Saturday, May 01, 2004

Fundamental of Project Management

During the past decade, the Malaysian construction industry had charted an average growth of 12.7%, in tandem with the country’s strong economic growth, which at one time exceeded 8% per annum. The trend has however reversed in 1998 till the year 2000, due to a widespread economic meltdown, which swept across the Asian region. The economic crisis had waned investors’ confidence. Capability had outstripped capacity. Liquidity has become drier and how long the industry players are able to survive in this uncertain climate is questionable.

In order to sustain the long-term growth, construction companies have to be innovative, far-sighted, competitive, focused and fast to win in the ever-challenging market. Industry players should also possess strong business acumen, continually improving their competitive advantage and being able to adapt their business to the ever-changing market needs. They have to ensure that their products would have to not only meet but also exceed the desired quality, project have to be completed on time and within the cost budgeted and most of all, satisfying the customers.

The most profound recent developments in construction are the increasing size of many of its projects and the increasing technological complexities of such projects. At the project level, management had to integrate design, procurement, and construction into one total process. Economic difficulties, shortages of materials and other resources are the major problems facing the industry. It has become more critical that the skills of project managers and engineers must improve and that they have better tools and techniques with which to work, so that they can optimize the planning and control of available resources and better cope with challenging realities imposed by the economic constraints. There is on-going need for the construction companies to expand and improve its capabilities and its scope of operations to meet changing and growing demands for its service.

There is also a growing need for experience and knowledgeable professionals to act as interface between the contractors, purchasers, property developers, bankers & investors. Such professionals must have proper qualification, relevant industry experience and sound techniques to play the role of leading, planning, directing, co-coordinating, controlling and managing the entire project in order to achieve the project goals and objectives as set. Management must decide and implement the ways and means to effectively and efficiently utilize human and non-human resources to reach predetermined objectives.

The project approach has long been the style of doing business in the construction industry in Malaysia and worldwide. Project management concerns the role played by a project-based person with cross-functional authority and experience of managing various resources to achieve certain set and stipulated objectives. By definition, project management is the planning, organizing, directing, and controlling of resources for a finite period of time to complete specific goals and objectives. A project is a temporary endeavor undertaken to create a unique product or service. Temporary means that every project has a definite beginning and an end. Unique means that the product or service is different in some distinguishing way from all similar products or services.

The main problems encountered in Project Management are: inadequate resources, unrealistic deadlines, unclear goals, team members uncommitted, insufficient planning, and poor communication. Project managers are expected to marshal resources to complete a fixed-life project – on time, on budget and within specification. They must orchestrate the completion of the project by inducing the right people, at the right time, to address the right issues and make the right decisions. Cost, schedule and quality are the three primary variables of a project. Any changes to one of the variables will cause the remaining variables to change. If the amount of time and money available for a project is reduced, this will certainly limit the quality of the product. It is therefore important that project managers must know how to balance these variables to create the optimal cost-schedule-quality equilibrium.

Project Management Functions

Setting realistic expectations and delivering the products of the project is frequently challenging and always requires wide arrays of techniques and skills. These techniques can be grouped into three project management functions as follows:

i. Project Definition lays out the foundation for a project. There are two activities involved in this groundwork:
 The project manager must determine the purpose, goals, and constraints of the project.
 The project manager must establish basic project management controls. He must get agreement on which people and organizations are involved in the project and what their roles will be. The project manager also needs to clarify the chain of command, communication strategy, and change control process.

ii. Project planning puts together the details of how to meet the project’s goals, given the constraints. Estimating and scheduling techniques will lay out the amount of work the project entails, who will be doing the work, when will it be accomplished, and how much will it cost.

iii. Project control includes all the activities that keep the project moving toward the goal. These activities include: Performance measurement, communication, and taking corrective action.

The above functions sum up the responsibilities of the project manager. A project must begin with definition, then proceed to planning, and finally to control. The functions must be repeated time and again, because planning will inevitably lead to modifications in the definition, and controlling actions will require constant changes to the plan and, occasionally, changes to the definition.

In the day-to-day work environment, project management is one of the most efficient ways to do business: change is constant, competition between organizations is vital, and the need for more complex and customer-focused products is necessary. Today, organizations are faced with increased costs and complexities, a scarcity of resources and phenomenal improvements in technologies and methodologies. Project management has therefore evolved as the answer to some of the management problems that result from today’s complex systems.

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