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Fuelling change in project management

ANALYSIS; Civil engineering clients still have much to learn about project management. But the successes of the oil industry are there to be used as a springboard, argues Garth Ward.

Civils demonstration projects put forward under the post Egan Movement for Innovation offer 'integrating the supply chain' as a characteristic to be measured - a worthy aim in view of the isolated way projects have been carried out in the past.

But if it is to be meaningful, it must also involve the integration of the client, consultant and contractor, not just the suppliers.

Any cultural change programme must be led from the top, with clients taking the project management inititiave. If led by middle management, the programmes often fail.

It will take significantly longer to implement cultural change if it is led from the centre of a project by contractors without top management backing and involvement from the client. There is also a good chance of failure - the benefits for both parties are unlikely to be realised. The contractor taking the lead in a risk/ reward sharing consortium may prove an insurmountable obstacle.

The problem in construction is that, on the whole, the civils client lacks maturity and sophistication in the project management process.

For example, the largest clients have had experience with large projects, so are mature, but are still at the low end of the sophistication scale. They are often so averse to risk - almost to the point of paranoia - that they mistakenly believe that all risk can be off loaded on to the contractor. Despite signs that they are now accepting some risks will not go away, it is doubtful they could take the lead in an alliance type project.

To add to the problem, their own project management process as utilised in alliance contracts is flawed. A fundamental principle of project management is that there is one person in charge reporting to, and accountable to, the client - an empowered leader rather than one with a contract administered from a legal perspective.

But an alliance project without full client participation will generate different objectives between the parties. The client will end up behaving in a confrontational manner, with the contractor having to be co-operative with the alliance subcontractors.

For clients this is good. It means that the bulk of the savings are reaped by them but there is little reward for the contractor - as demonstrated by recent correspondence in NCE.

The problem stems from the isolationist behaviour of the civils industry. This is graphically demonstrated by its failure to take on board ideas developed in the oil industry. For example, the offshore oil industry Cost Reduction In a New Era initiative was started in 1992 and the study was completed in 1993. But Latham's report in 1993 makes no mention of the ideas generated by CRINE. It took until 1998 for Egan's Rethinking Construction task force report to talk about alliancing.

Discussions concerning the creation of a 'knowledge centre' or a 'construction club' within M4i, where clients and contractors can share their successes and failures, is another delayed attempt at 'reinventing the wheel'.

The oil industry's First Point Assessment was established in December 1996 and has a similar benchmarking initiative to 'provide opportunities for improvement throughout the supply chain through enhanced knowledge of strengths and weaknesses'.

The onshore process industries have long recognised the opportunity to reduce costs. In 1995 they initiated the ACTIVE - Achieving Competitiveness Through Innovation and Value Enhancement - scheme. By 1996 a three year action plan was in place and operating and in 1998 a regular series of courses for enhancing project management and associated skills was established at Cranfield School of Management.

If civils project managers are to become truly inter-disciplinary project managers, they need to interact with other industries. The industry has already wasted too much time. It must now start to communicate and work together to avoid further mistakes.

But rather than reinventing the wheel, why not join with initiatives from other industries and share experiences of successful project management. This will enhance not only the discipline of project management, but of engineers as a whole.

Garth Ward runs a project management training and consultancy business, Ritchie Ward Associates, and was director of the Masters course in project management at Cranfield School of Management, where he is still consultant lecturer.

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