The QA&BI Team holds the Tuesday Talk event to support knowledge sharing in many fields that KOC employees are interested in, and enables them to develop their expertise to support the business and company in general.
Recently, Ramesh Damodaran, a TPL Specialist from the Contracts Team I delivered a presentation to explain project phases, and common pitfalls that may affect its success, as well as some planning perspectives.
A Project can be defined as a set of interrelated activities performed by individuals or by a collaborative enterprise to achieve a specific objective. Building a refinery, laying of cross country pipeline, imparting education to children in remote areas by voluntary organizations, implementing ERP software for a company are some of the varied examples of projects.
As entities invest a lot of time, effort and resources to complete a project, it is imperative that it must be implemented successfully. A project is deemed to be successful if it is completed within the estimated cost, time and at the desired quality. It is essential that all stake holders – (both internal and external) responsible for the project have a good working relationship and are committed to ensure its success.
Project phases:
In general, a project goes through 4 distinct phases. The first is conceptualization, and during this stage the owner analyzes various options available and finalizes the objective. It is essential for owners to conduct a detailed survey to identify all possible options and perform a cost benefit analysis prior to finalization. Then comes the planning phase, and aving identified the objective, the owner needs to arrange for the funds required and decide on the strategy for implementation in addition to finalizing the duration required, the level of quality to be maintained and the location where the project is to be implemented. This is by far the most critical stage which invariably is not given the level of importance that it requires.
Third is the implementation phase, which comes after putting the plan in place, and it constitutes the activities of this phase. This may include performing the engineering design, procurement of material, construction and commissioning either directly or through contractors. This phase normally would be the longest and consumes lots of resources and funds.
Finally, the closure phase marking the project completion, and may include a warranty period after which the project is financially closed by settling the outstanding dues and handing over the responsibility to the production team.
The above four phases as a whole is termed as ‘Project Life cycle’. The duration varies with the magnitude and nature of project. The average project life cycle for a major project in KOC may range between 6 to 7 years duration. Challenges can be faced by the executing teams at any of these stages if not addressed in the correct manner and at the right time, may lead to failure of the project.
Perspectives:
The Japanese are regarded as some of the best planners. A Japanese manager who is given the responsibility of a project spends a considerable amount of time in meticulously planning how to implement the project. The plan takes in to account all the risks involved and includes an alternative plan in the event the original plan meets any hurdles.
In the Japanese culture, if a project runs into a challenge that has not been accounted for in the plan, then the Project manager is considered a failure even if he manages to overcome the situation and completes the project within the cost and time.
In the rest of the world, Project Managers take pride in being projected as “Fire Fighters” and prefer to “Hit the ground running” instead of spending time on a reliable plan.
Project failure may have a huge impact on several fronts, in addition to directly affecting the client / owner. Companies may go bankrupt thereby resulting in loss of jobs to the existing and future employees. In addition, it may also impact the end users who may not be able to utilize the benefit that the project is intended to provide.
Multiple reasons:
he following is the list of most common causes that are responsible for project failure and some of the mitigation measures that a Project Manager could follow to avoid them:
1. Lack of clear objectives
-Objectives should be clearly identified and accepted by all stakeholders prior to start of work.
-Identify indicators that help you to assess achievement.
-Make objectives SMART (Specific, Measurable, Achievable, Realistic and Timely).
2. Understated scope
-Ensure clearly defined Project scope up front to ensure that Contractors / vendors do not find any surprises that may have a commercial impact.
-Rigorous change control mechanism to authorize changes e.g. “stage gate process” to avoid ‘scope creep’.
3. Risk Management
-Risk assessment to be carried out at the initial stages and reviewed periodically during project implementation.
-Risk registers to be maintained to capture identified risks.
-Ensure terms and conditions of the contract focuses on allocation of risk to the party which is better suited to handle it. Trying to pass on all the risk to contractor may sometimes become counter-productive and result in increase in cost and /or failure.
4. Poor Planning
-Ensure appropriate planning software is used for scheduling e.g. Primavera.
-Project plan to include milestones to identify problems as they emerge.
-Hold periodic meetings to review project status against planned milestones.
-Weightages to be allocated for various activities according to the effort required to ensure that the progress achieved shows realistic figures.
-Corrective action to be taken in a timely manner for identified delays.
5. Poor Communication
-Establish a communication management plan that details which stakeholders will get what information when and through what means.
-Keep channels of communication open at all times among stakeholders.
-Resolve issues through dialogue as and when it arises to ensure that they do not develop in to disputes.
6. Failure to engage stakeholders
-Identify all stakeholders involved in the project
-Engage the stakeholders at the appropriate time and level
-Monitor overall relationship and adjust strategies and plans as needed.
-Give due credit to the stakeholders when success is achieved.
7. Unrealistic Cost estimate and resource levels
-Utilize appropriate software and experts to estimate the correct values of expenditure and resources.
-Ensure that a safety factor is built in the cost estimates to meet any contingencies.
-Deploy optimum resources required for the project.
-Do not try to squeeze the contractors and vendors to cut down costs. It may affect quality of the project.
8. Unrealistic deadlines
-Ensure the specified schedules are tight but achievable.
-Add a safety factor for unforeseen conditions.
-Include incentives for early completion.
-Refrain from imposing stiff penalties / LD’s for delays as this may lead to increase in project cost as contractors tend to factor in the cost in their quotes.
Prepared by: Ramesh Damodaran
|TPL Specialist I (Contracts) | Contracts Group |