is used in many parts of the world. Visit: www.pmi.org and www.apm.org.uk for further information on the two institutes. APM and PMI issue certificates for professional project managers after completing relevant study and examination. These certificates are valued by several large organizations. Prince2 is the current standard promoted by the APM in the UK. The PMI offers Project Management Professional certificate to members.

1.3 The nature of project management

The CIOB (2010) sets out the purpose of project management in the following terms, namely to add significant and specific value to the process of delivering construction projects. This is achieved through the application of a set off generic project Heriot-Watt University Unit 1-3

orientated management principles throughout the life of the project. The CIOB assert that project management processes can be applied to all construction projects but that for smaller or less complex projects the role may well be combined with another discipline e.g. the design team leader. Projects have been defined by a number of authors but in general they can be said to contain some or all of the following characteristics, a project is a unique undertaking: each one will differ from every other in some respect projects have specific objectives (or goals) to be achieved projects require resources projects have budgets projects have time schedules projects require the effort of people measures of quality will apply

Construction related projects are executed in an atmosphere of risk and uncertainty. In addition construction projects need to have concern for sustainability and the health and safety of all project participants and stakeholders. Increasingly construction related projects are looking to establish a single point of responsibility for clients and this is a role most often taken by the project manager. Projects can vary in range, size and shape from large multi-million pound infrastructure works such as road, bridges, airports that take years to complete to small domestic projects with restricted budgets that take just a few weeks to complete. It is clear that construction related projects are organised works that need to be produced in context of pre defined goals or objectives. A projects success can be measured in terms of how closely it has met its predetermined objectives. Amongst other definitions of project management are the following, the application of knowledge, skills, tools and techniques to project activities in order to meet stakeholders needs and expectations from a project (APMBoK) The art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participant satisfaction (PMI) the planning, monitoring and control of all aspects of a project and the motivation of all those involved to achieve the project objectives on time and to cost, quality and performance (BS 6079) It revolves around the management of planned change and in the context of construction projects with problems in the lack of information it revolves around making robust decisions to affect the creation of value (Winch)

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What is clear is that project management and the application of its tools and techniques have moved progressively from concentration upon the problems apparent at the execution or tail end of a project towards problems found at the front end .. from downstream to upstream... and as such project management in construction now needs to engage in the whole process that starts from project inception and continues with many interactions with differing organisations to conclude with the commissioning and operation of the completed built environment asset. The Construction Industry Council (2000) defined the nature of project management in the construction industry as being concerned with defining the business need producing a project delivery strategy project briefing processes evaluating and managing project risks managing the design of the project procuring resources and skills to deliver the project controlling project costs, quality and timing of the project delivery commissioning and accepting the project

Project management is the managerial responsibility and actions involved in accomplishing a project on time, in budget and to the specified quality standards. The project manager is responsible for all aspects of the management system required in order to achieve these objectives. The definition of project is more difficult. In the simplest form, a project is a known objective with some form of parameters or limits applying to it. Generally all projects evolve through a similar process and through identifiable cycles. Classic project management skills are required. These include good all round management skills, thorough understanding of project management objectives, varied and wide technical knowledge, and a wide knowledge, backed up with experience of how projects evolve from the earliest inception stages to final completion and commissioning (close out), preferably in a number of different industries. Project management differs from other traditional management disciplines in several ways. Conventional specifically trained management practice concerns itself being completely responsible with initiating, planning, controlling, executing, and closing a process that involves resources such as labour, materials and plant in order to deliver a product within recognised constraints of time, cost and quality over a period of time that allows for process repetition. In construction, a lead consultant who is usually an architect or civil engineer traditionally manages projects. As such, the lead consultant is educated as a designer but acts in a management capacity. In addition, lead consultants are traditionally appointed to cover sections of the overall lifecycle project. One consultant might be appointed to carry out the feasibility study, while another might be appointed to manage the design and construction processes. Traditionally, there has been little direct involvement of lead consultants in commissioning, operation, decommissioning and recycling. In other words, the lead consultant manages windows or snapshots, but not the whole lifecycle. This approach tends to lead to a problem referred to as sentience. This problem centres on the Heriot-Watt University Unit 1-5

project being led by built environment professionals who are concerned with their own discipline related issues as well as the delivery of successful project management. It is asserted that this traditional approach causes conflicts to appear in the service such professionals offer to their clients. The use of project management processes and the appointment of a project manager, with no specific discipline related skills other than general project management skills, can combat this problem of sentience. Also as the project management process identifies the project manager as the person with single point responsibility for project success then clients can assess project performance on a more transparent basis. Traditionally, there has been no real standardisation of practice for professional consultants. There have been the professional bodies and their codes of conduct, but there has never been any real attempt to standardise how projects are set up and managed or what cost control systems are used and so on. Project management attempts to address some of these restrictions. It is about using fully trained project management professionals to run projects, rather than designers acting as managers. It is about managing the project from inception to operation (and even decommissioning in some cases) through an agreed and complete project lifecycle. Project management is about providing a specialist who can provide combined time, cost and quality control, using national and international standards of professional practice. It replaces the traditional diversified project teams led by a designer acting as a manager, with a coherent project team led by a professional project manager. The objective of project management may be defined as the successful completion of the project, on time, within cost and to the required standards of performance in the context of sustainability and within the constraints of consideration for health and safety for project participants and other stakeholders. Given the wider role of construction related project management it is necessary to consider the following issues so as to ensure that project success can be achieved . For instance consider, (i) (ii) (iii) (iv) (v) define project objectives - it would be necessary to establish, define, and communicate clear objectives for a project and all phases of a project risks it would be necessary to identify, assess and assign risks to aid management of the construction delivery processes timely decision making it would be necessary for instance to agree / signing off designs / plans prior to the project production phase initiating project planning it would be necessary to allocate appropriate resources to planning to achieve efficient production time and money it would be necessary to consider resource allocation and evaluation as a joint item as value can be achieved if rewards of project production at a fast pace outweigh the extra costs involved project team it would be necessary to have/build a committed team associated with project success and so it would be necessary to seek to achieve commitment in team where the main risks are located control - it would be necessary to consider resource requirement so as to have it minimised especially if planning has been properly effected

(vi)

(vii)

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(viii)

(ix)

(x)

(xi)

organisational learning it is recognised that project success would be more likely if organisational learning from experience of other projects can be captured and disseminated contract strategy it should be considered whether contracts to be used can motivate and identify risks/and reward processes should be made explicit external environment it will be necessary to ensure that all decision makers are aware of and can accommodate change caused by market circumstances, clients etc personal development it would be appropriate to ensure resource was made available for training, team building, performance appraisal, personal reflection and professional development

Burke (2003, p.10) details the benefits of project management and students are referred to that source for an extensive list of potential benefits of construction project management over more conventional methods of construction project delivery.

1.4 The project management standards, and their relationship with project management
The approach of project management to deliver projects and through such successful projects, now increasingly to deliver organisational and business management success is being supported by the establishment of benchmark standards that are being identified by the differing project management organisations. Project management practice is anchored on national and international standards. There are several standards in use around the globe but in the UK the major standards that are used as the basis for professional construction related project management practice are the Association for Project Management (APM) Body of Knowledge and the BS 6079 and ISO10006. The RICS also produce their own conditions of engagement for consultant project managers (see later material) and the CIOB have also produced a guide to construction project management. The APM, RICS and the CIOB are the professional bodies that operate in the UK and which are in competition to become established as the principal professional body for construction related project managers. The APM Body of Knowledge is the UK equivalent of the US (PMI) model. It is interdisciplinary and is applicable to all industries. It establishes the standards and areas of responsibility for project managers in all industrial sectors. As such it is a general document. BS6079 and the related ISO 10006 are UK and EC benchmarks for generic project management practice. They set national and international standards for practice while still being heavily based on APM approaches. These standards act together to set international standards. The APMs view is that BS6079 will go on t o become an EC wide standard for project management. Organisations such as the International Project Management Association (IPMA) and the Project Management Institute (PMI) are involved in identifying the contribution that effective management of projects can make to business success, and the development of competencies for project managers. The basis of such professional Heriot-Watt University Unit 1-7

competencies is being established by the PMI and the Association of Project Management (APM). The RICS, the leading professional body for built environment professionals operating in the UK and increasingly around the world now recognise project management as a separate faculty within the Institution which has its own specialist skills, knowledge and practices. The lists below indicate the differing areas of knowledge that each of the above consider as being relevant to the professional construction project manager. PMI BoK (2004) P M Framework P M Process Project Scope Management Project Cost Management Project Human Resources Management Project Risk Management P M Context Project Integration Management Project Time Management Project Quality Management Project Communication Management Project Procurement Management

APM - Handbook for Project Managers (2009) Project context Life Programme management Cultural influences Project success criteria Strategy/Project Plan Value Management Risk management Quality Management Health, Safety & Environment Work Content & Scope Management Time Scheduling Resource Management Budget & Cost Management Change Control Earned Value Management Information Management Design Management Cycle Design Management Post Project Evaluation Review Organisational structures Communication Teamwork Project Leadership Conflict Management Human resource management Hand-over management Configuration management Financial Management Procurement

Given the above it can be seen that the material in this module cannot cover the full range of topics addressed in project management processes and so the student needs to appreciate that the module addresses only the core areas of project management processes as applied in typical construction projects. The student is recommended to access the current APM Book of Knowledge and become familiar with the standardised generic processes advocated there for the management of projects in general. The approach advocated in BS 6079 is the approach that underpins the material and its consideration in the rest of this module.

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1.5 BS 6079 Guide to Project Management

BS6079 is the British Standard Guide to Project Management. It is a very detailed summary of current international project management processes. BS 6079 and the APM BoK indicate that a key project management tool is the generation and application of a strategic planning document for the project. This document is the generic or master/strategic project plan (referred to as a PMP or SPP). The PMI and ISO10006 use another term for this document namely a project execution plan (PEP). The philosophy of the PMP is based on standardisation. At present, projects can be set up and run in any form that the individual manager responsible considers best. There is no standard requirement for document preparation, recording, cost planning and control, or even of quality control. Projects are set up and executed in numerous different ways both between industries and within the same industries. Each organisation has its own procedures, and even members of the same design professions may have different approaches to designing and recording information. This has obvious drawbacks. It makes it very difficult for anyone to evaluate project performance and individual project team performance, because there are so many unknown variables. It would be useful to be able to measure how well a design team has performed in relation to the fees that have been paid. At present, this is not possible because of the levels of information in the system, and the difficulties involved in being able to isolate individual performance characteristics when there are so few constants. BS 6079 attempts to address this problem, at least in part. The standard establishes a standard generic project plan that is applied to all projects. An agricultural project would therefore be set up in exactly the same way as a construction project. The PMP/PEP is a master plan that develops the details of the strategic stages of a projects lifecycle and provides a baseline for anticipated costs and time /programme against which the consequences of changes can be evaluated. The PMP/PEP is also a control document that addresses organisations, support processes, environmental, health and safety systems. A preliminary PMP/PEP can be prepared as part of the assessment of a projects business case. Once authority has been given to go ahead with the project then the PMP/PEP can be expanded to match the level of emergent project information. The PMP/PEP can be produced in draft form as part of the project scope management process and in final form as an action planning/taking document once the client or project sponsor has given final approval for the project to proceed. The PMP/PEP is a live document that is subjected to revisions as the project itself develops. Nonetheless it is a key strategic planning tool and it usually contains a number of core aspects such as a statement of works (SOW), a procurement strategy, an organisational breakdown structure (OBS), a work breakdown structure (WBS), a task responsibility matrix (TRM), and a programme for the works. BS 6079 is an important document, but the sections on the recommended format for the PMP are extremely important. The following are the main sections of a basic PMP/PEP indicated by BS6079, namely (a) (b) Introduction and summary Commitment (budgets) and acceptance procedures

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(c) (d) (e) (f)

Project work breakdown structure (WBS) Organisational breakdown structure (OBS) Schedule or programme A statement of work (SOW)

Generic or strategic project master/execution plan (PMP/PEP) to BS 6079 A more detailed and comprehensive PMP/PEP for a more complex project contains the following sections which are detailed in BS 6079, such as, title page, summary, contents, distribution and amendment record, introduction, project description (SOW), aims and objectives, project policy and project approvals, project organisation, project harmonisation, project implementation strategy, acceptance procedure, programme management, procurement strategy, contract management, communications management, configuration management, financial management, risk management, project resource management, test and evaluation, reliability management, health and safety management, environmental issues, integrated logistics support, project team organisation, staff directory, staff organisational chart, management reporting systems, project diary In summary the PMP/PEP will identify significant project milestones such as, The identification and agreement on project objectives and success criteria The amount of physical and financial resources needed for the project The plan of action for the project The resources for the design need to be identified, obtained and a design generated and approved The resources for the production of the project need to be identified, obtained and managed to construct, commission and pay for the project A more detailed consideration of the contents and sections within a strategic PMP/PEP is provided in the next section of this module. 1. 2. Self assessment questions: What is the international significance of BS6079? What are the obvious drawbacks of a practice standard?

1.6 The role of the construction related project manager

Project managers are increasingly being recognised and employed in organisations of differing types, sizes and orientation. In construction, project managers can be employed by firms and organisations employed in small sized sub contactor and supplier organisations, work package sub contractors and principal contractors, consultant design organisations, as well as within their own specialised project management consultancy. It is usual to find on many construction projects that there is more than one person whose role is described as being a project manager. This can cause confusion to students of project management. It must be remembered that Heriot-Watt University Unit 1-10

project management is concerned with generic processes that can be applied wherever the project management practitioner is located. In construction projects it is normal to find project managers acting for differing participating organisations. For instance the principal contractor will normally have a project manager and perhaps assistant project managers resident on the site, depending on the size and complexity of the project. Similarly many of the larger sub contractors will employ a project manager to coordinate their activities and liaise with the project managers of the principal contractor. Increasingly client organisations will also have their own professional project managers who are concerned with the overall planning, management, and delivery of the project as well as the integration of the project within the clients other business activities. It is this role that that this module assumes as its focus. This role is increasingly being undertaken by consultant professional project managers. Such lead or clients project managers can be located in their own consultancy or are drawn from other large multi disciplinary consultancies that provide services such as design, quantity surveying, safety, and planning supervision for their construction clients. The RICS, in their Conditions of Engagement (RICS, 1999), set out the services that professional construction project managers could be involved with, namely 1. Site selection 3. Agency, valuation & funding 5. Other consultant appointments 7. Reporting and meetings 9. Capital budgeting 2. Project analysis & feasibility studies 4. Legal services 6. Brief, design and quality control 8. Programming 10. Construction economics & financial management 11. Cash flow 12. Statutory compliance 13. Contract procedures 14. Contract management 15. Building management, commissioning and maintenance 16. Tenancies and fitting out The RICS conditions of engagement make it clear that although consultant project managers could be involved in all of the above areas of service provision it is more likely that their services actually required on many projects would be tailored from the above list to suit the particular project circumstances. Given the issues indicated as being relevant by the differing Project Management standards and guides reviewed above it can be seen that the role of the project manager involves using a systematic approach to ......

ensure the project is clearly defined and understood by all enable the project objectives to match the business objectives of the sponsor organisation allow responsibilities for different parts of the project to be understood, allocated and agreed adopt a logical approach to planning & estimating resources provide a consistent means of monitoring and controlling progress provide reassurance by demonstrating visible control Unit 1-11

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In general terms the project manager is also responsible for . project definition & milestones overall project budget strategic project plan (SPP) & work breakdown structure (WBS) & Task responsibility matrix (TRM), draft master plan (DMS) task definitions & responsibility charts performance reports time and cost quality standards related to project process and product end of phase & project review reports

The role of the project manager is addressed in detail in Chapter 3 of Meredith and Mantels book p.107-133. The project manager and the project environment The project environment is the context within which the idea and reality of the project are achieved and developed. It includes everything around the project that could influence it, including: economic climate, labour market, investment levels, political factors, levels of economic activity, legal etc. Each of these factors will have some influence on the project at each stage. For example, the finance available and interest rates may well influence the size and scope of the project, and the way in which it develops. External or environmental factors may necessitate design cuts or savings in the later stages etc. The project manager has to be aware of all environmental factors and the ways in which they can affect the project. The project manager has to have wide general knowledge covering subjects outside the area of management specialism. The project manager therefore needs to have a reasonable understanding of the current economic, political and environmental issues and how these affect the project, together with any social, legal or aesthetic influences that may have an effect. Again, it is preferable if the project manager has this knowledge and experience in relation to more than one industry. In construction project teams, the main players are likely to be: Project Manager Increasingly, the project manager is specifically qualified and experienced in project management. (S)he is in charge of the project team and is responsible for the successful conclusion of the project. BS6079 indicates that the project manager is the individual with the responsibility for managing the project to specific objectives. A professional consultant project manager can manage the project on behalf of the client from inception to completion and occupation. Architect The architect does the main design work. (S)he is usually a professionally qualified member of The Royal Institution of British Architects (RIBA) in the UK, and produces the design drawings and schedules up to the award of the contract. Then Heriot-Watt University Unit 1-12

variation or change orders are issued (in some cases) and the architect is responsible for inspections etc right through the construction phase. Engineer Engineers design civil, structural or services works. They are usually professionally qualified and, in the UK, are members of The Institution of Civil Engineers (ICE) or members of The Chartered Institute of Building Services Engineers (CIBSE). They undertake engineering design work and, like the architect, produce additional designs for variation orders, carrying out on site inspections as required by their contract. Quantity Surveyor The quantity surveyor (QS) is responsible for cost planning and control (cost management). He or she is usually professionally qualified and in the UK is a member of The Royal Institution of Chartered Surveyors (RICS). The surveyor monitors the cost of the design as it develops, providing revised estimates. The QS prepares the bills of quantities and issues them to tendering contractors. The QS checks the priced bills and recommends on the award of contract, then monitors expenditure through the construction phase, agreeing interim payments right through to the settlement of the final account. Quantity surveyors can also work for contracting organisations to cost plan, procure sub contractors and prepare payment claims. Construction Managers The construction managers are usually employed by contracting organisations and they are responsible for the production of the construction project on the site. They may be responsible for the entire project or they may be responsible for parts or sections of the project. The construction managers are professional people who are usually members of the Chartered Institute of Building (CIOB). Increasingly the construction managers are responsible for planning and programming the works and liaising with the domestic and nominated sub contractors who are employed to undertake specified sections of the project. Project Sponsor BS6079 indicates that this is an individual or body for whom the project is undertaken and who is the main risk taker. The project sponsor can be thought of as the client organisation(s) although the project sponsor can also be the individual representing the client organisation/sponsoring body and to whom the project manager reports. Stakeholders of the project are those who have the potential to influence the course of a project. They can be members of the project team and so be the direct parties to a contract. Stakeholders can also be indirect in that they are part of the community in which the project is situated. The statutory/planning system in place in the project location can also be indirect stakeholders in that they can have influence over the project. Others Individual teams may involve other specialists such as building surveyors, who are usually members of the RICS and who are concerned with altering and refurbishing existing buildings, a services co-ordinator (on complex services projects) and a CDM Coordinator (CDM regulations, 2007).

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1.6 Summary
This unit has introduced the main concepts of project management in the context of construction projects. The unit has considered the contents and uses of the project management standards (APM, PMI, RICS, CIOB and BS 6079), their uses and purposes, the problem of sentience in construction project management, and the role and contribution of the clients project manager as well as other members of a construction project team.

Self assessment questions

1. Explain what project management is and set out the benefits of applying it to a large scale complex construction project instead of using a conventional design consultant as the lead consultant. 2. Outline the role and responsibilities of the clients professional project manager. 3. Consider project management and general management and set out the major differences between the two concepts. 4. An international banking organisation is the client for a large, complex, commercial city centre refurbishment project and it is unsure about using consultant project managers as the lead consultants for this project. Make the case for a project management consultancy rather any other type of consultancy to be appointed as the lead consultant for the project.

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