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Can construction disputes be settled easily?

 

STUDENT PAPER

By Vamsi Maru

SKEMA Business School

India and Paris, France

 


 

ABSTRACT

Construction is one of the most booming business in the world. It is one of the important sources of generating employment and capital. The construction industry is larger and more complex because of the involvement of various parties associated with the project. Due to its complexity, various risks are involved like delays, improper cash flow, lack of skill, change orders and environmental conditions; if these are not cleared they lead to Disputes. Disputes can break the relationship among the participants, affect the work quality and productivity, leading to claims and may lead to project fail if it is not managed inappropriate method. The aim of this paper is to present different types of disputes that occur in construction and analyzing various alternative dispute resolution methods using Multi-Attribute Decision Model by comparing different resolution methods between them and providing the best option to resolve the disputes without claims. These findings can be helpful to construction practitioners in understanding the dispute problems that occur frequently. This can minimize the risk of cost overruns associated with disputes.

Key words:      Construction dispute, Delay Causes, Road construction, Contract errors, Claims

INTRODUCTION  

The construction industry is complex, unique, and span for long period, which make more challenging to avoid disputes. Depending upon delivery method,  type of skills, and required type of contract to use an employee, have different forms of disputes. Disputes are never budgeted for therefore occurrence of any disputes turn out to be very costly. it can damage financial and human resources, time, quality of work, and opportunity cost. Therefore, disputes are unavoidable. It should be managed properly by assessing the causes.

                                               FIGURE 1. Risks changing into disputes[1]

“Road construction contracts are responsible for several types of disputes. The disputes may be among the client and the contractor, the key contractor, and sub-contractor over-compensation, concert of the contract, delay and disturbance of works, design variations, value escalation, the value of works etc.  Maximum disputes are fixed by compromise among the contracting revelries without the participation of third party[2].   The accessing architect and engineer tenacity maximum disputes that might arise through the development of the work on site. Roughly cases still may need the structure of dispute review professional or panel. Still, around cases could be mentioned to an autonomous adjudicator to seek practical solutions and disputing revelries may intentionally accept and implement the result of the adjudicator. Subsequently exhausting the preceding dispute resolution mechanisms, it may be inevitable to take the substance to arbitration, frequently for last and binding reward that is enforceable by public law court like any court decision”[3]

“Construction Claim can be well-defined as an appeal by any revelry to the agreement, frequently the Contractor, for reimbursement of reparations produced by a disaster of the further party to achieve his portion of responsibilities as stated in the contract. The reimbursement is frequently in the method of the added compensation or an extra time.

Claims are”[4] inevitable in road construction projects. Claims are an appeal for time and financial reimbursement for repairs acquired by any revelry to the agreement. The amount and occurrence of claims have enlarged over current years due to the upsurge in the proportions and complication of these missions. These claims outcome in cost overruns, agenda interruptions and combative relations amongst the contracting revelries[5].

The below Figure 2. shows the typical worth of construction conflicts globally between 2011 and 2016, corresponding by area. In 2016, the average value of construction disputes globally was 216 million U.S. dollars. A conflict was charted as a condition of concerns wherever 2 parties take problem within the declaration of a written bond right. The value of this dispute is that the extra claim to it enclosed within the contract.

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To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director paul.gardiner@skema.edu.

How to cite this paper: Maru, V. (2019). Can construction disputes be settled easily? PM World Journal, Vol. VIII, Issue VIII, September.  Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Maru-can-construction-disputes-be-settled-easily.pdf

 


 

About the Author


Vamsi Maru

Paris, France

 

 

 

 

Vamsi Maru is an Indian national student, is 22 years old and comes from Andhra Pradesh state located in South India. He comes from an engineering background with a bachelor’s degree in Industrial Engineering from GITAM university, India.

At the beginning of year 2018, he chose to study Project Management as a specialization and integrated Skema’s Master of Science in Project and Program Management and Business Development. He strongly believes that Project Management is more than a subject, a competence, that is absolutely needed today to make successful projects and have a clear approach to how to deal with schedule and stakeholders within projects in every single topic. Vamsi is certified in AGILEPM Foundation, PRINCE2 Foundation, Lean Six Sigma yellow Belt.

Vamsi lives in Paris and can be contacted at vamsikrishna.maru@gmail.com

 

[1] STUDY OF CONSTRUCTION DISPUTES & IT’s RESOLUTION THROUGH ARBITRATION? (2015, August 9). Retrieved from https://www.slideshare.net/abhishekshah798/c-51427660

[2] (PDF) Assessment of Construction Dispute Resolution in Ethiopian Somali Regional State Road Projects: A Case Study on Road Projects in the Region. (n.d.). Retrieved from https://www.researchgate.net/publication/321012269_Assessment_of_Construction_Dispute_Resolution_in_Ethiopian_Somali_Regional_State_Road_Projects_A_Case_Study_on_Road_Projects_in_the_Region

[3] Dispute_paper[1]. (2016, September 21). Retrieved from https://www.slideshare.net/YolenteMacarubbo/disputepaper1

[4] “Types and Causes of Construction Claims”. (2015, 28). Retrieved from https://www.slideshare.net/abhishekshah798/types-and-causes-of-construction-claims

[5] Causes of claims in road construction projects in the UAE. (2016, December 14). Retrieved from https://www.tandfonline.com/doi/abs/10.1080/15623599.2016.1230959

 

 

Digital Transformation in Financial Services

What Cost Estimation Methodology to Choose?

 

STUDENT PAPER

By Soukaina Touil

SKEMA Business School

Morocco and Lille, France

 


 

ABSTRACT

In a rapidly changing digital world, the financial services industry is struggling to stay competitive through digital transformation projects. Indeed, financial institutions today are engaging in huge digital transformation projects to stay up to date and create value. However, many of them fail in their digital transformation projects, mainly due to cost overruns. This paper discusses the reasons leading to the projects’ failure through a root cause analysis, followed by a presentation of the different alternatives to the main problem, then an analysis is established of the different alternatives through the multi-decision attribute model and a non-dimensional weighting technique to narrow down the alternatives to one best solution that can be applied to our problem. Finally, a Force-Field analysis is used to determine the forces supporting and hindering the application of our solution.

Key words:      Cost estimation, Financial Services, Digital Transformation, Top-Down, Fintech, Budget Methodologies, Contract, Project, Consulting

INTRODUCTION

In a world where technologies are rapidly evolving, the economic model has transformed in a very competitive way, and businesses are striving to keep up with the digital change and to create a significant competitive advantage. Indeed, “two-thirds of business leaders believe their companies will lose competitiveness if they don’t become significantly more digitized. The pace and volatility of digitization opportunities make it more difficult for IT leaders to help their companies exploit emerging digital opportunities”[3]. Taking this into account, organizations in different industries understood well that they should integrate digital technology into all areas of business, resulting in fundamental changes in how the business operates and delivers value to customers.[4]

Among all industries, the financial services industry, which can be simply defined as the services offered by financial and banking institutions, is struggling to optimize cost-effectiveness and profitability following the last decade’s downturn[5]. As such, this industry is particularly concerned with and affected by the digital transformation and process optimization through different financial technologies, or as they are commonly called, Fintech. Implementing new technologies require a huge investment from the financial institutions. In 2017, they have invested more than $13 billion on Fintech and digital transformation.[6] This number is significantly important compared to the other industries.

However, as much as the rewards can be promising and fruitful, the risk of the Digital Transformation failure is very high. Indeed, 84% of companies fail at digital transformation[7], including financial services institutions. A real example of this kind of failure is Co-op Bank, which has invested £300 million in 2007 in the modernization of its IT systems. Four years later, the whole investment went to waste and the digital transformation was deemed a failure.[8] One of the main reasons leading to this failure was “underdeveloped plans in continual flux and poor budgeting”[9].

However, if we take a closer look into the failing digital transformation projects, we can see that they have followed traditional funding and budgeting models that have closely impacted the failures.[10]

Indeed, the classical budgeting models such as the Top-Down cost estimating approach, have been proven to be inefficient in digital transformation projects. The Top-Down approach takes into consideration the different costs starting from the final deliverable, breaking it down into smaller work packages, and allocate the adequate budget for each package. It identifies tasks quickly and is efficient when there’s a clear insight into the details of a project[11]. However, in a digital transformation project, the emphasis should be put on the word “Transformation”, because it implies change. Implementing new technologies to replace the previous ones requires an agile environment and operating models[12]. The transition into that kind of models require another investment in business agility, and this is what the classical cost estimation approaches do not take into consideration, which leads to budget and schedule overrun and very often to the project failure.

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director paul.gardiner@skema.edu.

How to cite this paper: Touil, S. (2019). Digital Transformation in Financial Services: What Cost Estimation Methodology to Choose? PM World Journal, Vol. VIII, Issue VIII, September.  Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Touil-digital-transformation-in-financial-services.pdf

 


 

About the Author


Soukaina TOUIL

Lille, France

 

 

 

Soukaina Touil is an ambitious problem solver, freshly graduating from SKEMA Business School of Lille. Today she holds a master’s degree in Program and Project Management & Business Development, and also a master’s in Corporate Finance from IAE of Lyon. Born in Casablanca, Morocco, she moved to France to study for her master’s degree in Lille. Certified in PRINCE2 and AgilePM methodologies and preparing for the CAPM methodology Certification, she has acquired significant professional experience through her internship in Casablanca as a Junior Analyst in the Financial Services within a consultancy firm, then as a Junior Financial Market Analyst through her internship in Capital Markets within a Bank of Investment in Casablanca.  She has also worked for a French consulting firm specialized in Capital Markets as a Junior Business Developer helping them establish a market study and opening their new branch in Casablanca. Passionate about Finance and Project Management, she is today ready to face new challenges on the European market.

Soukaina lives in Lille, France and can be contacted at touil.soukaina@gmail.com

 

[3] CEB, The new IT Operating Model for Digital, 2017, Retrieved from https://www.infoq.com/articles/Digital-Transformation-Guide-1

[4] The Enterprises Project, What is digital transformation? Retrieved from https://enterprisersproject.com/what-is-digital-transformation

[5] Oracle Financial Services, A Strategic Approach To Cost Efficiency in Banking Industry, September 2017. Retrieved from http://www.oracle.com/us/industries/financial-services/strategic-approach-efficiency-wp-3886143.pdf

[6] Deloitte Center For Financial Services, Fintech by the numbers, 2017. Retrieved from https://www2.deloitte.com/content/dam/Deloitte/us/Documents/financial-services/us-dcfs-fintech-by-the-numbers-web.pdf

[7] Bruce Rogers & Michael Gale Interview, Forbes, why 84% Of Companies Fail at Digital Transformation. January 2016. Retrieved from https://www.forbes.com/sites/brucerogers/2016/01/07/why-84-of-companies-fail-at-digital-transformation/#58bd3665397b

[8] Rolin Zumeran, A Look Back at Digital Transformation in Financial Services (and Digital Transformation in General) in 2017, January 2018. Retrieved from https://www.openlegacy.com/blog/a-look-back-at-digital-transformation-in-financial-services-and-digital-transformation-in-general-in-2017

[9] Martin Gill, Why Do Digital Business Transformations Fail? April 2015. Retrieved from https://go.forrester.com/blogs/15-04-01-why_do_digital_business_transformations_fail/  

[10] Mark Lamoureux, How Budgeting Impacts Digital Transformation, April 2018. Retrieved from https://www.veriday.com/blog/budgeting-impacts-digital-transformation/

[11] Andy Makar, Top-Down vs. Bottom-Up Project Management Strategies, August 2018. Retrieved from https://www.liquidplanner.com/blog/how-long-is-that-going-to-take-top-down-vs-bottom-up-strategies/

Understand and find solutions to the main cause of disputes in construction

Project manager’s failures to understand or comply with their contractual obligations

 

STUDENT PAPER

By Pauline Vanneste

SKEMA Business School

Lille, France

 


 

ABSTRACT

Contracting imposed on the project manager and the contractor to agree and linked them to one another. However, the project manager doesn’t always succeed to understand or comply with its contractual obligations and that is the major disputes cause. To help to solve or at least reduce the problem, we must understand how it happens, the reasons why project managers fail to understand or comply with their contractual obligations and then find a solution to each reason. After findings several solutions, we will define attributes to measure and evaluate the solutions and finally resume our findings. We will see that the failures from the project manager result from him or her directly. But that we can put solutions in contracts to incent the project manager to comply with its contractual obligations.

Key words:      Disputes, Contractual obligation, Clauses enforcement, Risk management, Technical skills

INTRODUCTION

“Contract is important during every step of the project” according to Jean-Charles SAVORNIN[1]. “The contract contains the term of a mutually binding agreement”[2]. But sometimes after the mutual agreement, it doesn’t go as it should be and disputes appear. “Disputes are disagreements not settled by mutual consent which could be decided by litigation or arbitration”[3] .

According to ARCADIS, the main disputes clause in the contract is the failure to properly administer the contract in construction area[4]. That comes from the issue that a party fails to understand or comply with its contractual obligations. The disputes value and duration will have a bad impact for both parties with more or less on each one or both. Try to avoid or reduce the disputes that can arise is part of risk management, a major concern of the project manager. “Risk management is an organized assessment and mitigation of project risks as well as pursuit of consequential opportunities”[5]. And managing those risks could be done through the contract. Here our interest will be focused on project manager’s misunderstandings and failures to comply with their contractual obligations in the construction area.

“Disputes could be as complex as contracts and the reasons why disputes arise are many”[6]. That’s why as future managers, contractors or even investors, understand the disputes in the project linked to the contract can allow us to avoid delays, involving our responsibilities with bad actions or decisions, avoid failures… Simpler, it could help to improve project contracting in general. Giving a review of the reasons why, even possible solutions and consequences of project managers failures to understand or comply with their contractual obligations, will allow us to find solutions to put in place in the contract. In the first time, focusing on the construction area that we are studying here would give more specific and accurate results. Thanks to those results the application of those results on other fields and areas could be studied and a solution might be found to solve the first disputes clause in the contract. Moreover, the number of construction project is increasing over the years[7] and so it would be a good and large based to study the causes of disputes.

As we know, “the costs of construction disputes are huge especially in the Middle East, $82m”[8] and so deleting the disputes or at least find some ways to reduce them and their impact could save a lot of time and money. “The misunderstandings and failures to comply with contractual obligations of project managers are the first cause of disputes”[9] so find solutions to the first cause of disputes could importantly reduce a lot of disputes themselves. It is logical. Contracting would be easier and safer for both parties reducing that much risks. In studying this subject, we will also find the problems coming from the project manager part but it doesn’t mean that he or she is entirely and only responsible for it. For example, project manager over-optimism of the project manager lead to a quick review of the risks or the requirements and a thought that “everything would be ok no matter how but over-optimism often lead to delays”[10]. The schedule is part of the contract and so delays represent a failure to comply with a contractual obligation. The study will reveal if the project manager is responsible most of the time, the contractors, both parties or just the contract itself. Because the issue could come from the contract and not the parties. “Develop the contracting policies and processes”[11] to avoid disputes causes and so disputes themselves is our main point here.

In the construction area and especially in the construction project, project management, program management, portfolio management, and asset management are involved. As the table below (figure 1) prove it because the assess define if a project can continue or not. Managing the risks and so the disputes causes are essential to improve the analysis of dispute causes and also prevent risks and avoid disputes that would create a time and money waste.

More…

To read entire paper, click here

 

Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared as a deliverable for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director paul.gardiner@skema.edu.

How to cite this paper: Vanneste, P. (2019). Understand and find solutions to the main cause of disputes in construction: Project manager’s failures to understand or comply with their contractual obligations, PM World Journal, Vol. VIII, Issue VIII, September.  Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Vanneste-main-cause-of-disputes-in-construction.pdf

 


 

About the Author


Pauline VANNESTE

Lille, France

 

 

 

Pauline Vanneste is a young business student in Project Management with just a few years of experience, certified with Prince 2 and AgilePM. Born in the north of France, she spends two years in a preparatory class to the best business schools in France and succeeds to enter SKEMA. She lived 6 months in Sweden and 6 months in Brazil during her master’s degree. After two years studying management, finance, marketing and business she decided to specialize in Project Management by doing an MSc Project Management and Business Development during she studied International contracts. Studying the contracts and especially the causes of disputes in international contracting, she focused on the construction area. The main topic of her study was to understand the main cause of disputes in the contract: the project manager failures to understand or comply with its contractual obligations, propose solutions and evaluate them in order to have a review of the reasons why it happens and solutions for each reason.

She just completed his last assignment in December of 2018 under the tutorage of Dr. Paul D. Giammalvo, CDT, CCE, MScPM, MRICS, GPM-m Senior Technical Advisor, PT Mitrata Citra Graha, to attain Guild of Project Controls certification.

Pauline Vanneste lives in Lille, France and can be contacted at Pauline.vannest@skema.edu

 

[1] SAVORNIN, J.C. (2016) Contract Management Outils et Méthodes, Pratiques d’entreprises. Retrieved from http://www.scholarvox.com/catalog/book/docid/88833617?searchterm=contract

[2] R. Max Wideman. (2017). Wideman Comparative Glossary of Project Management Terms v5.5. (n.d.). Retrieved from http://www.maxwideman.com/pmglossary/

[3] R. Max Wideman. (2017). Wideman Comparative Glossary of Project Management Terms v5.5. (n.d.). Retrieved from http://www.maxwideman.com/pmglossary/

[4] Global construction disputes report 2017. (2017). ARCADIS. Contract Solutions.

[5] R. Max Wideman. (2017). Wideman Comparative Glossary of Project Management Terms v5.5. (n.d.). Retrieved from http://www.maxwideman.com/pmglossary/

[6] HAMON, K. (2003, October). Resolution of Construction Disputes: a review of current methodologies. Leadership and Management in Engineering. Retrieved from https://ascelibrary.org/doi/pdf/10.1061/%28ASCE%291532-6748%282003%293%3A4%28187%29

[7] US DEPARTMENT OF TRANSPORTATION. (December 2011). Work Zone Road Users Costs. Concepts and applications. Retrieved from https://ops.fhwa.dot.gov/wz/resources/publications/fhwahop12005/fhwahop12005.pdf

[8] LOFTHOUSE, S. (2016, August 31). The cost of disputes in the middle east. MeConstruction News. Retrieved from https://meconstructionnews.com/16782/the-cost-of-construction-disputes-in-the-middle-east

[9] Global construction disputes report 2017. (2017). ARCADIS. Contract Solutions.

[10] PRATER, J. KIRYTOPOULOS, K. MA, T. (2016). Optimism bias within the project management context: a systematic quantitative literature review. International journal of managing project in Business. Retrieved from https://www.researchgate.net/publication/315933641_Optimism_bias_within_the_project_management_context_A_systematic_quantitative_literature_review

[11] Guild of Project Controls Compendium and Reference | Project Controls – planning, scheduling, cost management and forensic analysis (Planning Planet). (n.d.). Retrieved from http://www.planningplanet.com/guild/GPCCAR-modules

 

 

Outreach, Networking, Communicating – Oh My

But I Am An Introvert

 

COMMENTARY

By Rebecca Winston

Idaho, USA

 


 

The other day I was reading an article in one of my other professional journals, American Bar Association Journal, 1 Jul 2019, and came across an article by Heidi Brown, “Navigating ‘Introvert Hell”: You Don’t Have to be Hard-Charging to be an Impactful Legal Networker”.  It got me to thinking about the numerous social events I have attended as a project manager, as well as the other outreach events or other communication activities in which I have had to engage.  Just thinking about them caused some stress and by the time an hour passed, I needed to think about something and have a session of mindfulness to relax and send my stress into the ether.  I am an introvert and I need to recharge my batteries following any event or communication activity. I thought I would share what I have learned over several years of such events and activities, as well as practicing law and doing public speaking events.  I will also share that I learned some of these items through the school of hard knocks and road rash and others by reading and learning in the classic sense.

Most dictionaries define an introvert as a reserved or shy person.  The American Psychological Association defines an introvert, as one that as an orientation towards the internal private world of one’s self and one’s thoughts and feelings; prefer to work independently.  Whichever definition one accepts, the overall impression is one in which one is not adept at outreach, networking and communicating.  So how does one become adept or at least give the impression of being adept.

Well, growing up I can remember my Mother telling such gems as “Smile more, it will make it easier.” “Shoulders back and just do it, once you begin it will be fine.”  “Making friends will be easy, just start.”  None of those words of wisdom helped and each time I heard them they caused me to panic.

I ended up spending time in the public library in my town reading up on my weakness as it was referred to in my home.  I read about numerous coping skills, but one of them registered with me and I began thinking that I was doing it to some extent just to cope with life in general.

The book, the title of which I can no longer remember, recommended that one take a drama class and assume a bit of an alter ego.  For years I assumed the alter egos of pioneer girls or Nancy Drew from books I was reading, I would try that route.  I took three years of drama in high school and a year in college.  I have used this technique to great advantage.  I have been the lawyer or the project management.  These roles have been well defined by me with specifications and other requirements that provide several personality traits, allowing me to interact in a complete way with others and to communicate in those roles.

Do I still have to re-charge the batteries after any event?  Absolutely, acting is tough.  It is not the natural state for this person.  I have to continually remind myself of the performance requirements and boundaries.  But I have also put up boundaries for the interactions that protect the introvert.

More…

To read entire article, click here

 

How to cite this article: Winston, R. (2019). Outreach, Networking, Communicating – Oh My! But I Am an Introvert; PM World Journal, Vol. VIII, Issue VIII, September. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Winston-outreach-networking-communicating-oh-my.pdf

 


 

About the Author


Rebecca Winston, JD, PMI Fellow

Idaho, USA

 

 

 

Rebecca (Becky) Winston, Esq., JD, PMI Fellow, is a former Chair of the board of the Project Management Institute (PMI®). An experienced expert on the subject of project management (PM) in the fields of research & development (R&D), energy, environmental restoration and national security, she is well known throughout the United States and globally as a leader in the PM professional world.  Becky has over 30 years of experience in program and project management, primarily on programs funded by the US government.  She is a graduate of the University of Nebraska’s College of Law, Juris Doctorate (1980), in Lincoln, Nebraska and has a Bachelor’s of Science (BS) degree in Education from Nebraska Wesleyan University She is a licensed attorney in the states of Iowa and Nebraska, USA.

Active in PMI since 1993, Rebecca Winston helped pioneer PMI’s Specific Interest Groups (SIGs) in the nineties, including the Project Earth and Government SIGs, and was a founder and first co-chair of the Women in Project Management SIG. She served two terms on the PMI board of directors as director at large, Secretary Treasurer, Vice Chair (for two years), and Chair (2002). She was elected a PMI Fellow in 2005.  She has served as a reviewer of the Barrie Student paper for the PMI Educational Foundation for several years and now serves on the PMI Educational Foundation Board for a three-year period of service beginning in 2018.  She is also a member of the American Bar Association and the Association of Female Executives in the United States.

Ms. Winston periodically serves as an advisor to organizations such as the National Nuclear Security Administration (USA), U.S. Department of Energy (DOE) and the U.S. Department of Homeland Security (DHS) on topics ranging from Program and Project Management to project reviews, risk management and vulnerability assessments. She served on the Air Force Studies Board for six years and currently serves on the Intelligence Science Technology Engineering Group for the National Academies of Science, Engineering, and Medicine, as well as actively serving on many studies for the National Research Council.

Since 2008 she has also served in the capacity of Chair of the US Technical Advisory Group and Head of Delegation for Technical Committee 258:  Project, Programme, and Portfolio Management, as well as serving on the various Working and Study Groups drafting international guidance standards. She has extensive recent PM experience in the areas of software development and sustainment, cyber security, alternative energy, national defense and security, and has worked closely with local, regional and national officials, including Congress and the Pentagon.  She is also a global advisor to the PM World Journal and Library.

Becky can be contacted at rebeccawinston@yahoo.com.

 

 

Alexander and the Indian King: Part 4

 

COMMENTARY

By John Schlichter

Georgia, USA

 


 

Prudence

PMI’s decisions regarding OPM3’s Capability Statements and subsequent standards pertaining to OPM degraded PMI’s ability to achieve its purpose and set the stage for a new level of commercialism, which is explained in empathy episode #6, the culmination of all previous empathy episodes: the cru de ta. The episodes leading up to this one demonstrated PMI’s logic, which has conflated advocacy for project managers with expanding commercial endeavors associated with professional services for organizations that implement strategies through projects, e.g. ProductSuite and HSI. This conflation appears to have resulted in gaps between PMI’s current strategy and its execution, which PMI has not clarified adequately despite repeated requests for answers (which creates the risk of a fallacy of ambiguity, reification, or hypostatization). I have tried and failed repeatedly to obtain answers from PMI that would mitigate this risk.

My firm, OPM Experts LLC, abandoned OPM3 when PMI bought HSI, and we developed a proprietary model to replace OPM3, which is the Strategy Implementation Maturity Protocol for Learning Enterprises (SIMPLE®). From the first day OPM Experts began marketing SIMPLE® in 2016, the firm has used the image of a maze with a vivid red arrow cutting through it as the only image to brand the offering (Figure 4). Soon thereafter, despite the PMI BOD’s apparent strategy to pivot away from organizational consulting and back to helping individual practitioners of project management demonstrate their professionalism individually, PMI launched a marketing campaign in the latter part of 2017 called the “Brightline Initiative” designed to “generate interest in and demand for project management capability within organizations.” PMI’s Brightline website emphasized “smart simplicity” as a key principle of its campaign and used the image of a maze with a bright line cutting through it to convey this idea.

Indeed, Brightline’s lead consultant narrated a video rendering of a bright arrow cutting through a maze to bridge the gap between strategy design and execution, emphasizing the word “Brightline” in punctuated plosives suggesting the “Brightline” brand’s derivation from an image of this vivid arrow cutting through a maze. In effect, OPM Experts LLC, widely known for having led the creation of OPM3 and for being a leading provider of maturity assessments and capability development programs pertaining to bridging the gap between strategy design and strategy execution, created an alternative to OPM3 that emphasizes simplifying strategy implementation in smart ways and branded that with a bright line cutting through a maze, and immediately thereafter, PMI did precisely the same thing. I know great minds think alike, but naturally I had some concerns.

Figure 4: Before PMI created Brightline and began marketing the need to simplify strategy implementation, which was a message PMI paired with the image of a bright line cutting through a maze, OPM Experts LLC had already launched SIMPLE© to propose simplifying strategy implementation, using the image of a bright red line cutting through a maze.

PMI’s officials and the consultants PMI had hired to carry out the Brightline Initiative appeared to me at first to present Brightline and PMI discretely, framing Brightline as its own thing though Brightline was conceived by PMI and funded by PMI to advance PMI’s interests. Many people were shocked to learn Brightline was a PMI action when I began telling them so as I wrote this article, but PMI’s corporate communications about Brightline have since improved on the specific point of clarifying the relationship between PMI and Brightline. At the bottom of the “About” page on the Brightline website, PMI has stated clearly that the Brightline Initiative is led by PMI. Overall, this appears to have been a rebranding effort, paving the way for PMI to embark on various sorts of commercialism, including some varieties PMI has tried before and other varieties that are unprecedented in PMI’s history (per Figure 5).

More…

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How to cite this article: Schlichter, J.  (2019). Alexander and the Indian King: Part 4; PM World Journal, Vol. VIII, Issue VIII, September. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Schlichter-Alexander-and-the-Indian-King-Part4.pdf

 


 

About the Author


John Schlichter

Atlanta, GA, USA

 

 

 

John Schlichter coined the term “Organizational Project Management” or “OPM,” which is the system for implementing the business strategy of an organization through projects. OPM became a global standard and is how companies throughout the world deliver projects valued in billions if not trillions of dollars. “John has contributed greatly to PMI,” Greg Balestrero, CEO, PMI Today, 2002. “In John’s role as the leader of PMI’s OPM3 program, he has immeasurably contributed to the growth of the profession,” Becky Winston, J.D., Chair of the Board of Directors, PMI Today, 2002. Having created OPM3© (an international standard in project, program, and portfolio management), John founded OPM Experts LLC, a firm delivering OPM solutions and a leading provider of maturity assessment services. Industry classifications: NAICS 541618 Other Management Consulting and NAICS 611430 Training. John is a member of the adjunct faculty of Emory University’s Goizueta Business School.

John can be contacted at jschlichter@opmexperts.com or frank.john.schlichter.iii@emory.edu.

To view more works by John Schlichter, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/john-schlichter/

 

 

Comparative Analysis of Project Management Frameworks

and Proposition for Project Driven Organizations

 

ADVISORY ARTICLE

By Tarun Mohindra and Madhur Srivastava

DRDO – Institute of Technology Management

Mussoorie, India

 


 

ABSTRACT

Risk and uncertainty are inherently associated with every novel developmental effort. Project Management integrates a variety of activities undertaken to successfully achieve project objectives. Various organizations across the globe have developed frameworks for guidance in these activities focused on different facet and elements in projects. In this paper based on open source literature review information about various project management frameworks is obtained, and a brief description of various frameworks for project management, their evolution, global utilization, their comparative analysis and tradeoff is presented. The mandate of Defence Research and Development Organization to indigenously develop defense technology and systems and become self-reliant is dependent on technological innovations and development which is managed using Procedures for Project Formulation and Management in DRDO (PPFM) guidelines. To attain the project objectives within time, budget and scope (QRs) constraints, over the years a systematic framework is devised. The intent of this research is to obtain best project management practices from available frameworks, assess their applicability and to enrich DRDO PPFM 2016 framework by augmenting it with the available best practices.

Keywords: Project Management, Global Project Management Frameworks, Comparative Analysis.

 

  1. PREAMBLE

Technology development efforts are best managed by implementing project management strategies. The utilization of these strategies facilitates mitigation of risks and uncertainty associated with developmental efforts of a novel product or process. All projects are unique endeavors, and one size does not fit all [1]. A diamond shaped framework presented by Shenhar & Dvir[2] assists in demarcating projects based on 4 dimensions namely, Novelty addressing the uncertainty of goals, Technology describing the level of technological capability required, Complexity referring to system engineering approach of product complexity and Pace taking time as dimension stating urgency of project.

To attain project objectives within time and budget constraints, the framework encompassing project activities must adjust with the environment, the task, and the goal, rather than stick to one set of rules. Projects have existed, and have been managed, since medieval period; however project management, in its modern form, its language, tools, techniques and concepts, first appeared in the early 1960s. IPMA (formerly known as INTERNET) traces its history back to 1964[3], and rests at present with development of GAPPS (Global Alliance for Project Performance Standard) in 2012. Applicability of various frameworks in varying degrees to meet the need projects is dependent on quality standards; customer satisfaction and benefit realization and hence no individual framework includes entire spectrum of knowledge required to successfully terminate a project. Various industries, global regions have their own preferences in choice of framework.

Defence Research & Development Organization (DRDO) Govt. of India has also developed its restricted framework called PPFM (Procedures for Project Formulation and Management) [4] which encompasses the timeframe from pre-project activity to the post-induction life cycle support. The general tenets of project management were brought out in PPFM 2006 and were updated in PPFM 2014 & 2016. PPFM 2016 has brought out a common and standardized management framework for planning, sanctioning, reviews and accomplishing projects for seven different technology clusters of DRDO [4]. DRDO being an organization undertaking projects across spectrum of readiness levels from ab-initio research to proven system for induction into service can provide a roadmap to undertake projects in Indian context, using a structured framework.

A framework by definition is a basic structure underlying a system, or concept. Various Project Management frameworks intend to increase the project success rate by putting emphasis on different prospective. The frameworks are classified into [5]:

  • Standards – A standard is a document established by an authority, custom, or general consent as a model.
  • Methodology – A methodology is a system of practices, techniques, procedures, used by those who work in a discipline.
  • Guides – A Guide is a foundation upon which organizations can build methodologies, policies, procedures, rules, tools and techniques, and life cycle phases needed to practice a discipline (project management)
  • Manuals – A manual is a book giving instructions or information to be adhered to.

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How to cite this article: Mohindra, T. and Srivastava, M. (2019).  Comparative Analysis of Project Management Frameworks and Proposition for Project Driven Organizations, PM World Journal, Vol. VIII, Issue VIII, September. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Mohindra-Srivastava-comparative-analysis-of-project-management-frameworks.pdf

 


 

About the Authors


Sh. Tarun Mohindra

Mussoorie, Uttarakhand State, India

 

 

 Sh. Tarun Mohindra has received his B.Tech. in Mechanical Engineering and MBA in Operations Research. He is serving Institute of Technology Management, Mussoorie as Sc. ‘G’ and has experience of over 25 years in Technology Management. His research interests include Technology Management, Project Management and Science Diplomacy

 


Madhur Srivastava

Mussoorie, Uttarakhand State, India

 

 

 

Madhur Srivastava has received his B.Tech (Mechanical Engineering) from Dr. APJ Abdul Kalam Technical University, Lucknow and M.Tech. from Defence Institute of Advanced Technology, Pune in Aerospace Engineering. He is presently working as Junior Research Fellow at Institute of Technology Management Mussoorie with research focus on Project Management and Technology Management from October 2018. Madhur Srivastava can be contacted at msrivastava.itm@gmail.com

 

The Digital PMO

How PMOs need to Digitalize themselves and evolve to support their organization Digital transformation

 

ADVISORY ARTICLE

By By Waffa Karkukly, PhD and Ian Laliberte, MBA

Ontario, Canada

 


 

Abstract

Congratulations! Your executives are ready to go Digital. Is your PMO ready to become Digital?

PMOs have proven their success and their worth in the industry; we do not need to re-prove this fact.  This series of three articles will explore the need for PMOs to digitalize themselves and evolve towards their organizations’ needs in order to support their organization digital transformation. In the first article, the authors will shed light on PMOs today and explore, what it means for PMOs to digitalize themselves and the areas of focus to achieve a DTPMO (Digital PMO).  In the second article, we will explore how DTPMOs can shift the current thinking to forward thinking and facilitate their organization digital transformation to move from a project base focus to a product base focus. In the last article, the authors will focus on the ultimate future destination for the digital office to become the core unit in their organizations to connect all CoE’s (Center of Excellence) and sustain a product/platform-based organization.  Furthermore, we will share a case study that explores the digitalization journey, and how one organization was successful in their transformation.

Key Words: Digital PMO, DTPMO, DTMO, EPMO, SPO, SRO, CGO,

Introduction

(Gartner 2019) Nearly two-thirds of CEOs and senior business executives already have a digital business transformation initiative underway at their organization. Some 90% of corporate leaders view digital business initiatives as a top priority, but 83% are not making any meaningful progress. In addition, 60% of EPMOs are not aligned to the strategic direction, or ready to enable their organization digital transformation.  PMOs need to become digital themselves before they are able to support their organization’s digital transformation. The industry is predicting that by 2021 which is less than two years from this article date, a 50% of large organizations will have hubs to enable digital transformation (e.g. Digital COEs, Transformation COEs, Agile COEs, etc.).  For who is leading the way?

Elements for Digital Transformation

“Future proofing your business as Digital is woven into everything we do” (Deloitte, 2019). This statement speaks to how digital is shaping our everyday life at the individual level and as consumers of products and services, soon will demand services if organizations are not embracing and moving forward faster than their competition, they might be left behind. First, what does it mean to be digital? Organizations today are struggling with a consistent definition to what “digitalization” means, to some it is automating the business including client experience via mobile, social media, etc. For others, it is instituting the myriad of practices PPM, Agile, Platforms, PMO, COEs, etc. and trying to make sense of which way will help them compete in the future. Second, what are the main digital transformations elements that drove transformations? They can be summarized into: Automation, Connectivity, Real-time information, Change management, and Risk management. Digital business transformation is changing the PMO/EPMO operating context. Before we explore how we foresee this happens, let’s explore today’s PMO landscape successes and challenges.

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How to cite this article: Vanderjack, B. (2019).  What is the Difference Between DevOps and Scrum? PM World Journal, Vol. VIII, Issue VIII, September. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Karkukly-Laliberte-the-digital-pmo-part1.pdf

 


 

About the Authors


Dr. Waffa Karkukly

Ontario, Canada

 

 

 

Dr. Waffa Karkukly, PhD, MIT, PMP, ACP, CMP has over 20 years’ experience in IT, and Project Management. Waffa has helped fortune 100, midsize, and small sized organizations improve their project management practices and PMO establishments through building scalable standards and proven solutions that improved their delivery process. She held many positions ranging from big 5 to small startups where she held the responsibility of managing IT strategy and operation; in her career progression she became head of PMO with titles ranging from director to VP, responsibilities ranging from $50 million to $1billion in Enterprise assets for global and international organizations.

Waffa is a strategist and change agent who had many organizations’ transformations in building agile organization culture and building CoE for IT organizations. Waffa teaches various beginners and advance project management and IT courses at various Ontario universities and colleges. She is a program and curriculum lead developer for variety of topics aligning education certificates with practical industry needs and trends.

Waffa holds a BSC in Information Systems from DePaul University, an MIT from Northwestern University, and a PhD from SKEMA School of Business. She is a Project Management Professional (PMP), Agile Certified Professional (ACP), and Change Management Practitioner (CMP) who is dedicated to improving the understanding and standards of project management practices especially in the Value proposition of Strategy execution via Portfolio Management and PMO.

Waffa is an active PMI member who has held various positions of Director of Communication for the PMO CoP and Regional communication coordinator for the PMOLIG. Waffa was one of the committee members that built the standards for PMI-OPM3. She is a volunteer and an Academic Reviewer for PMI’s academic paper proposals selection. She contributes often in project management publications and is a frequent speaker in project management chapters and forums.

Dr Karkukly can be contacted at karkuklyw@yahoo.com

 


Ian Laliberte

Ontario, Canada

 

 

 

Ian Laliberte, MBA, PMP, PRINCE2, is Vice President of Delivery Transformation, responsible for the TD’s strategy and transformation to ‘Agile Ways of working’. Ian joined TD in January 2014 as Vice President, Canadian Banking, Auto Finance and Wealth Management PMO and led the transformation of the project execution framework. In this role, he was responsible for managing the end-to-end delivery of the change portfolio for both business and technology initiatives.  From there, Ian then took on the role of Vice President of Delivery, Shared Services, where he was responsible for strategy, operating model and overall operations of IT for Canadian Banking and Wealth.

In over 20 years he has held senior positions leading business and IT transformation through turnaround, realignment and revitalization within international distribution, manufacturing, insurance (Life and GI) and banking industries.  Before joining TD, Ian held diverse Information technology, Project Management, and leadership roles at Canadian Bearings.  He has also held executive technology roles with Aviva Insurance, which included Change and IT Strategy, EPMO, Management Information & Analytics, and he has led Commercial Lines business transformation and the implementation of a business and operating model for Aviva’s Digital business.

Ian graduated from New York Institute of Technology with an MBA in Global Management. Ian’s leadership thinking has also been recognized as part of the top 50 thought-leaders in change excellence, and he has been published in 2014 Project Management Best Practices: Achieving Global Excellence – 3rd Ed (by Dr. Kerzner), collaborated in 2012 Managing the PMO Lifecycle, by Dr. Karkukly, and many other recent PMI article and publications on standards.

Ian can be contacted at ian.laliberte@sympatico.ca

 

 

 

4. Context of project dimensions

 

Series on Project Contexts

By Alan Stretton, PhD (Hon)

Sydney, Australia

 


 

INTRODUCTION

This is the fourth of a series of seven articles which identify and discuss a variety of key contexts which impact on the management of projects. The basic reason for developing this series is that there is far too little attention given to the contexts of projects in the relevant literature – particularly when you consider that, in practice, effective management of projects’ contexts is usually quite critical to achieving overall project management (PM) success.

The first article of this series (Stretton 2019e) identified six key types of project contexts. These were summarised pictorially into a combined model, depicted in skeleton format in Figure 1 to the left.

The second article of this series (Stretton 2019f) was concerned with the context of organisational strategic management, and the third (Stretton 2019g) with the contexts of projects being undertaken by supplier organisations (SOs), and by owner organisations (OOs). This fourth article is concerned with the context of what Shenhar & Dvir 2007 describe as project dimensions. Its place in Figure 1 is illustrated by bolder typeface and a heavier outer border.

 

RECAPPING DISCUSSIONS OF THE CONTEXT OF PROJECT DIMENSIONS IN THE FIRST ARTICLE

I discussed aspects of this context in Stretton 2019e, under the following headings.

The NTCP model of Shenhar and associates

NTCP is shorthand for what Shenhar and colleagues describe as the four project “dimensions” of Novelty, Technology, Complexity, and Pace. In Shenhar et al 2016 these are described as follows.

NOVELTY: Market Innovation – How new is the product to the market, users, and customers.

TECHNOLOGY: Technological Innovation – How much new technology is used

COMPLEXITY: Level of System Innovation – Represented by the complexity of the product or the organization.

PACE: Urgency of the Innovation – How critical is your time frame.

In the last version of the NTCP model that I know of (Shenhar et al 2016), each of the four dimensions has four levels, as indicated in Figure 6. The heavily outlined diamond illustrates a project with rather low levels of each of the Novelty, Technology, Complexity and Pace dimensions.

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How to cite this article: Stretton, A. (2019). Title, Series on Project Contexts, article 4; PM World Journal, Volume VIII, Issue VIII, September. Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Stretton-4-context-of-project-dimensions-series-article.pdf

 


 

About the Author


Alan Stretton, PhD      

Faculty Corps, University of Management
and Technology, Arlington, VA (USA)
Life Fellow, AIPM (Australia)

 

 

Alan Stretton is one of the pioneers of modern project management.  He is currently a member of the Faculty Corps for the University of Management & Technology (UMT), USA.  In 2006 he retired from a position as Adjunct Professor of Project Management in the Faculty of Design, Architecture and Building at the University of Technology, Sydney (UTS), Australia, which he joined in 1988 to develop and deliver a Master of Project Management program.   Prior to joining UTS, Mr. Stretton worked in the building and construction industries in Australia, New Zealand and the USA for some 38 years, which included the project management of construction, R&D, introduction of information and control systems, internal management education programs and organizational change projects.  He has degrees in Civil Engineering (BE, Tasmania) and Mathematics (MA, Oxford), and an honorary PhD in strategy, programme and project management (ESC, Lille, France).  Alan was Chairman of the Standards (PMBOK) Committee of the Project Management Institute (PMI®) from late 1989 to early 1992.  He held a similar position with the Australian Institute of Project Management (AIPM), and was elected a Life Fellow of AIPM in 1996.  He was a member of the Core Working Group in the development of the Australian National Competency Standards for Project Management.  He has published over 200 professional articles and papers.  Alan can be contacted at alanailene@bigpond.com.au.

To see more works by Alan Stretton, visit his author showcase in the PM World Library at http://pmworldlibrary.net/authors/alan-stretton/.

 

Providing Risk Infrastructure

to Support Opportunity Management

 

Risk Doctor Briefing

SERIES ARTICLE

Dr David Hillson, PMI Fellow, HonFAPM, FIRM

The Risk Doctor Partnership

United Kingdom

 


 

Failure to provide an appropriate level of risk infrastructure can cripple risk management in an organisation. Too little support makes it difficult to implement the risk process efficiently, while too much infrastructure adds to the cost overhead. Getting the supporting infrastructure right is essential for effective risk management, enabling the risk process to deliver the expected benefits to the organisation and its projects.

This might include choosing techniques, buying or developing software tools, providing training in both knowledge and skills, producing templates for various elements of the risk process, and considering the need for technical support from risk specialists.

It’s particularly important to get each of these elements right if we want to use an inclusive risk process that addresses both threats and opportunities.

  • Techniques. Although the underlying risk process is the same whether we are addressing only threats or considering opportunities as well, some modifications are needed to the standard risk techniques when we’re dealing with opportunities, and there are also specific additional techniques that we might employ. For example, we might use SWOT Analysis or Force Field Analysis to identify opportunities alongside threats. We’ll need a double P-I Matrix to prioritise both types of risk by probability and impact. Risk response strategies for opportunities are different from threat-based strategies.
  • Tools. Many current popular risk software tools don’t have the functionality needed to include opportunities. We need risk software tools that cover both threats and opportunities, especially for more complex projects that require an in-depth risk process with more detailed analysis.
  • Training. Many risk training courses still focus exclusively on threats, leaving project team members lacking in both the knowledge and skills required to address opportunities effectively.

 

More…

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How to cite this paper: Hillson, D. (2019). Title, Risk Doctor Briefing; PM World Journal, Volume VIII, Issue VIII, September.   Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Hillson-risk-infrastructure-to-support-opportunity-management.pdf

 


 

About the Author


Dr David Hillson HonFAPM PMI-Fellow CFIRM CMgr FCMI

The Risk Doctor

 

 

 

Known globally as The Risk Doctor, David Hillson leads The Risk Doctor Partnership (www.risk-doctor.com), a global consultancy offering specialist risk services across the world.

David has a reputation as an excellent speaker and presenter on risk. His talks blend thought-leadership with practical application, presented in an accessible style that combines clarity with humour, guided by the Risk Doctor motto: “Understand profoundly so you can explain simply”.

He also writes widely on risk, with eleven major books, and over 100 professional papers. He publishes a regular Risk Doctor Briefing blog in seven languages to 10,000 followers, and has over 4000 subscribers to the RiskDoctorVideo YouTube channel (www.youtube.com/RiskDoctorVideo).

David has advised leaders and organisations in over fifty countries around the world on how to create value from risk based on a mature approach to risk management, and his wisdom and insights are in high demand. He has also received many awards for his ground-breaking work in risk management over several decades.

To see other works previously published in the PM World Journal by Dr David Hillson, visit his author showcase at http://pmworldlibrary.net/authors/dr-david-hillson/

 

 

Choosing the best project delivery method

for contractor success

 

FEATURED PAPER

By Vishnu Nair

SKEMA Business School

UAE and Paris, France

 


 

ABSTRACT

Failure of projects in the construction industry is a common notion and it is widely increasing with time and different constraints. In this paper we have managed to analyze the various reasons for contractor failures, how contractors can be protected by surety companies and mainly classified and analyzed between the different project delivery methods of projects to arrive at a conclusion “the best project delivery method” that supports successful delivery. Project delivery method defines the process by which we understand the roles and descriptions of the jobs of each personnel in the project undertaken and it is necessary to choose the right project delivery method for the significant project; as identified project delivery method is also one of the main reason that leads to contractor failures. Hence we must identify and categorize the project into the required delivery method and this paper justifies this choice of decisions on a number of attributes related to the alternatives.

Keywords:      Contractors, Construction, Failure, Surety, Industry, Project management, Portfolio, Project delivery method, Control, Schedule

INTRODUCTION

The construction industry is an exceptionally widespread industry comprising of activities that range from quarrying, mining, construction of buildings or infrastructures, supply and manufacturing of products and also consists of operations, maintenance and disposal. “The construction industry has proved to generate an output of £110 billion per annum and also contributes to 7% of the GDP in the UK according (to ref Government Construction Strategy)”[1]. Such a widespread and growth promoting industry is interdependent on other industries and hence has a higher rate of chance of failure. “Shedding light on the U.S data of census from 1989 to 2002 the average failure rate in the construction industry is almost 14% which is higher than other industries that sum up to only under 12 percent”[2].

Contractor failure is a miserable and at times a pre-destined circumstance. “According to reports from Bizminer, an analysis of the industry showcased that out of 850,029 contractors operating in the construction industry in 2004 only 649,602 prospered by 2006 which equivalents to a 23.6% failure rate. It also states that companies that had a lifespan of less than a year had an even higher failure rate of 36.8%”.[3]

Figure 1. Fish bone diagram of root cause analysis of Failure of Contractors in the construction industry[4]

We can infer from the fishbone diagram the reasons that contractors fail are due to firstly ineffective and inefficient project planning that lacks a good business plan which covers the finance, marketing and development aspects of a company. It also includes not assessing or considering all the risks that may arise during the course of a contract. The absence of such plans can lead to an inability to withhold and forecast developments or changes that can be external or internal. Secondly, strong factors that come from the client side such as change orders in the project which makes it hard for the contractors to adapt accordingly and contain the risks related. As well as to add, delays in validating funds and documental signatures which expands the scope of time. Thirdly, inappropriate accounting which is a major factor that is required to support any project and is the engine which runs the project. Lastly, external factors such as government policy changes or character issues of the contract such as no management plan for the transition of posts in the case of a death or disability of a member.

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Editor’s note: This paper was prepared for the course “International Contract Management” facilitated by Dr Paul D. Giammalvo of PT Mitratata Citragraha, Jakarta, Indonesia as an Adjunct Professor under contract to SKEMA Business School for the program Master of Science in Project and Programme Management and Business Development.  http://www.skema.edu/programmes/masters-of-science. For more information on this global program (Lille and Paris in France; Belo Horizonte in Brazil), contact Dr Paul Gardiner, Global Programme Director paul.gardiner@skema.edu.

How to cite this paper: Nair, V.B. (2019). Choosing the best project delivery method for contractor success, PM World Journal, Vol. VIII, Issue VIII, September.  Available online at https://pmworldlibrary.net/wp-content/uploads/2019/09/pmwj85-Sep2019-Nair-choosing-best-project-delivery-method-for-contractor-success.pdf

 


 

About the Author


Vishnu B. NAIR

Paris, France

 

 

 

Vishnu Nair is a Mechanical engineer pursuing his Masters in project management and business development in SKEMA Business School, Paris. Born and brought up in the United Arab Emirates and completing High school from the emirate of Abu Dhabi with distinction, he moved to India to complete his Bachelor of technology in Mechanical Engineering from an esteemed Institution of National Importance (National Institute of Technology Rourkela) where he managed to obtain his degree with first class division. He managed to gather work experiences during his internships between his college semesters abroad and across the Middle East from MNC’s like Parsons International Limited. He completed his last assignment in Doha, Qatar under Lotus Contracting. Currently furthering the education by the way of distance learning mentoring course under the tutoring of Dr.Paul D.Giammalvo and also completing his second semester under his Masters.

Vishnu is currently living in Paris, France and is actively looking for international opportunities and internships and can be contacted at vishnu.nair@skema.edu.

 

[1] Assets.publishing.service.gov.uk. (2018). https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/61152/Government-Construction-Strategy_0.pdf

[2] Anon, (2018): https://www.census.gov/const/www/cci/frames.html

[3] Bizminer.com. (2018): http://www.bizminer.com/reports/samples/industry-financial.pdf

[4] By Author, with reference to Robles, G., A. Stifi, José L, Gentes, S., & Tienda, P. (2014). Labor Productivity in the Construction Industry -Factors Influencing the Spanish Construction Labor Productivity.