PVD Project Control Best Practices for Large Projects
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The document outlines best practices for managing large complex projects, focusing on key areas such as project governance, control, cost management, scheduling, and risk management. It emphasizes the importance of strong project leadership, effective teamwork, and agile responsiveness to complexity and unforeseen challenges. The conclusion suggests that organizations must enhance their project management capabilities and systems to successfully navigate the intricacies of large projects.
PVD Project Control Best Practices for Large Projects
- 1. Project Value Delivery © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m Best Practices for Large Complex Projects Control Jeremie Averous Senior Managing Partner V0 – March 2015
- 2. Contents © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m Large Complex Projects Best Practices • Introduction: Specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 3. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 3 • Be Focused on the right things – Convergence Monitoring • Be in Control while remaining Agile • Address Complexity • Create Space for Responding to the Unexpected
- 4. Section 1 © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m • Introduction: specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 5. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 5 What is Complexity?
- 6. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 6 Complex System = System with many independent components and strong interactions
- 7. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 7 Complicated vs Complex
- 8. Section 2 © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m • Introduction: specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 9. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 9 Project Team Best Practices • Strong Project governance • Strong Project Manager authority / specialized disciplines providing resources • Project Leadership not just Management • An effective, integrated team with full-time contributors in a separate open-space • Effective teambuilding and operating practices • The Project Execution Plans are developed and revisited as a group during workshops at project start-up • To the extent practical ensure alignment between individual capabilities and interests and project goals
- 10. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 10 Why? • Diminish complexity – Improve contributors’ alignment • Strength of Project Sponsorship & governance • Familiarization, alignment workshops • Incentive schemes – Minimize the number of contributors and interfaces • Integrated work package / subcontractors • Integrated teams
- 11. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 11 Integrated teams • High Authority Level of Project Manager • Most people are allocated full time to a project • The project-team is collocated in an open-plan space to facilitate communication • They do what it takes for the project – recognition of need to contribute outside formal role description for overall success • A Matrix organization is implemented within the project with delivery responsibility
- 12. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 12 Project Governance • Proper project governance is often lacking on large projects – Project sponsor should understand specifics of large projects, – Project sponsorship should be strong and present, – Project execution strategy and decision-making key points for management should be well defined (gates), – Utilization of contingency reserves process should be clear, – Will to invest to prevent future costs or manage risks.
- 13. …You need to build an effective integrated team to find the solution in complexity
- 14. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 15 A team where blaming starts = 100% project failure
- 15. Section 3 © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m • Introduction: specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 16. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 17 The Three Fundamental Questions WHERE ARE WE? (ARE WE ON COURSE?) WHERE ARE WE GOING? WHAT DO WE NEED TO DO TO BE BACK ON COURSE?
- 17. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 18 Project Control Best Practices • Project Control is implemented as a specific senior role reporting to the PM – does not exist as such in smaller projects • Project Control to ensure consistency between cost, schedule, risk and contracts at the adequate level of detail – Breakdown structures – Forecasts / Earned Value Management – Contingency, reserves, allowances • Project Control sets up the relevant measurement and reporting processes & systems • Project Control is not just about compliance - it needs to be the strategic advisor for the PMT
- 18. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 19 Large projects typical organization Project managerProject Control manager Package Manager 1 HSE, Q Package Manager 2 Package Manager 3 Engineering Manager Procurement manager Construction manager Commissioning Manager
- 19. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 20 What is Project Controls? Project Control is about building information sensors, and making sense of the information.
- 20. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 21 Project Breakdown detail level (Cost Model, Schedule) Breakdown detail Too little detail will not allow to grasp the project drivers Too much detail drowns the team and removes agility Effectiveness Optimal Cost / Schedule Detail Range
- 21. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 22 Too much detail! = Not enough time for analysis!
- 22. Section 4 © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m • Introduction: specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 23. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 24 Project Cost Control Best Practices • Fully distinct from Accounting • Focus on commitments and Project-end forecast • Actual Cost (VOWD) is evaluated independently of invoicing • Breakdown structures are owned by Project Control and coordinated with Procurement and Construction contracting strategies • A full Project Cost Model is maintained (in source currency, time-phased, by work package) • Issues / events are reported immediately in the forecast • Sensitivities are provided in addition to the (prudent) forecast • Data integrity is maintained, all variances remain traceable
- 24. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 25 Common “maturity’ observations when no strong Cost Management • Costs for internal resources as actual costs instead of standard rates – Extreme complication of cost tracking • Commitments are not tracked – only invoicing – Invoicing without commitments – Poor control on project bottom line because of invoicing delays • Poor consistency with project execution strategy and forecast schedule • No support to PM in scenario planning • No sensitivities available
- 25. Section 5 © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m • Introduction: specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 26. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 33 Project Schedule Best Practices • Limit the detail of the Project Integrated Schedule – use a proper scheduling hierarchy • Use the Convergence Planning / monitoring method + communicate focus to the team • Float and Buffers are owned by the PM • Avoid ‘virtual float’ generation by constraining delivery on fixed dates • Implement float monitoring / trending (evolution of float from one update to the next) • Avoid having different schedules for different stakeholders • Prefer to increase the schedule robustness and resilience instead of minimizing the critical path.
- 27. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 35 Best Practice Schedule Vision Integrated Project Schedule 1,500 – 2,500 activities Convergence Plan ~ 100-200 deliverables MOREDETAILS MOREFOCUS Document List & detailed engineering schedule SCM Detailed Plan Construction Sub- contractor’s schedules Commi- ssioning Plan / schedule Installation Plan Simplified Project Schedule 200-400 Activities (Schedule Risk Analysis)
- 28. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 37 Convergence processFor Complex Projects, the focus needs to be on convergence
- 29. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 38 Convergence process Simple Project Complex Project
- 30. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 39 Convergence process Project Performance Driver (or, what kills a project) Simple project Large project Efficiency Convergence Potential upside/ downside±10% +20% - 30, -50, -100%
- 31. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 40 Most Projects fail because of a small piece missing…
- 32. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 41 Convergence Plan Example
- 33. Section 6 © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m • Introduction: specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 34. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 43 Project Risk Best Practices • Opportunity and Risks, and ratings to be discussed as a team • Focused action-taking. Prioritize ruthlessly and focus effort • The earlier, the better for action-taking • Use all opportunities of contractual relationships to transfer risk • Do not confuse allowances, contingency, management reserves • Schedule risk analysis focus on improving schedule resilience • Monte Carlo methods are conventional and their limits must be understood (e.g. low probability risk, independence assumptions) • Most of the project risk is related to schedule slippage & lack of convergence, and consequential impacts • Prevention of major accidents is essential – industrial risk management • In case of major event, create a separate task-force to minimize consequential impact on project execution
- 35. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 44 Advanced Risk Management approaches • Industrial Risk Management – Specific methods to prevent major catastrophic events (low probability, high consequences) • Portfolio risk management – Manage dependencies between projects (resources etc) and consequential effects • Minimize complexity • Ensure there is a way to escape the project if it goes bad – contractual T&C – Limit of liability, termination clause etc • Proper contingency calculation and Senior Management ownership
- 36. Section 7 © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m • Introduction: specifics of Large, Complex Projects • Project Team • Project Control • Cost • Schedule • Risk • Project Systems • Summary
- 37. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 48 Systems • Large project = lots of data to control – Manual systems are overwhelmed, high error rate • Need to: – manage inter-office remote work, remote sites – guarantee data correctness and accurate reporting • What minimum systems? – Document control & Correspondence control – Cost control (different from accounting) – Commitments & approvals • SCM • Logistics • Travel, HR • Timesheets – Scheduling & convergence planning
- 38. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 49 Project Systems Best Practices • Minimize risks of mistakes by having systems that synchronize or are shared/ accessible between different sites & worksite (new trend = in addition, go mobile) and across the full process cycles (e.g. site commitments) • Single integrated systems (~ERP) often less effective in terms of control and efficiency than a suite of specialized systems with checks at the interface; and in addition longer and more expensive to set-up • All action-tracking systems to be coordinated to allow real prioritization across the board • Reporting to be as automated as possible to leave space for actual analysis work (new trend = real time dashboards) • Leverage systems to create performance indicators and reports • Ensure shared breakdown structures and consistent references across the entire contracting levels
- 39. Conclusion © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m
- 40. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 51 Moving into Larger, more Complex Projects • Management by “efficient” hierarchical departments • Purely rational approaches • Following an immutable baseline plan (a.k.a the Stalinist approach) …DON’T WORK!
- 41. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 52 So, is your organization is ready for large projects? Key indicators: • Strength of project managers vs department heads • Project leadership capabilities and effective teams • Office lay-out – really integrated teams • Cost mindset vs investment mindset at management level • Strength of project governance process • Strength of IT systems for project data management
- 42. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 53 • Be Focused on the right things – Convergence Monitoring • Be in Control while remaining Agile • Address Complexity • Create Space for Responding to the Unexpected LEAD!
- 43. © Project Value Delivery, 2016 w w w . P r o j e c t V a l u e D e l i v e r y . c o m 54 This presentation summarizes key best practices for Large Complex Projects. More information is available on our White Papers and other documents on www.ProjectValueDelivery.com …as well as in our handbooks!
- 44. W e E m p o w e r O r g a n i z a t i o n s T o b e R e l i a b l y S u c c e s s f u l i n E x e c u t i n g L a r g e , C o m p l e x P r o j e c t s Discover more on w w w . P r o j e c t V a l u e D e l i v e r y . c o m Project Value Delivery Project Soft Power Unleashing Value from Your Large, Complex Projects Project Health Check Project Coaching Organizational maturity Team effectivenessIntercultural leadership Advanced project trainingProject Startup support Project Recovery Advanced risk management Project Control and Reporting Support systems integration Convergence planning Remote sites integration Leadership development