Central project office in a railways industry

the right combination of process and expertise

Introduction

ALSTOM Transport is the global player in world-wide Rail Industry, with customers all around the world (New-York, Chicago, Mexico, Sao Paulo, Buenos Aires, Paris, London, Roma, Barcelona, Seoul, …). With a turnover of 4.5 B$, ALSTOM Transport federates more than 50 Business Units in 30 countries world-wide and performs daily major projects involving several units at the same time. Furthermore, with concentration in the Rail industry, the market became more and more competitive, and Project Management was identified as the key Competitive Advantage on which ALSTOM wanted to invest to stay the leader.

Therefore a Tender & Project Office was created in 1998 at Corporate level to lead the entire Company toward Project Management excellence. After having redesigned completely the Tender and Project Management process, the Office concentrated on:

• Operational involvement: support to tender and project teams, validation of tender reviews and project reviews, audits

• Methodology development: based on Tender and Project processes, design of a Framework fully consistent with the PMBOK® Guide encompassing all best practices in Tender and Project Management

• Tool development: design of a complete information system based on INTRANET, fully supporting the methodology, and allowing real-time project management through all the Business Units involved on a project

The proposed paper describes the genesis of the Tender & Project Office, its first successes, its main operational involvement, the main choices made in methodology and tool development and a return of experience on its deployment and implementation world-wide.

The Genesis

ALSTOM Transport is THE global player in world-wide Rail Industry, with customers all around the world (New-York, Chicago, Mexico, Sao Paulo, Buenos Aires, Paris, London, Roma, Barcelona, Seoul,…). However, in 1997, considering that having reached the size of 50 Business Units world-wide through internal growth and acquisitions, many projects were involving several projects at the same time, it was identified as mandatory to optimize the way in which the different units were working together. For example, there was no common language to describe the different stages of a project. Therefore, a global survey was launched with a consultant to identify how to work better during tender phase (before contract award) and during project phase (for contract completion). This survey involved key stakeholders from 20 units, completely representative of the overall activity. The first result was the identification of all the areas in which energy was lost during these phases:

• No structuring process for tendering team

• Poor transfer of information between tendering team and project team

• No formal coordination of project team.

In order to be able to address these root causes, a specific working group was created to identify a process for tenders and projects that would become the process for all the company and that would:

• Identify the different stages of a tender or a project

• Identify current best practices (project launch meeting,...)

• Provide a common language for all the teams.

After six months of intense work and first tests on pilot projects, this process was eventually defined and documented in a reference guide called Project Management Manual (PMM).

In order to ensure its understanding and its application throughout the company, a specific corporate department was created with experts in project management coming from and outside the company. Without knowing it, the Project Office of ALSTOM Transport was born!

The Development of the Project Office

The first key mission of the Project Office was to ensure the deployment of the Tender & Project process. In order to do so, several methods were used:

• Organization: identification of experts per area of business in order to cover all the company

• Communication: organization of road shows in every Business Units

• Incentives: allocation of bonuses to senior people based on the successful deployment of the process

• Support: help to tender or project teams to structure their work according to the process.

Exhibit 1

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Along with this deep structuring process, the Project Office received three new missions to fulfill.

The first of them was to ensure that tenders or projects were reviewed properly. In order to do that, a specific process was defined to structure the tender reviews and project reviews, and then to organize them on a forecast or periodical basis.

The second mission was to address difficult situations occurring on some projects by leading detailed audits, structuring recommendations and ensuring follow-up. A specific audit process was defined together with a recovery process.

The third mission and certainly the most structuring one was to design and to rollout a specific intranet tool to help tender or project teams to structure, quote and follow their progress and their costs. This tool was designed to be linked in real-time to accounting tools to ensure full-relevance of cost data to the project teams.

The Maturity of the Project Office

The Project office first achievement was to establish and deploy the Tender and Project process. This was the basis for structuring the project operation on a time axis with key milestones to secure achievements of Quality, Cost and Delay (QCD) targets.

But this was not sufficient to reach the ambition of world-class project management, which was becoming mandatory given the increasing competitiveness required on the market. The size of the company was increasing due to the market expansion and the acquisition strategy, the number of different business units involved in each of our contract was always increasing, this led us to focus on the development of common project management practices and to improve our expertise in project management techniques.

To address these needs, the Project Office embarked into the development of the so-called Tenders & Project Framework.

Having already a process in place, the PMBOK® Guide structure in nine areas was found to be the right backbone on which we decided to base our development activity.

To secure QCD targets for the development of the T&P framework, the already-proven project management practices were followed:

• A project team was put in place with the leadership of the Project Office and with more than 80 contributors representing various business units and expertise. An advisory committee of key players all around the company was set up to mentor our development activity.

• A project plan was set up together with a WBS.

• Based on the nine areas, over 20 work-packages were defined grouping more than 100 deliverables which were:

• Three development options were retained:

1. Vision was defined by the Project Office and development performed also by Project Office team members, business units contribution was only required to conduct few pilots.

2. Vision was also defined by the Project Office, but project teams were put on board right from the development phase and them continued to be involved in the pilots phases.

3. Last option was followed when the definition of the principles required a wider round than just the project office team, then development and pilots were also made with project teams.

• To secure quality, the principle of gate reviews has been followed involving a number of key stakeholders of the company.

• Development priorities were set according to a survey performed within the Project Managers community and the key findings of audits.

• To promote the development activity and to secure a rapid deployment, an extensive use of intranet site was made, combined with a number of internal communications using various media (newsletters, symposium,…)

The goal was to develop the T&P framework within 12 months. At the time of writing this article, we are halfway through and over 60% of the deliverables are ready for deployment.

The main issues we had to face were the following:

• Having the operational resources allocated part time to the development activity: it took some time before having people nominated by the operations, the triggering point was the demonstration by the Project Office of the quality of some work-packages developed by the core project team.

• To face the high number of candidates for being a pilot project: the risk is to mix the pilot phase and the deployment phase. Efficient pilot requires a high level of resources from the Project Office to ensure adequate return of experience so the efficiency of the guideline is demonstrated. With a high number of pilot, the project office is not able to coach efficiently all teams due to limited resources. The right balance must be found.

At this stage of the project, the lessons learned are the following:

• The PMBOK® Guide nine areas structure is highly efficient to communicate to the project teams what their accountability is. The acquisition of the expertise is then easier and quicker.

Exhibit 2

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• Before launching such project, you need to spend time in defining what the vision is you want to have for each of the deliverables, otherwise you will be in a difficult position to convince operation teams to contribute to the development and apply it afterward.

• The quicker you go, the better it is, do not try to reach perfection at the first shot, only pilots and return of experience will confirm whether you add value to the project operation.

• In a multinational, multicultural company, the establishment of a process is required, but it must be supported by common tools and principles so all project teams members, because they have a common knowledge base, are working towards the same goal, which is the profitability of the project through the satisfaction of the customer.

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.

Proceedings of the Project Management Institute Annual Seminars & Symposium
November 1–10, 2001 • Nashville, Tenn., USA

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