© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
Project Value Delivery
Best Practices forLarge Complex Projects Control
Jeremie AverousSenior Managing Partner
V0 – March 2015
Contents
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
Large Complex ProjectsBest Practices
• Introduction: Specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 3
• Be Focused on the right things – Convergence Monitoring
• Be in Control while remaining Agile
• Address Complexity
• Create Space for Responding to the Unexpected
Section
1
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• Introduction: specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 5
What is Complexity?
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Complex System = System with many independent components and strong interactions
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Complicated vs Complex
Section
2
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• Introduction: specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 9
Project Team Best Practices
• Strong Project governance• Strong Project Manager authority / specialized
disciplines providing resources• Project Leadership not just Management• An effective, integrated team with full-time
contributors in a separate open-space• Effective teambuilding and operating practices• The Project Execution Plans are developed and
revisited as a group during workshops at project start-up
• To the extent practical ensure alignment between individual capabilities and interests and project goals
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Why?
• Diminish complexity– Improve contributors’ alignment
• Strength of Project Sponsorship & governance• Familiarization, alignment workshops• Incentive schemes
– Minimize the number of contributors and interfaces
• Integrated work package / subcontractors
• Integrated teams
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 11
Integrated teams
• High Authority Level of Project Manager• Most people are allocated full time to a project• The project-team is collocated in an open-plan
space to facilitate communication• They do what it takes for the project
– recognition of need to contribute outside formal role description for overall success
• A Matrix organization is implemented within the project with delivery responsibility
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Project Governance• Proper project governance is often lacking on large
projects– Project sponsor should understand specifics of large
projects,– Project sponsorship should be strong and present,– Project execution strategy and decision-making key points
for management should be well defined (gates),– Utilization of contingency reserves process should be clear,– Will to invest to prevent future costs or manage risks.
…You need to build an effective integrated team to find the solution in complexity
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 15
A team where blaming starts
=100% project failure
Section
3
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• Introduction: specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 17
The Three Fundamental Questions
WHERE ARE WE?(ARE WE ON COURSE?)
WHERE ARE WE GOING?
WHAT DO WE NEED TO DO TO BE BACK ON COURSE?
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Project Control Best Practices
• Project Control is implemented as a specific senior role reporting to the PM – does not exist as such in smaller projects
• Project Control to ensure consistency between cost, schedule, risk and contracts at the adequate level of detail– Breakdown structures– Forecasts / Earned Value Management– Contingency, reserves, allowances
• Project Control sets up the relevant measurement and reporting processes & systems
• Project Control is not just about compliance - it needs to be the strategic advisor for the PMT
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 19
Large projects typical organizationProject
managerProject Control
manager
Package Manager 1
HSE, Q
Package Manager 2
Package Manager 3
Engineering Manager
Procurement manager
Construction manager
Commissioning Manager
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What is Project Controls?
Project Control is about buildinginformation sensors, and makingsense of the information.
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 21
Project Breakdown detail level(Cost Model, Schedule)
Breakdown detail
Too little detailwill not allow
to graspthe project drivers
Too much detaildrowns the team
and removes agility
Effectiveness
OptimalCost /
ScheduleDetailRange
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 22
Too much detail!= Not enough time for analysis!
Section
4
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• Introduction: specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 24
Project Cost Control Best Practices
• Fully distinct from Accounting• Focus on commitments and Project-end forecast• Actual Cost (VOWD) is evaluated independently of
invoicing• Breakdown structures are owned by Project Control and
coordinated with Procurement and Construction contracting strategies
• A full Project Cost Model is maintained (in source currency, time-phased, by work package)
• Issues / events are reported immediately in the forecast• Sensitivities are provided in addition to the (prudent)
forecast• Data integrity is maintained, all variances remain
traceable
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 25
Common “maturity’ observations when no strong Cost Management
• Costs for internal resources as actual costs instead of standard rates– Extreme complication of cost tracking
• Commitments are not tracked – only invoicing– Invoicing without commitments– Poor control on project bottom line because of
invoicing delays• Poor consistency with project execution strategy
and forecast schedule• No support to PM in scenario planning• No sensitivities available
Section
5
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• Introduction: specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 33
Project Schedule Best Practices
• Limit the detail of the Project Integrated Schedule – use a proper scheduling hierarchy
• Use the Convergence Planning / monitoring method + communicate focus to the team
• Float and Buffers are owned by the PM• Avoid ‘virtual float’ generation by constraining delivery
on fixed dates• Implement float monitoring / trending (evolution of float
from one update to the next)• Avoid having different schedules for different
stakeholders• Prefer to increase the schedule robustness and
resilience instead of minimizing the critical path.
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 35
Best Practice Schedule Vision
Integrated Project Schedule1,500 – 2,500 activities
Convergence Plan
~ 100-200 deliverables M
ORE DETA
ILS
MO
RE FOC
US
Document List &
detailed engineering
schedule
SCMDetailed
Plan
Construction Sub-
contractor’s schedules
Commi-ssioningPlan /
schedule
InstallationPlan
Simplified Project Schedule200-400Activities
(Schedule Risk Analysis)
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 37
Convergence processFor Complex Projects, the focus needs to be on
convergence
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 38
Convergence process
Simple Project Complex Project
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 39
Convergence process
Project Performance Driver(or, what kills a project)
Simple project Large project
Efficiency ConvergencePotential upside/
downside±10% +20%- 30, -50, -100%
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 40
Most Projects fail
because of a small piece
missing…
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 41
Convergence Plan Example
Section
6
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• Introduction: specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 43
Project Risk Best Practices• Opportunity and Risks, and ratings to be discussed as a team• Focused action-taking. Prioritize ruthlessly and focus effort• The earlier, the better for action-taking• Use all opportunities of contractual relationships to transfer risk• Do not confuse allowances, contingency, management
reserves• Schedule risk analysis focus on improving schedule resilience• Monte Carlo methods are conventional and their limits must
be understood (e.g. low probability risk, independence assumptions)
• Most of the project risk is related to schedule slippage & lack of convergence, and consequential impacts
• Prevention of major accidents is essential – industrial risk management
• In case of major event, create a separate task-force to minimize consequential impact on project execution
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 44
Advanced Risk Management approaches
• Industrial Risk Management– Specific methods to prevent major catastrophic
events (low probability, high consequences)• Portfolio risk management
– Manage dependencies between projects (resources etc) and consequential effects
• Minimize complexity• Ensure there is a way to escape the project if it goes
bad – contractual T&C– Limit of liability, termination clause etc
• Proper contingency calculation and Senior Management ownership
Section
7
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
• Introduction: specifics of Large, Complex Projects
• Project Team• Project Control• Cost• Schedule• Risk• Project Systems• Summary
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 48
Systems
• Large project = lots of data to control– Manual systems are overwhelmed, high error rate
• Need to:– manage inter-office remote work, remote sites– guarantee data correctness and accurate
reporting• What minimum systems?
– Document control & Correspondence control– Cost control (different from accounting)– Commitments & approvals
• SCM• Logistics• Travel, HR• Timesheets
– Scheduling & convergence planning
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 49
Project Systems Best Practices
• Minimize risks of mistakes by having systems that synchronize or are shared/ accessible between different sites & worksite (new trend = in addition, go mobile) and across the full process cycles (e.g. site commitments)
• Single integrated systems (~ERP) often less effective in terms of control and efficiency than a suite of specialized systems with checks at the interface; and in addition longer and more expensive to set-up
• All action-tracking systems to be coordinated to allow real prioritization across the board
• Reporting to be as automated as possible to leave space for actual analysis work (new trend = real time dashboards)
• Leverage systems to create performance indicators and reports• Ensure shared breakdown structures and consistent references
across the entire contracting levels
Conclusion
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 51
Moving into Larger, more Complex Projects
• Management by “efficient” hierarchical departments
• Purely rational approaches• Following an immutable baseline
plan(a.k.a the Stalinist approach)
…DON’T WORK!
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 52
So, is your organization is ready for large projects?
Key indicators:
• Strength of project managers vs department heads• Project leadership capabilities and effective teams• Office lay-out – really integrated teams• Cost mindset vs investment mindset at
management level• Strength of project governance process• Strength of IT systems for project data management
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 53
• Be Focused on the right things – Convergence Monitoring
• Be in Control while remaining Agile
• Address Complexity
• Create Space for Responding to the Unexpected
LEAD!
© Project Value Delivery, 2015w w w . P r o j e c t V a l u e D e l i v e r y . c o m 54
This presentation summarizes key best practices for Large Complex Projects.
More information is available on our White Papers and other documents on www.ProjectValueDelivery.com
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