Framework: An Integrated Approach to Portfolio, Program and Project
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II. STRATEGIC ASSET MANAGEMENT PROCESS - CHAPTER 4 - PROJECT IMPLEMENTATION
4.1 Project Implementation
The project implementation process governs the project control process by putting into effect the decisions and will of the enterprise in respect to its projects. The decisions of the strategic asset management team that initiate the first phase of project scope development are implemented by establishing project team leadership and then, working together, developing initial project direction and guiding documents including a description of the asset scope (product of the project that addresses a business problem or opportunity), project objectives, constraints, and assumptions. These outputs of the process are referred to as the "project implementation basis." Initial inputs to the project implementation process include information about the physical and functional characteristics (i.e., design basis) of the selected asset investment option, and the business constraints and assumptions (i.e., business decision basis, business case, or justification) upon which the asset investment decision was made (Section 3.3).
In addition, the enterprise maintains a project system (i.e., a process and attendant set of capabilities and tools) that supports project teams efforts to manage and control its projects. At project initiation, the system and other enterprise capabilities and resources are made available to the project team to use as appropriate or as required. The project team, using the project system capabilities, then develops the project implementation deliverables into a controllable project scope definition.
Typically, the implementation process is reviewed as the project scope and execution strategy development process (Section 7.1) progresses through proscribed or controlled phases (i.e., phases and gates process). A gate review at the end of each phase results in updated direction (i.e., a decision to proceed to the next phase, a request for additional work or information, or a halt to the project) and resource authorizations (i.e., phased project funding). A project system with scope development phases and gates ensures that the project scope definition and project plans are always aligned with the asset scope and the enterprises objectives and constraints. When project scope development and control planning reach a level of definition such that baseline project control plans are unlikely to change significantly during project execution, then final directions are given to the project team and full project funds are authorized.
After full funds are authorized, the project team proceeds with the full project control process, while the strategic asset management team measures and tracks the project performance as one project investment in its project portfolio (Sections 5.1 and 5.2) and typically only intervenes in the project management to the extent required by the project change management process (Section 10.3). When all or parts of the project scope are complete and ready for turnover from control of the project team, the project implementation process is used to formally review and accept that scope and initiate management of the asset.
4.1.2 Process Map for Project Implementation
The project implementation process centers on steps that help ensure that good investment decisions (Section 3.3) become good projects. The primary output is the basis for project control planning (Chapter 7). Figure 4.1-1 is a process map for project implementation.
Figure 4.1-1. Process Map for the Project Implementation Process
The following sections briefly describe the steps in the project implementation process.
.1 Establish Project Team Leadership
At initiation, a project leadership team is formed including both strategic (i.e., business) representatives and project leads to ensure that the entire team understands the asset scope and design and the business decision basis. The business representative must be knowledgeable of the strategic asset management process work that led to project implementation. That representative must also be familiar with the project system and have authority to make project implementation decisions, or to otherwise ensure that informed decisions are made effectively and in a timely manner. The team should also include representatives of those responsible for running, using, operating, maintaining, or otherwise dealing with the asset or product that will result from the project. Again, it is important that these individuals have the authority to make project decisions in an effective and timely manner.
The leadership team will also include a project manager, and depending on the level of project scope development and planning required for a specific gate review, may also include (but will not be limited to) leads of the project control functions (e.g., estimating, scheduling, cost control, etc.), technical or creative functions (e.g., engineering, systems analysis, etc.), procurement and contracting functions, project execution functions (e.g., construction, programming, etc.), and the quality and safety functions. Suppliers or contractors may be part of the team to the extent that they have a leadership role at that phase. At these critical reviews, it is important to get the full core team representation, understanding, and commitment to the project because this is the where the stage is set for project success.
.2 Define Asset Scope
As was mentioned, an initial input to the project implementation process is information about the physical, functional, and quality characteristics or design basis of the selected asset investment (see Section 3.2). The leadership team crafts this information into a concise asset scope description (i.e., statement, list, etc.) that forms the basis for project scope development (Section 7.1) and provides the project team with a clear understanding of the requirements (Section 3.1) that the asset scope will address. The stakeholders in the asset (i.e., those whose needs are reflected in the requirements) must also be identified.
As the definition of the asset scope is further developed into project scope, gate reviews ensure that the project scope is still aligned with the project implementation basis. Any changes to the project implementation basis must be managed through the change management process (Section 10.3).
.3 Establish Objectives and Targets
Objectives are measures of project success. The measures are primarily investment decision making criteria (Section 3.3). The core project team crafts these criteria into a concise set of measures that are well understood and agreed upon. The measures should also be prioritized in a way that the team understands how to evaluate and make project decisions when one objective must be balanced against another (e.g., cost-schedule tradeoff).
Typical measures include but are not limited to the following:
scope (i.e., the project scope must deliver the required physical scope of the asset or product)
operability (i.e., the project scope must deliver the required functionality or usability of the asset or product)
cost (i.e., budget and cash flow for the financial investment)
schedule (i.e., start, finish, and milestone dates)
resources (i.e., conservation of materials, use of local or disadvantaged labor, etc.)
profitability (i.e., return on investment)
quality (i.e., of the asset and outputs resulting from the asset function)
environmental, health, and safety (i.e., project effects on people and the environment)
satisfaction (i.e., qualitative perceptions of success from the viewpoint of various stakeholders)
Intermediate or sub-objectives may be established for each scope development phase (e.g., budget and completion date for the phase) and for different parts of the project scope as appropriate.
Objectives usually reflect the general success criteria of the asset owner and/or whoever is funding the investment. In some cases, targets may also be established. Targets are established by the project team as measures of its success in achieving project team (or project system) objectives such as achieving best-in-class cost performance as identified through competitive benchmarking. "Stretch goal" targets can also be used to foster project success. Stretch goals are targets intended to motivate the team, in a positive way, to the limits of what is reasonably achievable. Negative motivation (i.e., punishing those that fail to achieve targets) will in the long run motivate teams to bias or distort the asset management processes to result in easily achieved and generally non-competitive targets.
.4 Establish Constraints and Assumptions
Constraints are restrictions, limits, or rules on the projects use of resources and/or activities. They may quantitative in nature (e.g., when work will be done) or qualitative (e.g., how work will be done). A common constraint is that the project must use the enterprises project system. The required use of pre-approved or alliance suppliers and/or contractors is also a common constraint. A project is generally not considered a success unless it meets its objectives within the stated constraints. For example, if a constraint required that a union labor to be used, and the project kept its cost under budget by using a non-union supplier, the project would not be considered successful, and the project teams performance would be viewed unfavorably.
Assumptions, in regards to project implementation, are not rules or restrictions, but are documented asset and project factors, conditions, characteristics, and other information that the project leadership used and relied upon as a basis of understanding at the time of project initiation or at a gate review. A project can be a success if assumptions are not met or do not occur; however, some explanation may be in order, and it may affect perceptions of the degree of success. For example, if an assumption was that weather would always be difficult and rainy all during construction, and the project kept its cost at budget but the weather was always excellent, the project would be considered a cost success, but the project teams performance may not be viewed favorably.
.5 Provide Capabilities (i.e., Project System)
As mentioned above, a common constraint is that the project must use the enterprises project system. The project system is a process with a set of capabilities and tools that enables effective and efficient project execution (i.e., better considered an enabler than a constraint). Typical capabilities made available to project teams include procedures and tools (e.g., forms, templates, websites, etc.) for the phases and gates process of scope development (Section 7.1), the project historical database (Section 10.4), project change management (Section 10.3), schedule planning and development systems, cost estimating systems, cost/schedule control systems, financial and accounting systems, information technology, and so on.
In larger enterprises, an organization that is responsible for developing and maintaining project system capabilities is sometimes referred to as a project or capital office. In smaller enterprises that have few or low-value assets, the need for established project system capabilities may be minimal. In any case, even if the enterprises personnel do not perform many project activities themselves, it is their responsibility to maintain fit-for-use project system capabilities to ensure that the enterprises requirements are effectively addressed by suppliers and contractors performing project activities.
A key challenge in managing project system capabilities is to avoid bureaucratic approaches that impose needless constraints on project performance. The goal of the project system is to facilitate effective project management and control. The asset and process performance measurement and assessment processes (Sections 5.2 and 6.1, respectively) will help ensure that project system capabilities are monitored and continually improved.
.6 Review Asset and Project Status
Having completed all the steps above, the project team reviews the information to ensure that it provides a suitable basis for project implementation (i.e., basis for authorizing funds and guiding further scope development). For projects at intermediate phases of scope development, the status of scope development must also be assessed in terms of the performance of the work completed to date. Both project performance and strategic asset performance assessments must be reviewed to ensure continued alignment of the project work with the project implementation basis, and alignment of the project implementation basis with current asset performance (e.g., if the current asset production rate is deteriorating faster than expected, the project schedule objectives may have to be reconsidered).
The status review will also identify any special circumstances that might affect the authorization of further resources (e.g., change requests, claims, etc.). These circumstances may require additional strategic asset planning (Chapter 3) or forensic performance assessment (6.4) before implementation approval.
.7 Authorize and Accept Project
After the project leadership team determines that the basis for project implementation is appropriate, the project scope, objectives, targets, constraints, assumptions, and other information are documented to the extent and in the format needed to support the authorization step (e.g., the funding or authorization request). The asset owner and/or whoever is funding the investment reviews the request, and if found satisfactory, authorizes the project team to advance the scope development to the next phase, or to complete project execution. They also make whatever decisions and authorizations are needed for the project team to access the approved funds, resources, and capabilities. If the authorization request is not approved, the authorities must direct the project team on what steps it must take (if any) to obtain approval, or to close out work in progress if the project is cancelled. Typically, the authority to approve major investments resides with multiple people in upper management. It can often be a challenge to obtain authorization within a planned timeframe; delays in approvals often delay project progress and these delay risks should be communicated in detail.
When the project is complete, the project implementation process is used to formally accept the completed asset solution and initiate management of that asset. After the final review and acceptance, the project team and other resources are available for other enterprise projects or uses.
.8 Document and Communicate Project Implementation Basis
Either before or just after the work is authorized, the scope, objectives, targets, criteria, and assumptions are documented by the project leadership team in a manner that will support understanding and buy-in by all participants in the project. These documents form the basis for project planning (Chapter 7). In essence, the project implementation basis can be viewed as a quasi-contract between the asset owner and the project team. To ensure that the entire team understands this basis, many projects start the scope development phases or project execution with kick-off or alignment meetings or workshops in which all key project team members participate. In addition, team building exercises can be used to reinforce common understanding as well as to build motivation, encourage teamwork, set the stage for optimum project success, and so on.
4.1.3 Inputs to Project Implementation
.1 Requirements. Requirements (Section 3.1) play a part in project team selection (as they did to strategic asset planning [Chapter 3]). They are also inputs to the asset and project status review.
.2 Asset Investment Design Basis. Information about the physical and functional characteristics of the selected asset investment option or product of the project (Section 3.2).
.3 Asset Investment Business Decision Basis or Business Case. The investment decision and information about the business constraints and assumptions upon which the asset investment option decision was made (Section 3.3).
.4 Project Performance Assessments and Forecasts. For projects at intermediate phases of scope development, the status of scope development must be assessed in terms of the performance of the work completed to date and forecasts for remaining work, and the continued alignment of that work with the current asset scope, cost and schedule objectives, and so on (see Sections 10.1 and 10.2).
.5 Strategic Performance Assessments. For projects at intermediate phases of scope development, the status of the asset performance (Section 6.1) must be reviewed to ensure that the project planning basis is still appropriate.
.6 Change Requests. Changes to the approved project basis usually require approval (see Section 10.3).
.7 Disputes and Claims Information. In the course of the project, disputes and/or claims may occur that require a management implementation decision, or other special effort (e.g., forensic performance assessment) by the enterprise to analyze and resolve (see Sections 6.3, 6.4, and 10.3).
.8 Historical Asset Management Information. Historical project system performance information supports selection of the project team and establishment of the project planning basis (See Section 6.3).
4.1.4 Outputs from Project Implementation
.1 Project Implementation Basis. The asset scope definition, objectives, constraints, assumptions, and other guidance are inputs to the project control planning processes (see Chapter 7).
.2 Basis for Strategic Performance Measurement and Assessment. (Sections 5.1, 5.2, and 6.1, respectively). The asset scope, objectives, constraints, and so on are inputs to the processes in which project and project system success are measured and assessed.
.3 Change Information. (Section 10.3). Authorization or other guidance (e.g., constraints, etc.) regarding change requests, or disputes and claims are communicated to the project team.
4.1.5 Key Concepts and Terminology for Project Implementation
The following concepts and terminology described in this chapter are particularly important to understanding the project implementation process:
.1 Project Implementation Basis. (see Section 188.8.131.52) Synonym: Project Scope Statement.
.2 Phases and Gates Process. A project system procedure in which the project implementation process is re-visited (i.e., gate reviews) as the project scope definition process progresses through proscribed phases (i.e., phases). Each gate review results in updated direction (i.e., proceed to the next gate review) and resource authorizations (i.e., phased project funding). The process ensures that the project scope and project plans are always aligned with the asset scope and the enterprises objectives and constraints.
.3 Project or Capital Office. An organization whose responsibility is to establish and maintain project system capabilities.
.4 Asset Scope. The physical, functional, and quality characteristics or design basis of the selected asset investment.
.5 Objectives. Measures of project success.
.6 Constraints. Restrictions, limits, or rules on the projects use of resources, and/or performance of activities.
.7 Assumptions. Documented asset and project factors, conditions, characteristics, and other information that the project team uses and relies on as a basis of understanding at the time of project initiation or at a gate review.
.8 Authorization. Approvals granted by the asset owner and/or whoever is funding the investment for the project team to proceed with work and to expend or use funds, resources, and capabilities as appropriate.
.9 Acceptance. Agreement by the asset owner and/or whoever is funding the investment that all or part of the project work, as defined by the project planning basis, is complete.
Further Readings and Sources
Project implementation is a basic step of project management that is covered by most general project management texts. The following references provide basic information and will lead to more detailed treatments.
Amos, Scott J., Editor. Skills and Knowledge of Cost Engineering (section on planning), 5th ed. Morgantown, WV: AACE International, 2004.
Rapp, Randy R., Editor. Professional Practice Guide No. 14: Business and Program Planning. CD ROM. Morgantown, WV: AACE International, 2002.
Project Management Institute. A Guide to the Project Management Body of Knowledge, 3rd ed. Upper Darby, PA: Project Management Institute, 2004.
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