Download - Project Management Success Criteria
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THE CRITERIA OF PROJECT MANAGEMENT SUCCESS AT CHEVRONS CAPE
TOWN REFINERY: A CASE STUDY
ZENITH MOSES MITCHELL
Research report presented in partial fulfilment
of the requirements for the degree of
Master of Business Administration
at the University of Stellenbosch
Supervisor: Prof C Brown
Degree of confidentiality: A December 2010
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Declaration
By submitting this research report electronically, I, Zenith Moses Mitchell, declare that the entirety
of the work contained therein is my own, original work, that I am the owner of the copyright thereof
(unless to the extent explicitly otherwise stated) and that I have not previously in its entirety or in
part submitted it for obtaining any qualification.
ZM Mitchell September 2010
Copyright 2010 Stellenbosch University All rights reserved
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Acknowledgements
I acknowledge God as the Almighty Father of heaven and earth. Through His wisdom and
guidance, I managed to achieve great things and I believe that there is still more to come. I also
want to acknowledge my late father, Norman Mitchell for bringing me into this world.
Much appreciation goes to mother who plays a vital role in all my success stories and
achievements.
To my wife, no amount of words can describe my sincere appreciation for the support that you
gave me right from the beginning. This has been three amazing years for us: getting married and
expecting our first child. Wow, what more can a man ask for?
Lastly, I want to share my sincere thanks for my supervisor, Prof C Brown, who supported me even
in difficult times.
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Abstract
The Chevron Cape Town refinery was constructed in 1996 with a crude capacity of 100,000 barrels
per day (bpd). The focus of the unit is production and meeting the nameplate market demand. The
project environment for the refinery is that of maintenance and gradual upgrade. The majority of
projects handled are small capital projects.
The aim of this research is to identify what the success criteria for project management should be
for projects carried out within the small capital projects department of Chevrons Cape Town
refinery.
An important distinction to make is that this study looks at project management success and not
project success, although the aspects of project success will be discussed to highlight how closely
related the two concepts are. Project success is not directly proportional to project management
success and neither is project management success directly proportional to project success.
In the past decades, project management success was usually indicated by the project completion
within the time, cost and performance constraints (Kerzner, 2004:29). This has now evolved to
understanding all the objectives of the project. Project management can still be deemed successful
even if it did not meet all the objectives of the project and vice versa, as long as there are mutual
trade-offs agreed to by the developer (project manager) and the client.
White and Fortune (2002:1-11) conducted a survey to identify common criterion used for defining
project management success. The three criteria identified for judging project success are
completion on time, within the budget and to performance (specification).
Project management success has been found to be a very difficult topic to define. This research
report shown that project management success needs to be moved beyond the iron-triangle to
other criteria like safety and meeting the objectives of the client. What was evident was that
criteria, factors, dimensions and measures are concepts widely used by researchers and it is
hoped that these topics. A very interesting discovery during my first interview was that project
management success comes in three phases or parts, which are pre-delivery, delivery and post-
delivery.
What was evident from this research was that the criteria for project management success need to
be established up front before the project gets to the delivery phase. There is no way that one can
measure project management success when the success criteria one is looking for at the end of
the project have not been established up front.
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The case study is summarised using the diagram in chapter five showing the new project
management success criteria that needs to be adopted by the refinery.
Future research into project management success criteria could include a survey which could go
out the whole refinery and not just the representative sample who were interviewed for this report
which could confirm the project management criteria found in this report.
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Opsomming
Die Chevron Kaapstad raffinadery is in 1996 gestig met n ruolie kapasiteit van 100,000 vate per
dag. Die fokus van die eenheid is produksie en om aan die marknavraag te voldoen. Die
projekomgewing van die raffinadery is instandhouding en mettertydse opgradering van die
raffinadery. Die meerderheid van projekte wat hanteer word is klein-kapitaalprojekte.
Die doel van hierdie navorsing is om te identifiseer wat die sukseskriteria vir projekbestuur behoort
te wees vir projekte wat binne die klein-kapitaaldepartement van Chevron se Kaapstad raffinadery
behartig word.
n Belangrike onderskeid om te maak is dat hierdie studie na projekbestuursukses kyk en die
projeksukses nie, alhoewel die aspekte van projeksukses ook bespreek sal word om uit te lig hoe
naby verwant die twee konsepte aan mekaar is. Projeksukses is nie direk proporsioneel tot
projekbestuursukses nie en omgekeerd.
In die afgelope dekades was projekbestuursukses gewoonlik aangedui deur die afhandeling van
die projek binne die tydsraamwerk, koste en prestasiebeperkinge (Kerzner, 2004:29). Hierdie
konsep het intussen uitgebrei na n verstaan van al die doelwitte van die projek. Projekbestuur kan
steeds as suksesvol beskou word al het dit nie aan al die doelwitte van die projek voldoen nie, en
omgekeerd, solank as wat daar wedersydse toegewings deur beide die ontwikkelaar
(projekbestuurder) en die klint gemaak word.
White en Fortune (2002:1-11) het n opname gemaak om die algemene kriteria te identifiseer wat
gebruik word om projekbestuursukses te definieer. Die drie kriteria wat uitgewys is om n projek te
evalueer, is afhandeling van die projek binne die tydsraamwerk, koste en prestasiebeperkinge.
Projekbestuursukes is n baie moeilike onderwerp om te definieer. Hierdie navorsingsverslag wys
dat projekbestuursukses verby die yster-driehoek moet beweeg om ander kriteria soos veiligheid
en die voldoening aan die klint se doelwitte, in te sluit. Wat duidelik na vore gekom het is dat
kriteria, dimensies en metings konsepte is wat wyd deur navorsers gebruik word. n Baie
interessante ontdekking gedurende die eerste onderhoud was dat projekbestuursukses in drie
fases of dele voorkom, naamlik voor-lewering, lewering en na-lewering
Wat duidelik uit die navorsing is, is dat die kriteria vir projekbestuursukses voor die aanvang van n
projek vasgestel moet word, voordat die projek die afleweringsfase bereik. Daar is geen manier
wat projekbestuursukes gemeet kan word wanneer die sukseskriteria wat aan die einde van n
projek gesoek word, nie aan die begin vasgestel is nie.
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Die gevallestudie word opgesom deur die diagram in hoofstuk vyf te gebruik wat die nuwe
projekbestuursukseskriteria aandui wat deur die raffinadery aanvaar moet word.
Toekomstige navorsing in projekbestuursukseskriteria kan n opname insluit wat aan die hele
raffinadery gestuur kan word en nie net die verteenwoordigende steekproef met wie daar vir
hierdie verslag se doeleindes onderhoud gevoer is om die projekbestuurkriteria van hierdie verslag
te bevestig nie.
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Table of contents
DECLARATION ................................................................................................................... II
ACKNOWLEDGEMENTS .................................................................................................. III
ABSTRACT ....................................................................................................................... IV
OPSOMMING .................................................................................................................... VI
LIST OF TABLES .............................................................................................................. XI
LIST OF FIGURES ........................................................................................................... XII
LIST DEFINITIONS ......................................................................................................... XIII
CHAPTER 1 ORIENTATION .......................................................................................... 1
1.1 Introduction ............................................................................................................. 1
1.2 Project environment at the refinery ......................................................................... 2
1.3 Problem statement .................................................................................................. 5
1.4 Research objectives ............................................................................................... 7
1.5 Literature review ..................................................................................................... 7
1.5.1 Project life cycle ......................................................................................................... 7
1.5.2 Project life cycle used by the refinery ......................................................................... 9
1.6 Research design and methodology ...................................................................... 10
1.7 Chapter summary ................................................................................................. 10
CHAPTER 2 LITERATURE REVIEW ........................................................................... 11
2.1 Introduction ........................................................................................................... 11
2.2 Project management process ............................................................................... 12
2.2.1 Initiation ................................................................................................................... 12
2.2.2 Planning .................................................................................................................. 12
2.2.3 Executing ................................................................................................................. 12
2.2.4 Monitoring and controlling ........................................................................................ 13
2.2.5 Closing .................................................................................................................... 13
2.3 Project management functions ............................................................................. 13
2.3.1 Project integration management .............................................................................. 13
2.3.2 Project scope management ..................................................................................... 14
2.3.3 Project time management ........................................................................................ 15
2.3.4 Project cost management ........................................................................................ 15
2.3.5 Project performance management ........................................................................... 15
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2.3.6 Project human resource management ..................................................................... 16
2.3.7 Project communication management ....................................................................... 17
2.3.8 Project risk management ......................................................................................... 18
2.3.9 Project procurement management ........................................................................... 18
2.4 Criteria for project management success ............................................................. 19
2.4.1 The concept of project success ................................................................................ 19
2.4.2 Project management success criteria ...................................................................... 20
2.4.2.1 Indicator 1: Completion within budget ................................................................................. 21
2.4.2.2 Indicator 2: Satisfying the project schedule ......................................................................... 21
2.4.2.3 Indicator 3: Adequate performance standard ...................................................................... 21
2.4.2.4 Indicator 4: Meeting project objectives. ............................................................................... 21
2.4.3 Indicator 5: Optimising trade-offs ............................................................................. 22
2.4.4 Project success criteria ............................................................................................ 22
2.5 Project management success factors ................................................................... 23
2.6 Role of the project manager towards project management success ..................... 25
2.7 Organizational structure for projects ..................................................................... 27
2.8 Project management tools/techniques .................................................................. 28
2.8.1 Traditional methods (Gantt charts and wall charts) .................................................. 28
2.8.2 Concurrent engineering/management ...................................................................... 29
2.8.3 Project management information systems (PMIS) ................................................... 29
CHAPTER 3 RESEARCH FINDINGS AND ANALYSIS ............................................... 30
3.1 Introduction ........................................................................................................... 30
3.1.1 Core effluent project background ............................................................................. 30
3.1.2 The project management process used by the refinery ............................................ 31
3.2 Findings from interviews and project data ............................................................ 35
3.2.1 Interview 1: Drawing office supervisor ...................................................................... 35
3.2.2 Interview 2: Reliability and maintenance representative ........................................... 36
3.2.3 Interview 3: Electrical and Instrumentation stakeholder............................................ 39
3.2.4 Interview 4: Project manager ................................................................................... 40
3.2.5 Interview 5: Interview with customer (operations department) .................................. 42
3.2.6 Interview 6: Interview with mechanical contractor .................................................... 44
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CHAPTER 4 SUMMARY, CONCLUSION AND RECOMMENDATIONS ..................... 46
4.1 Introduction ........................................................................................................... 46
4.2 Summary of main findings .................................................................................... 46
4.2.1 Interview 1: Drawing office supervisor ...................................................................... 46
4.2.2 Interview 2: Reliability and maintenance representative ........................................... 46
4.2.3 Interview 3: Electrical and instrumentation stakeholder ............................................ 46
4.2.4 Interview 4: Project manager ................................................................................... 47
4.2.5 Interview 5: Interview with customer (operations department) .................................. 47
4.2.6 Interview 6: Interview with mechanical contractor .................................................... 47
4.5 Recommendations ................................................................................................ 48
4.6 Further research ................................................................................................... 50
REFERENCES .................................................................................................................. 51
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List of Tables
Table 1.1: Project management success criteria for Chevron projects ............................................ 5
Table 2.1: Individual competency model ....................................................................................... 17
Table 2.2: Critical factors in the project management life cycle ..................................................... 25
Table 2.3: Organisational structure and the project characteristics ............................................... 27
Table 3.1: Capital stewardship expectation table .......................................................................... 33
Table 3.2: Results of interview number 1 ...................................................................................... 36
Table 3.3: Results of interview number 2 ...................................................................................... 38
Table 3.4: Results of interview number 3 ...................................................................................... 40
Table 3.5: Results of interview number 4 ...................................................................................... 42
Table 3.6: Results of interview number 5 ...................................................................................... 44
Table 3.7: Results of interview number 6 ...................................................................................... 45
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List of Figures
Figure 1.1: Different types of projects undertaken at refinery (Refinery Project Data Base, 2007 -
2010) .............................................................................................................................................. 1
Figure 1.2: Typical structure for field projects at Chevron Refinery ................................................. 3
Figure 1.3: Typical structure for small capital projects at Chevron Refinery..................................... 3
Figure 1.4: Project life cycle .......................................................................................................... 8
Figure 1.5: Basic CPDEP road map ................................................................................................ 9
Figure 2.1: The Iron Triangle ...................................................................................................... 12
Figure 2.2: Definition of success over time .................................................................................... 19
Figure 4.1: Proposed project management success criteria for Chevrons Cape Town refinery
based on this research paper ........................................................................................................ 48
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List definitions
Project A project is a temporary endeavour undertaken to create a unique product or service (PMBOK GUIDE, 2000:4).
Project management
The application of knowledge, skills, tools and techniques to project activities to meet project requirements (PMBOK GUIDE, 2000:5). Munns and Bjeirmi defines it as the process of controlling the achievement of the project objectives (1996:81). Project Management is accomplished through the use of processes such as:
Initiating
Planning
Executing
Controlling
Closing
Project management success
The successful accomplishment of a project with regards to cost, time and performance. The three dimensions indicate the degree of the efficiency of project execution (Pinkerton, 2003:337)
Project success In the modern project management era project success is define as the accomplishment of a project within time, cost and quality and the project must be accepted by the customer.
Field projects
Field projects are all capital projects with a project value of less than two million rand (R2 million), regardless of the complexity of the project (Global Manufacturing Capital Stewardship Expectations, 2009)
Small capital projects
Small capital projects are all projects with a project value of more than two million rand (R2 million) and less than twenty five million dollars ($25 million) regardless of the complexity (Global Manufacturing Capital Stewardship Expectations, 2009).
Project life cycle
Project life cycle defines the phases that connect the beginning of a project to its end (Guide to the PMBOK, 2004:19). Burke (2007:273) on the other hand states that project life cycle provides and informative overview of how the level of risk changes as the project progresses through the project phases (concept, design, implement and commission).
World class performance
Project was within budget and schedule, meets client needs and was delivered injury and incident free (Chevrons Project Managements Handbook, 2007:203).
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CHAPTER 1 ORIENTATION
1.1 INTRODUCTION
The Chevron Cape Town refinery was constructed in 1996 with a crude capacity of 100,000 barrels
per day (bpd). The focus of the unit is production and meeting the nameplate market demand. The
project environment for the refinery is that of maintenance and gradual upgrade. The majority of
projects handled are small capital projects.
The majority of the projects at the refinery are undertaken due to five reasons namely
sustainability, replacement, growth, compliance and study. Figure 1.1 categories the different type
of projects undertaken at the refinery.
Figure 1.1: Different types of projects undertaken at refinery (Refinery Project Data Base, 2007 - 2010)
Safety, which is supported at all management levels, is one of the core values of the Chevron
Corporation ensuring the safety of all employees. There is a general feeling amongst all project
managers that project management focuses more on safety in terms of costs and schedule and as
a result, Chevron projects take longer and costs are slightly higher than benchmarked projects in
other industries.
In the early 1990s, Chevron developed and deployed the Chevron Project Development and
Execution Process (CPDEP). Since then, additional processes and tools have been generated
and are continuously improved upon and refined to support and complement the CPDEP. The
CPDEP and its related processes and tools have evolved into the Chevron Project Management
(CPM) System, which is an organised and coordinated methodology that promotes and sustains
the successful execution of projects. Moving from a process to a system perspective is crucial to
Chevrons sustained success with major capital projects.
34, 35%
6, 6% 26, 26%
25, 25%
8, 8%
Category
Compliance Growth Replacement Sustian Study
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By moving from a process focus to a system focus, Chevron is enabling a more cohesive
integration of the various processes and tools to manage capital projects effectively. It also
provides an opportunity to implement continuous improvement across the entire system and
ensures sustained organisational capability by applying the processes and tools to Chevrons
portfolio of projects.
The CPM System is comprised of five key components:
Project Management Process CPDEP provides the core process and framework, which
coordinates and aligns the other components.
Decision Making The decision making process and behaviours that guide the project
team and decision makers in making good quality decisions.
Project Assurance The reviews and assurance checks that are used to assess the
readiness of the project to proceed and help assure the project team is achieving a high
level of decision and execution quality.
Organisational Capability The people, processes, and practices that provide a means
to, develop organisational plans, acquire staff, and develop and lead an effective project
team.
Tools and Practices - The policies, standards, procedures, best practices, supporting
processes, and templates that enable the project team to plan and execute the project.
Chevron became the outright owner of the Cape Town refinery in 2002 and with it came the
expectation that the Chevron Project Development and Execution Process (CPDEP) would be
adopted for their projects.
The refinery has a project portfolio made up of a large number of field (short-term projects) and
small capital projects (long term projects). Chevron has introduced a project governance model for
projects that are linked to the CPDEP process. Projects are categorised by value and the
expectation is that the higher the value, the more complex the project. Field projects are all
projects with a project value (total cost) of less than R2 million and small capital projects are all
projects with a project value of more than R2 million and less than R25 million . All projects above
the R250 million threshold are categorised as major capital projects. Major capital projects
normally involves stakeholders and clients outside the refinery fence, hence these projects are
managed and monitored on a corporate level.
1.2 PROJECT ENVIRONMENT AT THE REFINERY
The organisation follows a matrix structure, with team members seconded to projects from different
departments. This in itself creates challenges for project managers to ensure that project
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alignment and project integration management are maintained at the required levels to deliver
successful project management practices.
Figure 1.2 illustrates the team members of a typical project in the field projects department:
Figure 1.2: Typical structure for field projects at Chevron Refinery
Source: Chevron Project Management Manual (2007:103)
Within the field projects group, project managers usually fulfil a dual function - that of a project
manager and the discipline engineer (mechanical, electrical, instrumentation, information
technology, etc.) for most projects within the field category. This means that the field engineers are
fulfilling a project-engineering role, instead of a pure project management role.
Field projects are managed with a weak matrix team and the authority normally lies with the
functional manager of the operations group. Per definition, the project manager fulfils this co-
ordinating role. The operations department is the most important client of the field group.
Figure 1.3 illustrates the team members of a typical project for the small capital project department:
Figure 1.3: Typical structure for small capital projects at Chevron Refinery
Source: Chevron Project Management Manual (2009:104)
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Small capital projects are managed with a weak matrix team and the authority is equally spread
amongst the technical department, operations and external stakeholders. External stakeholders
refer to the sponsors and end users (commercial and sales department). Most of the team
members are dedicated to a specific project on a full-time basis, but still reports to a separate line
manager. Much better alignment between functional departments is visible within the small capital
project department than the field project group.
The project support office provides services for both the field and small capital project
departments. The objectives of this department are as follows:
Routinely compare actual performance to cost, schedule and resource baseline.
Estimate/re-estimate cost, duration and resources needed to complete the project, by early
identification of changes to the project scope and proactively analysing performance.
Implement corrective actions when performance trends deviate from the baseline.
Promote accountability for meeting business plan and project objectives.
Develop an execution driven culture throughout the business unit.
Provide a summary level dashboard for tracking rolled-up performance of the refinerys
total project portfolio.
The construction department is an independent entity that provides services to the project manager
(field and small capital projects) concerning the execution of the project. For field projects, the
value added by the construction department is noticeable from phase three of the project cycle and
for small capital projects, the value added is visible from much earlier in the project cycle.
The procurement department provides services to the project manager through the entire project
cycle. The procurement department has has the reputation of causing bottlenecks for projects and
has implications on delivering projects on time and to some extent, on budget.
The refinery procurement department provides project managers with the following services:
Procurement / buying
Warehouse / stores management
Contracts management / legal contracts writing
Strategic sourcing / category management (high level strategic approach)
Business enablement / best practices
Starting a project is one of the key elements of a successful project. The Chevron Project
Management System starts the process by making certain that the opportunity is aligned with the
strategic interests of the business unit and that it creates value, as well as assuring alignment
among the participants. A high-level project plan is develop and communicated to the
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stakeholders, followed by a detailed project execution plan. In the early stages, project
alternatives are analysed to select the option that provides the optimal value for the
project.
1.3 PROBLEM STATEMENT
The aim of this research is to determine what the project management success criteria are for
refinery projects and how projects should be set up for future success. The success criteria
derived from this research should be useful to improve future projects.
Currently, Chevrons project management success criteria are somewhat traditional in their
expectations and are based on safety, cost, quality, and schedule. An additional criterion that is
important to take into consideration is operability. The project management success criteria are
mentioned in Table 1.1 below. The expectation is that each project puts up a world-class
performance and the measures to achieve this are also mentioned in Table 1.1 below.
Table 1.1: Project management success criteria for Chevron projects
Performance criteria Success measure
Cost performance Within a maximum tolerance of 10% of the authorised value.
Scheduled performance Within a maximum tolerance of 10% of the authorised duration.
Safety performance Zero recordable injuries and days away from work.
Operability Within a maximum tolerance of 5% of the design requirements.
Source: Chevrons Project Management Handbook (2009:203)
The cost performance criteria show that all projects need to come in under budget to achieve
world-class performance. The debate around this topic has been quite interesting at the refinery
because it uses a P50 (50% probability) cost estimation, which means that there is a fifty percent
chance that the project will under run and a fifty percent chance that the project will over run its
budget. The result is that if the corporation expects projects to come in under budget, the cost
estimate could no longer be a P50 but something a little higher and there is a chance that project
estimators will build an additional contingency into project estimates in order to come in under
budget. The schedule estimates are also based on the cost estimate but there is greater leniency
regarding the schedule so it has the chance of coming in both under and over schedule, which
seems to be it in the P50 range.
Safety is a core value at the corporation and safety performance expects to have zero incidents
and injuries. Project management staff is expected to introduce Chevrons safety standards for
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every project undertaken at the refinery. These include following the incident and injury free safety
programme, which is based on behavioural observations. This means that peers observe each
other at the workplace and identify risky behaviour. An example of this is when a civil engineering
contractor lifts a steel reinforcement into an excavation for a column base but the weight of the
base is too heavy for the steel fixing team to lift. The observer would stop the job and expect a
mobile crane to help the team complete the task. The risky behaviour in this instance would be
damage to the teams backs if they lifted the reinforcement. Although it may not be painful in the
near future, too much exertion could create long-term back pain.
The operability (customer needs) criteria expects that if a plant upgrade was expected to deliver
10,000 barrels of crude oil a day, it would be acceptable to run 9,000 barrels a day. Chevron
expects all four criteria to be achieved to maintain a world-class performance.
With the tight schedule and cost pressures in the small project environment, the project
management practices and execution of small projects are accelerated or neglected. In an
organisation where small capital projects are the main focus it is important to execute these
projects effectively.
For the purposes of this project, the research will look at the following problems within the small
capital project department:
The dual function of the project managers poses to be a career development problem for
them because project managers for small capital projects have to fulfil both a technical and
a project management role. This has been an issue for years at the refinery.
The support provided by the project support office concerning cost estimates, estimate
assurance, schedules, change control and reporting. Scheduling as a subject is not a main
stream course at tertiary institutions, one normally comes across it by chance. The result is
that most people have not received professional training in scheduling. At the same time,
employing experienced planners and keeping the existing ones is proving to be a difficult
task, especially in this industry. Various tools exist to assist the project support office.
These tools are stand-alone systems and a certain level of expertise is required to provide
quality reports to project managers and management.
Scope creep has resulted in large scheduling and costs overruns in the past and major
delays in projects.
The procurement department has been the cause of major bottlenecks for several years.
Several attempts have been made to improve the performance of the procurement
department, especially regarding service provision to the small capital project department.
Most of these attempts resulted in significant performance improvements in the
procurement department, but a lot still needs to be done.
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Small capital projects represent approximately 90% of the refinerys capital budget and far exceed
the number of major capital projects. Why then is it important to execute and manage small
projects effectively?
The reasons are:
that small capital projects have short schedules, and performance changes have a quick
impact on project outcomes;
that building competency in small projects helps to grow large project competency.
Refinery operations are well known for tight profit margins and with the crude oil price reaching
record high levels in 2008, effective project management processes and practices became more
and more essential.
1.4 RESEARCH OBJECTIVES
The aim of this research is to identify what the project management success criteria should be for
projects carried out within the small capital projects department of Chevrons Cape Town refinery.
An important distinction to make is that this study looks at project management success and not
project success, although the aspects of project success will be discussed to highlight how closely
related the two concepts are. Project success is not directly proportional to project management
success and neither is project management directly proportional to project success.
Effective project management within the small capital project department is imperative for older
refineries where growth projects form the minority of the departments project portfolio, with
compliance and sustain projects forming the majority of the projects.
Chevrons focus on project management is based on the drive to improve the return on capital
employed (ROCE) and to achieve superior long-term shareholder returns. Effective project
management will enable the refinery to:
Select investments with a higher return more value for money spent
Execute the same projects for less money than the competitors do.
1.5 LITERATURE REVIEW
1.5.1 Project life cycle
A number of different life cycle models exist in project management. Gray and Larson (2009:6)
state that some project managers find it useful to use the project life-cycle as the cornerstone for
managing projects. According to Gray and Larson (2009:6) the project life cycle plays a vital role
in:
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recognising that any project has a limited life span;
ensuring that there are predictable changes in the level of effort and focus over the life of
the project.
The starting point begins the moment the project has been given the go ahead. For most projects
the efforts in the beginning start slowly, builds to peak, and then declines to the delivery of the
projects (see figure 1.4 below).
Figure 1.4: Project life cycle
Source : Gray and Larson (2009:6-7)
In practice, the project life-cycle is used by some project groups to estimate or re-estimate the
timing of major tasks over the life of the project, like when the team plan a major commitment of
resources in the defining stage.
A driving force behind the rapid demand for project management in todays world is the shortening
of the product life-cycle (Gray and Larson, 2009:7). Today, high-tech industries have product life
cycles averaging 1 to 3 years, compared with 30 years ago when product life cycles averaged 10
to 15 years. A common rule of thumb in the world of high-tech product development is that a six-
month product delay can result in a 33 percent loss in product revenue. Emphasising how effective
project management can provide businesses with a competitive advantage.
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1.5.2 Project life cycle used by the refinery
The Chevron Development and Execution Process (CPDEP) is the core process for project
management within the Chevron Project Management System. CPDEP is a phase-gated process
designed to improve decision-making and execution of projects by fostering better planning,
collaboration, and communication.
The key objectives of the CPDEP phase-gated process are to:
Improve project decision making
Improve project execution
Create better alignment of team members, decision makers and shareholders
The phase-gated process is a team-orientated process that provides overall structure and a
sequence of work steps that are consistent across all types of projects. The most common
representation of CPDEP is the five-phase road map shown in Figure 1.5 below.
Figure 1.5: Basic CPDEP road map
Source: Chevrons Project Manual Handbook (2009)
Endorser(s) ______________Decision Executive ________Decision Review Board_____
Endorser(s)______________Decision Executive ________Decision Review Board_____
New Opportunities
The process does not end here! Secondary
opportunities and projects will loop
back into the appropriate phase.
Decision Makers
The decision makers,as defined in CSOC,
responsible for project decisions and ultimate
project outcomes.
Deliverables at Major Reviews
These deliverables provide the information
needed for decision makers to make their
decisions. The key deliverables are collated into a
comprehensive Decision Support
Package (DSP) to ensure a high quality decision.
Work Team
The multifunctionalwork team carries out the work under the
guidance of the project manager or
team leader. Expectations of the decision makers are
met through frequent communication and
alignment checks.
Focus Items
Focus items can be shown on the Road Map, or simply documented in
the PEP. These Focus Items indicate work that
will be completed to produce deliverables necessary for effective
decision making.
NEW OPPORTUNITIES
Project Manager/Team Leader____
_____________________________
Work Team ___________________
_____________________________
PHASE 5Operate and Evaluate
PHASE 4Execute
PHASE 2Generate and Select
Alternative(s)To Phase 1
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Update Frame Refine & add further detail
Generate Alternatives
Define Scope for Alternatives sufficiently to support evaluation
Analyze Alternatives Value/Benefits Costs Schedule Uncertainties & Risks
Narrow and Select Alternatives
Update the Business Case
Project Management Practices & VIPs
Phase 2 DEQ Assessment Seek and Incorporate Lessons Learned
Others as needed
Develop Project Execution Plan (PEP) for Phase 3
Road Map PEP Objectives& Strategies Detailed Plans as needed Overall Project Schedule
Other Focus Items __________________________
Fully Define and Freeze Scope
Begin Detailed Design
Project Management Practices & VIPs
Phase 3 DEQ Assessment Seek and Incorporate Lessons Learned
Others as needed
Develop Project Execution Plan (PEP) for Phase 4
Road Map PEP Objectives& Strategies Detailed Plans as needed Overall Project Schedule
Develop Funding Request
Other Focus Items _____________________________
_____________________________
Complete Detailed Design
Consistently Execute defined Plans
Finalize Business Plan
Finalize Operating Plan
Project Management Practices & VIPs
Seek and Incorporate Lessons Learned
Others as needed
Other Focus Items _________________________
_________________________
Execute Business Plan
Operate Asset
Monitor and Evaluate Performance
Identify New Opportunities
Project Management Practices & VIPs
Seek and Incorporate Lessons Learned
Others as needed
Other Focus Items ________________________ ________________________
STOP, HOLD,
or RECYCLE
STOP, HOLD,
or RECYCLE
STOP, HOLD,
or RECYCLE
PHASE 1Identify and Assess
Opportunities
Develop Frame Discovery Definition Structure
Preliminary Assessment
Project Management Practices & VIPs
Phase 1 DEQ Assessment Seek and Incorporate Lessons Learned
CPDEP for Change Assessment
Others as needed
Developed the Business Case
Develop Project Execution Plan (PEP) for Phase 2
Road Map PEP Objectives& Strategies Detailed Plans as needed Overall Project Schedule
Other Focus Items ______________________ ______________________
AcceptPlan?
PHASE 3Develop Preferred
Alternative
STOP, HOLD,
or RECYCLE
Endorser(s) ___________________Decision Executive _____________Decision Review Board__________
Decisions
The decision diamondrepresents key decisions and serves to
delineate phases. The decision can be to stop,
hold, recycle or proceed.
OperableAssets
Fully Defined Scope
Proceed with Execution,
Approve Funding
and Phase 4 Plan?
Execution Plan,Funding Request
Project Manager/Team Leader
________________________
Work Team ______________
________________________
Project Manager/Team Leader
________________________
Work Team ______________
________________________
Endorser(s)______________Decision Executive ________Decision Review Board_____
Project Manager/Team Leader
________________________
Work Team ______________
________________________
Endorser(s)______________Decision Executive ________Decision Review Board_____
Project Manager/Team Leader
________________________
Work Team_______________
________________________
Proceed with
Operations &
Approve Operating
Plan?
Operations Metrics
New Opportunities
RecommendedAlternative(s)
Proceed with
Development of
Preferred Alternative& Approve Phase 3
Plan?
Framing Document,Preliminary Assessment,
Forward Plan
OpportunityIdentified
Proceed with
Generating Alternatives
& Approve Phase 2 Plan?
BASIC CPDEP ROAD MAP
Pursue New
Opportunities?
Rev_14-Jan-20102010 Basic CPDEP Roadmap.ppt
Chevron Project Development and
Execution Process (CPDEP) Principles:
Focus on key value drivers for the opportunity
Use of integrated multifunctional teams
Effective input, communication and alignment between teams, decision makers, and stakeholders
Decision driven, not activity driven - do the work necessary to support the next decision
Consistent use of best practices and tools
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DS
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1.6 RESEARCH DESIGN AND METHODOLOGY
The outcome of this research will be qualitative in nature resulting from a proposed case study.
The mode of observation or sources of data will be participant observation, with semi-unstructured
individual or group interviews and the use of documentary sources and other existing data. The
unstructured interview process will be carried out with six individuals who are stakeholders in
projects carried out at the refinery. The discussions with the participants will play a key role in
identifying project management success criteria as projects move through the project management
life cycle.
The interview process will develop a table which can be used to represent project success criteria
at the refinery. Once these criteria have been identified, the discussion will involve the importance
that these criteria have as different categories of project are concerned.
The semi-unstructured interviews will start by asking senior project managers what they think the
main problems are that needs attention in this research study. The literature study will then focus
around these problem areas, followed by an in-depth study on the documentary sources available
and the unstructured interviews with the six participants.
The main problem is that each project is unique and the question arises whether different category
projects should be managed in different ways or is whether each project is so different that their
uniqueness needs to be respected even at the project management level. Another consideration
would be whether elapsed time has an impact on the criteria identified
1.7 CHAPTER SUMMARY
The velocity of change required to remain competitive or simply keep up has created an
organization climate in which hundreds of projects are implemented concurrently. Sharing and
prioritizing resources across a portfolio of projects in a multiproject environment like at the Cape
Town refinery has proven to be a major challenge for senior managers at the refinery. It as to be
highlighted that many firms has no idea of the problems involved with the inefficient management
of small projects. A question that this research is trying to address is how to create an
organizational environment that supports mulitproject management. The criteria developed for
project management success in this research should assist the organization with achieving more
accountability, flexibility, innovation, speed, and continuous improvement with regards to project
management.
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CHAPTER 2 LITERATURE REVIEW
2.1 INTRODUCTION
Kerzner (2004:1) states that for more than 35 years project management was viewed as a process
that might be nice to have, but not one that was necessary for the survival of the firm. Project
management was viewed as a threat to established lines of authority and, in most cases, only
partial project management was used. In the 1950s, project management was defined as the
application of a collection of tools and techniques to direct the use of diverse resources toward the
accomplishment of a unique, complex, one-time task within time, cost and performance. By the
mid-1990s companies started to change this mentality largely due to two reasons:
Companies were under severe competitive pressure to create quality products in a shorter
period of time.
The importance of developing long-term relationships with the customers had come to the
forefront, the survival of the company was now at stake.
Each task requires a particular mix of these tools and techniques structured to fit the task
environment and project life cycle from conception to completion of the task (Atkinson, 1999:337-
342). The main criteria identified from what is commonly known as the iron triangle (shown in
Figure 2.1) is still used to this day even though it is considered inadequate because of other criteria
like safety and meeting the objectives of the client.
Project management is a field of practice that promotes a normative approach to the management
of projects. It is codified in standards, tools and techniques, based primarily on experiences of
practitioners in developed Western economies and relies extensively on assumptions of economic
rationality (Muriithi & Crawford, 2003:310). Project management applies knowledge, skills, tools
and techniques to project activities to achieve project requirements. The art of project management
is accomplished through the application and integration of the project management processes of
initiating, planning, executing, monitoring, controlling and closing (PMBOK Guide, 2004:8).
Project management varies from project to project, which makes it imperative to define what a
project is. A project involves a single, definable purpose, end-item, result or outcome, usually
specified in terms of cost, schedule, and performance requirements. Turner (1993:44) defines a
project as an endeavour in which human, material and financial resources are organised in a
novel way, to undertake a unique scope of work of given specification within constraints of cost and
time so as to achieve beneficial change defined by quantitative and qualitative objectives.
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Figure 2.1: The Iron Triangle
Source: Atkinson, 1999:340
2.2 PROJECT MANAGEMENT PROCESS
According to Cleland and Ireland (2004:53) project management involves five processes: initiating,
planning, executing, controlling and closing. These processes are based on the assumption that
project managers are rational problem solvers who are able to identify and apply rational problem
solving models to projects. These processes follow the sequence in which they are listed. In the
event that a project goes off course, re-planning comes into play, and if a project is found to be in
serious trouble, it may have to go all the way back to the initiating process to be re-started.
2.2.1 Initiation
In this stage, a project is launched after the decision has been made to undertake a project. The
project sponsor creates a project charter that defines what needs to be done in order to meet the
customers requirements. The charter should be used to authorise work on the project, define the
authority, responsibility, and accountability of the project team, and establish scope boundaries for
the job (Cleland & Ireland, 2004:53).
2.2.2 Planning
Planning is the most crucial part of the project, as it determines the outcome of the project. Lack of
planning or no planning at all results in project failure. Failure to plan makes it impossible to control
the project in cases of hiccups (Cleland & Ireland, 2004:53).
2.2.3 Executing
The execution stage has two aspects to it. The first is the technical aspect where the focus is on
execution to create the product. The second aspect is implementing the project plan. This
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facilitates easy control of the project when encountering difficulties. It is easy to take corrective
measures to get back on track when following a well laid out plan (Cleland & Ireland, 2004:53).
2.2.4 Monitoring and controlling
Control is exercised by comparing where project work is to where it is supposed to be, then taking
action to correct any deviations from the target. Controlling is done by monitoring progress. In
monitoring, the quantity and performance are assessed with the tools available for the particular
project. The results of the assessment are compared to the plan and if there are major deviations,
mitigation plans are applied to put the project back in line. (Cleland & Ireland, 2004:54).
In every project that goes well there are always minor deviations, which are usually ignored unless
they exceed the pre-established threshold or if they could potentially drift further off course.
2.2.5 Closing
Cleland and Ireland (2004:53) stated the in many cases, once the product is produced to the
customers satisfaction, the project is considered finished which should not be the case. A final
lessons-learned review should be done before the project is considered complete. Failing to do a
lessons-learned review means that future projects will likely suffer the same headaches
encountered on the one just done.
2.3 PROJECT MANAGEMENT FUNCTIONS
In project management, there are nine broad project management functions or knowledge areas
(Artto, Lehtonen & Saranen, 2001:255). These include the management of integration, scope, time,
cost, risk, quality, human resources, communications and procurement. These nine functions are
managed through the project management life cycle. Thus the knowledge, skills, tools and
techniques are applied to manage scope, organisation, quality, cost, time and risk, from initiation
and concept through to hand-over (termination) in a rolling, iterative process.
2.3.1 Project integration management
The guide to the PMBOK (2004:337) state that project integration management includes the
processes and activities needed to identify, define, combined, unify and coordinate the various
processes and project activities within the project management process groups. In the project
management context, integration includes characteristics of unification, consolidation, articulation
and integrative actions that are crucial to project completion, successfully meeting customer and
stakeholder requirements and managing expectations. The project integration management
processes include:
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Develop project charter developing the project charter that formally authorises a project.
Develop preliminary project scope statement developing the preliminary project scope
statement that provides a high-level scope narrative .
Develop project management plan documenting the actions necessary to define,
integrate, and coordinate all subsidiary plans into a project management plan.
Direct and manage project execution executing the work defined in the project
management plan to achieve the projects requirements defined in the project scope
statement.
Monitor and control - monitoring and controlling the processes required to initiate, plan,
execute, and close a project to meet the performance objectives defined in the project
management plan.
For the project to produce the desired outcomes, it should be well coordinated. The project
integration management ensures that coordination by guaranteeing that the project is properly
planned, executed and controlled.
2.3.2 Project scope management
The guide to the PMBOK (2004:338) states that project scope management includes the
processes required to ensure that the project includes all the work required, and only the work
required, to complete the project successfully. Project scope management is primarily concerned
with defining and controlling what is and is not included in the project. The Project scope
management processes include:
Scope planning creating a project scope management plan that documents how the
project scope will be defined, verified, and controlled, and how the work breakdown
structure (WBS) will be created and defined.
Scope definition developing a detailed project scope statement as the basis for future
project decisions.
Create a WBS subdividing the major project deliverables and project work into smaller,
more manageable components.
Scope verification formalising acceptance of the completed project deliverables.
Scope control controlling changes to the project scope.
Burke (2007:116) states that effective scope management as one of the key factors determining
project success. Failure to accurately interpret the clients needs or problems will produce a
misleading scope of work, therefore project management success could be limited.
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2.3.3 Project time management
The guide to the PMBOK (2004:338) states that project time management includes the processes
required to accomplish timely completion of the project. The project time management processes
include:
Activity definition identifying the specific schedule activities that need to be performed to
produce the various project deliverables.
Activity sequencing identifying and documenting dependencies among activities.
Activity resource estimating estimating the type and quantities of resources required to
perform each schedule activity.
Activity duration estimating estimating the number of work periods that will be needed to
complete individual scheduled activities.
Schedule development analysing activity sequences, durations, resource requirements,
and schedule constraints to create the project schedule.
Schedule control controlling changes to the project schedule.
2.3.4 Project cost management
The guide to the PMBOK (2004:338) states that project cost management involves estimating of
project cost by covering cost of all resources such as human, material, equipment, plant, travelling
expenses and other support details. These expenses are budgeted and tracked to ensure that the
project is running within budget. The project cost management process include:
Cost estimating developing an approximation of the costs of the resources needed to
complete project activities.
Cost budgeting aggregating the estimated costs of individual activities or work packages
to establish a cost baseline.
Cost control influencing the factors that create cost variances and controlling changes to
the project budget.
2.3.5 Project performance management
The Guide to the PMBOK (2004:339) states that project performance management includes the
processes and activities of the performing organisation that determine performance policies,
objectives and responsibilities so that the project will satisfy the needs for which it was undertaken.
It implements the quality management system through policy and procedures, with continuous
process improvement activities conducted throughout, as appropriate. The project performance
management processes include:
Performance planning identifying which quality standards are relevant to the project and
determining how to satisfy them.
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Performance assurance applying the planned, systematic quality activities to ensure that
the project employs all processes needed to meet requirements.
Performance control monitoring specific project results to determine whether they comply
with relevant quality standards and identifying ways to eliminate causes of unsatisfactory
performance
Project performance management covers two aspects: performance assurance and performance
control. Performance assurance is achieved through intensive planning to meet the performance
requirements while performance control involves following certain steps to monitor results and
check if they conform to the specified requirements. If performance management is overlooked, it
can result in project failure.
2.3.6 Project human resource management
This refers to the identification of people required to execute the job, defining their roles and
responsibilities and relationships. After identifying these people, they should be acquired and
managed to execute the project.
Cleland and Ireland (2004:11-17) states that project management competency is an essential
building block for an organisations future growth and profitability. Competency depends on the
personal characteristics of an individual, reflected in his or her knowledge, skills, and attitude,
where knowledge consist of suitable familiarity, awareness and comprehension acquired by
experience and study. Skill on the other hand is the ability of the individual to apply the knowledge,
with attitude referring to the persons state of mind or feeling.
The challenge that most companies have is that competency is expressed in so many ways within
organisations, and different levels of positions within an organisation may apply different
definitions.
The following table indicates an individual competency model that can be used to determine the
competency of a project manager and a method of promoting understanding and appreciation of
top performers. It can also be used as a guideline to define job grades of project managers within
organisations.
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Table 2.1: Individual competency model
Knowledge + Skills + Attitude = Competency
Knowledge: Skills: Attitude:
Familiarity, awareness, or comprehension acquired by study
The ability to apply knowledge
A state of mind or feeling
Project Technology Interpersonal skills Maslows needs
Strategic management Communication
skills McGregors
Theory X and Y
Project management theory and practice
Systems applications
Authority & Responsibility
Project management process Political sensitivity
Emotional Intelligence
Project management systems model
Building conceptual models
Source: Cleland and Ireland (2004:17)
2.3.7 Project communication management
The guide to the PMBOK (2004, 340) states that project communication management includes the
processes required to ensure timely and appropriate generation, collection, distribution, storage,
retrieval, and ultimate disposition of project information. The project communication management
processes provide the critical links among people and information that are necessary for
successful communication. Project managers can spend an inordinate amount of time
communicating with the project team, stakeholders, customer, and sponsor. Everyone involved in
the project should understand how communication effects the project as a whole. Project
communication management processes include:
Communication planning determining the information and communication needs of the
project stakeholders.
Information distribution making the needed information available to project stakeholders
in a timely manner.
Performance reporting collecting and distributing performance information, including
status reporting, progress measurement, and forecasting.
Manage stakeholders managing communication to satisfy the requirements, and resolve
issues with project stakeholders.
Any information that effects the project and the needs of the project stakeholders such as the
project status, accomplishments and relevant events needs to be communicated. Communication
management involves planning, executing and controlling the acquisition and broadcasting of all
relevant information required by the stakeholders.
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2.3.8 Project risk management
The guide to the PMBOK (2004:340) states that Project risk management includes the processes
concerned with conducting risk management planning, identification, analysis, responses,
monitoring and the control of a project. The objectives of project risk management are to increase
the probability and impact of positive events and decrease the probability and impact of events
adverse to the project objectives. Project risk management processes include:
Risk management planning deciding how to approach, plan, and execute the risky
management activities for a project.
Risk identification determining which risks might affect the project and documenting their
characteristics.
Quality risks analysis prioritising risks for subsequent further analysis or action by
assessing and combining their probability of occurrence and impact.
Quantitative risks analysis - numerically analysing the effect on overall project objectives of
identified risks.
Risk response planning developing options and actions to enhance opportunities and to
reduce threats to project objectives.
Risk monitoring and control tracking identified risks, monitoring residual risks, identifying
new risks, executing risk response plans, and evaluating their effectiveness throughout the
project life cycle.
2.3.9 Project procurement management
The guide to the PMBOK (2004:341) states that project procurement management includes the
processes to purchase or acquire the products, services, or results needed from outside the project
team to perform the work.
Project procurement management includes the contract management and change control
processes required to administer contracts or purchase orders issued by authorised project team
members. Project procurement management also includes the administration of any contract
issued by an outside organisation (the buyer) that is acquiring the project from the performing
organisation (the seller) as well as administrating the contractual obligations placed on the project
team by the contract. Procurement management processes include:
Plan purchases and acquisitions determining what to purchase or acquire and
determining when and how to do this.
Plan contracting documenting products, services, and result requirements and identify
potential sellers.
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Request seller response obtaining information, quotations, bids, offers, or proposals, as
appropriate.
Select sellers reviewing offers, choosing from amongst potential sellers, and negotiating a
written contract with a seller.
Contract administration managing the contract and the relationship between the buyer
and seller, reviewing and documenting how a seller is performing or has performed to
establish the required corrective actions and provide a basis for future relationships with the
seller, managing contract related changes and, when appropriate, managing the
contractual relationship with the outside buyer of the project.
Contract closure completing and settling each contract, including the resolution of any
open items, and closing each contract.
2.4 CRITERIA FOR PROJECT MANAGEMENT SUCCESS
2.4.1 The concept of project success
This research is conducted to determine the project management success criteria of capital
projects at the Chevron Cape Town refinery, but the fundamentals of project management and
project success criteria and success factors needs to be established first.
Kerzner (2004:29-32) states that during the traditional period, project success was measured in
technical terms only. This mainly occurred because the project objectives were also defined in
technical terms only. During the renaissance period, cost and quality became equally important as
technology. The definition of success changed to a project being finished in time, within cost and at
the appropriate technical level or quality. The modern project management includes the need of
the customer and not the manufacturer. With this definition one realises that acceptable
performance is determined by the customer and not by the manufacturer.
The definition of project success has changed over the years, as shown in figure 2.2.
Figure 2.2: Definition of success over time
Source : (Kerzner, 2004:29-33)
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2.4.2 Project management success criteria
In the past decades, project management success was usually indicated by the project completion
within the time, cost and performance constraints (Kerzner, 2004:29). This has now evolved to an
understanding of all the objectives of a project. Project management can still be deemed
successful even if it did not meet all the objectives of the project and vice versa, as long as there
are mutual trade-offs agreed upon by the developer (project manager) and the client.
White and Fortune (2002:1-11) conducted a survey to identify common criteria used for defining
project management success. The three criteria identified for measuring project success are
completion on time, within budget and according to performance specification.
However, these are not the sole principles by which success is determined - the fit between the
project and the organisation and the coincidences of the project for the performance of the
business were also reported as important criteria. Furthermore, the survey revealed that factors
such as a realistic schedule, adequate funds and resources as well as clear objectives play a
significant role in the project management success.
On the other hand, project management success is also dependent on the abilities of a project
manager. The attributes of a project manager that contributes to project management success of
the project are his/her abilities to plan, solve problems, monitor, network, inform, motivate, solve
conflicts, support , consult, develop, reward and delegate. According to Hyvaris (2006:216-225)
study, it seems that planning/organising, networking and forming are the most significant
managerial practices in the leadership behaviour of project managers.
The overall findings of Hyvaris (2006:216-225) study implies that technical project management
tools and methods are so developed and widely used that now that it is time to turn the focus on
developing leadership skills. The most important factors in project management success are
classified into three categories, namely project participants, communication and information
exchange and the system development process.
The common project management success indicators are completion to budget, satisfying the
project schedule, adequate quality standard and meeting project objectives (Munns & Bjeirmi,
2001:81-87). But the project manager (pm) cannot be held responsible if the objectives were
incorrectly defined. In which case, the project will be a failure but the project management is still
successful.
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2.4.2.1 Indicator 1: Completion within budget
The budget refers to the allocation of monetary resources to the project. Completion of a project
within the estimated budget is a good indication of project management success. According to the
Chevron Basic Project Management Manual (2009:3), cost estimation is the predicting or
forecasting of the cost of constructing and equipping a facility to manufacture goods, or to provide
a service. Cost estimation also provides the project manager and management with a realistic
representation of the final project costs at any stage of project development to meet a specific
project objective. Chevron expects that the actual project cost be within 10 percent of the
authorised value for a project to be declared successful concerning cost management.
2.4.2.2 Indicator 2: Satisfying the project schedule
The schedule portion projects the desired completion date of the project, using the exact date for
the day of completion. The purpose of the schedule is to create a systematic process for creating a
project schedule, which is likely to be predictable and credible. This promotes effective
management with specific, tactful decisions about the task, sequence and time for project
completion.
Chevron expects that the actual project cost be within 10 percent of the authorised value for a
project to be declared successful concerning cost management.
2.4.2.3 Indicator 3: Adequate performance standard
This indicator captures the portion of the desired result relative to the (set) required standards of
the quality of the completed work.
2.4.2.4 Indicator 4: Meeting project objectives.
The fourth indicator comprises of the first three. It describes what the project is to accomplish,
when it is to be accomplished and how much it will take to accomplish it. To be able to use this
indicator, the project objective statement is set to be clear, concise and quite effective. The
objectives should clearly define major deliverables as the primary project outcomes as they will be
used as the basis for judging the success of the project (Harvard Business School, 1997). Major
deliverables serve as a primary tool that focuses managements attention on the key project
outcomes.
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2.4.3 Indicator 5: Optimising trade-offs
The essence of effective optimisation is examining the entire project plan and developing creative
means for making it more efficient (Harvard Business School, 1997). Any component of the
project can be changed or adjusted as long as the changes are done in a systematic way, visible to
all project stakeholders. Common trade-offs are eliminating some major deliverables, developing a
different way to perform a task, changing dependencies, changing resources or accepting new
parameters. Optimising means making tough decisions to make a project a success as well as the
management thereof.
There are several factors that can lead to a project management failure; these include an
incompetent project manager, unsupportive top management, misuse of project management
techniques, lack of commitment to the project and inadequate basis to the project. All these factors
require careful consideration, but above all, the choice of the project manager is the most important
of all. In line with the research goals the opposite of the factors for project management failure can
also be stated as project management success indicators.
2.4.4 Project success criteria
What does project success mean? Should the same rule apply to all projects? Shenhar and Dvir
(2007:26-27) suggest that a comprehensive assessment of project success in the short and long
term can be defined by four basic measures:
1. Internal project objectives (efficiency during the project)
How successful was the project team in meeting its schedule?
How successful was the project team in meeting its budget objectives?
How successful was the project team in managing any other resource constraints?
2. Benefit to customer (effectiveness in the short term)
Did the product meet its specified requirements of functional performance and technical
standards?
What was the projects impact on the customer, and what did the customer gain?
Does the customer actually use the product, and are they satisfied with it?
Does the projects product fulfil the customers needs, and/or solve the problem?
Has it created a larger market share?
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3. Business and direct success (in the medium term)
Has the new or modified product become an immediate business and/or commercial
success - has it enhanced immediate revenue and profits?
Has it created a larger market share?
4. Preparation for the future
Has the project created new opportunities for the future, has it contributed to positioning the
organisation consistent with its vision, goals?
Has it created a new market or new product potential, or assisted in developing a new
technology?
Has it contributed additional capabilities or competencies to the organisation?
Project success criteria shape many aspects of the project, beginning with the functional and non-
functional requirement specifications. This simply means that if the stakeholders understand the
projects principal business objectives and success criteria, its easier to make decisions about
which proposed product features and characteristics are in scope and which are not.
2.5 PROJECT MANAGEMENT SUCCESS FACTORS
One further clarification is required at this stage and that is the difference between success criteria
and success factors. Lim and Mohamed (2000:98) dealt with this very question and cited the
Concise English Dictionary to define a criterion as a principle or standard by which anything can
be judged and a factor is any circumstance, fact or influence which contribute to a result.
Collins and Baccarini (2004:20-25) differentiated between success criteria and success factors by
stating that criteria are used to measure success and factors facilitate the achievement of
success.
According to Cooke-Davies (2002:54-56), project management researches have been trying to
discover which factors lead to project success and have reached conclusions that have been
widely reflected in literature for project management. Recent research shows that cost, schedule
and quality (also called the iron-triangle) are still determining criteria when measuring project
success. What has been debated for many years, is that even though the traditional iron triangle
of cost, schedule and performance have stood the test of time, projects still do not meet their
objectives as frequently as they should be doing.
The success factors that Cooke-Davies (2002:54-56) draws from an extensive research are:
1. Adequacy of company-wide education on the concepts of risk management,
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2. Maturity of an organisations processes for assigning ownership of risks,
3. Adequacy with which a visible register is maintained,
4. Adequacy of an up-to-date risk management plan,
5. Adequacy of documentation and organisational responsibilities on the project, and
6. Keeping project below three years as far as possible.
7. Allowing changes to scope of work only through a mature scope change control process.
8. Maintaining the integrity of the performance measurement baseline.
9. An effective benefits delivery and management process.
10. Portfolio and management practices allow the enterprise to resource fully a suite of projects
that match the corporate strategy and business objectives.
11. A suite of project, programme and portfolio metrics that provide feedback on current
projects and anticipated future success. A distinction needs to be drawn between the fact
that project success can only be measured at the end of the project and project
performance can be measured while the project is in progress.
12. An effective means of learning from experience that combines explicit and tacit knowledge
to the continuous improvement of project management processes and practices. In an
organisation where the business is operationsbased, successful project management
practices leads directly to the bottom line of the business
White and Fortune (2002, 1-11) state that there are seven project success factors:
1. Meeting clients requirements.
2. Completion on schedule.
3. Completion within budget.
4. Meeting the organisations objectives.
5. Yielding business benefits.
6. Causing minimal business disruption.
7. Meeting quality/safety standards.
The project success factors identified above are relevant to project success but needs to make
sure that a project has a handful factors and criteria to consider before the process becomes too
cumbersome.
Kerzner (2004:29-33) defined the critical success factors for a project over the period of the project
life cycle. This can be seen in Table 2.2 below.
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Table 2.2: Critical factors in the project management life cycle
Project management life cycle Critical success factors
Executive management acceptance phase Consider employee recommendations
Recognise that change is necessary
Understand the executive role in project management
Line management acceptance phase Willing to place company interest before personal interest
Willing to accept accountability
Willing to see associates advance
Growth phase Recognise the need for a corporate wide methodology
Support uniform status monitoring/reporting
Recognise the importance of effective planning
Maturity phase Recognise that cost and schedule are inseparable
Track actual costs
Develop project management training
Source: Kerzner (2004:42)
2.6 ROLE OF THE PROJECT MANAGER TOWARDS PROJECT MANAGEMENT
SUCCESS
Gray and Larson (2009:7) states that the role of a manager is to decide and implement the ways
and means to effectively and efficiently utilise human and non-human resources to reach
predetermine objectives. Project managers in a small manner perform the same functions as
functional managers since they are responsible and accountable for planning, scheduling,
motivating, and controlling. Project managers are unique because they manage temporary, non-
repetitive activities and frequently acts independently of the formal organisation.
Although competency of the project manager cannot be considered as a success indicator, in
reality the success of any project depends on the project manager. The primary responsibility of
the project manager is to ensure that all work is completed on time, within budget and scope and at
the correct performance levels, but this can only be done through functional knowledge which the
project manager typically doesnt have. To achieve all the set project objectives, project managers
must understand the mission and vision of the organisation first, then they must see how the
project they are managing meshes with the organisations mission, and they must steer the project
to ensure that the interests of the organisation are met.
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To perform this big task, a project manager has to be flexible enough to wear a lot of different hats,
many at the same time, which include the hats of an integrator, communicator, decision maker,
motivator, evangelist, entrepreneur and change agent (Nicholas, 2004:30-40).
This means that the project manager has to be able to integrate everything and everyone to
achieve the project goals.
Nicholas (2004:30-40) listed the usual responsibilities of the project manager as the following:
Planning project activities, tasks, and end results, including doing the work breakdown,
scheduling, budgeting, coordinating tasks, and allocating resources.
Selecting and organising the project team.
Interfacing with stakeholders:
Negotiating with and integrating functional managers, contractors, consultants, users,
and top management.
Providing contact with the user.
Effectively using project team and user personnel.
Monitoring project status.
Identifying technical and functional problems.
Solving problems directly or knowing where to find help.
Dealing with crises and resolving conflicts.
Recommending termination or redirection of efforts when objectives cannot be achieved.
In most projects, the role of the project manager is not well defined as the project managers find
themselve