Construction Management

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Location:  PMKI > IT & Construction Industries > Construction Management. 
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This page focuses on the unique challenges of construction management and the tools and processes needed to deliver major projects on time, on budget and to the satisfaction of stakeholders

Topics included in Construction Management:

- Improving construction management
- Managing Construction Stakeholders
- Managing time
- Managing construction risk
- Causes of project failure
- Useful External Web-links & Resources.

Other related sections of the PMKI:

- Building Information Modelling (BIM)
- Construction & Engineering Case Studies
- CIOB Resources
- Dispute management in construction/engineering 
- Claims and Forensic Analysis
- ADR and Dispute Services
- Casewatch Reports – building & contract law


Improving Construction Management

CIOB Definition of Construction Management:

CIOB CMConstruction Management: Management of the development, conservation and improvement of the built environment; exercised at a variety of levels from the site and project, through the corporate organizations of the industry and its clients, to society as a whole; embracing the entire construction value stream from inception to recycling, and focusing on a commitment to sustainable construction; incorporating a wide range of specialist services; guided by a system of values demonstrating responsibility to humanity and to the future of our planet; and informed, supported and challenged by an independent academic discipline.

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Rethinking Construction
- Latham report 1994 constructing the team © Crown Copyright: View PDF.
- Eagan Report 1998 Rethinking Construction © Crown Copyright: View PDF
- The benefits and on-going recommendations updated in Accelerating Change 2002 (Egan & Crane):
   View PDF

Scope for Improvement

Ashurst's Scope for Improvement series of reports focused on major Australian construction projects with an average value in excess of $400 million. Issues identified included inadequate scoping (on average 20% was missed) and inefficient risk allocation.  Almost 50% of the projects finished late and experienced significant cost overruns. Unfortunately, nothing much has changed in the intervening years and the advice and findings in these reports are still relevant today. Scope for Improvement reports. These reports identify a series of major issues in the scoping of manager projects and the allocation of risk. The trend between 2006 and 2014 was basically a flat line, with a consistent average of 20% of scope missed from the project at the time the contracts were signed.
- 2006 report: Project Pressure Points
- 2008 report: Project Scoping
- 2011 report: Project Risk
- 2014 report: Project pressure points - where industry stands


Blg: Defining Project Scope. If a project’s client cannot ask for what it needs, the project team is highly unlikely to deliver what’s wanted!

Blg: Scope for improvement 4. A summary of the 'scope for improvement' reports.

Blg: Scope for improvement 4 pt2. The management and delivery of mega projects in Australia; focused on the interlinked topics of productivity, innovation and training.

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Managing Construction Stakeholders

Prs: Rethinking Construction - Stakeholder Management in the Construction Industry. Stakeholder Circle
Many technically competent builders are failing to maximize the value of their work to their client organizations/employers by focusing exclusively on technology, data and processes. By including an awareness of communication and relationship management within the overall matrix of skills used to develop a schedule, cost plan, etc, the builder can transform the perception of the documents value from being seen as an ‘administrative overhead’ into a valuable resource. To achieve the spread of effective relationships needed to succeed, the builder, must recognize that project teams and senior management have different perceptions, expectations and measures of success and customize his/her communication strategy to meet their different requirements. The relationship aware builder is trusted and relied on by both project teams and senior management, acting as an effective cultural translator between the two groups. Technical competence is still a vital requirement, if this is missing there is no point in communicating, but once the technical issues are conquered the difference between average and exceptional performance is found in the capability of the builder to effectively relate and communicate with his/her stakeholders up and down the organization. This paper outlines a number of techniques and tools, including the Stakeholder Circle® that can be used to identify and map stakeholders, understand their requirements and develop an effective communication plan.
See more on the the Stakeholder Circle®.

PP: Mega Projects, Mega Problems - The critical need for effective stakeholder management. Effective stakeholder management is mandatory for mega-project success in all advanced economies and in most emerging economies. The ability of people to protest has increased exponentially with the advent of mobile communications and social media. In the 21st century, a single dedicated person can quickly generate a large protest movement. This applies equally to political, environmental and social movements, and mega-projects will inevitably create opposition. The larger the project, the more opponents it is likely to generate, as Spike Milligan is quoted to have said: Money can't buy you friends but you can get a better class of enemy. Traditional construction management has focused on the ‘iron triangle’ of time, cost and scope. Today, this is not enough, ignoring the social aspects of a mega-project will cause the project to fail! If the project is sufficiently controversial, the protest movement can quickly spread globally.

But, effective stakeholder management can contribute to a profitable project outcome. Within the project, stakeholder management encompasses the project team (workers, managers, clients and customers) and the project supply chain. Effective engagement with the ‘supply chain’ has been a focus of reports since the 1994 including Latham and Egan. External to the project stakeholder management encompasses politicians, ‘the public’ and the media as well as people directly or indirectly impacted by the work or its outcomes. Fortunately for both groups of stakeholders, including both the proponents of the project (supporters) and the opponents of the project, the art of stakeholder management remains the same. The key steps are:

  1. Identify all of the stakeholders that matter at this point in time – who’s who and who’s important. There are always too many potential stakeholders to attempt to manger everyone.
  2. Prioritize the stakeholders to see who is really important. For the important stakeholders assess their wants and expectations and understand what the project needs from them (mutuality).
  3. Develop specific communication plans for the key internal and external stakeholders. Develop general PR communications for the wider audience.
  4. Implement the communication plan(s).
  5. Reassess the stakeholder community at regular intervals to see what is working and what is not and adjust accordingly.

Communication within effective relationships is the only ethical way to change stakeholder perceptions and expectations to the benefit of the project. Supporters need to be encouraged, opponents need to be managed and their opposition minimized. The skill is focusing on the right people at the right time. Two tools developed to assist in this process are the Stakeholder Circle® methodology and the SRMM® maturity model. These tools are discussed within the framework of managing mega construction projects to optimize the stakeholder relationships in and around the project and minimize risk exposures.

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Managing time

Prs: Time management -v- Contract administration. Delayed completion affects IT, process plant, oil and gas, building, civil engineering, shipbuilding and marine work contracts. In fact it affects all industries in all countries and the bigger the project, the more damage delayed completion causes to costs, to reputation and sometimes, even to the survival of the contracting parties themselves. Without effective time management there can be no effective resource management, cost management or delay management. Unfortunately, despite the obviousness of this proposition, far too many contracts and contract programs seem designed as highly detailed, ridged mechanisms for measuring failure; rather than using the schedule as a tool for proactively managing time to the benefit of all of the parties to a contract.

Although much has been written about how to apportion liability for delay after a project has gone wrong there was, until recently, no guidance on how to manage time pro-actively and effectively on complex projects. This paper seeks to address this imbalance by focusing on the effective management of time in the 21st Century. This paper defines the standards by which project schedules should be prepared, quality controlled, updated, reviewed and revised in practice to effectively manage time. And then describes the standards of performance which should reasonably be required of a project scheduler. It will contrast the static approach to scheduling defined in most contracts with The Guide’s logical step by step procedures to manage time from inception and risk appraisal, through design and construction to testing and commissioning, to show how an effective and dynamic time model can be used to manage the risk of delay to completion of complex projects. And will demonstrate that as a practical treatise on the processes to be followed and standards to be achieved in effective management of time, The Guide is a scheduling reference document capable of wide application. It can be used in any jurisdiction, under any form of contract, with any type of project and should be identified as the required standard for the preparation and updating of contract programmes, progress reporting and time management.

These concepts are built into our schedule training, including our Easy CPM Course-in-a-book

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Managing construction risk

PP: Balanced Baselines - A Fairer Allocation of Uncertain Risks. The use of a Geotechnical Baseline Report (GBR) in the construction contract provides the parties to the contract with a mutual understanding of the subsurface site conditions (the baseline). The actual conditions encountered are measured against this baseline. If the contractor comes across a more adverse condition than that of the baseline, then the owner pays the contractor more to complete the work under those adverse conditions, and if the conditions are less adverse than the baseline, then the contractor is paid no more than that tendered. The reduced risk to the contractor should result in lower tender prices and minimizes the opportunity for contract claims and disputes.

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Causes of project failure

Blg: Project or Management Failures? (sources of project failure). The question this blog asks is how many project failures are caused by project management shortcomings and how many failed projects were set up to fail by the organizations management?

Prs: Trust: a tale of two constructions. This blog contrasts Wembley Stadium to the construction of Heathrow Terminal 5 where collaborative contractual arrangements lead to an on time, on budget construction outcome that is unprecedented for a £4 billion airport terminal.

Art: Fairs Fair - Process & Procedural Fairness. When you have to deliver bad news to a person, the processes you use are at least as important as the decision you have made.

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Useful External Web-links & Resources

The Chartered Institute of Building (CIOB). the world's largest and most influential professional body for construction management and leadership: https://www.ciob.org/about

Constructing Excellence - CE (UK) aims to achieve a step change in construction productivity by tackling the market failures and promoting continuous improvement: http://www.constructingexcellence.org.uk

IACCM - The International Association for Contract & Commercial Management world-class standards in contracting and relationship management process and skills: https://www.iaccm.com Publishes the IACCM Capability Maturity Model to benchmark contracting processes: https://www.iaccm.com/services/contracting-capability-maturity-assessment/

ICPMA - The International Construction Project Management Association (ICPMA) is an international umbrella association focusing on international Knowledge Management, the General Annual Meeting, working groups and publications: http://www.icpma.net

Major Projects Knowledge Hub (UK). Brings together learning, innovation and good practice from many different sources such as learning legacies by major projects, other related knowledge hubs and websites: https://www.majorprojectsknowledgehub.net

Strategic Forum for Construction (SFfC) UK. SFfC brings together the organisations representing the UK construction sector to work collaboratively for a better industry: http://www.strategicforum.org.uk/

 

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A course in a book

Communication management template


A course in a book

Communication management template


A course in a book

Stakeholder management tools


A course in a book

Risk management template


A course in a book

Risk management template