Programme management is seen by many as something of a dark art; hard to qualify and harder still to quantify the value it brings. NCE teams up with international consultancy and construction company Mace to demystify the practice.
So what is programme management? It’s a simple enough question, but, as with many things in life, the answer is often far more complex. Practitioners are masters at hiding behind jargon and acronyms and clients don’t provide clarity, employing a range of different names for what appears to be the same role; project managers, programme managers, asset managers, delivery partners, programme delivery partners, project delivery partners and construction managers all working within major projects across the UK.
“When people ask what we do as programme managers, we say we are responsible for everything to do with that programme”
Mark Reynolds, Mace
Put simply by Jason Millett, recently appointed as Mace’s chief operating officer for major programmes and infrastructure, “many people don’t really know what programme management is, and its full impact is not understood”. And, given that it’s Millett’s new role to deliver the concept of programme management to clients around the world, clearly it’s in his interest to articulate it so that people do understand.
So can how we demonstrate the value that programme management brings to a client? One major project that was recently delivered to time and to budget was, of course, the London 2012 Olympic and Paralympic Games. So who better to ask to explain programme management than Mace, one third of the CLM delivery partner (CH2M Hill, Laing O’ Rourke, Mace) that supported the Olympic Delivery Authority (ODA) in delivering the venues and infrastructure of a major, international multi-sport event.
“The Olympics is a good example of successful programme management. As the delivery partner on the London 2012 Olympic and Paralympic Games, the ODA wanted us at the very beginning, to have shared responsibility of delivery until the very end,” says Mark Reynolds, newly elected chief executive of Mace, an appointment that will start officially on 1 January.
“This meant managing the key issues that spanned costs, design, schedule, environmental, sustainability, health and safety, equality and diversity, employment and skills, legacy and transformation.”
As far as Reynolds is concerned, it is really quite simple. “When people ask what we do as programme managers, we say we are responsible for everything to do with that programme,” he explains. “That’s helping identify the business case, setting the strategic brief, devising the project solution, setting the cost and time targets, implementing socio-economic targets and making sure that each one of those targets is delivered.”
“Many people don’t really know what programme management is, and its full impact is not understood”
Jason Millett, Mace
“But no one size fits all,” says Mace global services group director Ian Parker. “Programme management can be executed across very different types of programmes, in the UK and internationally, with each programme based on the individual client drivers. Where it works best is where the client is looking for an outcome that will drive organisational change in some way; to deliver multi-faceted projects for multi-stakeholders and the supporting infrastructure and environment that surrounds it.”
As demonstrated by the successful completion of the London 2012 Olympic and Paralympic Games, Reynolds adds that programme management is ideal for those clients whose aim is to deliver a “game changing programme” and set long term, new behaviours and solutions within their organisation and beyond.
But these “game changing programmes” are so broad that it is vital to dig a little deeper and find out what the client truly wants and values. “It’s trying to get to the real drivers,” explains Mace capital delivery programme director for Affinity Water Mike Healy. “It’s about finding the baseline and focusing on the right outcomes.”
Mace has been managing the asset delivery for Affinity Water since 2005; however, its work goes beyond a simple build project. The real driver for the programme is to ensure the provision of a regular supply of fresh, clean drinking water to 3.5M households.
So in other words, it’s only worth bringing in external support if you are prepared to implement long term change, prepared to be challenged on what you actuallywant - not what you think you want - and are prepared to integrate with an external, expert team to get it right. Makes sense so far.
London 2012: Reworking the stadium
Client: Olympic Delivery Authority
Value: Overall ODA budget £8.1bn
Back in 2006, the burst of enthusiasm that had greeted London’s appointment as Olympic hosts was fading. Rumours of cost overruns and programme delays were rife.
The main stadium was a particular problem, with initial designs coming in way over budget. Delivery partner CLM’s programme-level approach, which enabled the team to look at design, planning and procurement in combination, was the answer. A radical redesign from a three-tier to two-tier stadium immediately ensured the venue was brought in on budget.
The two tiers were structurally independent, which meant CLM could obtain planning permission for the stadium’s bottom level before the superstructure had been finalised, enabling contractors to get onsite nine months early, bringing the project back on schedule. Finally, adopting an NEC shared risk and reward contracting model helped CLM convince its subcontractors that the stadium was a project worth fighting for.
These early interventions paid off. London’s Olympic Stadium was delivered three months early at a cost of £431M - well below the Olympic Delivery Authority’s baseline budget, with savings released back into the programme.
So when Reynolds says programme management is taking responsibility for everything, it really can be that. The Olympics is a great example: CLM took full responsibility, not only for delivering the venues and what they would actually be used for, but also altered the original plan to remove some completely, saving money and ensuring the project came in on budget.
“CLM and the ODA set up a joint cost reduction team, with a remit to examine every part of the programme. By taking this programme-wide view, the team identified a wide range of efficiency measures that would not have been visible to individual project managers,” says Reynolds.
“It was clear that the driver for the Olympics was cost; so we came at it as a cost reduction solution. We had to take £800M out of the programme, so we started taking things off site,” he explains.
“Within a programme you can manage the high level priorities; you have got that responsibility to remove venues and reuse venues,” says Millett. “For example we took fencing off the Olympic Park and relocated it to Excel; and we relocated the Basketball arena, Velodrome and BMX arenas in the Park, saving money and creating a better legacy solution.
“You couldn’t have done that if you had looked at the projects in isolation. A project manager might deliver an efficient temporary venue, but in the bigger picture it may bean unnecessary one. With programme management your involvement starts at the planning stages and it is here that you may decide to design it out as part of the solution.”
While CLM was involved at the design level, the Olympics also served as a great example of how to get your hands dirty with project management.
“Key aspects of programme management are discipline, standardisation, control and consistency. Involvement in the strategy and design stage ensures the right plan is in place, but then the plan has to be delivered to meet the performance measurements. On a lot of the Olympics there was no new innovation; what was needed was to be belligerent with discipline and making people deliver,” says Millett.
With just seven years to transform an urban wasteland into the Olympic Park, clearly discipline was going be key. That ODA chief executive David Higgins instigated a 2-4-1 strategy with two years of planning, four years of construction and one year of testing and commissioning is now well documented, and much of the success of the programme is put down to that vision. But it is one thing having a strategy and another sticking to it.
“We put in place robust systems and procedures and established that baseline of what we had to deliver. Then we built momentum. Every month we had to spend 2-2.5% of the budget so we just couldn’t prevaricate,” says Reynolds.
“A lot of the time construction delivery is not the core business of the client,” says Parker. “They look to us to deliver their programme because we understand what and how it needs to be done. We needed to reassure the client to allow full integration to drive that change across the entire programme.”
Clients are understandably concerned about quantifying the added value they get from paying for programme management. Just one look at the scrutiny Mace and its CLM partners have faced over their London 2012 fee from committees of MPs and the mainstream media and it is easy to understand the pressure clients - and particularly public clients - are under to justify spending valuable cash on programme management.
“In the early stages the results are not tangible, no buildings are being built. There’s nothing to see for your money, admits Millett, referencing the two years spent planning the Olympic Big Build. “But the point is, the most crucial stage is the time spent on planning, refining the business case and identifying future risks and opportunities and communicating the outcomes and their benefits. Without this time spent at the start, the programme won’t succeed.”
What often happens, says Reynolds, is companies like Mace will be brought in in a limited role, as a design manager, and then find its expertise being sought more and more by the client until it ends up programme managing the whole thing anyway. “Which is what we will have suggested to the client in the first place because we know how the programme needs to work.”
Reynolds is adamant that the earlier a company is brought in, the more value it can add. “Some organisations don’t know what they’re looking for to make that next step,” he says. “They don’t have that baseline or know how to approach a drive for organisational change.”
“The initial interrogation to establish that baseline is at the heart of programme management; it is this that will drive the outcome,” he says. “You’ve got to start with the most difficult questions sometimes.”
“We built momentum. Every month we had to spend 2-2.5% of the budget so we just couldn’t prevaricate”
Mark Reynolds, Mace
This direct and frank approach does demand a degree of trust and open-mindedness from the client.
“There is an element of bravery on the part of the client,” says Healy. He cites Affinity - the former Veolia Water - which transferred over 48 of its delivery staff to Mace and gave Mace complete control of its £230M budget when it brought it in to deliver its five year programme back in 2005.
So how do you get the client to be brave or to give you that trust and how do clients really know when the programme manager is doing a good job?
“The client knows because we have rigorous measures and KPIs in place,” says Healy. “The trust comes from our advocating integration, demonstrating that we understand what the client wants to achieve. We have been at Affinity for seven years now, we have Affinity people working for Mace people and vice versa. We’re truly integrated.”
Clarity brought to the project goals, which are aligned to a detailed understanding of business needs
Design a rigorous programme, including team roles and responsibilities, identifying efficiencies and savings, risk and opportunities
Mobilise quickly, operating from deep within the client organisation, working harmoniously within corporate culture
Deliver programme to the satisfaction of all stakeholders, demonstrating real value in both quantitative and qualitative term
Reynolds agrees. “When we bid for Affinity in 2005 we knew they wanted to drive organisational change; that was our winning strategy. We knew we weren’t the cheapest bidders, but the bottom line is they wanted to make changes and to get someone in who would create momentum to deliver,” he says.
“The first thing we did was to understand the contract situation. We asked the client to hold its nerve and persist with the existing supply chain and drive efficiencies against clearly defined targets. We then ensured that these targets were met,” explains Healy.
Once again, it comes back to setting that baseline. Even on projects like London 2012, baseline might not be as obvious as you’d first think. “Certain things were given on the Olympics,” explains Millett. “Health and safety, sustainability and, of course, time, were all givens. But cost was the driver. The Treasury scrutinised what we were doing and we got that,” he says.
“We are one of the few companies that provides strategy and delivery leading to organisational change”
Jason Millett, Mace
One key lesson that Mace has learnt from its role at Heathrow Terminal 5, one of the largest and highest profile construction projects in Europe, is that the team has to change as a programme evolves. “Some people are right for the initial set up; some people are delivery people,” says Millett. “The evolution of the team was planned from the start on London 2012 Olympics and Paralympic Games.”
But the ultimate question - does it ever fail?
“We do find that some clients will never change,” says Millett. “They don’t want to integrate; they see programme management as relinquishing control. But it’s about integration; that is a vital part of the process. Once you’re truly integrated you act as one team.”
And what about success? How do you know when you’ve succeeded?
“The greatest demonstration of success in programme management is when the defined values have been delivered and processes and learnings have been established for those who will continue to manage and use the programme,” says Reynolds.
“You helped deliver organisational change and the client has the tools to continue with it. That’s when you know you’ve done your job.”
Case study: Affinity Capital Programme
Client: Affinity Water
Mace has been working with Affinity Water - previously known as Veolia Water UK - as part of an integrated, co-located team delivering capital projects to keep clean water flowing to 3.5M households across the UK.
The joint team delivers all of Affinity Water’s capital projects - building new treatment works, pumping stations and reservoirs that draw clean water from the rivers, repairing or replacing the pipes that carry the water to households, and even installing individual water services for new houses or home extensions.
This strategic relationship means Mace has supported Affinity Water as it has separated from its parent company, providing cost consultancy to plan future workloads, ensuring it has the right health and safety governance in place, providing facilities management consultancy for the rebranding from Veolia and fitting out its new headquarters.
Mace started working with Affinity Water in 2005. From the start, the aim was to squeeze the best value from the budget set by Ofwat, the water regulator, under the Asset Management Plan (AMP) 4 and AMP5 cycles.
The team knew that its first task was to bring order to Affinity’s way of delivering projects. In an industry driven by forecasting and spending targets, an important first step was devising a strategic delivery plan to help ensure the team would deliver what it had committed to, to the right quality, in each AMP cycle.
This was more than just a list of projects - it encompassed understanding Affinity’s own objectives and delivery methods, how they would work with the supply chain and even social inclusion and environmental initiatives. As a result, the team has met its targets every year for cost, quality, delivery and health and safety. It has delivered a mains renewal programme that has contributed to Affinity Water achieving stable serviceability of its infrastructure assets. There has been no RIDDOR incident for ten months.
Now, the team is working to bring more flexibility and agility to its programme. This is of vital importance to the water industry, where seasonal variations - particularly droughts or floods - can have a huge effect on the water supply.
The goal is to be able to refocus the programme to handle these contingencies, without losing sight of the bigger picture. In this way, the team will ensure the best quality water is available to all of its customers, all of the time.