Project management requires transorganizational standards

a new outlook

Proactive Management Group, Inc.

This paper briefly analyses the present situation in project management, particularly in planning and control standards. It identifies three current problems along with the most likely trend and associated consequences in the absence of a planned change effort. A proactive intervention is proposed based on an analogy from the success of ANSI standards in the maturing data processing industry since the mid- 1960s.

Introduction

The geographic size of Canada, the dispersion pattern of its population, the wide fluctuations of weather conditions, the cultural diversity and multilinguistic identity of the work force impose unique demands in the methodology and practice of project management, especially in capital programs. In order to meet these demands, managers have since the early 1960s witnessed an unprecedented development in network-based planning techniques without a corresponding growth in the rate of success of projects. Although some progress has been achieved, persistent problems and frequent failures to reach prescribed goals continue to plague the large scale projects.

Speculation about the possible causes of these failures ranged from inadequate recognition of risk, to unpredicted increase in the relative price level of critical resources such as oil, inflation beyond the level assumed at the beginning of the project, and underestimation of work complexity to adverse changes in world market prices. In order to fill the void between speculation, symptoms, and the actual problems, our consulting organization is presently trying to identify the critical factors that spell the difference between success or failure of a capital project. So far, research into the causes of failures and delays is proving difficult, not only by virtue of the complexity and diversity of the subject itself, but also because capital projects such as the Panartics, the James Bay, the Gentilly nuclear reactors, the Alaska pipeline, the Athabaska tar sands, the NORAD defense network renewal, and last but not least, the Montreal Olympics, do stand at the center of a powerful social, political, and economic struggle which continually influences management decision making in different ways. However intimidating the difficulties may appear, there is in Canada an urgent need to overcome them, for the effects of capital projects concern the society as a whole. Although the relevant power groups may by the very nature of the situation differ in approach, there is little disagreement about the need to identify and prevent the problems from happening.

A. P. Martin has directed several multimillion dollar projects and consulting assignments both as an independent consultant and as president of Proactive Management Group, Inc., an Ottawa-based firm specializing in organization diagnosis, project planning, and process/impact evaluations. He has been a consultant to executives in nearly every facet of project management and delivered seminars and conferences in four continents. He is also designer and faculty leader of the 1980 World Seminar in Project Management sponsored throughout the U.S., Canada, Europe, Latin America, Japan, and China. He is the author of the upcoming book on breakthroughs in project management to be published in early 1980 by the Professional Development Institute.

While it is too early to reach the final verdict, a cautious attempt can be made to discuss the predominant problems already identified during the study still in progress:

  • Inadequate project definition and preparation
  • Insufficient training and development of project managers
  • Absence of a uniform methodology to plan and control capital projects

The discussion of each of these problems and a projection of the resulting trend follow.

The Current Needs

1. The need for better project definition and preparation

The study found several examples of ill-defined projects, principally in soft public programs. Duplicative need assessments have been conducted for related programs, priorities have been established independently, and project plans have disregarded similar types of services provided by projects sponsored by other government authorities. For instance, provincial and municipal transport projects have traditionally been undertaken by funding sources without examining interrelationships among various programs or the most favorable intermodal mix.

Project definition is the first major step in the planning process. All subsequent efforts depend upon a good and acceptable definition which includes the following elements:

  • Review of the core mission to which the project is a prerequisite and a clear definition of the project linkage to organizational mission
  • Formulation of the project objectives — either the new opportunities that would materialize as a result of the project or the needs to be met by the project products or services (project objectives are also the raison d’etre for the outputs)
  • Definition of products or services expected from the project in the form of outputs
  • Definition of input resources required to produce the outputs and the linkage from resources to products and services
  • The critical success factors sometimes called performance indicators—the level of effort required for inputs, outputs, the best and worst-case expected performance, and the criteria for measuring objectives
  • The means of verification of the critical success factors
  • Explicit statements of assumptions — conditions beyond the project manager’s control but which must take place for the objectives to be achieved, e.g., stable government, plausible level of inflation, availability of resources, cooperation of veto powers, inter-project complementarity
  • The likelihood of the assumptions, the means of monitoring assumptions, and a contingency scheme

The importance of a better project definition is also reinforced by the findings of the three annual reviews of the World Bank covering 177 projects totalling about $5 billion in cost. (Annual Review of Project Performance Audit Results. IBRD publications, Washington, D.C.)

2. The need for an open systems strategy for the training and the continuing professional development of project managers

The ultimate objective of training is effectiveness in achieving desired results. Such effectiveness is rooted in an appropriate inventory of knowledge, attitudes, and skills. During the study the isolation of the project manager was clearly demonstrated not only from the senior executives and politicians who increasingly look at the existing planning methods with suspicion, but also from the implementors and field supervisors who are rarely university graduates but have a more adequate understanding of local conditions. The latter are disillusioned with the complexity of network-based methods and their inability to reflect the real-world conditions, particularly in railway renovation tasks, off-shore drilling, highway and power line construction programs.

Project managers must learn and apply tools which are readily accessible to all parties with vested interest in the project destiny. They should develop skills to further effective communications with all hierarchical levels ranging from the CEO to the working force. Among the recognized universities and other credit granting powers in North America, until the mid-1970s, only the University of Quebec offered a master’s degree in project management. Universities have generally been reactive to the specific needs of the project manager rather than proactive.

This need for an open systems orientation has also been debated extensively at the International Congress about Management Education in the 1980s, chaired by Olivier Giscard-D‘Estaing in Ea Hulpe, Belgium. (Proceedings published by AMA, New York, 1979.)

3. The need for a common approach and consistency in planning and control methods both within and across organizational boundaries

In the past, entrepreneurs developed methods to cope with specific situations and designed automated systems largely to meet the basic record-keeping needs of the project manager. Usually it has been painful, to say the least, to adapt marketable products and services to meet specific client requirements. Access to computerized information was difficult, it not impossible, especially when the information required interaction between different software systems. Few suppliers are recognizing that more flexibility is essential.

Consequently, redundancy and duplication of efforts seem to be the way of life in planning, process control, and evaluation. There is right now a variety of incompatible project management methods within several government agencies and Fortune-sized companies. The important point is not simply whether or not more than one method is used but the extent to which multiplicity reflects ambiguity, confusion, and undue complexity.

In addition to automated software which is unsuitable or expensive, there is a mismatch between available data from functional systems and project requirements. It has become obvious that the general functional information systems are not well constructed to handle the details of project management. A recent examination of several projects has shown that there is no easy solution to the problem of providing adequate balance between the differentiation and integration needs of both functional executives and project managers. Faced with this difficulty, systems analysts have occasionally developed separate systems. It must be recognized, however, that this route does have drawbacks such as lack of complete compatibility and transferability, only some of which can be overcome by good corporate standards adhered to by all systems designers and users.

Our typical capital projects have grown from a few million in the sixties to billions in the seventies. Risks, uncertainty, economic turbulence and social hostility found a “droit de cite” in the capital project environment. While hardware technology has improved tremendously, providing new potential capabilities, our planning and controls methods still date back to Du Pont breakthroughs of the late fifties. And yet, despite their twenty years of existence, the application of PERT and CPM is still not universally understood, as demonstrated by a recent survey where only 40 out of 173 respondents could indicate that the fundamental difference between these systems is that one is probabilistic, the other is not. Concurrently, experienced practitioners do realize the complexities of extending PERT and CPM methods beyond the scheduling phase of the planning process.

We are entering the eighties with greatly increasing demands for better management. A practical methodology that transcends all phases of project planning and control is long overdue. It should combine the benefits of existing methods and preferably overcome their limitations.

Scenario of a Trend

It is becoming progressively clearer that the magnitude of some problems go far beyond the terms of reference of the individual project managers. The constant changes in client priorities, compliance regulations, and conflicting demands of influential powers have made project plans increasingly obsolete and left project managers with a sense of paralysis. To this end, PERT/CPM academics and automation entrepreneurs brought a full spectrum of attractive prescriptions and push-button options. Caught at times in escalated confusion, some project managers have surrendered their limited power and dispersed authority to computers or even worse to external consultants! New methods, software systems, and training packages are now produced at a rate faster than evaluators can assess and usefully implement them. The process of evaluation itself is of growing complexity in the absence of generally accepted benchmarks and a common terminology.

While the status quo is of concern to each manager individually, a laissez-faire attitude is still predominant in the market place. A speculative analysis of the most likely trend of present demands and suppliers’ responses inevitably raises questions for the project manager and leads to the basic issues. A projection of existing forces into the future under the present laissez-faire assumptions could see the field develop into too many uncoordinated areas, incompatible growth paths, and duplication of efforts. Within the same organization, separate and inconsistent accounting, reporting, and evaluation systems would continue to exist for projects providing similar products or services.

Perhaps this trend could be of a great disservice to clients and to our aspiring counterparts, particularly in an era of austerity. The failures of the broadcasting world1 and telecommunication industries2 should provide us with ample examples to avoid the adverse consequences of de facto standards in project management. We are already experiencing fragmentation and lack of communications among corporate teams, each of which is too small to be effective individually.

Surprisingly, the the issue of planning and control standards has received little attention across organizational boundaries. Advocates of active state patronage, particularly in Britain and France, argue that the driving force should emerge from the public sector. Fortunately, government officials have wisely limited intervention to their own contracts such as defense and public works, for the initiative should preferably come from users to be effective and compatible with the private sector’s recognized needs. However, should the business world delay standardization in capital project management, it may be in the national interest for policy makers to take measures to stimulate more interest in it. Ideally, the government should mainly facilitate and encourage private undertakings aimed at improving capital project management. In this context, its support is essential for the fulfillment of needs for which everyone shares a collective responsibility.

A Possible Solution

Based on analogy from the success of ANSI standards, chiefly COBOL language in the maturing data processing sector, a proactive intervention could be contemplated by senior project managers acting as corporate representatives rather than individually. The purpose is to “do more with less” by combining our efforts.

The creation of the Conference on Data Systems Languages (CODASYL) in 1959 was a landmark in the history of data processing. This group of corporate representatives found their respective organizations pursuing simultaneously too many computer language routes. They now set the framework for COBOL standards. It is worthwhile to briefly outline the benefits of COBOL such as a universal training scheme for programmer/analysts, machine independence of software investment, and a greater access to computers. As a group of volunteer organizations, CODASYL was independent from the Association of Computing Machinery (ACM) which already had a strong individual membership base

1. European versus American TV color standards.

2. Transmission standards for voice and data networks (Telex, TWX, PTT).

In capital projects, planning and control requirements cannot adequately be captured by existing network-based techniques. At the expense of duplicated efforts, managers have reluctantly used multiple systems to fill existing gaps. A new standard methodology promoted by a recognized forum should be explored. While the Project Management Institute (PMI) can actively contribute as a catalytic force, only a forum with a duly mandated corporate membership base would provide the impetus and the commitment for implementation. The core mission of the group would be to develop and test project management standards across organizational boundaries. Its membership should include a diversified regional and sectorial representation including consulting engineering firms, contractors, utilities, universities, software suppliers, general consultants, governments, and recipients of project management services. Until the formation of such a forum, a central taks force or a standards committee within each organization could be established to provide support to project managers.

Development and acquisition of standards, with all implications of support and maintenance costs, should be done to meet a certain set of objectives and not for vaguely defined reasons. Users and senior executives are notably unimpressed with complex methods that are overdesigned and do not meet client requirements. From the experience gained in managing international projects, an attempt has been made to draft a number of objectives as indicated in table 1 (courtesy of the Professional Development Institute of Canada).

Table 1. Project Management Systems Selection Criteria

A good project management technique should have the following characteristics:
1. Be useful to all levels of management and operating personnel, not just to the project manager
2. The methodology for planning, control, and evaluation should be designed with differentiation/integration in mind
3. Should permit planning changes with a minimum of delay and an effective control
4. Be easily accessible through either programmed instructions or short training sessions
5. Permit scheduling, resource allocation, balancing, budgeting, and work accomplishment without duplication of effort
6. Should not artificially break activities to accommodate the limitations of the technique
7. Permit representation, planning, progress evaluation, and control of partial precedence interfaces within the project
8. Facilitate tracking of interdependencies between several projects
9. Should clearly portray concurrent events
10. Display slack and critical paths visually
11. Should permit analog as well as digital representation of temporal entities
12. Be applicable to hard as well as soft projects
13. Be available to small-scale enterprises as well as large governmental and multinational organizations (relatively low start-up costs) both in the industrialized and the third worlds
14. Be effective under a manual operation as well as in a partially or fully automated environment
15. Facilitate reproduction of planning and progress reports without extensive use of colors, if any
16. Should use, as much as possible, universal symbols that can be transmitted or typed internationally

Conclusion

Analysis of our clients’ past histories indicates a remarkable uniformity in capital project control requirements. Nevertheless, there seems to be a widespread tendency throughout the whole industry to reinvent the wheel on almost every capital project. This paper has demonstrated three growing problems and has proposed an alternative.

While it is too early to advocate a normative strategy, cautious lessons can already be derived from this ongoing formative evaluation experience. These lessons tend to apply regardless of the project settings and point to the need for a forum to develop standards in project management to avoid the present tendency. The merits of standards would be to facilitate project definition, planning and control, training, uniformity in automated systems, and information exchange within and across organizational boundaries. Judging from the data processing success, organizations could immensely benefit from a transition to maturity in project management.

Readers interested in a more complete discussion are referred to the author’s forthcoming book

Breakthroughs in Project Management. Comments to the author are welcomed.

A. Martin, 79 Fentiman Ave., Ottawa



* Copyright, A. P. Martin, 1979. 79 Fentiman Ave., Ottawa, Canada.

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.

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