Application and Development of Modern Project Management in China

Brief Introduction of Project Management in China

The systematic research, as well as the industry application of project management, has seen a comparatively late start in China. From the subject research aspect, although some colleges or universities have already engaged in this area from the end of 1970s, the scope of research is rather limited and it was not until 1991 that a nationwide project management research institute was established. From the industry application aspect, project management is widely practiced in construction projects, which are comparatively mature; while in other industries, it is still in its initial stage.

Development Track of PM

The origination of Modern Project Management can be traced back to the 1950s, with the appearance of CPM and PERT in America. The worldwide popularity of this subject came after its terribly successful application in the Apollo Program in the 1960s. At the beginning of the 1960s, Professor Hua Luogeng started to promote this technique in China, called is overall planning method, which now commonly called network planning techniques. Actually, after forty years of development, this subject has been far beyond the scope mentioned above, and has formed a knowledge system with rather abundant context.

In 2000, the Project Management Professionals (PMP®) of the Project Management Institute (PMI®) was introduced into China. However, in the beginning, few people could realize its value, and there were no more than 60 people enrolled for the first PMP Examination in China in June, 2000. Now, after three years of promotion, the senior managers within those industries that are characterized in dealing with multiple project operation, such as IT, Construction and Chemical industries etc, have recognized the importance and necessity of project management. As for other industries, such as Finance, Manufacture, Environment Protection, Pharmacy and Transportation, to learn Project Management is no longer a superior consciousness at all. By June of 2003, there have been more than thousand people participating the PMP in China.

At the latter half of 2001, the International Project Management Professional (IPMP) of International Project Management Association (IPMA) was introduced into China. In June 2001, the first nationwide IPMP attestation was held in Beijing, Shanghai, Xi'an and Shenzhen, and more than 300 people attended the examination.

Until now, many industries have successively set up their own project management organizations in China, such as the Construction Project Management Committee of China Construction Industry Association, the Project Management Committee of China International Project Consultation Association, Project Management Instructional Committee of China Project Consultant Association and so on, all these are the embodiment of the development and application of project management in China.

The Characteristics of Project Management in China

The subject system has become more mature.

The application areas have become more multiple.

The construction project and the national defensive project are the first two industrial areas to which project management was applied. However, with the development of technology, as well as the furious competition in the market, the application of project management has been expanded to many other industries, such as Software, IT, Culture, Petroleum and Steel industries, etc. The concept of project has been extended far from its original simple meaning, and to administrate as a project has become common practice among all kinds of enterprises and industries.

Quick development in education and training program

The development of Non-degree education has greatly promoted the development of the degree education: the National Education Committee has set up undergraduate experiment unit of project management in Qinghua University as well as other four Colleges. Actually, postgraduate and doctoral courses orientated in project management have already been set up in many universities and colleges.

Nowadays, the demands for project management are increasing in almost every industry, which have led to the flourishing of project management training program. These training programs are generally divided into two major kinds: public courses that are directed toward the demands of society, and internal training courses that are directed toward the requirements of enterprises.

Those project managers, who not only have a sound education background of project management but also have abundant practical experience, have become the hot number of big companies.

Extreme popularity of qualification attestation

At present, the main professional qualification attestation include: PMP, IPMP, Project Management Qualification of Construction Enterprises (Issued by the Ministry of Construction), National Project Management Professional (issued by Ministry of Labour and Social Security), Project Management Qualification of System Integration Enterprise (Issued by Ministry of Information Industry), etc.

Influence of press and media—adding fuel to the fire

Compared with the development of other subjects, the press and media have played a very important role in the promotion of project management application and the development of project management professionals. BMMTEC has issued many specific reports in lots of nationwide publications, while the local papers or magazines have even more articles concerning this aspect, which all promote the awareness and understanding of project management theory as well as its application by the enterprises.

Intended application of project management software

Facing furious competition, it is necessary to make good use of advanced methods and techniques to have a dynamic management of the tons of information or data when dealing with a project, and to increase the administration level and working efficiency. The statistical data shows that there are about 90% of project managers in America have more or less made use of the project management software, some of which are oriented in planning and schedule management, some of which are based on the common share of network environment, some are characterized in three reference frame of time, quality and expenses, some are based on administration of information resource system, etc. In our country, project management software has gotten the attention of many project managers, and Microsoft Project 2000 and P3 are the most popular.

Application of Project Management in Typical Industries

Although it has been many decades since the appearance of project management in China, its applications are limited in project construction industries; in the recent year, the subject has caught the attention of more and more industries and organizations, however, its application areas are still rather narrow, not only to the extend of its depth, but to the extent of its width as well. In the following part, we will have a brief introduction on the application of project management in construction and water and electricity industries.

Construction industry

In the present construction market of our country, two major methods are adopted by construction companies and design institutes who has the qualification of general contract during the course of project management:

PM: That is in accordance with the agreements, in the strategic stage of project, the main task is to conduct project plan and feasible analyses, as well as to draft feasibility report to the owner. In the implementation stage of project, the main task is to provide biding, design administration, procurement, construction management and operation experiment service, etc, as well as to carry out security, quality, schedule, expenses, contract and information management and control on behalf of the owner.

PMC: Apart from the services included in the first method, the project managers are also responsible for carrying out the preliminary design (basic construction design) as the responsibility party of the contract, and undertake the administration risk and economic responsibilities to the schedule, quality, and expenses of project.

Water and Electricity Industry

Since the establishment of our country, a kind of self-support system has been adopted in big water and electricity construction projects, which are characterized in national investment, construction carried out by state-owned construction bureau, and final delivery to electric administration department who will eventually take charge of the production and operation after the accomplishment of the project. The profit will be totally handed to the national government. Since it is the construction bureau which is in charge of the use of capital, the project schedule, quality and cost, there is no actual project management based on the modern concept. Until the early years of 1980s, our country began to transfer the working focus to economic construction, which led to the booming of water and electricity construction; however, the shortage of capital became a major restricting element. At that time, foreign investments were absorbed into China to solve the capital problem. Out of many people's expectation, accompanying with the foreign capital, the advanced theories and methods of marketing and project management, called ‘international common practice’ were also absorbed into China, which were regarded as a more important and meaningful result compared with the temporary solution of capital problem.

Airline Industry

 

The airline industry belongs to those large-scale manufacturing industries, which are featured as high-grade and high-precision, technology-intensive and capital-intensive. Generally speaking, the level of this industry indicates the level of overall manufacturing industry of one country. From the design of a type of plane to the manufacturing processes are all extremely complicated projects, which make it necessary to apply project management technology.

At present, the project management system adopted by most of airline companies in our country is still the Russian mode which used to be popular in 1950s. Although some improvements have made in the 1980s, there were no substantial enhancements at all and the gaps are considerable compared with advanced project management. Even during the process of setting up an organization for production research, the responsibilities and powers of a project manager are not completely unified; at the same time, the communication within the organization indicates a lack of uniform management. All of these lead to the lack of ability to anticipate the problems which may occur in the course of project, not to mention how to carry out some remedy methods; as a result, many passive phenomenon appeared. Therefore, it has become an urgent question we have to face of how to enhance the establishment of project management supporting system and formulate the standard procedure of project management.

Other industries

The chart below, provided by BMMTEC Group Holding Ltd, shows industry distribution by in-house training times in 2005. It states that Project Management has been adapted in most industries in China, not only the typical industries.

Industries Distribution by Training Times

Exhibit 1 Industries Distribution by Training Times

Major Research and Training Organization

In the past two years, the research and training organizations engaging in project management emerge as bamboo shoots after spring rain, among them, the most famous are:

Major Research Organization

♦ Beijing Zhongke Project Management Research Institute, Website: http://www.project.net.cn

♦ Project management Research Committee, Website: http://www.pm.org.cn

Major Training Organization

♦ BMMTEC Group Holdings Ltd., www.cpmi.org.cn

BMMTEC Group Holdings Ltd., Beijing-headquartered, is the first and one of the largest Registered Education Provider (REP) certified by PMI in the PRC China. As early as 1998, it's was BMMTEC who introduce the modern project management and PMP certification into China. By now, after five year development, BMMTEC‘s businesses have covered all of the country and have set up subsidiary companies and sub-offices in most major cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Wuhan, Chengdu, Qingdao, Dalian, Nanjing, Xi'an, Chongqing, and Changsha.

Committed to meet the needs and requirements of the customers, BMMTEC has provided high quality and diversified professional services from the foundation, which including education, training, translating, publishing and consulting services among aerospace, computer, electronics and communications, gas and electric utilities, chemical processors, engineering/construction, shipbuilding, environmental restoration and other industries. As a specialized project management training and education organization that is pioneer in the country, BMMTEC has been providing project management training coursed successfully to a number of global corporations in various industries such as: IBM, HP, GE, MOTOROLA, NORTEL, NOKIA, LUCENT, PANSKY, LEGEND, FOUNDER ORDER, CAPITAL INFO, HUAYUAN, DHL, DELPHI, and so on.

The table below shows the in-house training times and days in the year of 2004 in China based on the statistics of BMMTEC.

Management in-house training survey in China in 2004

Exhibit 2 Project Management in-house training survey in China in 2004

♦ Xi'an Huanding, IPMP certification centre http://www.xahuading.com

♦ National Foreign Expert Training Center http://www.chinapmp.net

♦ Shanghai Power Science & Technology Co. Ltd. http://www.p3china.com

Lag behind International Practice

Facing the developing science and technology, the new economic environment, the dynamic market, and fierce competition on a higher level, governments and enterprises must continuously deal with new challenges. Project has become an important element of economic development of China, and the quality of project implementation has become the most concerned issue of the State, society, and units. In the time of projects, project management is not only the effective means of managing large complicated projects, but also a major form of organization and management for governments and enterprises in the 21st century.

After over twenty years of learning and practicing by China, project management receives a large degree of acknowledgment and application in China, and has made some achievements. However, there is still a great gap between its situation in China and its application in the world.

Major Problems of Project Management in China

Project management in China has differences or gaps to project management in the world in the following major aspects:

Absence of Project Management

The absence of project management provides opportunities for people with power and people who have chance to get power to easily get a sum of money from finance and put it into their own pockets under the name of doing constructions, projects, activities, subjects, etc.

Prejudice to Project Management

In China, project management is often understood as engineering and construction project management. There are people who even think project management is only relevant to industries such as construction, national defence, and cosmonautics. All these are prejudices due to lacking of understanding of project management. With the further opening-up of China, it will be the trend for project management to receive as much favour by enterprises and managements as it is in developed countries.

Lack of Institutional Platform

When a company arranges all its businesses in time, clearly defines task objectives, approaches and measurements for every phase, it has built a business management system. However, at present, most organizations in China lack plans in their operation, or, changes in their work make the work different from what they have planned.

Low Level of Professionalism

Compared with developed countries, China's project management is still at a lower level, and the major cause is non-professionalism of project management, in other words, not being able to adopt this advanced management technique comprehensively and systematically in projects.

Insufficient Laws and Regulations

Although China has already had laws and regulations relevant to project management, they are still incomplete and lack of system. There are still no guiding rules for project management profession and industry, and no systematic summarization and improvement for practical experience in project management implementation.

Malpractice in Reality

The application of project management in China is still in its early stage and not wide enough. Many enterprises find that, in practice, the application of project management cannot ensure success of the project, and they lose confidence on project management.

Discipline Research to be improved

Compared to world-class level, project management in China is narrow in application scope, slow in development, and lacking in world-class project management professionals. The reason for these is that China has not established its mature, complete theoretic system, its comprehensive project management education system, and its professionalism of project management staff.

Lack of Professional Institutions

In China, besides the construction industry, there are almost no professional project management institutions, and almost no request from the country and industries for such institutions. The lack of professional institutions though reduces the burden of enterprises, increases the possibility of problems because of the lacking in both professional capability and supervision from the third party.

Low Benefit of Project Investment

Last year the total investment of fixed capital of China is more than three thousand billion yuan, with projects covering all important fields such as economy, culture, education, national defence, etc. The amount of projects and investments, number of fund sources, and complication of management are much more than before. Although project management in China has been greatly improved since the opening-up, there is a large portion of projects with delayed schedule, overrun in budget, bad quality, low, even none benefit. For many projects, the day they are completed and put into production is also the day they start losing money.

Major Misunderstandings of Project Management in China

The advancement of science and technology and the increasing degree of work division results in the increase of scale and complication of projects. It is no longer the time for individual heroes, and the management grows from “workshop” style to modern scientific management. As a result, the management staff should further understand and master the theories and methods of modern management, in order to complete the transform of ideas.

Generally speaking, the present project management in China has the following misunderstandings:

1. In the phase of requirement analysis, it is enough for the contractor and the customer to reach an agreement on the general issues, and details can be filled in later, because later modification of requirement is almost inevitable no matter how detailed they are at the beginning.

2. Project implementation phase is the process that produces project result, so it is the most important phase of the whole project, and must be given a large amount of time and allocated with major resources.

3. Project management is the business of project managers, and has no relation with other department and people in the company.

4. A project is considered successful as long as it is completed within schedule.

5. When lagging behind schedule, it is necessary to enrol more people in the project team and catch up by increasing resources of people.

6. A core technical person should become project manager; project manager must have the high salary among team member.

7. Only the project manager and upper managers should take care of the total quality of project; team member only need to care about tasks assigned to them.

8. In order to keep core members continuing with the project, the only way is by increasing their salary.

Conflict to Traditional Culture

China is a country with thousands of years of history. Therefore, even until now, the values, conventions, ways of thinking, and behaviours of Chinese people are still influenced, more or less, by the traditional culture. Modern project management, which was proposed by the West, has a lot of conflicts with our customs, including mainly:

♦ Lack of humanity

♦ Idea of hierarchy

♦ Reluctance of authorization

♦ Lack of transparency

♦ Lack of credibility

Suggestions for Resolutions

Facing China's entering into the WTO, and the ever-changing market, project management in China must accept challenges from globalisation and informationalisation of project management in an active way.

Adaptation to international conventions

With China's entering the WTO, in order to participate in international competition and expand global market, China must become adapted to international conventions. It is possible to start the adaptation from contract administration, engineering management, quality management, safety management, quotation management, etc. There is a complete set of international regulations on project management: strict regulations on qualification registration of contractor and relative technical people, and various detailed technical regulations to regulate project implementation and ensure quality standards. In the changing global market, only when we thoroughly understand international conventions, regulations, standards, etc. can we enter global markets following international conventions and protected by international law.

Establish complete set of laws and regulations on project management

Now, project management in China not only lacks laws and regulations, but also the enforcement of existing laws and regulations is difficult. Therefore, laws, regulations and institutions of every industry must be established according to the nation's relative policies. Meanwhile, the government should make full use of legal measures to cultivate and develop the project management law system, in order to ensure a legal operation of all project activities from planning, designing, implementation, controlling to closure.

Establish project management companies

The realization of project operation requires companies that master management models, procedures, methods, and techniques. This kind of company is qualified and experienced to provide the best project management service for the owner. China should encourage companies that specialize in project management, and let them organize and manage the whole project for owners through their professional techniques and management experience.

Good feasibility study of projects

A feasibility study forces a review and all-around technical-economic analysis of the project before implementation, in order to exam the economic rationality and profitability, technical advancement and usability, and implementation possibility and risk of the project, providing scientific evidence for project decisions. However, many projects in China do little of this, starting with no or only rough studies. They not only cause great economic loss, but also leave potential quality problems. Therefore, we must reinforce studies in early stages, presenting a good feasibility study and economic study of projects. The feasibility study must actually be included in the core of project management in order to get the maximum economic and social benefit.

Enhance the quality of project management staff

Developed countries pay great attention to the education and qualification of project management professionals, and have developed them into industries. The PMP Test and Certificate conducted by PMI is recognized by the world, and people who earn PMP certificates have more opportunities to find good work in government and large companies. China starts project management research and practice later than developed countries, and is left behind in education of project management staff. Some experts suggest that, in order to enhance the quality of Chinese project management staff, there should be frequent communication and seminars on project management with scholars from in and out of China, reinforce work on PM societies, try to establish professional publications, build degree programs on project management in universities, and institutionalize the training and qualification of project management.

Informationalisation and networking of project management

At this time of computers and the Internet, there is accesses to tremendous amount of information, which can no longer be dealt with by traditional management models and methods. The informationalisation and networking of project management is important in increasing working efficiency.

Innovation in project management

First, a company manager should sign contracts or liability letters with the project manager, according to specific projects, clearly defining the position and responsibilities, authority and benefits of the project manager. Second, every project should make an independent calculation, and connect economic benefit directly to benefit of project manager and members, in order to stimulate the scientific management of project manager and reduce cost. Third, the performing organization should establish complete quality assurance system for project manager, and supervise the implementation of the system. Creation of a good project and company image should be one important criterion in the examination for project managers. Finally, project managers should establish complete management systems, distribution systems and flexible labour systems, using all scientific project management methods to deliver qualified results to the owner or customer and gain profit for the company according to the contract.

Implementation of advanced operation strategy

In this day of a “knowledge economy”, some experts think that besides network operation and informational management, project management should also implement advanced operational strategy, including dummy operation, cooperation-competition, global strategy, and multi-cultural competition. Dummy operation is the trend of management in a knowledge economy. The company must control key resources and capabilities, and should not be controlled by others, in order to use this great advantage in a limited environment of resources and capability to enhance the company's competitiveness as great as possible. Cooperation-competition aims at a win-win result with as much benefit as possible in a changing environment and fierce market competition. Multi-cultural competition must identify culture differences, and keep one's own cultural advantages while realizing advantages of other cultures, in order to enhance adaptability and international competitiveness.

References

Yun, Q. (2004), Project Management Tide, 2004, Nankai University Publication

Wu, J. (2004) http://learning.sohu.com/20040911/n221989623.shtml originally from Xinhua website, Sep.11, 2004

Newsletter of BMMTEC, Oct. Nov. Dec., 2004

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2005, Cindy Qin
Originally published as a part of 2005 PMI Global Congress Proceedings – Singapore

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