A strengthened PMBOK® Guide in a sequence

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A strengthened PMBOK® Guide in a sequence
by Prof Vernon Ireland, BE, BA, MEngSc, PhD, FIE Aust, CP Eng, Eng.Exec.

1.   Introduction 

The Project Management Body of Knowledge (PMBOK® Guide – Fifth Edition) has very significant advantages for use in a well-defined project with known components. This can be recognised as a linear project in the sense that the future approximately follows the past and therefore planning and control is reasonably straightforward. 

The PMBOK® Guide – Fifth Edition is presented as a matrix of five processes and 10 knowledge areas. It houses 47 cells, which are called knowledge area cells in this paper. However, when this body of knowledge is applied to a real project, one cannot address all 47 activities at once and furthermore, there is a natural sequence within these knowledge area cells starting with signing the Charter and ending with Closing the Project. This paper presents a view of a sequence of knowledge area cells that can be performed on a project to logically work through each of the 47 cells.

The opportunity is also taken for the author to provide comments on a few activities which are felt to be underrepresented, mainly to do with choice of a project delivery system, the role of constructability, the role of PMBOK® Guide – Fifth Edition underpinning company processes and complexity issues.

2.   PMBOK presented as a sequence of knowledge area cells 

The PMBOK® Guide – Fifth Edition knowledge area cells shown in the Appendix are also presented in a sequence in section 3, which has been chosen from the list of knowledge area cells shown in the Appendix. 

The PMBOK® Guide – Fifth Edition does recognise the sequence of Inputs, Tools and Techniques and Outputs for each of the knowledge area cells but it does not recognise the sequence of activities between knowledge area cells. The purpose of presenting these activities as a sequence is to assist project managers. The list purely represents the author’s view of managing a project.

Using the diagram one moves from top left to bottom right and generally the knowledge area cells have been presented within their process group categories with one or two exceptions, which are noted by shading. The reason that two knowledge area cells have been brought into the Initiating Process Group from the Planning Process Group is because of the importance of engaging stakeholders in the early stages of a project. This is strongly endorsed generally but particularly important for infrastructure projects, because the input of stakeholders can change the whole management of the project. 

3.   Principles in establishing the sequence

Some obvious principles have been adopted in establishing this sequence of PMBOK® Guide – Fifth Edition These include: 

1. It is necessary to engage some elements of a project team very early in the project;
2. The scope of work needs to be developed before activities can be defined or estimates completed;
3. Project staffs are required to develop a project plan, and on many projects this requires an understanding of stakeholder needs; consequently Planning Human Resource Management and Acquiring a Project Team have to be brought in relatively early;
4. The location of some aspects may appear debatable although they reflect the author’s view of managing the project.

4.   PMBOK as a sequence 

PMBOK® Guide – Fifth Edition is shown as a process in the following figure.

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5.   An iteration during feasibility 

The first activity in the sequence is creation of the Charter. However the delivery contractor would be expected to go through a number of the knowledge area cells in the sequence in a more ‘schematic’ manner, that is, attempting to address the key issues without getting immersed in too much detail. Therefore this sequence could be used in developing feasibility for both the sponsor, in identifying whether the project should proceed, and by the delivery contractor, in deciding whether to bid for the project.

While it is recognised that PMI’s standard for Portfolio Management includes aspects on sponsors deciding whether to commission a project and delivery contractor bidding for a project, many such people only consult the PMBOK® Guide – Fifth Edition and this is worth pointing out to them. 

6.   Leveraging the body of knowledge

a. Choice of a project delivery system

A project delivery system is a methodology chosen by the sponsor to structure a range of aspects on the project, including the roles and responsibilities of the sponsor and delivery contractor, engaging professionals such as designers, the party responsible for financing the project, and post-execution of the project, in terms of operating the facility or system produced.

The PMBOK^® Guide – Fifth Edition does not recognise alternative project delivery systems as outlined in this section. The words design construct and alliance contract and the acronyms EPC and PPP do not appear in PMBOK^® Guide – Fifth Edition. However there is a small section in Planning Procurement Management which addresses fixed price contracts, cost reimbursable contracts and time and material contracts, which is a small aspect of project delivery systems.

It should be noted that there is a Construction Extension to the PMBOK^® Guide – Fifth Edition (PMI 2007), which contains additional processes appropriate to the construction industry.

The main types of project delivery system used generally in industry are briefly discussed. The terms initially came from the construction industry but are applicable to most industries.

i. Cost plus

In this methodology the delivery contractor does the work and charges for the cost of the work plus a margin for profit. The methodology does include any competition and on this basis it can be criticised. The methodology is largely used for emergency work, such as repair of a burst water main or a blocked sewerage system, where there is no time to call tenders.

ii. Traditional separation of design and delivery

The classic methodology is initiated by the sponsor seeking design and documentation from a group of professionals. When the design is fully completed and documented, tenders are called for delivery and a series of delivery contractors bid competitively. Normally a group of selected contractors are invited or selected to bid to ensure they are capable of doing the work. Given that quality of work should be ensured by only choosing from the group of selected tenderers and the time of delivery is written into the contract, the main variable on which competition occurs is cost.

There are two primary disadvantages of this method. Firstly the contractor only agrees to deliver what is based on the drawings and hence if there are any errors the sponsor is liable for a change order which, in the authors experience, are at higher unit rates than the initial bid.

The second potential disadvantage of this methodology is that the delivery contractor is not able to give any advice on potential improvements to the design to achieve faster or better delivery. 

iii. Design and construction

Design and construction, or EPC, which stands for Engineer, Procure and Construct, has become the predominant method in the western world for major construction projects.

The title EPC is a misnomer in that, in the author’s view, the title should be Procure, Engineer, and Construct, seeing the delivery contractor is responsible for all or most of the design. While there is no universal agreement on this, the author’s view is that Design and Construct, which is usually used in the construction industry, often has a little bit more of a role played by the sponsor. For example experienced sponsors, such as a government health authority, will often issue 1:200, or 1:100 drawings which include their experience for general arrangements such as the relationship between the hospital kitchen, operating theatres, and general wards. The delivery contractor then chooses systems within these constraints.

By comparison, EPC is usually used in the engineering industry, for projects such as oil refineries, major defence acquisition and supply, and others. In this case the EPC sponsor provides a list of requirements which have to be satisfied. The construct only methodology is almost never used as the overall methodology in defence projects although it can be used for supply of components.

One of the advantages of this methodology is the use of constructability advice, to ensure the project is easier, and usually faster, to deliver. Constructability is discussed separately below.

iv. Managing contractor

The managing contractor methodology provides a sponsor with significant flexibility by engaging an experienced general contractor to manage the processes from the beginning, and in the construction industry, the choice of site. Major projects are built using this approach, such as the Getty Museum in Los Angeles on which the author worked.  It is an art museum that cost over US$1 billion. The Getty Trust wanted an iconic building that would last for 500 years. The project is divided into packages of work each of which is tended.

The managing contractor’s role was to manage the whole project on behalf of the Getty Trust, which included the choice of site. The reason behind this methodology was the expectation of many changes being required and in each case the Getty Trust wanted the world-class architect to have significant freedom.

Normally the managing contractor forms part of the small project board, which is made up of the sponsor, an architect and possibly a third party such as a lawyer or an international firm such as PwC or KPMG.

v. BOOT or PPP

This methodology involves the delivery contractor providing finance, which of course is usually borrowed, and in return operating the facility for a period, usually in excess of 20 years, and gaining revenue during the operational phase. The methodology is often used for provision of infrastructure, such as a toll road.

Obviously the delivery contractor has a strong influence on the design including strong constructability management. Usually the tendering entity includes the delivery contractor and a company that is a specialist in operation of the facility. The delivery contractor often withdraws after construction is completed although one may retain some equity in the project.

vi. Alliance contracting

All of the above methodologies can be seen as win-lose in which can be illustrated when there is a form of confrontation between the sponsor and the delivery contractor. If the delivery contractor claims additional cost, and the sponsor agrees, the delivery contractor has gained at the sponsor’s expense. If the claim is refused the delivery contractor has lost and the sponsor wins this issue. This basic tension can lead to frequent confrontations.

By comparison in Alliance contracting the delivery contractor and the sponsor agree on a target price for the work and if the work comes in less than the target price they share the gain on some pre-agreed basis. However if the work cost more than the target price they share the pain by both contributing to make up the difference. Usually there is a set of dispute resolution clauses, for example, if executives of the sponsor and the delivery contractor cannot agree on a settlement of an issue it is escalated to the boss of each, usually after four or five days, and if there is no agreement after a period, such as 15 days, the issue is escalated to the two chief executives. Consequently, the emphasis is on moving forward.

vii. Evolutionary acquisition

Evolutionary acquisition is a major project delivery system in use primarily in defence acquisition in which delivering mission capability occurs in increments with continuous reassessment of future-increment priorities, within a tightly controlled systems engineering process. There is scope to both change requirements during the process of development and also to break the project  into sequences of development of requirements, apply systems engineering to produce a module of a full system, test the module through operation, and then go back and develop the next module. 

b. Constructability

Constructability is a term describing the project management process of examining the project design and attempting to make minor or major changes, which still satisfy the brief or requirements while making the project easier to deliver or execute. The concept also applies in the manufacturing industry where the term ‘design for manufacture’ is used.

In the construction industry this term has been taken to a further level of attempting to change design details to make them faster to construct. This process can be very extensive if the delivery contractor is aiming for speed of delivery. Two examples in which the author was involved are outlined to illustrate the point. The first is a multi-storey building in Sydney of over 70 storeys in the 1970s, in which the delivery contractor spent 15 person years of effort on constructability analysis alone. The system used involved the construction of six typical floors simultaneously using a system of precast concrete facade components, a slip form core and in situ concrete slabs. Site crews were highly trained and their activities on over 60 typical floors were scheduled to the minute. Computer modelling was done to optimise the output.

The second example is of a 40 kilometre toll road constructed in the last 10 years in which there was 60 person years of constructability analysis undertaken, and in the process, the 72 bridges and 18 tunnels were redesigned. This work was driven by the incentive to reduce construction time because of the incentive of gaining the revenue on the toll road sooner.

Constructability analysis could be added to the planning phase as the last item.

c. Using PMBOK^® Guide – Fifth Edition to underpin company internal processes

The PMBOK^® Guide – Fifth Edition provides a very thorough methodology for checking the internal systems of both sponsors and delivery contractors. The methods proposed in the guide can be used to audit systems of project based organisations.

There is great benefit of consistent behaviour of staffs working on a project. The author’s experience is that many companies put limited resources into training their own staffs and they recruit people trained by other companies, or people who have learned by the experience on a range of projects. However this approach has serious deficiencies in that the team responsible for managing the project can all be doing so by using different processors and this leads to significant lack of coordination.

The very great benefit of teamwork is shown in the sporting field as a champion team will usually manage to defeat a team of champions. In the project industry the same applies. Therefore it should be recognised that consistent behaviour by project personnel has great advantages because other people can expect and rely on particular actions being taken. Again, this can be illustrated on the sporting field; if one player recognises that another is following an agreed set of moves, they can anticipate where the ball is likely to be passed.

One of the other advantages is that supervisors can more readily check the work in the regular project reviews, because they know how the people they supervise are behaving.

The major study comparing the US and Japanese car industries in 1990, by Roos, Womack, and Jones (1991), showed that a higher quality work was largely about consistent processes and this saves money because there was significantly less rework, which is very costly. The value of consistent processes is borne out by six Sigma training and also assessment and recognition by CMMI, both of which measure methodologies and strongly endorse consistent processes.

However, while consistent behaviour provides reduced cost of work in the long term, it does not do so in the short term because of the cost of training staff and re-defining company processes. Consequently many companies, who are struggling to make a profit, do not train their staff because of the initial cost. However companies which plan to be in the industry for a long time, and have a significant value proposition, believe there is a strong value in having staffs who follow consistent processes because of the longer term reduction in costs delivered by these consistent processes.

d. Recognition of complex systems

A complex project is one in which autonomous and independent systems are included. These are systems developed for other purposes and  continue to have a life of their own in serving the purpose for which they were originally built. A simple example is the inclusion of a global positioning system as part of the operating systems of a project.

A more complex example is the Air Operations Centre created within the US DoD in which there are 80 autonomous independent systems operating (Norman & Kuras (2006). The US DoD encourages use of existing autonomous and independent assets because of the additional power created by the inclusion of additional system.

Further examples of complexity include projects created to establish an enterprise system of systems, a supply chain system, a project to address managing climate change internationally, terrorism and solving disputes between warring nations. Examples include operating in a foreign environment in which the laws, decision-making structure, culture, role of religion and other aspects are very foreign to the norm experience by the project manager. A project of addressing climate change internationally takes the project manager into the political systems of other countries. These examples illustrate the range of autonomous independent systems which are very active.

Some project managers would say that these examples are not projects because the scope is unclear. The defence industry disagrees in affirming that these are real projects for which defence departments are encouraging tenders by companies with skills to cope with the problems associated.

The PMBOK^® Guide – Fifth Edition does not address complexity and certainly the issues discussed above are not addressed by the guide.

Typically the PMBOK^® Guide – Fifth Edition projects are called complicated whereas projects which include autonomous independent systems are called complex. A sharp distinction between these concepts is illustrated by the comment that building jet engines is complicated whereas selling jet engines is complex, because of the independence of customers and competitors.

Lest the reader believe a limited perspective is being pursued in this point they should check some of the following references (Jamshidi (2008), Boehm & Lane (2010), DoD (2008), Norman & M. Kuras (2006) and Schwartz (2013). Dozens more references can be provided to illustrate this point.

7. Conclusions

It is concluded that there is benefit in rearranging the PMBOK^® Guide – Fifth Edition into a sequence of knowledge area cells as shown in figure 1. It should be noted that there are limitations in the guide including the lack of recognition of project delivery systems and constructability activities and there is no reference to complex projects.

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APPENDIX 

 Table1 PMBOK^® Guide – Fifth Edition Project Management Process Group and Knowledge Area Mapping (PMI 2012:61) 

References

Boehm, B. and Lane, J., (2010), DoD Systems Engineering and Management - Implications for Evolutionary Acquisition of Major Defence Systems, csse.usc.edu/csse/TECHRPTS/2010/usc-csse.../usc-csse-2010-500.pdf‎;

DoD (2008), Systems Engineering Guide for Systems of Systems, www.acq.osd.mil/se/docs/SE-Guide-for-SoS.pdf‎;

Jamshidi, M. (2008), System of Systems Engineering, John Wiley and Sons, Hoboken, USA:

Norman, D. & M. Kuras, M. (2006), Engineering Complex Systems in D. Braha, A. Minai and Y.  Bar-Yam Complex Systems (eds.), Springer.

PMI (2007),  Construction Extension to the PMBOK^® Guide, 3^rd Ed, Project Management Institute;

PMI (2012), A Guide to the Project Management Body of Knowledge (PMBOK^® Guide) Fifth Edition,;

Roos, D., Womack, J.P. & and Jones, D.T., (1991), The Machine that Change the World, the Story of Lean Production, Harper Perennial, ISBN 0060974176, ISBN 978-0060974176;

Schwartz, M., (2013), Defense Acquisitions: How DOD Acquires Weapon Systems and Recent Efforts to Reform the Process, www.fas.org/sgp/crs/natsec/RL34026.pdf‎. 

About the author

Professor Vernon Ireland is Director of Project Management and Industry Programs for The University of Adelaide.  From 1991-1996 Vernon was Corporate Development Director of Fletcher Challenge Construction, responsible for people and business systems improvement in the USA, NZ, Australia, Pacific and Asian businesses, in the $2.0 billion pa company.

He was Dean of the Faculty of Design, Architecture and Building at the University of Technology from 1987 to 1991. He is also a Past-President of the Sydney Division of the Engineers, Australia.

He is also the Course Director for Ngee Ann-Adelaide Education Centre’s Master of Project Management.  He travels to Singapore frequently to deliver lectures, conduct talks and research.

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