psmj xl webinar developing your pm plan: why …xlgroup.com/~/media/xldp/pdfs/webinar/psmj xl...

PSMJ XL Webinar Developing Your PM Plan: Why Failing to Plan is Planning to Fail

DEVELOPING YOUR PROJECT MANAGEMENT PLAN: WHY FAILING TO PLAN IS PLANNING TO FAIL

This presentation contains proprietary information protected by XL Group plc companies copyright and PSMJ copyright. All rights reserved.

Christopher P. Martersteck, AIA, LEED AP, DBIA – PSMJ Resources

Bob vanArsdall, MBA – XL Group’s Design Professional unit

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Using the Technology

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Webinar leaders

. Christopher P. Martersteck, AIA, LEED AP, DBIA• A/E/C Project Delivery Seminar Leader &

Consultant - PSMJ Resources• Past Vice President & Director of Project

Management - 4 top 50 A/E/C firms

• Past Chair - AIA Chicago Design-Build Knowledge Community

• Past Board Member - DBIA Great Lakes Chapter

• Design-Build Certification Course Leader -Design-Build Institute of America

• [email protected] or PSMJ Resources - www.psmj.com

• Connect on LinkedIn: http://www. linkedin.com/in/christophermartersteck

Bob vanArsdall has worked in engineering and consulting since 1983 and has been with XL Group’s Design Professional unit since 1996. As an author, vanArsdall has contributed to national and international business publications, and is called on frequently to speak on marketing and management

issues at industry, national, and international forums. He has been a frequent speaker at the US national and regional AIA conferences, ACEC conferences, and at GLOBE in Canada.

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About XL Group’s Design Professional unit

Specially designed loss prevention for today's A/E firmsHaving served both large and small A/E firms for more than 40 years, we understand the challenges today's design professionals face, and we've tailored our solutions to their unique risks and requirements.

Our mission is simple: to bring policyholders the resources and protection they need to run a successful business.

• Our innovative professional liability insurance programs offer broad, cost-effective coverage that's tailored to your firm.

• Industry-leading educational programs draw on real claims data to help you implement proven risk management techniques.

• Through a dedicated national network of underwriters, claims consultants, agents and loss prevention specialists, we work with each of our clients to reduce the cost of loss and preserve valuable business relationships.

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• Content providers of management information• Focused exclusively on the A/E/C industry for over 30 years

About PSMJ

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Get more. Learn more.

From XL Group:

•Complimentary test drive of XL Group’sContract eGuide

•XL/PSMJ 2012-2014 webinars OnDemand

• Related XL article

From PSMJ:

PSMJ’s limited time offers• Project Management Bootcamp – register

for one of the upcoming 8 locations and bring a colleague to this seminar for 50% off the regular registration fee.

• PSMJ Newsletter – Webinar participants receive 18 months of this newsletter for the price of 12 months.

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Webinar attendees will get more risk management information

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AIA Certificate of Completion

The live webinar is registered with the AIA by PSMJ.• In order to receive a copy of the

Certificate of Completion, please send an email to:

[email protected]

• Upon receipt of your email, an electronic PDF version of the certificate will be sent to you.

The OnDemand webinar is registered with the AIA by XL Group.

Visit:

xldp.com/LearnMore/OnDemandWebinars.com

This webinar is registered with the national AIA, and units earned by architects are directly reported to the AIA. Engineers can, in general, use certificates of completion to self-report Professional Development Hours. Not all States and licensing boards accept these programs for learning units.

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Learning objectives

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After participating in this webinar:

• By the end of this webinar, attendees will be able to identify the critical success factors for the project in the client’s eyes.

• In today’s workshop, attendees will learn why risk needs to be addressed up-front before the project begins and incorporated into the project plan.

• In today’s workshop, attendees will learn how to break a project into tasks and sub-tasks and to map these to the critical success factors.

• By the end of this webinar, attendees should be able to recognize the impact of not following a project plan on the outcome of their work.

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• Set goals & build teamPlan

• Manage team & hours Delegate

• Project ProgressMonitor

• PM coaching & mentoringReview

Project Process

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• Set goals & build teamPlan

• Manage team & hours Delegate

• Project ProgressMonitor

• PM coaching & mentoringReview

Know your

Today’s Agenda: Project Process

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When Should You Start to Plan?

Get the RFP

Accomplish the Two Objectives of Planning

Understand Client’s Priorities PMP

Start Proposal

Submit Proposal

Negotiate Contract

Award

Mobilize Project

Do the Work

Close the Job Number

Project Concept by Client 1. Convert project goals into manageable tasks

2. Anticipate problems

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1. Proposal is your first draft

2. Finalized after project is secured

3. Consolidates information• Request for proposal• Proposal due diligence• Proposal document• Negotiations• Contract

4. Planning & Communication tool• Project team• Client

Project Management Plans

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Plan for a Small Project

Work Element Task Lead Date Budget %

CompleteEarned Value

1. Survey Zack 4/1 $1,000

2. Data Analysis Don 5/1 500

3. Report Outline Don 5/5 500

4. Permitting Rhonda 5/15 250

5. Agency Meeting Rhonda 5/25 150

6. Project Mgmt Don 5/30 150

7. Final Report Don 5/30 500

Totals $3,050 E.V. $

Spent to Date $

Over/Under $

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Process of Endorsement

1

3 2

INPUT

INCORPORATEGAIN COMMITMENT

BUY IN

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1. Vision/Goals 2. Critical success factors3. Scope 4. Schedule5. Financial plan 6. Team organization, resources, responsibilities7. Quality control process8. Change management process9. Communication plan10. Contingency/risk management plan

PMP Vision & Critical Success Factors

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Project Objectives

1.Objectives can generally be categorized as Cost, Performance orSchedule. Examples:

• a particular functionality• meeting deadlines• within budget• avoiding a particular identified risk

2.One or two of the three goals areusually more important to the client

3.You must understand the client’spriorities regarding which goals are:

• Maximized• Accepted• Constrained

4.Be aware of how the client’s priorities may conflict with your firm’s

PERFORMANCE / SCOPE

COST SCHEDULE

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Vision/Critical Success Factors

Project Title:Client:Project Number:Project Manager:

Critical Success Factors Performance Measures

Project Vision

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Project xyz Pete's Contracting Co PN 1234 Sam

metric:

metric:

metric:

metric:

metric:

metric:

metric:

metric:

metric:

Project Vision

Outcome

Priorities

Critical Tasks

Critical Success Factors

Performance Measures

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PMP Scope

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1. Work Breakdown Structure (WBS)What are the tasks, subtasks, deliverables?

2. Organizational Breakdown Structure (OBS)Who is responsible for completion of each task?

3. Accounting Breakdown Structure (ABS)Where are costs for work charged & monitored?

Defining the Work

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Three Breakdown Structures

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• Scope of Work – written description of the work that will be performed

• Work Breakdown Structure (WBS) – hierarchical list of primary tasks and subtasks (detailed task outline)• presents logical organization of work

What Real Work Looks Like

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A. Define beginning and end (project sequence)

B. Define duration (one start & one stop date)

C. Specify level of effort (hours and/or dollars)

D. Able to define progress (completion status)

• Include PM as a separate task

ABCs of Defining a Task

Defined Work

PackageDuration Resources

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Work Breakdown Structure

• AT101.xx• 1.0 Summary Task

• 1.1 Detail Task• 1.1.1 Subtask • 1.1.1.1 Deliverable

• 2.0 Summary Task• 2.1 Detail Task • 2.1.1 Subtask• 2.1.1.1 Deliverable

• 3.0 Summary Task• 3.1 Detail Task • 3.1.1 Subtask• 3.1.1.1 Deliverable

• Level 1

• Level 2

• Level 3

• Level 4

• Level 5

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Setting Up Your Financial Breakdown Structure

Do:1. Assign separate ABS numbers

to each person on the OBS who you want to be accountable for financial performance

2. Make sure ABS managers access regular job cost reports for their job

3. Assign separate ABS numbers to track historical costs (e.g., hours per sheet by discipline)

Don’t:1. Feel compelled to use all the

detail available in your accounting system

2. Expect people on your team to understand or remember the details of a complex ABS

3. Make your ABS more detailed than is absolutely necessary

4. Try to use your ABS to control budget status

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Putting It All Together

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PMP Schedule

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Why Are Task Relationships So Important?

What is Rework?

1. Client change late in the game*

2. Review comments over and above reasonably expected*

3. Value engineering after 30% submittal (~SD)*

4. Errors & Omissions

*for which we are unable to get an Add Service Fee

What is NOT Rework?

Iterative design process included in our budgets

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Have You Ever Measured Rework?

Recent Example• 28 Projects• Over a Calendar Year• Range of Fee Sizes• All Less Than 6 Months

Rework Hours as Percent of Total

8%

13%

23%

0%

5%

10%

15%

20%

25%

Best Median WorstProject

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• Task Duration – determine the number of days to complete each task

• Task Relationships – define the sequence of each task and the relationships between the different tasks

• Project Milestones – identify project deadlines and associated intermediate internal deadlines

• Critical Path – identify tasks that “drive” the project schedule

Preparing a Schedule

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Milestone Chart

• Small projects• Minimal

prep costs• Fair team

buy-in

Bar Chart

• Medium Projects

• Moderate prep costs

• Fair team buy-in

Critical Path Method (CPM)

• Large Projects

• Moderate prep costs

• Fair team buy-in

Wall Scheduling

• Large Projects

• Expensive prep cost

• High team buy-in

Scheduling Techniques

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Milestone Chart

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Bar Chart

ID

1

2

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Task Name

PRELIMINARY DESIGN

Kickoff & Review Char Data

Design Calcs

Design Criteria

Title Sheet

Site Plan

P&IDs

Mechanical Plan

Equip List & Outline Spec

Client Review

Cost Estimate

Start Date

1/1/2002

1/1/2002

1/5/2002

1/10/2002

2/15/2002

2/15/2002

1/15/2002

2/15/2002

2/15/2002

3/15/2002

3/15/2002

End Date

1/1/2002

1/7/2002

1/25/2002

1/30/2002

2/21/2002

2/28/2002

2/4/2002

3/7/2002

3/7/2002

4/3/2002

3/25/2002

0d

5d

15d

15d

5d

10d

15d

15d

15d

14d

7d

12

13

14

January February March

2002Duration

x

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Critical Path Method Schedule

ID Tas k Na me1 PRELIMINARY DESIGN

2 Kickoff & Review Characteriz

3 Design Calcs

4 Design Criteria

5 Title Sheet

6 Site Plan

7 P&ID

8 Mechanical Plan

9 Mechanical Section

1 0 Equip List & Outline Specs

1 1 Client Review

1 2 Cost Estimate

1 3 Vendor Quotes

1 4 Material Take-offs & Unit P

1 /4 1 /1 1 1 /1 8 1 /2 5 2 /1 2 /8 2 /1 5 2 /2 2 3 /1 3 /8 3 /1 5 3 /2 2J an ua ry Feb rua ry Ma rch

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PMP Financial Plan

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1. Upward budgeting - most detailed/must use• Detailed task outline is basis of budget• Identify staff needed to complete each task• Estimate staff hours for each task• Estimate Other Direct Costs (ODC)• Add appropriate contingency • Calculate and add profit (if not already included)

Budgeting a Financial Plan

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2. Downward Budgeting – value of the project has been established

3. Unit Price Budgeting – based on the number of units of work performed

4. Staffing Level Budgeting – based on staff estimates to complete similar work

Best Practice – use all four budgeting methods

Best Practices Budgeting Methods

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PMP – Risk Management Plan

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0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Negotiation and Contracts

Client Selection Project Team Capabilities

Communication

2001

2012

Percentage of Claims Affected

Top 4 Non-Technical Risk Drivers

13%

16%

24%

27%

6%

23%25%

39%

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Project Team Capabilities

• A primary factor in:• 25% of claims count• 34% of claims dollars

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Project Team Capabilities

51% - Inexperienced design staff

20% - Inexperienced on-site staff-

18% - Inexperienced project manager

4% - Other

3% - Firm inexperienced in project type

2% - Unqualified back-up staff-

2% - Outside firm's normal territory

1% - Insufficient number of staff

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Communication Issues

• A primary factor in:• 39% of claims count• 29% of claims dollars

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Communication Issues

51% - Lack of procedure to identifyconflicts, errors and omissions

17% - Project issues and potentialdisputes not handled correctly

13% - Scope of services not explained to client

9% - Lack of documentation re: changes in scope, budget, etc.

6% - Project staff not aware of responsibilities

3% - Other

1% - Regular progress reports regarding changes not approved

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• All Projects are equally risky, right?

First Question:

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Project Type Risk Factors

Project TypeRatio of Claims to

Weighted FeesRatio of Dollars to

Weighted Fees

Residential condos (new) 8.5 12.0Wastewater/Sewage treatment plant or system 2.1 2.7

Single family residence 3.0 2.1

Schools through grade 12 1.5 1.5Single Family residential subdivisions 1.4 1.2

Comm/Ind <= 9 stories 1.1 0.8Malls, shopping centers, retail stores 0.9 0.6

Source: XL research data, 2012rce

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• What are the risks of this particular project?

• What are the risks of this particular client?

• What contract elements should the team be particularly aware of? (see Contract eGuide)

• What skills will we need to succeed?

Questions for the RMP

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• The risk management plan is an integral part of the PMP

• You should start the risk management plan at the same time you start the PMP

Timing for the RMP

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All these should be discussed and written down for the team to understand:• Client specific issues (CSF’s for this project)• Contract-specific conditions (see Contract eGuide)• Quality documentation• Communication matrix for the project• Change & contingency management

Elements of the RMP

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Keys to Successful Kick-off Meetings

Internal Kick-off Meeting1.Complete all prior planning steps prior

to the meeting.

2.Make sure everyone understands the overall project goals, not just their part.

3.Get real input and buy-in from each team member.

4.Establish a process for making any needed changes.

5.Redo the meeting if there are key personnel changes (e.g., new PM or client rep)

Client Kick-off Meeting1.Bring all key team members.

2.Ensure client has all key members.

3.You don’t know everything about your client - Get a dialogue going!

4.Validate and refine the client’s goals, objectives and priorities – then document them.

5.Get client’s commitment to meeting all their deadlines.

6.Establish the change procedure.

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Summary of Planning Tools

•Your Proposal = Initial Plan

•Critical Success Factors Performance Metrics

•Defined Scope / Schedule / Budget

•Risk Management Plan – document, document, document

•Work Planning Meetings• Internal team including Subconsultants• External team including Client, CM, Program Manager• Document & confirm

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Questions?

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Learn More.visit xldp.com/LearnMore/OnDemandWebinars

Get XL/PSMJ Webinar series OnDemand

Each earns 1 – 1.5 free learning unit(s)

A recording of today’s webinar will be available at this link on October 23

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Get More.visit xldp.com/LearnMore

Download our entire Top 10 series

Test drive our Contract eGuide—copy/paste recommended contract language directly into your documents.

© 2014, X.L. America, Inc. All rights reserved

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PSMJ Project Management Products & Tools

Project Management Boot CampThis interactive, two-day seminar is extremely useful for those who are looking for all levels of project management

• Webinar participants register now for one of the upcoming 8 locations and bring a colleague for half off the regular registration fee.

Project Management NewsletterThis monthly newsletter provides PMs with great ideas on how to make their projects more successful.• Webinar participants receive 18 months of this newsletter

for the price of 12 months ($337 per subscriber)• Significant discounts are available for multiple subscribers in the same firm

Call Diane Constantine at 800-537-PSMJ (7765) and mention that you participated in this webinar to receive these special offers for a limited time only.

Offer ends Friday, November 28th!*PSMJ PM Boot Camp offer – not valid on previously registered and paid attendees

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AIA Certificate of Completion

The live webinar is registered with the AIA by PSMJ.• In order to receive a copy of the

Certificate of Completion, please send an email to:

[email protected]

• Upon receipt of your email, an electronic PDF version of the certificate will be sent to you.

The OnDemand webinar is registered with the AIA by XL Group.

Visit:

xldp.com/LearnMore/OnDemandWebinars.com

• Recorded version requires a short on-line quiz for credit.

This webinar is registered with the national AIA, and units earned by architects are directly reported to the AIA. Engineers can, in general, use certificates of completion to self-report Professional Development Hours. Not all States and licensing boards accept these programs for learning units.

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Questions?

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Thank you

Christopher Martersteck, AIA, LEED AP, [email protected]: 312-925-3191connect on LinkedIn: www.linkedin.com/in/christophermartersteck

• www.psmj.com

• 800-537-PSMJ

Bob vanArsdallXL Group’s design professional [email protected]: 919-928-8002

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Contact us if you need further information or help

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XL Group is the global brand used by XLGroup plc’s insurance subsidiaries. Coverages are underwritten by the following XL Group plc insurance companies: Greenwich Insurance Company, Indian Harbor Insurance Company, XL Specialty Insurance Company. Coverages not available in all jurisdictions.

This publication is provided for information only and does not constitute legal advice. For legal advice, seek the services of acompetent attorney. Any description of insurance provisions are general overview only. THE INSURANCE POLICIES, NOT THIS PUBLICATION, FORM THE CONTRACT BETWEEN THE INSURED AND THE INSURANCE OCMPANY. The policies contain limits, exclusions and conditions that are not listed in this publication. All coverage are subject to individual underwriting judgments and to state legal requirements.

© 2014, X.L. America, Inc.All rights reserved. This publication may not be duplicated without written consent.

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psmj xl webinar developing your pm plan: why …xlgroup.com/~/media/xldp/pdfs/webinar/psmj xl...

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