Abstract
The objective of this paper is to discuss key drivers of medium and large projects in developing countries. We also want to provide some insights into impediments to effective project management and discuss why local capacity assessment should be a necessary first step before embarking on the five classical project management processes recommended by the Project Management Institute's A Guide to the Project Management Body of Knowledge (PMBOK® Guide). It is also our goal to offer a local capacity implementation model for developing countries which may still be grappling with systemic issues of power failure, central and rigid organizational structures, improper clarification of partnerships roles, lack of clarity of internal and foreign-based stakeholders identification, security problems and other issues which may often be taken for granted by consultants and project managers and consultants from developed industrialized nations. We encourage flexibility in using our project capacity model due to prevailing different circumstances and conditions in various countries. Our model is also tweaked toward design and construction industry.
Organizing process analysis with a focus on capacity gaps and mitigation should be in the front end so as to gain better understanding of strengths, weaknesses and risks of existing institutions or lack of, which should be considered as a pre-condition and the first gate of project implementation. These problems are often overwhelming and beyond the control of project manager as they significantly impact project scope, cost, quality and delivery timeframe.
To keep things in a proper perspective, the following issues are addressed in this paper:
- How do we define project and project management?
- What drives project in Developing Countries?
- What are the barriers to project management?
- Why is local capacity development for project management important?
- Is there a suggested model for local project management capacity and process?
Introduction
Since the middle of the last century, some developing countries of Africa, Asia, former eastern block countries of Europe and Latin America have been striving to improve economic and social welfare of their citizens. While existing statistics show that Asia, Latin American and eastern European countries are moving more rapidly in the realization of their development objectives, most African countries cannot claim the same result. In many ways, there has been an explosion of economic and social projects in developing countries since the mid-1990s, in part because of global trade and also in response to infrastructure development needs due to population growth in developing countries. The dramatic increase in national income of some countries endowed with natural exploitive minerals and commodities fueled with Direct Foreign Investments (FDI) has contributed to myriads of projects. Even with economic growth, good ideas and FDI, development projects have not translated to better living conditions of billions of people in the developing countries. To ameliorate this situation, governments and private sector have been partnering to bring about desired positive changes by sponsoring projects like water, wastewater facilities, transportation, energy, agriculture, IT and telecommunication, etc. What is constantly missing is implementation capacity sustainable at local levels where projects take place.
There has also been a tremendous growth in corporate and private philanthropic giving, but effective organizations to implement projects are lacking. As a result, Bill Clinton wrote that “billions of people are denied the chance to live their lives to the fullest, and millions die needlessly every year.”
The Fundamentals: Project and Project Management Defined
As stated in the Project Management Institute's (PMI®): A Guide to the Project Management Body of Knowledge (PMBOK® Guide) 2004 edition, a project “is a temporary endeavor undertaken to create a unique product, service, or result.”(PMI, 2004, p 5) Project has a definite beginning and a definite end and so they are not ongoing operations efforts. The purpose of a project is to achieve its objective and then terminates. Project is a carefully defined set of activities which use money, manpower, material, energy, space, communication, diplomacy and motivation to achieve the project goals and objectives for the specified time frame. A project can be as small as a family reunion or as complex as engineering design and construction of community water and sanitation facilities or a power plant.
Project management “is the application of knowledge, skills, tools and techniques to project activities to meet project requirements.” (PMI 2004, p.8) The term project management is often used to describe organizational or managerial approach to implementing projects. In a variety of ways, most western implementing organizations including multinational agencies use standardized project management framework to accomplish activities through the utilization of process groups such as: initiating, planning, executing, controlling, and project close-out.
Forces driving the growth of Projects in Developing Countries
It is almost impossible to list multi-dollar projects completed or which are still going in developing countries. However, the following summary illustrates selected but non-exhaustive categories:
Investments in public projects
According to World Bank report in 2007, investments commitments to infrastructure projects with private participation grew by 10% in 2006. A total amount of US1, 090 billion was expended in almost 3,800 projects. Telecommunication projects reached the peak levels in 2006, accounting for 55% of investment commitments. Other projects in the order of expenditures are: transportation, energy, water and wastewater. Exhibits 1 to 3 illustrate the trend, project sector and investment commitments across the region.
Exhibit 1: Strong economic growth in developing countries in two decades
Exhibit 2 – Regional economic growth trend in Developing countries
Exhibit 3 – Projects by sector in Developing countries
Global Trade
Several studies have shown that over the past two decades, international trade has contributed to the acceleration of business opportunities. Exhibit 4 shows there has been rapid increase in income attributable to global trade. Globalization has led to liberalization of markets, change in macroeconomic policies, flexible human capital and a boom in the telecommunication sector. Even though global trade has led to explosive economic growth in China, India, Vietnam, Nigeria and many other economies in transition, this has also brought about environmental disasters and internal inequitable distribution of wealth. It can be argued that the synergy between global trade and economic development continues to create environmental challenges which in turn might bring about more project opportunities in clean technology.
Foreign Direct Investments
According to Council on Foreign Relations report, foreign direct investment (FDI) has grown dramatically and is now the largest and most stable source of private capital for developing countries and economies in transition, which account for nearly 50 percent of all capital flows. Capital inflow into developing countries has been boosting myriad of projects.
In the private sector, the global economy has encouraged the propensity of multinational corporations to locate their businesses in emerging economies of India, China, former Eastern European countries, Nigeria and South Africa. The increasing world demands for oils and other mineral exploitive industries have also been contributing to huge projects in Africa, Asia and Latin America and the Middle East.
Exhibit 4: Effects of global trade bring about rise in income and projects
Role of multilateral and bilateral Aid for development projects
Several events have triggered a dramatic increase in the number of projects sponsored in developing countries of Africa particularly from the 20th Century to the contemporary times. There have been significant increases in domestic public finance, international donors, multilateral and bilateral aid, private philanthropy, remittances, and private corporation investments.
Both multilateral (World Bank, United Nations, European Union, Africa Development Bank, Asian Development Bank, etc.) and bilateral donors (based on specific countries aid programs, such as USAID, Canadian, and Japanese foreign aid assistance, etc.). Both multilateral and bilateral donor agencies and civil societies have been calling for more investments to stem the tide of poverty and mitigate deadly and preventable diseases particularly in Africa. The most advanced industrialized nations (G8) have also pledged to provide funds to developing countries. Although pledge have not kept paced with real donor-sponsored projects.
According to World Bank report, International Development Association (IDA) consisting developed industrialized countries would commit $25 billion to poverty alleviation and climate change projects.
UN Millennium Declaration and Millennium Development Goals
In September 2000, heads of government worldwide gathered in New York and declared Millennium Development Goals (MDG) in eight specific areas, which range from reducing extreme poverty to halting HIV/AIDS and providing universal primary education, and improving health and environmental conditions. The goal set a target date of 2015 as the time to reduce these human problem areas by 50 percent. In order to realize these broad policy objectives, in 2005, UN convened a high level ministerial to affirm commitment to MDG and called for global institutional harmonies, strengthening partner countries national development strategies and increase alignment of aid with partner countries. This push would increase aid to an annual world total of $195 billion per year in 2015. As a result of these universal goals, several development projects such as building of school, roads, water and sanitation facilities, environmental sustainable facilities, hospitals and service delivery programs cropping up in developing countries.
Global Explosion of Philanthropic giving
On top of the list of global giving to projects for eliminating diseases and alleviating poverty around the world are Bill and Melinda Gates Foundation (Gates Foundation). In June 2006, Warren Buffet provided more than $31 billion to Gates Foundation. Other major corporations have partnered with the Gates Foundation which has consistently given rise to numerous agricultural development projects, HIV/AID and other health care projects in the developing world. The Bill and Melinda Gates Foundation recently donated $306 million to boost small farmers' crop yields and income generation projects.
International Relief Organizations
Institutions such as Red Cross, World Vision, Oxfam, Doctors without Boarders, etc. have been contributing to projects and service deliveries of various sizes all over the world. Following the 2004 Tsunamis event in south East Asia and part of eastern Pacific Ocean boarders of Africa, there were huge amount of resources and rebuild projects sponsored and executed.
Barriers to Project Management Implementation
Despite the proliferation of medium and large projects in developing countries, our field observation of selected projects and extensive literature reviews reveal that many projects don't get off the ground, abandon mid-way, do not meet quality specifications, several years behind and do not stay within the scope boundary. Needless to say that project managers in the developing countries face these systemic issues which are overwhelming to project managers. It is recommended that country specific or regional issues be identified so as to unmask impediments to local implementation capacity earlier on before initiating, planning, executing, monitoring and closing out of a project. That is why we recommend organizing process as a staring point before commencing to the five processes (initiating, planning, executing, controlling and closing) recommended in the PMI PMBOK.
Exhibit 5 shows the summary of what we observed as potential and real barriers to project success and project management in developing countries.
Exhibit 5: * Based on extensive project management experiences of authors in some countries of Africa, Middle East and Eastern Europe within a time frame of two decades
The Significance of Local Project Management Capacity
Regardless of the industry, evaluating both the human and organizational capacity enables the decision maker and the project team to put the required skills, physical and financial resources including necessary systems and processes in place to deliver projects on sustainable basis. When you effectively assess and build a sustainable institutional capacity for project delivery the following objectives should be realized:
- Gain an understanding of institutional requirements for project implementation. Capacity issues at local organizational, team and individual levels would come out through assessments.
- Gain knowledge of realistic assumptions and expectations of all the partners and stakeholders who can influence project success across the life cycle processes before project roll-out.
- Identify project funding sources, security and organizations commitments in support of project implementation. As soon as this is known, project manager may have to adapt project plan to incorporate realistic project activities, work breakdown structure, budget and schedule in order to allow all parties deliver what is expected of them.
- Forster agreements among project partners and stakeholders.
- Promote understanding of institutional and human resources gaps and take steps to bridge it promptly earlier on before the commencement of project implementation.
- Enable development of a field-based project delivery capacity which should be a step in the right direction
- Gain an understanding of local vendors, procurement process, contractors, consultants, professional organizations that are crucial to effective delivery of projects within the time frame, budgetary constraints and meeting quality conditions specified.
- Promote workable organizational flexibilities and strategies for accomplishing projects
- Promotes a good judgment of what contributes or may impede project success.
Local Capacity Project Management Model
Capacity building means assessing and establishing resources needed to fulfill a mission or achieve a goal. It is widely recognized that project management professional groups, national and local governments need a range of tools to effectively manage their various programs and projects. To implement projects effectively, national and local governments including commercial organizations need technical tools for scientific support, engineering support, information technology (IT), assistance with legal issues, project management, outreach, and planning support. They also need legal authority for activities such as permitting, enforcement, contracting, fund raising, and resource management. These issues should be assessed and addressed within the organizing processing phase, what we consider to be the first gate of project implementation (see our discussion below).
The local capacity model proposed is consistent with the PMBOK® Guide. The model is illustrated in Exhibit 6.
The following steps define the main phases for the processes identified under this model:
- Organizing Process: This is the assessment of project context where project vision is developed which starts with the translation of ideas to projects. Main activities under this phase include comprehensive analysis of project environment. The project environment includes everything outside the control of the five main processes recommended in PMBOK® Guide but which can affect the scope, budget, time and quality of project or product delivery. A broad assessment of organizational capabilities, internal infrastructure systems, physical space, human resources, partnerships, power and influence, financial management capacities, governance and transparency, procurement management capacities is required before proceeding to the next process. Gaps in skills, organizational process, technology and other resources should be well documented and appropriately mitigated. If gaps cannot be mitigated at this level, then escalate to risk management and seek senior management support. The product deliverable for this first process is a field-based project delivery capacity report and it opens the first gate (gate 1) to project development phase. Primary project sponsor(s) and partners should also be clearly identified at this phase.
- Initiating Process: After organizing process is complete, then a project charter is developed and signed off by key stakeholders and partners. Initiation should also cover organizational, financial and human resources commitments across the whole project phases. The dominant activity should focus on business or project case evaluation and an outline of alternative analysis for project delivery. Project success criteria should also be outlined and provide the basis for success assumptions. Another important activity under this phase is budget allocation and commitment to project life cycle. Progression from project charter approval by partners and stakeholders should lead to gate 2 of the process, which is project planning. Project manager should be assigned and empowered to lead the project to the close-out phase.
- Planning Process: At this phase, activities would include development of preliminary project plan identifies initial scope, cost, schedule, risk, communication, procurement, work breakdown structure (WBS), and quality requirements. Project manager should also be empowered to assemble team and develop team directory and responsibility matrix. The principal product deliverable is alternative engineering and architectural pre-design analysis report based on project plan. As more information is gathered, the plan should be updated and proceed to the development of a competitive bids for procuring and retaining consultants (if design work cannot be done in-house, meaning within the implementing organization). The project plan provides the comprehensive road map and guide from the organizing to initiating, planning, execution and control, and close-out. Under this phase project reviews are conducted to decide whether to go to the execution stage. Project requirements baselines are set at this point and any changes can only be approved by project control board of which membership should consist of senior management and the project manager.
- Executing Process: Gate 3 door opens at this point. This is the phase of final engineering and architecture design development. Activities also include construction contract bid advertising, contract award, field construction, development of As-built drawings for the post-construction records. Construction audit report, operations and performance testing.
- Controlling Process (sometimes referred to as Monitoring): Activities under this process (gate 4) iterate with executing which is essentially to control all the tasks itemized under work breakdown structure (WBS). All project risks, work progress, project deliverables and milestones, testing, quality assurance, project communication, partnership level of interests and commitments are monitored and controlled by the project manager. Other task to be carried out under this process involves project status and management reporting including deliverable acceptance. A major briefing of project substantial completion need to be carried out by the project manager to all the stakeholders and partners.
- Closing Process: Under this phase, a formal acceptance of the project takes place. This is a ribbon cutting time for project sponsors and partners. This brings the project to a systematic conclusion. Activities include closing contracts and financial appropriation, project team termination and development of a close-out report. Another major component of this close-out phase is to conduct post project delivery assessment to assure that the project benefit the intended users or customers or in some cases citizens. Finally, activity involves archiving of close-out information including lessons learned in the official filing records.
Conclusion
Because of the dire needs of African and other developing countries, it is important for global project professional associations such as PMI and multinational organizations to partner with existing local project management associations to help bridge the knowledge and organizational capacity gaps. Since the envisioned goal of PMI is conceived in the notion of “worldwide, organizations will embrace value and utilize project management and attribute their success to it,” it is morally imperative for PMI and other global project management institutes to help strengthen organizations in developing countries, particularly in Africa. Specific ways to articulate and address these issues will be discussed in another forthcoming forum.