Engineering Construction Transformation Challenges & Change Hurdles - How to Build Sustainable Competitive Advantage - Part 2: Value Creation

This is the 2nd part of an article entitle: Engineering Construction Transformation Challenges & Change Hurdles - How to Build Sustainable Competitive Advantage

Project Management in Engineering Construction

It is not a secret to state the fact that project management in the E&C industry is hovering around mediocrity, at best! This is a bad reality especially that many of the problems mentioned above are solved in majority by project personnel. What makes things intriguing is the fact that a high calibre project personnel can altogether prevent the occurrence of these problems; but this is not happening in most of cases.

What contributes i failing to build a holistic value for the firm (and for the industry as a whole) is the unfortunate trend where Management blames the project personnel for being of poor or mediocre calibre, when the Management itself does not support them with a fit-for-purpose construction project management process and documentations that are aligned and linked with ISO standards (9001, 14000, 45000) and ERP system. When such systems do exist, unfortunately they are not properly trained upon, not followed by all without exemption, and/or not maintained to reflect clients’ needs and industry changes. Another unfortunate trend is where project personnel contribute heavily to the failure in properly implementing a project management system, blaming the corporate for not being reasonable to the realities of the project’s complexity and challenges.

The cause of this blame-game between the two teams stems from lack of alignment and understanding of the different realities, assumptions, and challenges that govern each ecosystem. This famous proverb rings many bells: “It takes two to tango!”

Thus, to work collaboratively it is imperative to align and understand the different perspectives of the two teams. If this is done correctly and collaboratively, the results would be an engineering construction company-tailored Project Management Office (PMO) that:

1. improve project management practices, resulting in better control over project scope, schedule, and budget, leading to higher project success rates, better customer satisfaction, and increased profitability.
2. establishes standardized project management processes and methodologies, ensuring consistency across projects and minimizing the risk of errors and omissions.
3. provides visibility into resource availability and utilization to optimize resource allocation, resulting in better resource utilization and improved project outcomes.
4. facilitates communication and collaboration among project teams, stakeholders, and senior management, ensuring that everybody is aligned and working towards common project goals.
5. identifies and mitigate project risks, ensuring that potential issues are addressed early and proactively, reducing the risk of project delays and cost overruns.
6. tracks project performance against key performance indicators (KPIs), providing visibility into project health and identifying areas for improvement.
7. streamlines project management activities, reducing administrative burden and freeing up project teams to focus on delivering project outcomes.
8. create one source of Truth, eliminating wrong and miss-information through a centralised digital platform

Project Management Personnel

The best of systems would not function if proper training were not done adequately.

Young project personnel got employed in the first place because they have the minimum requirement, which is in most cases a university degree. However, they do not carry skills in project management and thus they must learn it, either by observing and doing (and what they currently observe is not worthy of learning) or by getting trained and upskilled to think of projects as business, technical, and managing endeavours. As engineering knowledge must be learnt, so must engineering construction project management knowledge.

With the advancement of systems thinking and aligned governance mechanisms, a PMO can be connected to ISO and ERP (construction-tailored). Management must keep in mind that it is essential to get these three systems linked together collaboratively to provide the compounded benefit that overspills to other functions in the corporate. This topic is big enough to deserve its own article.

A well-trained team on a well-established (aligned and linked to ISO and ERP) and fit-for-purpose construction project management process and documentations can benefit the project through:

1. Better alignment between the different internal stakeholders
2. Better understanding of the relationship with external stakeholders
3. Improvement on performance and productivity because obligations, duties, responsibilities, and accountabilities are clear
4. Clarity on schedules and inherent risks for better planning and follow-up
5. Access to and clarity of the required procedures and method statements
6. Visibility on technical and business risks to avoid delays and disruptions
7. Production with high-quality workmanship that abides with HSE
8. Elimination of bad behaviours and minimum tolerance for poor performance
9. Minimisation of time and material waste that improves performance and productivity
10. Avoidance of wrong, delayed, and/or missing paperwork and reporting
11. Improvement on progress reporting that can minimise billing issues and consequently cashflow disruptions
12. Better management of subcontractors, with all the good things that come with it
13. Transparency for better relationship with Engineer/Consultant and Client
14. Building holistic business and project management thinking that encourages innovation to solve ad-hoc problems
15. Higher chance to spot stars for future leadership positions

For an E&C firm to manage what it can control, it must have fit-for-purpose project management processes, methods, and procedures ... ?Equally important, Management must have the tools to encourage project personnel to learn and follow them

To build and sustain a successful PMO that is linked to other corporate systems, Management must work relentlessly on building competent and skilled project and corporate teams.

To conclude on Project Management

To transform the project management ecosystem into a true value-creation entity, a shift in management thinking is required towards establishing fit-for-purpose project management office that helps to

1. achieve consistency in project management processes,
2. centralises and consolidates all data and information in one repository,
3. ensure that the projects are delivered on time, within budget, and meet the desired quality standards,
4. make informed decisions about project progress and performance.

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Project management is an art for dealing with soft issues and a science for dealing with hard issues. It must be learnt and mastered if we want to achieve the sought-after transformation in the E&C industry.

Next article (Part 3) will cover Strategic Management, a table on Change Management, and a final Conclusion: https://www.dhirubhai.net/pulse/engineering-construction-transformation-challenges-change-fadi-bayoud-2f

Related Articles:

1. Engineering Construction Transformation Challenges & Change Hurdles - How to Build Sustainable Competitive Advantage - Part 1: Setting the Scene: https://www.dhirubhai.net/pulse/engineering-construction-transformation-challenges-change-fadi-bayoud/
2. Engineering Construction Transformation Challenges & Change Hurdles - How to Build Sustainable Competitive Advantage - Part 3: Support Value Creation: https://www.dhirubhai.net/pulse/engineering-construction-transformation-challenges-change-fadi-bayoud-2f