Project Delivery | Scheduling | Cost Controls | Disputes & Claims | Risk Management

AACE International and Project Management - http://www.aacei.org/
President’s Message
Cost Engineering Vol. 49/No. 8 AUGUST 2007 3
William E. “Bill” Kraus, PE CCE
President

Certified Portfolio, Program and Project Management (C3PM)

With the advent of AACE International’s new Certified Portfolio, Program and Project Management (C3PM) certification program, one might think that our Association is branching out into the broader field of project management. However, the more accurate statement would be that AACE International has been involved in project management from the outset, more than 50 years. Indeed, AACE International’s Recommended Practice 10S-90, Cost Engineering Terminology, defines cost engineering as the field where, “judgment and experience are used in the application of scientific principles and techniques to problems of estimation; cost control; business planning and management science; profitability analysis; project management; and planning and scheduling.” Project controls is an essential element of project management and project controls professionals have successfully practiced the principles of project management in developing, maintaining, and producing our schedules, estimates, business plans, forensic schedule analyses, and other deliverables as long as we’ve been at work.

However, the C3PM certification program allows us to bring together a program of strong project management principles and procedures integrated with people skilled in the exercise of both the technical skills, as well as the interpersonal skills, required to effectively manage projects and collections of related projects. For as Jim Zack states in the C3PM brochure (click here), “The key to the cost effective management of project, programs, and portfolios is not software, but competent people.” In fact, effective project management
involves well-integrated coordination of proven management principles with the people skills necessary to have a project team function as a unit. In my experience, functioning as a unit is one of the two major hurdles to accomplishing project objectives. That’s where the interpersonal skills come into play. Working with a project team comprised of people from different organizations, with differing backgrounds and jobs, perspectives, priorities, and objectives, ethnic and cultural backgrounds, etc. and getting them to function as a team with a common goal is a big job. This demands from the leader skills that industry seems to assume that they all come equipped with. It requires not only the ability to manage budget, schedule, resources, quality, and other technical aspects of the project, but also the ability to shepherd the quality of our services, expectations, relationships, accountability, and communications toward the accomplishment of project objectives. This entails application of people skills such as problem-solving, teamwork, leadership, critical analytical thinking, time management, managing relationships, attitudes, and expectations, and the ever-critical communications, to the problems raised in the day-to-day managing of projects, programs, and portfolios. The other hurdle is failure on the part of the project team to adhere to accepted principles of project management and established project procedures.

Therein lies, in my opinion, the key to successful project management—the discipline brought by good project
controls to cause adherence to the principles of project management and established project procedures. Whether it’s maintaining a scope control program and taking appropriate action when that program indicates that the approved scope is being violated, establishing a schedule baseline and refusing to accept a schedule update that violates the baseline without approval, or dealing with an estimate that exceeds the approved budget before allowing design to proceed to the next step, the mandates of effective project management are aided by the practice of project controls. Indeed, I believe that successful project management hinges on effective application of project controls.

Referring again to AACE International Recommended Practice 10S-90, Cost Engineering Terminology, project controls entails “1) project planning including establishing project cost and schedule control baselines; 2) measuring project performance; 3) comparing measurements against the project plans, and; 4) taking corrective, mitigating, or improvement action as may be determined through forecasting and further planning activity.” Seems to me a lot like the old “Plan / Do / Check / Act” Shewhart Cycle of Total Quality Management (TQM) days. I’ll wager that we’ve all seen projects wherein the first three steps of the project control cycle were accomplished with aplomb, but the “Act” part of the cycle—the corrective, mitigating, or improvement action—is missing or incomplete. Plans were developed, baselines established, work was performed, actual performance measured and compared against those plans. But when it came to taking action to reduce the variances of actual against planned, things tapered off. Inadequate, incomplete, inappropriate, or no corrective action was taken. The reasons for this failure are many and revolve around our fallibility as human beings. Often the project team fails to take heed, ignoring or even failing to read variance reports. In other instances, they don’t believe the variances are real. In still other situations, they believe they represent spot or start-up variances that can be corrected quickly before the trend becomes permanent and uncorrectable. And often, higher authorities need to be convinced before action can be taken. But the reality is that appropriate corrective action on variances needs to be taken immediately upon identification of variances as the opportunity to affect positive change economically diminishes quickly with the passage of time. This is where the emphasis needs to be on the interpersonal skills, developing a plan of corrective action, communicating the need to the team, to management, to stakeholders, in short, to those who need to know. If people need to be convinced, the arguments need to be formulated and presented. It is the project team’s responsibility to identify situations where baselines are not being met and variances exist, for developing plans for correction, and for obtaining approval for corrective actions, and then implementing them. Those responsible for authorizing corrective steps need to be informed of the ramifications of failure to act. Often correction can involve legal steps and can revolve around project dynamics (i.e., politics). A well-positioned project team will be aware of the implications and will manage those as well as other aspects to affect a satisfactory solution.