Reengineering the capital development process
Concerns of Project Managers
Albert A. Badger, PMP HH Spectrum, Boston, Massachusetts Donald R. Hall, The Herzog-Hart Group, Boston, Massachusetts Joseph P. Morray, Jr., HH Spectrum, Boston, Massachusetts
If there is a single word that characterizes project management, it is “integration.” It is the responsibility of the project manager to integrate the efforts of the varied human resources; the variety of equipment, supplies, and materials; and the technologies … to produce the product of the project … in conformance with the requirements/specifications, on schedule, and within budget [1, p. 21].
With the rapid improvements in computer-aided engineering systems, database technologies, and graphics workstations, the project manager of today has the ability to exploit and control a wealth of project information previously unavailable. As a result of this, tools and methodologies that have become standards for project management need to be supplemented to take advantage of the power of the information age. Along with the ability to create information about projects in greater detail, the ability to integrate this information with the project objectives has also been multiplied exponentially. This article addresses the new strategies and challenges for project managers and the authors' view of their impact.
The advances in systems for managing project-based information continue to accelerate, and the project manager has a new set of parameters available. These include:
- The ability to visualize, store, retrieve, and manipulate a broad set of information at the component level.
- The capability to create a wide range of sorts, analyses, and reports on a virtually interactive basis.
- With formal database systems, the ability to create corporate data banks or libraries and archive them in a comprehensive system.
INTEGRATION AND EDI
Traditionally, project managers have relied on the Work Breakdown Structure (WBS) and Critical Path Method (CPM) network processors as the basic tools to define and integrate the information about the scope, time and the cost of projects. There are, however, many aspects of project information not adequately addressed by these primary project management tools. As with many earlier systems, these were programmed by automating the earlier processes and designed to sort data and display it in the form of tables and charts. Part of the reason is that these systems were developed in an era when today's advanced programming technology and hardware, which permit electronic data interchange (EDI), were not available.
In a recent Business Week [2, p. 9] special supplement promoting ways in which information technology is reinventing the enterprise, a diagram similar to Figure 1 was used to illustrate the paradigm shift going on in the business world. To quote this supplement:
The new enterprise treats business units as networked clients and servers which can be internal or external to the organization. Through the enabling effect of the new technology paradigm companies are creating modular team based structures which cascade into inter-organizational networks.
Figure 1. The Enabling Effects of Information Technology
If we view the diagram and consider the “High Performance Team” as representing the project disciplines, and the “Integrated Organization” representing the project organization, then the “Extended Enterprise” would represent the collective companies and organizations involved in furnishing labor and materials on a project. This leads to the conclusion that our team-based projects will, as a result of the greater enabling effects of information technology, recast the project's external relationships.
Using the new technologies to store information in an electronic medium, many companies and projects are achieving various degrees of success in the communication, integration and management of data. As electronic data interchange (EDI) advances, so do opportunities for minimizing transaction costs and schedule delays that directly affect the performance of the project. For example, as an object is specified on a schematic diagram, it can now be automatically procured by connection to a vendor's database and the status reports generated automatically. By implementing a similar approach with their vendors, Ford Motor Company reduced procurement clerical staff by 75 percent. The approach also can have a dramatic effect on schedules, since the time to prepare purchase orders, obtain quotes, etc., is minimized. If quotes are required, they can be similarly obtained from multiple vendors by EDI and an expert system implemented to evaluate bids, place orders, and upon receipt, cut the appropriate checks with little or no human intervention.
In many companies, however, the project management systems are implemented and maintained by the project team or cost schedule specialists, while the selection, maintenance and operation of the CAD systems and other technical database systems are considered the responsibility of the functional technical departments and no attempt at EDI with the project management systems is attempted.
In CAD and Management of construction Projects , Atkin and Gill pointed out that there are four levels of system integration:
1. Tools. Essentially, an non-integrated system, but one that offers the potential for sharing data.
2. Inter-connected tools. Relates to those tools that offer some degree of inter-connection so that data can be moved across from one application to another.
3. Shared data. Greater amounts of data transfer are possible and a number of separate disciplines/users may be able to work on an evolving design.
4. Total design database. These systems rely on large-scale databases to drive the design through to completion of production information. Data-driven design systems exist in a variety of forms, depending on the amount of data captured within the database. They range from a parts model, where the building is represented by a collection of parts or components (each one a 3D solid), to a sophisticated database, where all facets of the building are present.
The total design database solution cannot be implemented without a complete project EDI focus. One problem that project managers must face once the total design database is implemented is how this information will be managed, what degree of linkage can or should be achieved with the cost and schedule systems and what links are permissible with other organizations. In this environment, it is clearly not effective to store information randomly or by type of document, as in earlier times. Information should be integrated in a logical fashion so that it can be easily found by the many individuals on the project or in external organizations who did not store the information, but need to use it.
DEFINING AND MANAGING SCOPE
Experienced project managers have long been aware of the difficulties in controlling the scope of a project. We have relied on the WBS as the tool to define and control project scope. Vertically on the WBS, we represented the cost aspects of the project and summed and sorted it in output reports at various levels of detail. Horizontally across the WBS, we summed and sorted organizational and resource aspects of a project. This information is integrated in the CPM processor, where we added time duration's, and based on progress, calculated differences between project objectives and current forecasts. Some projects were able to integrate the costs, resources and schedules with respect. time and predicted resource requirements and produced earned value reports. The fundamental problem with these systems was our ability to accurately define the scope upon which the predictions are made in sufficient detail. Projects are composed of components, which are essentially objects. For this reason, additional component-oriented material control systems were developed to supplement the WBS and CPM reports.
Scope definition was improved to a limited extent by writing narrative “work package” descriptions. A major problem with this approach is that at the beginning of a project the full scope is not known. As the project evolves, the scope definition evolves. Our systems have not developed effective methods to manage the growth of scope. In order to control the scope and visualize and modify the changes that result as the project evolves, new techniques are needed that better integrate the technical processes with the cost schedule systems.
As a result of the advances in formal database technology, and specifically the ability to store fill data models of a complete facility at a component level, the methodologies for defining scope and responsibilities have advanced. Within the authors' firm, an object-oriented approach has been adopted for storing corporate information, and more importantly, for defining project-specific scopes. As projects are developed, engineered and constructed, plant systems are classified and banked away electronically for future use. Thus, when a new project is brought forward at a very conceptual stage, the object approach extracts predefined components, assemblies, modules, and bay configurations as a means for defining the project scope.
To coherently organize this information, the principals of object-oriented programming have been borrowed, whereby objects are defined that serve as a center for storing and organizing information. Objects typically represent physical items, such as pumps, heat exchangers, valves, etc., that are placed and repeated in a plant layout. Similarly, an activity that interconnects physical objects can also be defined as an object, and appropriate data schema and inter- dependencies attached to them. This allows the entire scope of the project to be broken down and mapped in a WBS format.
The “informationalized” objects become the foundation for estimating costs, defining detailed configuration and specification parameters, and most importantly, a basis for all interested parties to direct their decision-making process through. The power of the object approach is that it provides a tangible mechanism for projects to be “front loaded,” allowing actions to be taken at a phase in the project when the cost impact of change is minimal. In addition, it provides a logical mechanism or schema for object information to be stored and be added to as new project experience becomes available.
THE OBJECT-ORIENTED WORK PACKAGE
Let us examine a typical work package on one of our past projects. It would have the following project management attributes, which are integrated via a reference to the work package number:
- A written scope
- An assigned budget
- An account number
- A schedule and resource relationship
- An assigned work package manager
As shown in Figure 2, the types of additional technical data include:
- One or more schematic diagrams
- A design specification
- A 3D computer model
- Fabrication and/or construction video sequencing
- Procurement specifications
- Material takeoffs
At a level below the work package, but related to it through the technical data, are the objects. For example, a work package at the system level would include development of the schematic for that system. The components (objects) that are represented on the schematic are then also linked to the WBS through the database at the W.P. level. If we want to access the system to see its scope we can first locate it on the WBS and, by clicking on it with a mouse, we can selectively access many attributes of the system beyond the traditional cost and schedule or status information. For example, we could go from the WBS to the schematic and from the schematic to the 3D representation of the objects as they would be installed in the plant.
Once we switched to the 3D view of the data we can access color-coded models with project management information about the purchase, delivery, installation, or operating status that are related to labor-hours expended and other project management data.
Figure 2. Data Stored Based on WBS Objects
PROJECT INFORMATION MANAGEMENT
The use of EDI continues beyond the scoping phase of the project. Today's project manager has the ability to attach a wide variety of attributes to individual plant components. Some of the data attributes provide links to other data about the components. These data links may be technical, graphical, or managerial.
Three- dimensional modeling, expert systems and more powerful hardware have now made it possible to represent, store and call out the “objects” with appropriate physical, management and operational attributes. These objects can be created and stored in a database that contains references to their costs, schedules, installation status, operational status, safety requirements, spare parts and other important physical, graphic and non-graphic attributes. This data may be stored as object data, as an assembly of objects as in a system, or as building data. These breakdowns parallel various levels on the WBS.
The work breakdown structure then becomes a mapping of objects, and their interconnecting logic, for specific projects. One may visualize this as the WBS linking to a “third dimension,” as shown in Figure 3, containing the full object-based information set carried with it. The third dimension of the WBS allows us to display and manage project information about objects during project implementation, and probably more importantly, it provides a methodology to manage various kinds of project information assets after project completion. For example, operational data, maintenance status, or waste storage data may be accessed.
A strategy therefore evolves that utilizes management tools capable of integrating and manipulating large sets of information on a continual basis, viewing this information in many contexts, and rolling this detailed-level information up to achieve the parameters for daily project control.
Using this methodology, the project control system is established by first mapping the project schedule for design, procurement, construction, fabrication, and virtually any other milestone-based activity into the project component-level data model described above. This results in a series of baseline dates, which serve as the source for defining planned sequence of activities and comparing actual to plan performance. To enhance this process, a system called ProjectVISUALIZER (Figure 4) provides a friendly, application- specific, visually-realistic method for review on a daily basis the actions taken, and comparison to plan, for virtually all activities associated with the project.
Using ProjectVISUALIZER, this exercise can be performed in seconds, and gives the project manager and others on the project the ability to instantly visualize priorities in terms of what needs to be expedited to prevent holdups in the erection sequence and permits informed judgments of potential cost or schedule overruns. Tabular cost, schedule and performance measurement data can be displayed concurrently on the screen.
Electronic technology is now available to reduce the cost of storage of important data, but how should we use this new technology to locate and access this information more effectively?
PROJECT MANAGERS WORKSTATION
A complete project management system can therefore address more than just the cost and schedule aspects of a project and can approach total information management. Figure 5 is a screen image printed directly from ProjectVISUALIZER showing the “3D” model of a process plant bay and the appropriate graphic user interface (GUI) controls to manipulate the model to adjust views, walk-through, simulate construction, or to access the project management and technical data.
Figure 3. Third Dimension of the WBS
Figure 4. The Project VISUALIZER System
Figure S. Screen Image from Project VISUALIZER
The major ingredients of a complete project management system should include the conventional project management system tools:
- Cost Schedule Control System, including:
- WBS display system, which integrates and displays WBS information
- Critical Path Method schedule processor
- Cost processor, which summarizes and displays information at various levels of the WBS and does earned value calculations
- Resource processor, which relates information to the schedule processor and displays resource requirements and usage
- Document Management System, in-eluding:
- Document retrieval software
- Scanning and optical character recognition (OCR) and/or photo CD capabilities
- Document storage
- Word processing
- Three-Dimensional (3D) CADD System, including:
- Three-dimensional object modeling
- Access to a database with stored objects
- Linkage to stored graphic and non-graphic attributes
- Plant “walk through” capabilities
- Object scheduling system that establishes object schedule requirement
- Three-dimensional status system (Project VISUALIZER), which allows the project manager to review object activity status, attributes in a model format
A NEW AGE IN PROJECT MANAGEMENT
After initial investments in information technologies, our parent company has demonstrated cost and schedule improvements in excess of 30 percent over previous projects using improved information technologies, including “3D” CADD. We foresee savings approaching 50 percent by applying the additional improvements discussed in this article.
It is clear that the companies that are most successful in reengineering the way they do their work will succeed in the marketplace and those that are less aggressive will not. One of the most effective ways, if not the most effective way, to reduce project costs and schedules is to improve and radically restructure the way information is integrated and processed. The project manager's understanding of and support of information technology capabilities is a key ingredient in the process. Project managers and functional managers must work together more constructively than ever before to develop a project object-oriented information technology strategy, and take advantage of the Electronic Data Interchange capabilities that will allow us to effectively create, store, access and act on information with minimum transaction time and costs.
1. PM101: Project Management. PMNETwork. September 1993.
2. Business Week. Paradigm Shift: How Information Technology is Reinventing the Enterprise. October 25, 1993.
3. Atkin, Brian and Gill, Moira. CAD and Management of Construction Projects. September 3, 1985. ❏
Donald R. Hall is chairman of The Herzog-Hart Group, a diversified group of technology companies involved in plant development, design, and construction for the pharmaceutical, biotechnology, and batch fine chemical industries.
Albert A. Badger, PMP is a senior project manager with HH Spectrum and has managed the engineering and construction of many domestic and international projects in the electric utility, petrochemical and biotechnology markets. He is a former member of the PMI Board of Directors and chairman of the Research Committee.
Joseph P. Mortay, Jr. is president of HH Spectrum, an information technology implementation company specializing in re--engineering services, software products, and consulting for the plant design and operations marketplace. HH Spectrum is a subsidiary of Herzog-Hart which provides plant, process, and information technologies in the pharmaceutical, biotechnical and chemical industries.
PMNETwork • February 1994