Implementing formal project management to local government projects

Abstract

Local Government Agency (LGA) projects are planned and implemented by applying variable degrees of project management processes, ranging from informal to formal. Standardization of scalable project management processes, tools, and templates requires significant effort by the organization.

This paper describes some of the challenges that are typically encountered by LGAs when attempting to improve their project management processes and shares the lessons learned from the experience at King County (the 14th most populous county in the United States). The lessons learned from this case study could be applied to LGAs that are comparable in size and provide similar products and services.

Project management cultures, organizational structures, and challenges of standardized project management for LGAs are discussed. The case study discusses business processes, micro-cultures, drivers for standardization, and a strategic approach toward project management process improvement. Project management process improvement requires systematic planning, executive initiatives, adequate resources, and support from all management levels.

Introduction

Local Government Agencies (LGAs) provide a variety of services and products to their customers by implementing diverse arrays of public works, health and safety, information technology, and other legally mandated projects and programs. Primary drivers of these projects and programs are local ordinances, state laws, federal regulations, and the business plans of the organizations. The public, elected officials, regulatory agencies, and other government organizations are usually the key stakeholders for the projects and programs that are implemented by LGAs. Typical LGA project planning processes and decisions are usually influenced by the stakeholder's expectations rather than the potential to make a profit, and project success is generally viewed as adherence to the stakeholder's satisfaction. In order to gain some of the stakeholder's satisfaction, sponsors often direct the project implementation in a hurry without comprehensive project planning. Some of the LGAs view systematic project planning as a costly or even an unnecessary step and usually minimize or eliminate a systematic application of comprehensive project management processes.

LGAs that are understaffed and/or functionally organized utilize a line manager or other professional to perform a multitude of managerial, technical, and administrative functions by wearing the hat of a project manager. Although acting as a project manager, often they are not well versed in standardized project management practices. Project management maturity levels among LGAs vary due to several reasons, including organizational polices, business needs, experience, professional background, resistance to change, and financial constraints.

During the last decade, some of the LGAs are revisiting their business processes primarily to offset the impacts of the economic downturn by increasing productivity through the optimization of their project delivery processes. In order to be more accountable and to increase transparency of public funds expenditure, LGAs are improving their financial reporting for projects and programs. Many LGAs, including King County, initiated the development and implementation of standardized project management processes to improve the delivery of the Capital Improvement Program (CIP). In 2008, the King County Council passed Ordinance 16308 to continuously improve its management and accountability to citizens by developing a strategic approach for implementation of projects and programs countywide (King County Council, 2008). Various Implementing Agencies (IAs) within King County have their own processes and protocols for project management, and their level of maturity varies to some degree. As a result, projects and programs even within King County IAs are managed by following varying degrees of project management processes, documentation, and performance reporting. In 2010, the King County Executive issued an order CIP 8-1 (AEO) for development of consistent, comprehensive standards for capital project budgeting, reporting, management, and performance measurement (King County Executive, 2010). Through Executive Order CIP 8-1, a County-wide Project Management Work Group (CPMWG) task force consisting of representatives from all of the IAs was formed to develop a common project management standard. The main responsibilities of the CPMWG are to develop minimum project management standards, tools, and templates, which can be included in all project management manuals for the IAs. This paper focuses on the key challenges that are typically encountered by LGAs to improve their project management processes and will provide an in-depth review of the lessons learned from the experiences of King County Solid Waste Division (SWD).

Project Management Cultures in Local Government Agencies

The term “local government agency” is very broad and includes all local government bodies and individuals, excluding only purely advisory bodies and school boards. For the purpose of this paper, LGAs are referred to as those local agencies, including cities and counties that operate independently. Based on the geographic area, population, revenue, and the business objectives, cities and counties may provide a broad range of services, including development, maintenance, and operation of infrastructure, utilities, and natural resource management. LGA projects are typically planned and managed by an area specific Subject Matter Expert (SME). For example, a roadway development project would most likely be managed by a civil engineer, whereas a wetland restoration project would be managed by a natural resources scientist. Most SMEs focus on the technical elements of the products and put less emphasis on the project management aspects. As a result, projects are planned and managed with varying degrees of emphasis on project and product quality assurance and quality control.

Organizational Structure

Organizational structure plays an important role in how projects are managed to achieve organizational objectives through utilization and coordination of resources. The majority of LGAs are typically organized as a functional or weak matrix. Traditionally, LGAs operate in a functional organization structure, wherein the organization is typically broken down into different sections based upon the specialties of its employees. The work accomplished in each work group is usually specific to the specialty of the work group. In a functional structure, the authority to assign resources and make final decisions rests with the functional managers, while the responsibility for execution of processes and projects rests with the project managers. Functional structure creates rigid vertical chains of command and each activity becomes the focal point of the work group, with employees grouped together in silos of similar function-based work (Mallory, 2012). The goal of functional structure is to maximize performance by sharing the expertise of each group with other functional groups while positioning the SMEs in their own work groups. There are LGAs where organizational structures are combinations of a balanced matrix and strong matrix, where the projects are typically managed by individuals specialized in project management. Matrix structures allow for efficient and direct exchanges of information between project staff because they work closely and are eager to share data to achieve common goals.

In contrast to the traditional LGAs operating as functional organizational structures, only a handful of LGAs exist that are truly projectized organizations. As an example, King County Wastewater Treatment Division (WTD) utilized a projectized organizational structure for implementing Brightwater CIP project (lifetime cost estimate of US$1.849 billion and project duration of over ten years). In a projectized environment, resources may be brought together specifically for the purpose of a project, and the project manager has the authority to avail of resources freely, control project budget, and maintain complete line of authority over the entire project. There are several disadvantages with projectized organizations, including cost of maintaining dedicated staff, unemployment threat after project completion, lack of motivation, and lack of career opportunity (Kerzner, 2009, pp 104–105). Considering these challenges, a projectized organizational structure may not be very efficient for the LGAs unless they have a very large project with a long duration such as the King County Brightwater project.

Typical Project Management Practices for Local Government Agencies

Project management practice varies widely among LGAs and even within the various divisions of the same organization. Based on the project management maturity level and/or the enterprise environmental factors of the LGAs, projects are managed by applying varying degrees of project management knowledge, processes, tools, and templates. Organizations without standardized project management policy often manage projects informally (i.e., by applying some elements of project management processes without comprehensive documentation, formal review, change control, or approval. A number of federal and state funding agencies often require formal project management practices, including progress reporting using Earned Value Management (EVM) Techniques. In order to comply with these funding requirements, LGAs manage their projects formally by developing a project management plan, change control process, and EVM reporting.

A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) — Fourth Edition provides a comprehensive approach of project management Process Groups and Knowledge Areas. Among the 42 project management processes and the nine project management Knowledge Areas of the PMBOK^® Guide, LGAs typically focus on the following four project management Knowledge Areas:

The majority of LGAs have policies, processes, tools, and templates for procurement planning, contract management, and closeout. Project Time Management is performed by using milestone schedules or comprehensive Critical Path Management software. Project Cost Management also varies from simple cost estimating to complex budgeting processes. Project Scope Management typically focuses on scope development for planning procurement.

Typically, projects are initiated by developing some elements of a project charter, such as high-level project scope, summary budget, and milestone schedule. Stakeholder identifications are typically performed for relatively large scale CIP projects with varying levels of interest and influence analysis. Public outreach processes are used for LGA projects to manage project communications to meet the stakeholder's expectations.

A formal project risk management process is not typically implemented for LGA projects. Project risk is often misunderstood as being health and safety risks associated with construction. Project Risk Management process includes risk management planning, identification, qualifying, quantifying, risk response planning, and monitoring. LGA project planning typically includes a certain percentage of the budget or float in schedule as a contingency amount to address project uncertainties. A few of the LGAs perform formal project risk management processes for large and complex CIP projects. As an example, King County SWD and WTD both implement a form of risk management process for large CIP projects.

Monitoring and controlling efforts are generally limited to large scale CIP projects and primarily focus on cost control. A very few of the LGAs have an established process for developing and managing baseline, which is essential for effective monitoring and controlling.

In addition to the aforementioned diversities, there are several reasons for the formation of project management micro-cultures in LGAs, such as a lack of standardized project management procedures, tools, and templates. Organizations without any standardized or singular project management methodology tend to follow varying degrees of processes, tools, and techniques to managing their projects. As a result, they are unable to gain the efficiency of applying a singular and proven project management methodology.

Importance of Standardized Project Management Practices

The primary benefit of standardized project management practices is to improve the likelihood of project success by applying systematic planning and implementation approaches. Project success typically means completion of a project within the scope, schedule, budget, and per the customer satisfaction. A strategic investment of resources during the early planning process of a project minimizes unnecessary cost overrun, schedule delay, scope creep, and other negative consequences associated with informal project management.

A standardized project management process at a minimum includes common language, common processes, and a singular methodology for managing projects and programs within an organization. Common language means that the same terminology is applied for all project management processes. The common project management processes are defined by the organization, so successes of one project can be repeated to achieve success in others. A singular methodology could be developed by combining all organizational methodologies into one, the center of which is project management. Continued excellence in project management can be achieved by developing a singular methodology through the integration of essential project management processes.

Managing projects informally by applying varying degrees of monitoring and controlling processes and insufficient documentation is often the root cause of unsuccessful projects. Furthermore, inconsistencies with financial tracking and reporting can be attributed to informal project management. LGA projects and programs are subjected to audits by the sponsors, especially the projects receiving state and federal funding, which may undergo a systematic review of the project scope, budget, and change control process.

Due to the economic downturn, a majority of LGAs are exploring options to efficiently manage their capital assets and CIP projects while optimizing funding and resource utilization. Many agencies are aligning their projects and programs with their organization's strategic objectives to reduce waste and maximize value added. Standardized project management plays a key role in streamlining processes to eliminate unnecessary work, proactively managing risks to increase project successes, increasing stakeholder's satisfaction, improving product quality, and improving accountability and transparency of the use of taxpayers' money.

LGAs such as King County and the City of Seattle are exploring the “Lean” approach to improving their businesses processes by maximizing customer satisfaction while minimizing waste and using fewer resources. Lean process mainly focuses on improving process efficiency by removing waste, allowing for quality improvement, reducing cycle time, and reducing costs (Kerzner, 2009, p. 914). The principles of Lean complement project quality management. The benefits of the Lean process can be enhanced through the systematic application of standardized project management processes.

Key Challenges Associated with Implementing PMBOK^® Guide Project Management Practices

The PMBOK^® Guide was developed to serve as a “foundational project management reference” for project management professionals and by design this document does not include all standards, methodologies, tools, and templates for managing all types of projects (PMI, 2008, p. 4). There is a common misconception that the PMBOK^® Guide is a project management manual and should be adopted by the agencies to manage projects. Customization and adaptation of project management processes to the LGA projects and programs are essential to systematically integrate and apply PMBOK^® Guide based project management. In order to implement standardized project management processes, it is essential that the staff and management of the organization understand the fundamentals of the PMBOK^® Guide.

Project managers often wonder: “Do I need to apply all 42 project management processes to all of my projects, regardless of their size?” Not really! Project management processes are scalable and can vary depending on the size, degrees of complexity, and the needs for project controls. Standardized project classifications based on value (e.g., small to large dollar value), type (e.g., Engineering, Construction, Operations and Maintenance, IT), and risk level (e.g., low to high risk) can be used to develop scalable project management processes.

Another major challenge is the resistance to change with the implementation of new project management processes. Many LGAs have been managing their projects by applying certain procedures and are comfortable with their traditional approach. During the 1990s, organizations started to acknowledge that implementing project management is not a choice; rather it is a necessity (Kerzner, 2009, p. 45). Implementing formal project management processes requires a concerted effort by the organization to develop and implement policies, processes, and methodologies to support its effective use. Also, certain behavioral expectations of organizational personnel are necessary for the systematic and effective execution of the methodology.

Many LGAs use a phased approach for planning and implementing projects. As an example, King County uses six phases (planning, predesign, design, implementation, closeout, and acquisition) as the project life cycle for CIP projects and programs. Project management practitioners with limited knowledge of the PMBOK^® Guide often confuse project phases with the project management Process Groups. Further adding to the confusion, the naming of project phases for the King County planning and closeout are very similar to the Planning and Closing Process Groups of the PMBOK^® Guide. As a result, some of the project management practitioners find it difficult to apply project management process groups to the project phases.

Project management implementation success requires documented support from senior management and the willingness of the upper manager to relinquish some of his or her authority to the middle managers through delegation (Kerzner, 2009). Delegation of authority to middle managers and project managers is not typically done in LGAs for various reasons, such as hierarchical reporting and organizational structures where the functional managers are held accountable for the project performance.

A Case Study of King County Solid Waste Division

King County is located in Washington State, covers 2,134 square miles, and is nearly twice as large as the average county in the United States. With more than 1.9 million people, it also ranks as the 14th most populous county in the nation. King County provides a multitude of regional services, including legal services, public health services, records and elections, property tax appraisals, regional parks and facilities, the King County International Airport, public transit, sewage disposal, and solid waste management. The total budget for 2012 is approximately US$5.3 billion. King County has several IAs, which are divided into several departments and divisions. SWD is one of the four divisions that are organizationally placed under the Department of Natural Resources & Parks (DNRP). This case study is primarily focused on the experience of project management improvement for SWD and the lessons learned.

Organizational and Business Description of the King County Solid Waste Division

SWD provides refuse transfer, disposal, and recycling services for residents and businesses in all of King County, except for the cities of Seattle and Milton. Its overall goal is to conserve natural and reusable resources through readily available services with a continued emphasis on public awareness. The Division's service area has a population of approximately 1.28 million that dispose of more than 800,000 tons of solid waste each year. SWD's customers include commercial haulers, as well as both residential and non-residential self-haulers who use county transfer station facilities. SWD operates eight transfer stations and two drop boxes in King County. These facilities accept municipal solid waste from residents and businesses. SWD also operates the Cedar Hills Regional Landfill (CHRLF), which receives waste collected at the transfer stations and from the direct haulers. In addition, SWD manages eight closed landfills by performing environmental monitoring and reporting necessary to comply with local, state, and federal regulations.

In order to operate and maintain the aforementioned facilities, SWD must undertake various projects and programs. Transfer station and CHRLF facilities are constructed by initiating, planning, implementing, and closing CIP projects. These CIP projects are monitored and controlled through a project control program within the SWD. Operation engineering projects are typically small to medium and are managed under the Capital Asset Maintenance Program. Environmental monitoring, system improvements, and reporting activities for the closed landfills are ongoing, and therefore they are considered maintenance and not managed as CIP projects.

Project Management Micro-cultures within King County

As indicated above, King County has several departments and divisions that are responsible for managing a variety of projects, including public health services, regional parks and facilities, airport, public transit, sewage disposal, and solid waste management. Project parameters such as size, technical complexity, stakeholder's requirements, and risks vary widely. Each division and department has their own project management processes and procedures and follows a varying degree of monitoring and controlling effort. Organizational structures vary from division to division and even within the same department, ranging from functional to strong matrix. As an example, the WTD and the SWD are both within DNRP, but the WTD CIP group is organized as a strong matrix, whereas the SWD CIP group is organized as a weak matrix. Projects are managed by employees with varying degrees of project management knowledge, certifications, skill levels, and job classifications. Each division uses different types of project management software, databases, and reporting systems. Due to the diverse organizational structures, organizational process assets, and enterprise environmental factors within King County, departments and divisions, each agency has its own project management micro-culture. Even within the SWD, there are no uniform standards to managing all projects and programs.

Drivers for Formalizing Project Management Processes

In 2009, the Washington State Auditor's Office issued an Accountability Audit (SAO Audit) Report for King County focused on construction management, capital project reporting, and information management. In 2010, in response to a SAO Audit, the King County Executive issued Executive Order CIP 8-1 to direct the development of consistent, comprehensive standards for capital project budgeting, reporting, management, and performance measurement (King County Executive, 2010). Executive Order CIP 8-1 formed and empowered CPMWG to develop a standardized table of contents and standard elements to be included in all project management manuals. Each County Implementing Agency is responsible for the development of a project management manual that meets the CPMWG standards and addresses the requirements of the unique and individual capital programs implemented across the County.

In 2010, King County Council passed Ordinance 16764, which requires high-risk CIP projects to be subject to greater scrutiny to ensure accountability of government spending (King County Council, 2010). The legislation categorizes capital projects that are determined to be at greater risk of exceeding schedule or budget as “high-risk.” For example, high-risk projects may include those that have a total cost of over US$10 million and are determined to be high-risk by a joint Council-Executive advisory group. This provision for high-risk projects requires establishing a baseline prior to beginning detailed design and construction. These projects require performance reporting on scope, schedule, and budget by comparing actual expenditures against the baseline. These performance reports are required to communicate project status with all branches of government and taxpayers. Funding for these projects is approved by the King County Council and the Executive in three project phases, including (1) preliminary design, (2) design, and (3) construction. In the past, CIP projects have received an initial appropriation that covered the entire project. As a result of this ordinance, all high-risk projects must follow formal project management processes that are necessary for setting the baseline and reporting performance on scope, schedule, budget, and risks.

Project Management Process Improvement Efforts Undertaken by the Solid Waste Division

In order to comply with the aforementioned Executive Order and the ordinances, SWD initiated a phased approach toward the improvement of project management processes. The phase-I of the project management improvement included a formation of a task force, a project management needs assessment, training, development of project management manual, review of the current organizational structure, and the implementation of a project information management and reporting database. Phase-I implementation was completed in July 2012, and the following sections provide a brief description and outcomes.

In 2011, a consultant was hired to conduct the project management needs assessment by reviewing and analyzing the current policies, processes, protocols, tools, and templates used for SWD projects and programs. The consultant reviewed existing documents and interviewed project teams, project managers, functional managers, and upper management to understand the project management culture, level of application of project management processes, competency and knowledge, and the business processes of the SWD. Based on the results of the project management needs assessment, it was evident that the current practices can be improved by focusing on several project management knowledge areas such as risk management, quality management, and human resources management. The King County SWD 2011 Project Management Needs Assessment Report (Needs Assessment Report) provided a quantitative ranking of the current maturity level and recommended a targeted level for the SWD based on the organization's business needs. The Needs Assessment Report recommended the following measures for the SWD to achieve the recommended project management maturity target (Sauerburn, 2011):

The SWD retained a consultant to provide a series of project management training sessions for the project managers, contract managers, functional managers, and other supporting staff. In order to continuously provide training on a regular basis, King County applied and obtained Registered Education Provider (R.E.P.) status with Project Management Institute (PMI). Through the R.E.P. program, SWD developed and implemented project management training modules that are customized for King County CIP projects. Customization of the training has been beneficial to the project managers for their knowledge retention and application of the tools to their specific projects and programs.

In 2011, in collaboration with a group of SWD employees, a consultant team developed a draft project management manual for CIP projects. The primary focus of the project management manual was to provide processes, tools, and templates necessary for managing the project life cycle, from starting to closing the project. Considering the short timeframe, SWD decided to develop a manual that would meet the CPMWG requirements. The primary goals of the SWD project management manual were:

The project management manual developed during phase-I meets the CPMWG requirements; however, it will require further customization, adaptation, and development to ensure scalability and user acceptance.

Early in 2012, SWD started the implementation of a Project Information Management System Database (PRISM) to manage project information, develop budget, and process change control functions. Several training sessions were provided to the user groups to facilitate the implementation of PRISM. User feedback and suggestions are currently being gathered to improve the functionality of PRISM. In order to unify PRISM with the project management processes, the project management manual will integrate PRISM workflow and guidelines.

In 2012, the Engineering Services Section (ESS) of SWD conducted an organizational assessment to examine the efficiency of project delivery by analyzing staffing levels, work load, project management processes, and other organizational processes. The outcome of the assessment included recommendations to augment staffing levels with the appropriate skills, job classifications, and a project based organizational structure to effectively meet the strategic objectives of the ESS. Based on the nature of projects and programs performed by the ESS, the organizational assessment report recommended the following measures to improve project delivery processes (Mallory, 2012):

Later in 2012, SWD plans to undertake phase-II of the project management process improvement and will update the project management manual, revisit organizational study recommendations, and apply the Lean process to streamline project procurement. During phase-II of the project management manual development, user feedback from the SWD employees will be gathered, analyzed, and incorporated in the updated manual.

Lessons Learned

In 2006, WTD among all the IAs within King County proactively initiated an effort to improve their project management processes by providing training to their staff and updating their project management manual. As part of the initiative, WTD hired a consultant to conduct a project management needs assessment. In collaboration with the consultant, WTD management developed a detailed plan to improve their project management maturity level. In 2010, other divisions within DNRP such as SWD began to coordinate with WTD to gather information on their experience with the project management process improvement. The vision of the WTD leadership team was instrumental for SWD to initiate the project management process improvement. Executive champions play an important role in an organization to improve project management processes by accelerating its acceptance at the executive levels (Kerzner, 2009, p. 393). Since the WTD management played the role of champion to improve project management, it was helpful for SWD management when they initiated a similar effort.

Providing formal project management training to SWD project teams and functional managers was very helpful because they were able to understand the fundamentals of the project management processes. The participants were able to recognize the importance of a systematic project management process within SWD.

King County executive orders and ordinances were very helpful in obtaining senior management support with the planning and implementation of the project management process improvements. As a result of the Executive support, the formation of CPMWG was a priority, and the group was staffed properly.

Organizational policies required immediate implementation of several new project management processes, such as EVM reporting. Unfortunately, there were no detailed guidelines provided with the policies. In order to facilitate the implementation of new policies, detailed guidelines, training, and necessary resources would be beneficial.

The project management needs assessment was an important step to identifying the current level of maturity and to set a benchmark for improvement. The Needs Assessment Report provided an approach to improving project management processes, and the following recommendations are being currently reviewed for systematic implementation:

Development, customization, and implementation of new project management processes require resources and time to gain proficiency. Unfortunately, SWD lacked the necessary resources due to budgetary constraints. In order to offset some of the resource constraints, a phased approach is being applied, where the development and implementation of project management processes are stretched over a longer period of time.

Conclusions and Closing

LGAs, such as King County, that are seeking to continuously improve project management are realizing the importance of integrating organizational processes to formulate a singular methodology for project management. The King County SWD intends to continue toward excellence in project management by developing a singular methodology, which will include enhanced risk management, quality management, human resource management, and change management processes and other quantitative and qualitative benefits through a continuous improvement process.

In order to improve project management processes, LGAs should develop a curriculum rather than just a project management course. A comprehensive process improvement plan should include a policy reaffirming executive commitments, dedicated resources, and a strategic approach to meeting the organizational goals. Organizations should perform both quantitative and qualitative benchmarking by analyzing processes and methodologies, whereas qualitative benchmarking integrates project management applications (Sauerburn, 2011).

A successful project management improvement initiative requires support from the senior management and project staff. If the current organizational structure does not support project management then organizational realignment may be necessary. Organizational culture modification mandates continued support from the entire organization. Project management should be encouraged by all levels of management within an organization and each layer of management should understand its roles and must provide documented support to the process. Change management requires systematic planning, training, documented support, and a strategic implementation of new processes.

Performance progress needs to be monitored and an adaptive management approach should be applied for continuous improvement of project management processes within an organization.

© 2012, Zahid Khan
Originally published as a part of the 2012 PMI Global Congress Proceedings – Vancouver, Canada