FOR MEMBERS AND FRIENDS OF THE PMSA
SEPTEMBER
/ O
CTO
BER
20
06
web: www.pmisa.org.za email: [email protected]
Five questions to uncover project fraud
New thinking in construction &
engineering
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ProjectNet is an alternate monthly
publication produced by Cyan Sky
Communication Consultancy and distributed
free of charge to the members of PMSA, on
behalf of PMSA.
Editorial Director:
Prof Les Labuschagne, Ex-officio President
Managing Editor:
Taryn van Olden
Design and Layout:
Paper Plane Communication Design
Reproduction and Printing:
Remata Inathi Communications and Printers
Please direct editorial submissions
and enquiries to:
The Editor, ProjectNet, [email protected]
or 082 779-1314.
Advertising enquiries can be directed
to The Editor at the above email address.
For extra copies of ProjectNet and any
PMSA-related enquires such as training
and membership, please contact the CSSA.
Their contact details will soon be available
on the pmsa website www.pmisa.org.za
General contact details related to this
magazine:
Email: [email protected]
Website: www.projectnet.co.za
Address: PO Box 518 Featherbrooke Estate
Ruimsig 1746
Cover image:
Steven Rollins - Chief Project Strategist for
ALLPMO Network Inc. - See page 12
Copyright©
The copyright of all material in this
magazine is reserved by the proprietors,
except where expressly stated. The editors
will, however, consider reasonable requests
for the use of information provided the
source and author are clearly attributed.
Please note: Editorial submissions are welcomed but are subject to review by the PMSA Exco, ProjectNet’s editorial team and editor before a decision is made regarding inclusion. Product- or service-specific information submitted in the form of a news item may be considered for publication in the Our World section, but may not be accepted in any other section. Please contact the Editor for content classifications to guide your submissions. The editor reserves the right to shorten articles but will consult the author should any adjustments be deemed necessary.
th is e
dit
i onINSIDE
Editorial Message from the editor Pg 2
President’s Pen A word from the president Pg 3
Thought Leadership New thinking in construction & engineering Pg 4
The new engineering contract Pg 7
Global Network Project, programme and portfolio
management come together Pg 8
5 Questions to uncover project fraud Pg 12
Advertorial Cranefield to develop EuroMPM Curriculum Pg 17
Branch News News and updates Pg 18
Industry News Bridging through GAPPS Pg 19
PMSA now represented on SACPCMP Pg 21
Academic corner A structured approach to derive projects
from the organisational vision Pg 24
Reviews Book review by Ian Jay Pg 25
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P r e si de
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e
n
So it is probably the “best” time for changes to occur
in PMSA as well.
You may be aware that we will be moving offices on
2 October. We are moving away from the current offices
to share with the Computer Society of South Africa (CSSA),
in Midrand. Many of you will already be familiar with the
venue because of the PMITSIG.
A decision was taken a little while ago to outsource
our administration to the CSSA, who have an excellent
infrastructure already in place and have been doing this
for some years for organisations like the Electronic Industries
Federation, and a few others. The CSSA is managed by an
Executive Director, Roger Dawes, whom I have known and
worked with for a number of years.
In time, we will introduce some of the other people
in the Secretariat.
Our administrative procedures will be changing
dramatically, over the next few months as we discuss and
introduce changes like internet banking, anniversary-based
membership renewals, web-based communication, more
virtual meetings, and so on.
I would like to take the opportunity to express gratitude
to Bruce Rodrigues and his company, who have been
hosting first the PMI SA Chapter, then both PMSA and the
Chapter for a very long time. Whilst they have been paid
for these services, anyone who has been involved in such
a relationship knows that there are many things that are
done and services provided that go unbilled and thus
unpaid for. Thanks, guys.
At the same time, we are also saying goodbye to one
of the longest serving friends and colleagues: Elise Airey.
Presidents come and go, but Elise has always been there
to provide continuity and stability. One of the most scary
things about saying goodbye is the knowledge that there
is an institutional memory that is irreplaceable.
Just how much Elise will be missed will become evident
in the next couple of months and I beg your indulgence
when we experience an inevitable dip in service levels.
For that, I apologise in advance.
Hamba kahle, Elise.
Then, we are finally getting around to our website
revamp. Watch this space. And that is not all (I am starting
to sound a bit like that advertisement that keeps on adding
more “free” stuff).
Last time, I wrote to you about shaping our vision
for the future.
Since the creation of PMSA, a lot has changed.
One thinks of the adoption of the PMBoK guide as an
international (ISO) standard, of the rise in influence of not
just PMI but also of organisations like APM, and the waning
of others.
The question for me is, “where should we be going and
who should we form alliances with?”
As president, I see myself primarily in a governance role,
and representing you, the member. Whilst I feel passionately
about PMSA, and have views about where we should be
going, it is only “my” association in the same way as it is
“your” association.
I would like to know what you think.
Where do you want us to go?
If you are able to, won’t you take the time to tell me by
dropping an email to [email protected].
OCTOBER rings in some changes
The fear of any publication editor is that they are not
in touch, or are losing touch with their audience.
Over the years as editor of various custom publications
in different industries, it has become apparent to me that
just having the publication read is a victory. Knowing the
audience, while desirable, becomes a nice-to-have.
We are overloaded with information, and while there
is clearly still a requirement in most markets for printed
publications, editors are under no illusions that these are
read from cover to cover. I am sure most of us (editors)
would be happy enough to have readers skim through the
publication and find at least one or two items of interest
to them, that they will read.
Of course one could introduce a measurement
mechanism, such as a reader satisfaction survey – and we
did conduct one back in 2003 – but from the responses it
was evident that if project managers have little time to read
the publication, they really don’t have time to participate in
a survey. This means that we have to make many assumptions
about what it is that readers like to see in ProjectNet, based
on interactions with members at meetings, conferences
and other PM events. This goes a long way towards knowing
the audience but I seem to see the same faces at these
events, and they don’t total the full complement of PMSA’s
E d i t
or i
al
SPEAK
* Barna, George. The Power of Vision. Regal Books. 1992.
October, according to an Afrikaans poem, is the most beautiful month. The first rains have fallen, the air has been washed a few times and new growth is in full swing. Trees and plants will be in full bloom and there just seems to be an energy and sense of new beginnings all around us.
member base. There are many of you out there who are
members, readers, project managers who we don’t know.
At the risk of sounding clichéd we really do want to hear
from you. We want to get to know you, without taking up
too much of your time. What I propose should, in fact, take
just a few minutes!
We ask you to answer these three questions, and supply
a couple of personal details. We will even reward 20 of you
for your time with one of the gifts pictured below.
Here we go:
1) What kind of project management are you involved in
(discipline and industry)
2) What aspects of project management would you like
to read about?
3) What do you see as the biggest challenges facing
South African project managers?
Send your answers with your name and email address by
fax to (011) 662-2961 or by email to [email protected],
with ProjectNet Q and A as the subject.
Until next time…Taryn van Olden
to us
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BOTT Technology in Developing Countries
Shaun Krause, a Lecturer in the Department of Engineering
at the Nelson Mandela Metropolitan University says,
all industries in the developing world periodically have
to adapt, upgrade or introduce new technology to gain or
maintain competitive advantage and accommodate new
business strategies.
Since the implementation of capital projects in the
developing world faces many difficulties, in particular the
financing and implementation of high technology projects,
a viable alternative for these technology-based projects
can be formulated around the Build-Operate-Train-Transfer
(BOTT) model.
The BOTT model works on the premise that the client
awards a concession to an implementation consortium to
design, build, finance, train and operate a particular section
of the new technology infrastructure for a defined period.
At the end of the period, ownership of the infrastructure
either reverts back to the client at no cost or remains with
the implementer.
In his presentation, Krause investigated the principles
of BOTT as a model to gain local development and
technology transfer by outsourcing of infrastructure provision
to small and medium enterprises that do not have access
to these new technology developments. He also presented
preliminary findings of a survey among organisations in the
civil, electrical and mechanical disciplines that undertake
these projects.
The outsourcing of non-core business and the impact
of globalisation have affected local first and second
tier manufacturing organisations. Local suppliers find
themselves vulnerable and not competitive. They thus
require innovative ways to gain access to new technology
and innovative procurement systems to achieve this.
The development of these procurement systems
has given rise to a variety of acronyms, such as Asset
Procurement and Operating Partner System (APOPS), Build,
Operate, Transfer (BOT), Build, Own, Operate and Transfer
(BOOT), Design, Build, Own, Operate and Transfer (DBOOT),
Public-Private Partnership (PPP) and Public-Private Funding
Initiative (PPFI).
The general features of these systems is that they transfer
some aspect of the development, design, construction,
ownership, operating, maintenance, use and financing
of the facility from one entity to one or more other entities.
Thus, a State building may be executed in terms of a PPFI
agreement whereby the State owns the facility and only
involves the private sector as far as the financial package
is concerned. In the case of a BOOT or DBOOT process,
however, apart from including the design, construction and
other aspects, a private entity will own, operate, maintain
and refurbish the facility for an agreed period, for its own
account. At the end of the agreed period, ownership of the
facility will be transferred to the State or appropriate State
agency. Examples of these projects are prisons and toll roads.
In addition to serving its own interests and those of the
population in respect of the provision of services, the State
may also encourage the establishment of new industries or the
introduction of new technology for the sake of development,
progress, job creation and economic prosperity. In such cases,
the State may act as project sponsor or initiator, setting the
general requirements and including aspects of innovative
procurement systems as required, but leaving all aspects
of project ownership, operation and finance to private sector
entities. Examples in this case are the establishment of casinos
and other tourism facilities.
From a broad industrial and commercial aspect, the BOTT
process (McKechnie, 1999) works on the premise that the
client awards a concession to an implementation consortium
to design, build, finance, train staff and operate a particular
section of the new technology infrastructure for a defined
period. At the end of the period, ownership of the infrastructure
either reverts back to the client at no cost or remains with the
implementer. Generally the BOTT process (UNIDO, 1996) can be
described as a developing technique for infrastructure projects
by using initiative and funding. A concession is granted to a
concession holder / sponsor, who is required to build the relevant
project facilities or infrastructure, operate them for a fixed period,
train the operators and, at the end of the period, transfer them
back to the entity which originally granted the concession. The
concession (Vinter, 1998) will run for a finite period, which would
ensure that any participating financial institutions are repaid
and the shareholders receive a sufficient return on their initial
investment.
From the research conducted thus far, Krause has made the
following conclusions.
• From a literature survey thus far undertaken, it can be
concluded that industrial development can be boosted,
especially in respect of developing countries.
NEW THINKING
WHAT IS BOTT?
IN CONSTRUCTIONINGOINGOINGO
GNGNGN
KITIONK
TIONKI
TIONTIOTIOTIOAND ENGINEERING
The PMSA conference held earlier this year featured many presentations that shed light on specific
elements of project management. Those engaged in this discipline within the construction industry
could attend a dedicated stream where case studies and research papers brought new ideas
to the fore. In this edition of Thought Leadership, we look at two of these presentations and their
key messages.
Further innovation in respect of procurement systems for the
acquisition of knowledge, production facilities and technology
is possible in the manufacturing and process industries by the
introduction of systems analogous to those in use for constructed
facilities. In this case, initiatives are not confined to the State.
Private sector industries may adopt similar and appropriate
procurement systems and this may be of particular relevance
in developing countries where there is a dearth of finance,
expertise, training facilities and other factors essential for the
introduction of advanced technology and the benefits thereof
in raising living standards and creating jobs.
The Build, Operate, Train and Transfer (BOTT) option, presents
one such possibility. In his presentation, Krause reflected the
initial stage and status quo of research into BOTT as means
of accelerating industrial development in South Africa.
• Several advantages for BOTT principles have been
identified, including the acceleration of economic and skills
development and the possibility of creating more business
and participative opportunities.
• Some arguments against BOTT have also been identified.
Knowledge of these enables them to be proactively
addressed, thus reducing the risk of negative effects.
• A number of standard provisions that should be incorporated
into BOTT agreements have also been identified. These
can be amended, expanded or tailored to suit specific
circumstances, thus reducing the possibility of failures.
• Although innovative procurement systems, of which BOTT
is one, have found beneficial implementation in respect
of infrastructure, state-initiated, construction and other
projects, it is clear that little awareness exists thereof and little
implementation has occurred in industry.
• The primary data collected in respect of BOTT processes
in industry are insufficient at this stage and needs to be
expanded
• More research about BOTT and its introduction into industry
is required.
For more information about this ongoing research and subsequent
developments, contact Shaun Krause at: [email protected].
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The NEC’s flexible structure is opening opportunities for
new and wider project management applications
not only in its priced, incentive and cost reimbursable
options but in its firm foundations in competent time, cost,
scope and risk management provisions.
In his presentation, Thurlow analysed many of the
traditional procurement and contracting philosophies and
contrasted them with the improved, simple procedures
under the NEC.
The key elements he explored are the competently
structured, resource-driven programmes, their method
statement provisions and their priced relationship with the
activity schedule.
Users are often confounded, he said, to find these new
principles, along with time and cost risk allowances, float
and health and safety provisions now being part of the
management of their contracts.
The management of change under the compensation
event procedure rests on the contractor providing
integrated time, cost and resource quotations largely
in advance of the new or changed work being executed.
The efficacy of these procedures in protecting both parties’
interests requires the construction industry players to take
a bold step forward in embracing the new predictive,
project management techniques and procedures.
The NEC’s use of adjudication as a contractually
implemented decision to resolve any disputes has
highlighted the need for skilled adjudicators to have honed
time, cost and contractual skills within the terms of the
NEC’s procedures themselves.
It is widely and wrongly believed that, in good project
management practice, conditions of contract should
remain in the bottom drawer until such time the lawyers call
for them. This is due to the adversarialism built into traditional
conditions of contract tainting the project manager’s view
of the pure mysticism of what project management is really
all about. And yet despite this, large proportions of real,
live ‘project management services’ are provided by the
hundreds of contactors - controlling their own time, cost
and performance deliverables - who are forced to provide
their best project management endeavours under the
severe constraints of the many, adversarial conditions of
contract used in the South African market.
It thus seems as if the project management industry
focuses more on the relationships between project
managers and their clients, than in addressing the
contractual constraints they place on the contractors and
subcontractors providing their own ‘project management
services’ to those very same clients.
In South Africa our clients do not recognise that their
choice of procurement system is a critically important
decision determining the degree of success or the degree
of failure of their projects. One only has to look around
at the maze of traditional, adversarial contracts in use
in South Africa and the resulting, poor track record of our
construction industry in meeting our client’s expectations,
let alone exceeding them.
The UK construction industry recognized these issues
ten years ago and took the lead in providing the most
comprehensive reviews of their contracting procedures;
they have subsequently implemented and legislated
recommendations making their industry, as a whole, more
productive and internationally competitive.
In 1995 Sir Michael Latham, in is his well-received “Final
Report of the Government / Industry review of Procurement
and Contractual Arrangements in the UK Construction Industry”
recommended that “Endlessly refining conditions of contract
will not solve adversarial problems. A set of basic principles
is required on which modern contracts can be based.
A complete family of interlocking documents is also required.
The NEC fulfils many of these principles and requirements...
A target of one-third of Government-funded projects started
over the next four years should use the NEC.”
Ten years on and, in addition to the UK Government’s
endorsement of the NEC3 for Britain’s £40 billion public-sector
construction market, Sir Michael recommended the NEC for
procuring the £2.4 billion 2012 London Olympics facilities; his
recommendation was recently endorsed by the Olympic
Delivery Authority in London.
But, where are we in all these international developments
and of what concern is it for us? Thurlow says the NEC family
is being increasingly used and accepted in South Africa.
Firstly, project managers need to understand the contract
and its significant potential to improve project management
practice. Secondly, project managers need to embrace the
NEC and apply the contract - as it was intended - to improve
our industry and make us more internationally competitive.
In developing the NEC - the drafting Panel in London
- widely representative of all the industry’s players set three
objectives for the family of contracts.
Firstly, flexibility - that it should be suitable for all construction
or service disciples, all or no contractor’s design and for all
contract types ranging from lump-sum, re-measurement, target
contracts, cost reimbursable and management contracts.
All the contracts in the family should be similar with consistent
procedures and terminology.
Secondly, clarity and simplicity - that it should be written
in ordinary language, organized in a structure which helps the
user gain familiarity with its contents. The actions of the parties
in administering the contract should be precisely defined
to minimize any misunderstandings about who is to do what,
when and how. Legal terminology should be minimized.
Thirdly, a stimulus to good project management; every
procedure is designed to ensure that it should contribute to,
rather than detract from, the effectiveness of the management
of the future work. However, the overriding and most important
draughting principle had nothing to do with structure, words or
grammar. It was that every action and every procedure should
be designed to motivate the actors to collaborate. In this
way, project results could be improved by applying collective
foresight to all decisions about the future work. We all know
that this will mitigate problems and shrinks risks; the clear
function and responsibility will also promote accountability and
motivate people to play their part. Many of these elementary
principles are sadly lacking in our construction industry today.
The NEC is thus an integrated suite of contracts covering
works, services, subcontracts, short contracts, term service,
supply and maintenance contracts - all have their associated
guidance notes and flow charts. The flow charts show every
action and response which the parties take in managing the
contract, so users are always aware of exactly what has to be
done, by whom and in what time period. This certainly promotes
cooperation, teamwork and early resolution of changes,
difficulties and, of course, the old unforeseen situations.
In as much as the PMBoK defines the broad areas of project
management as integration, scope, time, cost, quality, human
resources, communications, etc. so the NEC, in its turn, defines
the detailed procedures within each PMBoK area which the
parties take in managing the contract. The NEC thus amplifies
the general provisions of PMBoK into a detailed set of project
management procedures whilst, at the same time, providing
thoroughly competent conditions of contract.
Having presented an extensive background to NEC, Thurlow
further asserted that NEC should be seen as a set of live project
management procedures which the parties use on a daily
if not, an hourly basis as they follow the actions and responses
they take in the daily management of the contract.
For a full account of his presentation or to find out more about
NEC, contact Peter Thurlow at [email protected].
Peter Thurlow of Thurlow Associates Industrial Project Managers addressed his audience at the
PMSA conference on a new engineering contract suite: the international NEC suite of contracts
published by the Institution of Civil Engineers in London, based on the principles of simplicity, clarity
and a stimulus to good project management. The contract is widely used internationally and is now
an integral part of the procurement and contracting scenario in South Africa.
THE NEW ENGINEERINGCONTRACT
Project managers need
to understand the contract and
its significant potential to
improve project management
practice.
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COMETOGETHER“We needed to organically build capability and fortunately,
we had a culture that was open to change, learning and risk
taking.”
Mr Knapp was brought back to review TOps’ plan and
agreed the transformation had to inculcate the organization
to improved project management by way of the bigger
picture of program and portfolio management.
TOps shed its structure of a decentralized cadre of project
managers who tended to work in isolation and replaced it with
a project management organization working in an integrated,
centralized fashion.
A central component in TOps’ transformation was a
program management life cycle model. Created by program
management expert and PM Network columnist Michael Thiry,
the FOrDAD life cycle uses five phases:
The article is based on material in the white paper “From 0 to 100
kph in Under Six Seconds: Rapidly Building Project Management
Capability in a Complex Organization,” presented by Rod
Gozzard and Michael Knapp at PMI’s Global Congress 2006
EMEA, held in Madrid, Spain.
The technology operations (TOps) unit at National
Australia Bank (NAB) seemed to be doing just fine.
Responsible for all of NAB’s non-application IT and
communications infrastructure for the Australian arm of the
business, the unit was performing well on cost management
and operational level performance. However, internal
customer satisfaction rates with TOps services left much
to be desired.
Looking to change that, the unit deployed
a massive overhaul to integrate its project, program
and portfolio management. Six months after it was
completed, those satisfaction rates shot up above
80 percent, according to Rod Cozzard, Melbourne, Australia
based manager of portfolio management services for the
TOps unit.
“Our key customers are saying they’re really happy with our
project services,” he says. In addition, for the year ending
September 2005, demand for project services increased
a whopping 275 percent, with the average time to
produce estimates slashed from 13 weeks to four weeks.
That transformation didn’t come about easily, though.
In October 2003, Michael Knapp, director at Sydney
based Knapp and Moore Pty Ltd., had assessed TOps
project management capability. “At the time, TOps was
one or two levels below the maturity level needed for an
organization of its type and size of projects,” he says.
The unit was plagued by accountability issues
as well as a disconnect between the TOps group and
project governance and management elsewhere
in the organization. “Project managers were frustrated
that verbal commitments weren’t being honoured,”
Mr Knapp says.
When Mr Gozzard joined NAB in mid 2004 to help
improve TOps’ performance, there were “challenges
in executing individual projects,” he says. “A more
fundamental problem was the focus on managing,
individual projects versus the management of all projects.
It was clear we had work to do. We understood that in
order to improve project performance we needed to
develop a solution that integrated project program and
portfolio management supported by a strong governance
framework.”
The Overhaul Begins“The problem was more than just project management.
We had to look at projects as components of programs
and an overall portfolio,” Mr. Gozzard says.
Toward the end of 2004, the revamp began, with
the deadline set for September 2005. “It was clear that
a big bang approach would not work, as the organization
wouldn’t be able to absorb such a change,” he recalls.
1. Formulation: Ensure all benefits are valid for all
stakeholders.
2. Organization. Prioritize delivery strategy to optimize realization
of benefits.
3. Deployment: Be nimble, expect and manage change, and
focus on benefits.
4. Appraisal: Make sure your efforts are aligned with priorities.
5. Dissolution: Upon program completion, ensure you are well-
positioned to continually deliver benefits.
“This program approach expects change whereas a project
approach tends to resist change,” Mr Knapp says. B cont...
Banking on an integrated project, program and portfolio management
approach, a financial services company boosts its satisfaction rates
and maturity.
TOps shed its structure of a decentralized cadre
of project managers who tended
to work in isolation and replaced it with
a project management organization working in
an integrated, centralized fashion.Project Management Institute, PM Network,
Project Management Institute, Inc., 2006
Copyright and all rights reserved
By Marcia Jedd
Management Services Chamber
The management Services Chamber is one of the four chambers in the Services SETA. The Services SETA comprises the following four chambers:
• The Business Services Chamber
• The Client Care Services Chamber
• The Commercial and Industrial Services Chamber
• The Management Services Chamber
Chamber profi leThe Management Services Chamber encompasses the following industries and SIC codes spanning over 9 regions:
SIC CODE MANAGEMENT SERVICES
88141 General consulting (including management consulting code 99015)
9002 Public relations and communication management
88900 Business services (not elsewhere classifi ed)
88000 Other business activities including administration and secretarial
99039 Generic project management
84202 Property management
95992 Associations, federations and umbrella bodies (including professional bodies)
99014 Quality management and related services
Your
lea
din
g p
art
ner
in s
kills
dev
elo
pm
ent
The chamber has a total of 23 registered learnerships. This includes a National Certifi cate in Project Management at NQF Level 4.
Contact the Services SETA at: Tel: 011 276 9600, Fax: 011 276 9660, Customer Care Hotline: 0861 10 11 [email protected], Website: www.serviceseta.org.za
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overall environment of the organization,” Mr Gozzard says.
“This is driving improved throughput and project delivery.”
Integrated KPIsTOps transformation depended on more actively engaging
stakeholders in formulating benefits and ensuring involved
parties carry out their agreed accountabilities. To that end,
integrated key performance indicators (KPIs) were developed
for all areas of the portfolio, program and project environment.
“The KPIs all support each other rather than compete with
each other. Performance scorecards within TOps were also
adjusted to reflect the increasing importance of project
management,” Mr Gozzard says.
“Everyone can see how their work translates from a strategy or
a business need to the activities they conduct daily and the
knowledge to assist in choosing relative priorities.” he says.
TOps spreads the word by educating non-project management
professionals. We’ve trained 70 executives, senior managers
and managers in the FOrDAD life cycle and our methodologies
and processes. This ahs been very well-received and is viewed
as a transformational change by leadership and management
teams,” Mr Gozzard says. “Project managers actually like
change. We spend our lives working on projects that create
change, but the new program at NAB works because it flows
bottom up and top down.”
The Results Are InTops met its September 2005 deadline, and by the end
of the year, a reassessment of the unit’s project management
maturity by Mr Knapp found a 55 percent improvement.
That ranking placed Tops among the leading 30 percent
of its peers.
For the 2006 fiscal year, the goal is to improve efficiency.
In September 2005, NAB announced a $1.8 billion investment
over the next three years to rebuild the Australian regional
business, with most monies dedicated to infrastructure and
IT improvements. “We expect the number and breadth of projects
to increase as NAB undertakes this transformation program,”
Mr Gozzard says. And thanks to the unit’s own transformation,
it’s ready to take on all those projects.
Marcia Jedd is a Minneapolis, Minn., USA-based supply chain and
business writer
“Everyone can see how their work
translates from a strategy or a business need to the
activities they conduct daily and the knowledge to assist in choosing
relative priorities.”
3. Change actions must be taken within an organizational
and cultural context.
4. Engage key stakeholders at all levels of the
organization.
5. For complex organizations, a program-based approach
using a value-oriented life cycle works well.
“There is no silver bullet,” Mr Gozzard says. Improved project
management maturity and performance is built organically
one step at a time.”
Managing the PipelineFor the transformation to succeed, leadership at the
executive level and effective communications were
mandatory, Mr. Knapp says. “Project champions were
explicitly sought out for their opinions and input, and they
were kept involved throughout.”
Buy-in from project managers was secured by involving
them in the formulation, organization and deployment
of the program. “Making project management work
is everyone’s job,” Mr Gozzard says.
“It worked because everyone involved in the
transformation had a voice,” he says. For example, one
team member recommended TOps incorporate demand
management. “Now we have a core team of about five
people that works with others in the organization to get
a core view of what’s in the pipeline. We have the added
benefit of establishing an end-to-end view of all projects
across the portfolio, which brings resource management
efficiency and allows earlier identification of constraints.”
This form of demand management helps TOps stay
agile. “We work with each business unit technology group
to understand their project priorities,” Mr Gozzard says.
Every month a TOps, portfolio management forum
of about a dozen senior people from project management
and executive management examines the demand
pipeline to understand the number, scale, resourcing needs
and priorities of new projects. The group then works to
ensure the demand and supply sides of the portfolio are
balanced.
“As is the case in most organizations, we often find
there is more to do than we are able, so we use program
management as the linkage between strategy and projects
to build our own demand portfolio that is integrated in the
Currently, 60 professionals in project management
constitute the TOps portfolio management services team.
Each of the individuals is charged with accountability
in one of the following functions:
• Governance
• Demand management
• Portfolio office
• Program management
• Project management
• Estimation.
Integrating the 5 Ps
To build its project management capability, the technology
operations unit at National Australia Bank (NAB) deployed
a process dubbed P5. “It’s integrating the domains of people,
process, portfolio, program and project management,”
says the NAB’s Rod Gozzard. Here are some of his lessons
learned:
1. Processes, methods and technology are part of the
game, but change happens because people want it
to happen.
2. Be prepared to learn and take risks.
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• PROJECT MANAGEMENT • PMBOK ® Methodology
• CONSULTING • Lean Manufacturing • Benchmarking • Failure Methods Effects Analysis
• INNOVATION MANAGEMENT • Continuous Improvement Process • Computer Aided Engineering • Computer Aided Design • Computer Aided Machining
• MAINTENANCE MANAGEMENT • Total Productive Maintenance • Reliability Centred Maintenance • Hybrid Systems
• CHANGE MANAGEMENT • Avoid Stagnation • Understand Change
• KNOWLEDGE MANAGEMENT • Learning Systems • Learning Methods • Knowledge Transfer
LEARN MORE ABOUT US.....A consulting company, offering professional, expert advice and council, liaising with clients and other consultancies to compare and deliberate views. We focus our efforts on making a difference; changing, improving, encouraging, guiding, counselling people who are and want to continuously grow. We would not only design you a unique solution, but also implement it!
YOUR SOLUTIONS DESIGNER, FROM CONCEPT TO REALITY BY THE INTEGRATION OF:
Visit our web www.peproj.com or call: Rudolf Schenker PMP, Pr.Tech.Eng.Tel. +27 (0)83 751 9119
PART IAs a CEO, CFO, COO, you are in your office faced with
the daunting task at hand of signing your name to official
corporate correspondence. What makes this so frightening
is that you may be unknowingly falsifying information
to the government that states you are certifying the
corporate fiscal statement that details of the corporate
quarterly fiscal report are true and accurate. In fact, you
know that because of the rapid pace of change in your
business this past year, you are not sure anyone knows
the correct answer. Your team, at best, can only make
a calculated guess that may have more significant errors in
this required assessment prepared for the government than
the government allows.
In realizing the consequences of certifying this report to
the government, you worry about what you are doing. Are
you placing your career, your job, your family at risk, every
three months? You bet you are and more. You are risking
personal financial penalty and jail time when in fact you
may have nothing to do with the errors in the report. This is
the best your team can do given the information at hand.
What can YOU do about this? As one of the executive
leaders in your business, you have the opportunity
to initiate improvement in fiscal controls to lessen risk for the
corporate entity that you serve, as well as you and others
who are subjected to this same standard and penalty.
Knowing what the business must do to control project fraud
should be the goal. Answering the following five questions
will give you and your business a great start.
1. What is Project Fraud?
2. How do we prevent project fraud?
3. How do we detect project fraud?
4. How do we train our workforce to manage project
fraud?
5. What policies should we implement to effectively manage
and communicate on project fraud?
Getting Started
Gaining total control over project fraud requires the ability
to recognize project fraud at all levels of the workforce.
Secondly, the organization must be able to evaluate work
results compared to what the organization expected.
Thirdly, the organization must establish an environment that
consistently reduces the opportunity for project fraud as
a means to improve project fraud prevention. A key
construct to project fraud control is improving visibility to
work results at all levels.
What is Project Fraud?
Let’s define the objective you seek to remedy – project
fraud. Project fraud is a type of corporate fraud. Fraud
is defined by Webster Dictionary as “deceit; trickery;
cheating”. A person who intentionally deceives or is not
what they pretend to be is a fraud. Thus, anyone that is
a part of a project team, directly or indirectly, that deceives,
tricks, or cheats in the project work they do, is committing
project fraud, technically speaking.
Accounting/Finance departments in most businesses
are performing an adequate job in auditing and improving
financial reporting except for those areas of the business
where fiscal management can be manipulated to support
personal career management, personal reward, or other
personal interests that are not in the corporation’s best
interests or is not what the business paid for.
Examples of Project Fraud
1. Project Sponsor mis-management. Project Sponsors that
lead the project team knowingly in a direction that they
know is not what the business has requested.
2. Over-estimation of work level-of-effort at the project and/or
task level. Project members who over-state work estimates
for personal benefit.
3. Intentional suppression of project progress reporting
information. Not reporting correct project status, even
when the information is negative, is mis-representation.
4. Internal business partner unwillingness to assume
accountability for project success or failure for the
project they funded. This example is tricky however their
lack of ownership creates opportunity for project fraud
to develop.
5. Business case justification misrepresentation. Have you
seen any business cases that were over-stated because
it helped make the case for project activation?
6. Internal business-side partners that compete with other
business-unit peers for project delivery support not
in alignment with the fiscal year work plan of strategic
projects. CIOs are often targets of business side project
owners to deliver their projects when they have not been
approved to do so.
7. Worker sense of urgency that is personal-need driven versus
business focused driven. Workforce members who work on
what they want to do when they want to do it.
8. Worker vendettas that prevent project delivery progress.
Enough said!
9. Including customer requirements into an existing project
when the new requirements were not approved. Project
Teams have enough to do.
10. Adding unplanned project vendor workers to the project
team without approval to do so. This costs the business
money id did not expect to spend.
These types of fraud appear most often in the project delivery
sphere and represent the tip of the iceberg on types of project
fraud that eat away at corporate fiduciary accountability
and personal risk for those required by law to certify quarterly
and annual fiscal reporting as set forth by the Sarbanes-Oxley
federal legislation.
5QUESTIONS to Uncover Project Fraud
By Steven Rollins
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• Implement a “Project Fraud Management” Policy
Whoever performs project audits should consider the following
project fraud checkpoints:
• Project team is educated about current project fraud
policies?
• Establish project fraud detection and prevention procedures
through your PMO
• Are visible project status charts on the progress of the project
progress displaying all relevant information posted on a
regular basis?
• Does the project apply “Critical Path” scheduling for the
project?
• Is the Project Sponsor trained on project fraud?
• How was work estimation for the top project tasks
performed?
• All project resources are working project work in the correct
priority order.
How Do We Train Our Workforce To Manage Project Fraud?Project Management delivery success has been improving in
recent years in companies that have project management
as a practice. It use to be that five out of six IT projects failed
every year due to some type of project failure. Given these
odds, why would anyone want to work on project teams?
Now with the current economic pressure to minimize project
resources (costs), the pressure is even more intense. Project
Fraud Management should be perceived as an improvement
How Do We Prevent Project Fraud?
Several methods exist that will help the business prevent
project fraud as soon as they are implemented.
1. Reducing the opportunity for project fraud will reduce
project fraud. Project Fraud requires the opportunity
to actually become realized. Opportunity for project
fraud can come from anywhere. Rigor and discipline
from the practice of project management when applied
in an uniform manner will aid the prevention effort.
2. Raise the visibility of project progress to all involved
workforce members. Team Members should be aware
of the project critical path schedule and who is currently
on the “hot seat”.
3. Enlist the Program/Project Management Office to design,
develop and implement Project Fraud Management
policies that when implemented will improve project
fraud prevention and detection. Internal Auditing
or Strategic Planning are not the best solution since
this requires seasoned understanding of the principles
of project management and how that rigor and discipline
is applied in the business.
Project delivery environmental contributors that enable
project fraud opportunities
1. Over-worked employees who are helplessly multi-
tasked.
2. A business environment that accepts project delivery
success as “close” to expected delivery date and
budgeted cost.
3. Project Sponsors that have not been trained in a standard
business model for leading project investments.
4. Missing entity to support and facilitate tactical
progress of all project investments, such as the “Project
Management Office”.
5. Poor visibility to down-range project delivery hurdles,
inter/intra project.
6. Poor executive sponsorship to promote project fraud
control management in the organization.
7. Lack of awareness by the workforce for the current year
fiscal objectives – what the business expects to achieve
for this fiscal year.
8. Inappropriate force-ranking of project investments
in alignment with the corporate objectives for the
fiscal year.
9. Inefficient support for the workforce for project
management rigor and discipline.
10. Business model that embraces cost-optimization
compared to throughput-optimization.
How Do We Detect Project Fraud?
In most companies, this activity falls to Internal Auditing,
Strategic Planning or to the Program/Project Management
Office. Internal Auditing or Strategic Planning are good
choices to start with if a PMO does not exist. However
neither Internal Auditing nor Strategic Planning normally
do not possess sufficient project management principles
expertise to perform this role over the long term. Adding
Project Fraud Management to the charter of the PMO
does not mean that the PMO must take on a “Police” role.
In fact, great care must be given to how this new service
is communicated to the workforce. In many companies
today, the PMO is emerging as a “Help Desk” to help project
teams overcome unplanned hurdles in project delivery.
If these project teams begin to believe that “what they say
may be used against them in a court of law” do you think
they will ever visit the PMO again for help? The PMO should
be collaborating with Internal Auditing for Internal Auditing
to perform the project fraud audits so that the PMO can
maintain its helpful role with the project teams.
The PMO should be responsible for ensuring that:
• All strategic projects are linked to a primary corporate
objective.
• All project teams educated about current project fraud
policies.
• Uniform project fraud detection and prevention
procedures are implemented.
• All Project Sponsors are trained in Project Fraud
Management.
• Set an ethical tone from the top.
• Take all reported fraud tips seriously and investigate each
of them.
With The Current Economic
Pressure To Minimize
Project Resources (Costs), The
Pressure Is Even
More Intense.5QUESTIONS to Uncover Project FraudG lo b al
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With its project- and programme management
learning programmes, Cranefield provides
organisations with “new economy” strategy-
centered leadership and management education to assist
them to progress towards a learning culture and knowledge
management excellence. This enables organisations
to discard bureaucratic practices and progress towards
managing the organisational value chain by employing
a project- and programme-based approach, culminating
in continuous transformation, change and improvement.
Enhanced communication, as also, strategy aligned
coordination and integration of operations, lead to
a structured yet flexible approach towards achieving
measurable benefits of strategic importance. Importantly,
the project and programme based high performance
teams approach enables larger organisations to operate
like a group of synchronised small businesses, with
a resultant improvement in competitiveness.
The EuroMPM is the envisaged European Union
Master’s Degree in Project and Programme Management.
The project team consisting of experienced academics
in the field of project and programme management is
constituted from staff members of the Ecole Superieure de
Commerce, Lille and Paris, France; University of Applied
Science, Dortmund, Germany; University of Applied
Science, Giessen-Friedburg, Germany; Norwegian University
of Science and Technology, Trondheim, Norway; University
of Maribor, Slovenia; University of Zaragoza, Spain; and
the University of the Basque Country – Bilboa, Spain. The
chairperson is Dr Brane Semolic from the University of Maribor,
current Deputy President (Research) of the International Project
Management Association.
Participation in world congresses where Cranefield’s
academics are regular speakers did not go unnoticed. The quality
of the papers delivered on these occasions is acknowledged
internationally. Cranefield will not only play an active role
in compiling the learning programme of the EuroMPM, but
has also been invited to participate in the facilitation thereof.
Moreover, Cranefield’s principal Professor Pieter Steyn, will be
the official representative and also take charge of facilitating
the subject “Program and Portfolio Management” on the
EuroMPM learning programme.
Cranefield is pleased with the growing international
recognition afforded its learning programmes and faculty.
Participation in the EuroMPM will impact positively on the
credibility and status of Cranefield’s academic qualifications.
It will have the added advantage of paving the way for
Cranefield graduates to vie for senior positions internationally.
An aim of the EuroMPM is to establish a learner exchange
programme. It is Cranefield’s intention to seek collaboration
regarding this venture. Cranefield’s participation on the
EuroMPM will accrue benefits of strategic importance for its
own learning programmes. Moreover, it affords Cranefield and
its faculty the opportunity to remain at the cutting edge of
global developments in the field of project-, programme- and
organisational value chain management.
An exceptional honour has been bestowed on the Cranefield College of Project and Programme Management with a request from the project team of leading European Universities to assist them in creating the EuroMPM curriculum.
Advertorial
CRANEFIELD COLLEGE to develop EuroMPM curriculum
to the culture behind the project delivery environment.
As these polices are implemented, these new rules will
add more protection to the blind sides of the project
team from those people who might be inclined to take
advantage of the project. Project teams should welcome
this news with open arms in most businesses if the message
is communicated well. This embracement will help facilitate
the project team training necessary to support project
fraud management policies.
Project teams should be trained on how to manage
to a project schedule using critical path/critical chain
techniques. A four-hour awareness class will do initially for all
project team members. Subsequent project status meetings
should include this scheduling technique as part of the
review process so that all project team members are kept
informed as to current progress by the project.
Project Sponsors should be trained in an uniform manner
to manage for project fraud. If your business is not harnessing
the Project Sponsors for this type of support, opportunity to
catch the project fraud early in the process is will be lost.
Corporate Governance committees should be
communicated and trained on organization project fraud
management policies as well using operational data to
help them navigate difficult project decisions.
What Policies Should Be Implemented To Effectively
Manage And Communicate On Project Fraud?
Our objective in managing for project fraud is to
prevent and detect project fraud while reducing project
delivery costs. While this may seem improbable, consider
that the information listed below is what you should
be accomplishing today but for some reason it is not.
Furthermore, the costs associated to performing these
policies are really a one-time event primarily for the
creation and implementation of the project fraud policies.
In a mature state, these new policies and processes will
become second nature with no apparent direct cost
other than through the PMO and/or Internal Auditing when
performing project fraud functions.
To achieve this objective, policies are required to establish
necessary guidelines for:
1. Necessary project information
2. Resource role accountabilities
3. How to conduct project audit events
4. Organization Governance support
5. Service Level Agreements between Internal Auditing,
Strategic Planning and the PMO
6. How to report project fraud
7. How to manage for project fraud
This is a start for most likely policies to be implemented.
There may be others that you will need for your business.
The bottom-line of these policies should yield the following
benefits.
Top benefits for managing project fraud detection and prevention
1. Reduced rework 6% of budget or more
2. Reduced investment in projects that do not meet ROI
guidelines.
3. Improved corporate governance to leading, managing,
and navigating fiscal year tactical work plans.
4. Improve workforce work satisfaction.
5. Improved project delivery success.
In the next edition of ProjectNet, we will pick up this article
from the point where the value proposition of the PMO is
explored in detecting and preventing project fraud and the
steps to be taken to regain project control.
Steven C. Rollins, MBA, PMP is the Chief Project Strategist
for ALLPMO Network Inc., providing global consultative
solutions and services for businesses in developing and
implementing organizational governance processes that
lead to bottom line improvement. Steve is a global subject
matter expert in developing and implementing PMOs and
supporting processes such as portfolio management for
projects, resources, assets, customers, and others.
5QUESTIONS to Uncover Project Fraud
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PMSA Fee increase from 2007PMSA members are advised that from 2007, membership
fees will increase to R410.00 plus VAT = R467.40 per PMSA
financial year, which runs from March to February.
New Administrators for PMSA As and from 1 October 2006 the PMSA administration
department will be moving to Midrand where they will
be sharing facilities with the Computer Society of South
Africa (CSSA). This will mean the closure of an association
with the Emtheni Group, who have been in various forms,
serving PMSA for almost 20 years.
Elsie Airey who has been synonymous with PMSA
since those early days has decided to take a well earned
rest. Her services, her insight into the who’s who of project
management in South Africa and her knowledge of the
association will be sorely missed. The Board and all of the
Excos over the years have experienced her charming
and helpful attitude to any task requested of her.
The new contact details for the office will be
e-mailed, posted and placed on the web site for our
members use. We ask you to be patient with our new
admin staff and trust that the service you have been
used to will soon resume.
And then they press
“ ”.... PMSA’s Western Cape Branch recently hosted Gerald Louw,
Business Development Manager for Kaplan IT Learning in
South Africa. Gerald has been in the IT industry since 1997,
specifically working for software end-user training and
support companies on implementation projects locally and
overseas.
His presentation looked at simulations, which are being
used more and more in successful software rollouts and
upgrades. According to Gartner, Inc. the success or failure
of a major software application implementation or upgrade
projects has a direct correlation with the thoroughness of
the training provided. Gerald took the audience through:
- the common pitfalls associated with end-user training
during software implementations and upgrades
- the various types of simulations available and how they
are used
- the benefits software simulations provide, including high
end-user adoption, proof of end-user competency, low-
cost training, cost and time efficiencies
- a demo of a software simulation and examples of how
they are used at SA Companies
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A further meeting took place in Boston USA where the American Society for the
Advancement of Project Management (ASAPM) played host.
Several fundamental administrative and organisational matters were
resolved at this meeting which included the agreement on the redesign of the logo,
the conceptual design of a revised website and the planning of the worldwide launch
of the framework for project manager standards.
A copy of the global standards level 1 and 2 are available for downloading
on the Services SETA Website and the PMSA website (www.serviceseta.co.za/
www.pmisa.org.za).
The South African component of the project management unit standards is to be
aligned to the relevant global unit standard for certification purposes. Because the
SA standards are also used for learning programmes, they are in more detail and often
several SAQA unit standards will map to one global unit standard.
Services SETA and PMSA are founder members to a Memorandum of Agreement for
the Global Standards initiative and a sponsor of the process of developing performance
based standards in South Africa. The Project Management Standards Generating Body
is a contributing party to the Global Standards and participates under the umbrella
of the Services SETA membership of the workgroup.
It is the intention of GAPPS to have the standards accepted by the European
Qualifications authority and thus have the South African Project Management
qualifications recognised on a global basis. This would fall in line with the Services SETA’s
intention of having their qualifications recognised. To date the Hair Dressing and Beauty
qualifications, as well as those for Marketing have already been recognised.
At the GAPPS meeting in Boston a work group was formalised to discuss the content
of Programme Manager standards, which is the next step in the project management
standards acceptance. The PMI has produced some documents on the Portfolio and
Programme management practices which can be seen on their website for reference.
The ceremony for signatures of the GAPPS organisation should take place this
coming October 2006 when PMSA will be representative.
We will keep you up to date in further issues of ProjectNet with the developments
within GAPPS.
PMSA is a significant contributor to GAPPS - the Global Alliance for Project Management Standards.
Into the final stretch for 2006The KZN Branch of PMSA, in conjunction with the eThekwini
Municipality will present the second-last of its 2006 series of
Project Management talks, based on the latest PMBOK®
Guide, Third Edition.
On Wednesday, 11 October, the presentation will be
on Project Risk Management.
From left to Right Arnold Schachat, Gerald Louw: Business Development Manager for Kaplan IT Learning and Julian Diaz: Marketing Manager for Kaplan IT Learning.
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Amongst the associations that are included are:
South African Institute of Civil Engineering (SAICE),
South African Federation of Civil Engineering
Contractors (SAFCEC), South African Association of
Consulting Engineers (SAACE), Association of Construction
Project Managers (ACPM), Chartered Institute of Building
(CIOB), Association of South African Quantity Surveyors
(ASAQS), Gauteng Master Builders Association (GMBA), Free
State Master Builders Association (FSMBA), South African
Institute of Architects (SAIA), PMSA and several NGOs.
At the meeting held on 27 July 2006, which Robert Best
attended on behalf of PMSA, the following matters were
raised and discussed.
1. It was the opinion of the majority of attendees that
the Voluntary Association (VA) was a committee and
not a forum, the chairperson and secretary pointed
out that it was always noted as a forum due to the
representation of various NGOs and labour parties who
were not section 21 companies. It was raised by the VAs
that the status of the association was thus reduced with
little or no power invested to have certain proposals
to be carried out by the council. This matter was
to be brought to the council’s attention for comment as
the VAs represent the construction project manager’s
interests.
2. The Council and VAs have identified certain key strategy
areas for action as follows and in this order:
• Acceptance of registration process for Construction
Project Managers (CPMs).
• Identification of Work for CPMs
• Scale of fees for CPMs
• Code of Conduct for Construction Project managers.
3. A request for the presentation of the VA’s dissatisfaction
with the SACPCMP council’s processes was made
to the chairperson and was later accepted for a session
at the next council meeting.
A presentation by the representatives of SAICE (M Deeks)
and PMSA (R Best) was made at the SACPCMP council
meeting on 18 August 2006, some of the areas of concern
regarding the following were made;
• Delays in processing applications
• Communication breakdown in information regarding
application status
• Fees for invoicing being inappropriate
• Certificates of registration not being received
• Access to data base of listed construction project
managers
• Website not current.
• Of the 5503 applications received 3180 had been
approved, with 1183 pending and others awaiting
payment.
• The scoring system was not appropriate for registration
and needed to be more in line with using established
recognition of prior learning assessments.
• The criteria of scoring were meant to be aligned after
consultation with the VAs, which did not take place.
• No evidence of investigations and prosecutions of the
existing registered c.p.m.’s
• The VAs offered their assistance with registration
methods, IDOW, etc.
• Ensuring recognition for being registered as construction
project managers with Job adverts being displayed.
PMSA NOW REPRESENTED ON SACPCMP
PMSA has been approved as a representative on the SACPCMP Voluntary association forum. This is a group of associations whose members are required by legislation to register as construction project managers with the council. This process was proclaimed by an Act of parliament and legislation was publicised in the government gazette for action.
SAPMO – An Association of OrganisationsTo meet with the requirements of the Services SETA for
employee representation on the Project Management Chamber
of the SETA, it was necessary for PMSA to form an alliance of the
established generic project management institutions. The PMSA
along with the APM SA, the CEASA, and the PMI SA Chapter
formed an association called South African Project Management
Organisation (SAPMO).
This agreement enabled us to participate and engage on
behalf of project management employees with the Services SETA
for the development of project management skills. This involves
our elected exco officers serving on various committees within
the SETA Framework to recommend and assist the role players
within the SETA.
Amongst the areas we feel that PMSA should be involved in are
the formation of unit standards for project management within the
Standards Generating Body (SGB) and the certification process
of project management qualifications and skills programmes.
There is a gap in industry for employers to recognise the need
for project management skills development and promote their
staff to enter into learnerships on project management with the
SETA. The learnerships are not only restricted to SETA levy-paying
companies, as a memorandum of understanding (MOU) can be
entered into with other SETA’s, ie ISSETA and Bank SETA.
We will keep you up-to-date in further issues of ProjectNet with
the developments within SAPMO. If you would like to know more
about SAPMO, please contact the PMSA office or Robert Best on
031 5645711
Services SETA NewsThe Services SETA is restructuring the PM Chamber Board
make-up to suit the Department of Labour legislated requirements.
SAPMO was requested to submit and make up the employee
representation of the Project Management Chamber and the
employer representation will follow. PMSA have representation
from all our branch members on this PM Chamber body
to ensure that our continued support and monitoring of project
management developments within the sector. This refers to such
matters as qualification development and certification, funding
and development of project management learnerships, marketing
and awareness of project management skills development.
We will keep you up to date on Services SETA developments,
but if you have any questions in the meantime, contact the PMSA
office or Graham Campbell on 011 463 1022.
Events in October• The SAACE Construction Conference, with the theme:
Uniting the Construction Industry for Growth, Development
and Transformation, will take place at the International
Convention Centre in Durban from 29 to 31 October
2006. For more information, visit the SAACE website at
www.saace.org.za or contact bruce@zazisecommunication.
co.za.
• The annual PMI Global Conference will take place from
21 to 24 October 2006 in Seattle, Washington, USA.
There is a gap in
industry for employers to
recognise the need for
project management
skills development and
promote their staff to
enter into learnerships
on project management
with the SETA.
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According to global survey results released by
Borland Software, organizations across the world
are making progress with IT management and
governance (ITM&G) but still fall short in key process areas
like project management, portfolio management, demand
management and resource management. Borland’s
study, which consisted of self-assessments completed by
IT professionals at 125 organizations in 29 countries, still found
a relatively low level of maturity in how organizations defi ne
project goals, allocate resources and, most importantly,
measure overall success of their IT portfolio.
The survey also found companies’ ITM&G efforts are
frequently challenged by the inability to integrate their
systems for managing application development – which
contain vital data and assets – with their overall ITM&G
processes. In fact, 87 percent of respondents say their
organization has been either ineffective or only somewhat
effective at integrating their overall ITM&G process with
their Application Lifecycle Management (ALM) platform
and tools.
“These fi ndings show most organizations have
an enormous opportunity to improve how they are
approaching and executing on key process areas
related to IT management and governance,” said
Branndon Stewart, director of ITM&G products at Borland.
“The most successful organizations are taking a holistic view
of focusing, managing, and measuring their IT efforts with an
integrated combination of best practice processes, training
and technology. Unfortunately, most organizations today
still aren’t taking this approach.”
Project and Portfolio Management Show Promise but Fall Short
Responses from participants in the study indicated
they are making positive strides in portions of project
management, such as their ability to plan and track project
execution. However, more probing questions show that
they still lack many of the rigorous processes established by
industry best practices.
For example, more than 80 percent of respondents said
they have some formal launch process for new projects and
almost three quarters believe their organization effectively
or somewhat effectively measures and manages project
execution. However, only 22 percent reported that their
organization either effectively or very effectively uses
a project plan for managing projects, and only 17 percent
have either rigorous or very rigorous project plans, which
include base lining and estimating schedule, cost and
business impact.
In terms of portfolio management, which enables
companies to collectively analyze costs, benefi ts and risks of
proposed and in-progress IT projects and other investments,
the data clearly showed that most organizations are
unsuccessful at implementing an effective portfolio
management process.
— Only 20 percent of respondents agreed their organizations
monitor portfolio progress and coordinate across
inter-dependent projects
— Only nine percent reported their organization very clearly
defi ned goals and decision criteria for each segment
within the portfolio, while 46 percent had no defi ned
goals, only defi ned decision criteria
— Over half of respondents believe their organization
is somewhat rigorous in collecting suffi cient information to
properly respond, prioritize, and analyze requests. More than
one third of respondents felt theirs was not at all rigorous.
Responses in the area of resource management, which
involves the processes and technologies used to manage the
people related to technology investments, showed that one-
third believe their organization does not effectively allocate
resources to projects. Other notable highlights include:
— Only six percent of respondents said their organizations’
personnel capacity is regularly analyzed against current
and future resource needs, putting in place specifi c plans
are made to address gaps, including training, hiring and
outsourcing.
— Nearly 20 percent of respondents reported that their
organizations are not detailed when it comes to tracking
the time spent by project team members. Many of these
do no time tracking.
Study MethodologyThe Borland ITM&G study was administered as an online
self-assessment. Survey respondents were not compensated
nor employed with Borland, and more than 30 percent of the
self-assessments were completed by director, vice president
and C-level executives. Respondents provided answers to
questions related to the six key areas of ITM&G; demand
management; portfolio management; project management;
resource management; fi nancial management; and asset
management. Approximately 54 percent of survey respondents
were from the Americas, 32 percent from Asia Pacifi c,
14 percent from Europe, the Middle East and Africa.
SURVEY HIGHLIGHTSPM ACHIEVEMENTS &
CHALLENGESCompanies lack best practices and technology to mature key IT process areas, especially project and portfolio management
— When it comes to measuring performance of the
overall IT portfolio, the majority of respondents agreed
their organization has no business impact assessment
for completed projects, and success is measured only
at the project level based on performance against schedule
and budget. Just two percent felt their organization
was very effective at measuring performance of the
overall portfolio.
“IT leaders understand the value of a balanced portfolio
aligned with business objectives, but most lack a well-
defi ned and consistent process for managing the origination,
evaluation, and execution of IT investments,” continued
Stewart. “Portfolio management enables IT to make fact-based
investment decisions in unison with business stakeholders, thus
ensuring alignment, improving visibility, and shifting the burden
of investment decisions from the CIO to all stakeholders.”
Demand Management and Resource Management
Similar to the results from the areas of project management
and portfolio management, assessment results for demand
management and resource management showed some
progress but room for signifi cant improvement. Demand
management, which establishes processes for gathering and
managing requests for IT resources, is a critical step toward
identifying opportunities, managing the IT pipeline, and driving
consensus on the best investments.
— Two-thirds of respondents believe their organization has
a somewhat effective process for collecting and managing
new projects and major change requests. They agreed that
certain request types have assigned owners, but requests
are communicated via multiple channels and they lack
a systematic mechanism for tracking them.
Only six percent of
respondents said
their organizations’
personnel capacity
is regularly analyzed
against current and
future resource needs.
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R e vi ew
This book is the result of a study of sixty ‘Large Engineering
Projects’. The expertise of the study team covers;
corporate and project fi nance, civil and industrial
engineering, and project management. The study identifi ed
practices that gave signifi cant cost and time savings in large
projects.
In the mid nineteen eighties there was a change in the
way large engineering projects were structured and fi nanced.
The change was due to large cost overruns and poor safety
management by the institutions that usually managed these
projects. The new model consisted of groupings of partners
such as banks, investors and engineering fi rms. These new
sponsor models were the focus of the ‘International Program
in the Management of Engineering and Construction’ (IMEC)
study. The output of this work provides the basis for the book.
One of the main problems projects face is that plans focus
on identifi ed risks, and unknown risks do not receive suffi cient
attention. To address known risks contingency is put in place
and then the project ‘passively’ awaits the outcome. The
problem is that the known risks do not always emerge and
additional risks arise that were not anticipated.
In the group of companies studied, the research found
that active steps were taken to signifi cantly reduce the
chances of known risks arising. Then further effort was spent
to develop strategies that would deal with unanticipated
risks. This second group of risks are referred to as turbulence.
A number of strategies to survive turbulence were identifi ed,
and an index of their use created. When the index was applied
to the study sample, it was found that there was a clear
relation between the index ‘score’ and project survival.
Where projects have few strategies to manage turbulence,
they tended to break up when problems arose. Those projects
which put effort into creating additional strategies, survived.
The successful projects also had 20 percent to 30 percent less
CAPEX and needed 10 percent less time to complete.
Many literature sources agree that projects enable and
facilitate the implementation of the organisational
vision (Cohen & Graham, 2001; Kendall & Rollins,
2003; Phillips J.J., 2002). The Project Management Institute’s
Organizational Project Management Maturity Model
(OPM3®) states that “projects help organisations deliver
desired strategic changes in a changing world” (2003). It also
states that “this is true whether the goal is the development
of a new software product, implementation of new systems
in an organisation, or designing and building a bridge”.
Although the OPM3 recognises the fact that the vision
and strategies of an organisation are implemented by
means of projects, it does not provide a clear approach
for proceeding from the vision to the projects. According
to PriceWaterhouseCoopers, “any project undertaken
by a company should be driven by business objectives”
(Peterson, 2002). They also state that many organisations lack
a structured process through which to derive projects from
the business objectives. Longman and Mullins (2004) also
acknowledge the fact that an organisation’s strategy should
provide the boundaries for projects. They further state that
“installing effective project management includes putting
a mechanism in place to evaluate every project for its
fit with the strategy before implementation” Longman
& Mullins, 2004).
The purpose of the article to which this summary refers,
is to suggest a structured, holistic process for deriving projects
from organisational vision and strategies using a top-to-
bottom approach. It also attempts to provide organisations
with a process to link projects back to the vision to directly
measure and monitor its contribution using a bottom-to-top
approach. This bottom-to-top approach is directly linked to
the top-to-bottom approach, and the two complement one
another. The process suggested uses a normative approach
and is based on a combination of existing methods and
techniques.
The value of such a process is twofold. Firstly, it ensures
that only projects that fulfil the organisational vision and
strategies are initiated. Secondly, it provides project teams
in the organisation with a sense of direction because the
projects they work on directly contribute to the success of the
organisation.
The article suggests a structured approach that uses the
vision of the organisation to determine the projects that it must
implement. The approach makes use of strategy maps and
balanced scorecards to determine the strategies, business
objectives, measurement criteria, and targets. These are then
linked to projects, programmes and portfolios. The suggested
approach, although conceptual in nature, provides a holistic
view of how to turn vision into projects. Many literature sources
state that it must be done, but do not provide any guidance
on how to do it.
The main benefit of this approach is that it is generic and
can, therefore, be used by any organisation within any industry.
Secondly, the selected projects are directly related to the
vision, which eliminates pet projects and projects that do not
contribute towards realising it. Thirdly, the approach is based
on existing, proven techniques and best practices such as
balanced scorecards and the PMBOK® Guide and, therefore,
does not suggest a drastic departure from current thinking.
One of the limitations of the suggested approach
is that it can only be applied to organisations that have
already reached a certain degree of maturity in project
management. Project management forms the foundation
of both programme and portfolio management. Another
limitation is that it is currently conceptual in nature, and so
does not take into consideration the inherent limitations and
flaws of existing techniques and best practices.
There is a void in the current literature when it comes
to holistic approaches for implementing organisational vision
and strategy using project management. This article attempts
to fill the void by providing a possible approach. From this
conceptual approach, it is hoped that a more pragmatic
approach can be developed.
Future research is aimed at applying the approach
to organisations in order to test it. The practical application
of the approach will indicate shortcomings that can be used
to improve it.
To obtain a copy of the article referenced here, contact Prof.
Les Labuschagne at [email protected].
The process of making these arrangements took an
average of six years; this involved a series of episodes as
the project was shaped in an iterative fashion. The key
to the concept is to remain in the shaping, and initiation
stage of the project for as long as it takes to ensure all
suitable arrangements are in place.
The traditional approach to risk management is described
by the authors as the casino model. The new approach
they uncovered in the study, they call ‘decisioneering’. The
book provides lists of the types of devices that are used in
this approach; its main aim is to align the project strategy
to the risks it may encounter. The process of arriving at
these arrangements is complex because it involves steering
multiple organisations through the project shaping stage;
attributes needed to do this include leadership and systems
thinking.
Times have changed, and a new model for Large
Engineering Projects is emerging. Institutional arrangements,
laws and utilities have to change with each new type
of project. The book indicates that if this is done well, the
players can expect substantial gains compared to previous
projects of a similar nature. The up front effort involved in
shaping the project so it can survive turbulence, improves
the chances of success.
Each chapter in the book is written by different
members of the study team, depending on their particular
expertise. Apart from the processes described above, the
new role of Government and Utilities is explored. This book
will be of interest to anyone involved in large projects.
This includes; managers in large utilities, state organisations,
and government, as well as anyone involved in fi nancing or
initiating large capital projects.
‘The Strategic Management of Large Engineering Projects:
Shaping Institutions Risk and Governance’ by Roger Miller
and Donald R Lessard. Published by Massachusetts Institute
of Technology 2000 ISBN 0-262-12236-7
Book review by Ian Jay, PMP
A STRUCTURED APPROACHto derive projects from the organisational vision
The following summarises an article based on the research conducted by Carl Marnewick towards his doctoral degree, under the supervision of Prof Les
Labuschagne at the University of Johannesburg.
THE STRATEGIC MANAGEMENT OF LARGE ENGINEERING PROJECTS:
SHAPING INSTITUTIONS, RISKS AND GOVERNANCE
For Members and Friends of Project Management
South Africa (PMSA)
Name Portfolio Cell Number Phone E-mail
Sandro Quattrocchi PMP President 082 4655807 031 2084506 [email protected]
Jack Daya Ex President 083 7998082 031 2071340 [email protected]
Malcolm Hartwig Projects 083 3073844 031 5662201 [email protected]
Michelle Lambert IT Sig N/A 031 5081814 [email protected]
Thulane Mthembu Exco Member 082 5502793 031 2089366 [email protected]
Vimilan Naiker IT Sig 083 3031588 N/A [email protected]
Hareesh Patel Finance 083 7516363 031 2621328 [email protected]
Rocco Roodt Marketing 082 7770033 031 3661117 [email protected]
Frans Van Der Walt Richards Bay 082 4600875 035 7880088 [email protected]
Theo Wilcox Pietermaritzburg 082 4423608 033 3451483 [email protected]
Featured Branch – Kwa-Zulu Natal
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