Australian Project Manager sep05 web.pdfexemplary project management training and education activities, as well as continued professional development for our registered project managers

Australian Project Manager

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Endorsed career development courses

• Top performing project managers• Building strong teams

• New column: Legal eagle

AustralianInstitute of

ProjectManagement

• Top performing project managers• Building strong teams

• New column: Legal eagle

Endorsed career development courses

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Education/knowledge Committee:

David Baccarini, chairperson – [email protected]

Brad Cowan – [email protected]

Ken [email protected]

Alan Hunter – [email protected]

Lyn Travar – [email protected]

Dr Neveen Mousa – [email protected]

Editor:Kay Fay

Unit 1002 Solander42 Refinery Drive

Pyrmont NSW 2009ph: 02 9518 5792

email: [email protected] by:

Banksia Media Group Pty LimitedPO Box 230

Wahroonga NSW 2076ph: 02 9487 1188fax: 02 9487 4441

email: [email protected]

It is the policy and practice of the AIPM to protect theconfidentiality of members details contained in its database.

The Institute, therefore, refuses all requests from organisationswishing to purchase our membership mailing list. From time

to time, the editor of the Journal will permit promotionalmaterial to be inserted into the Journal. This action does not

in any way indicate the Institute's endorsement of, or supportfor, the product or services promoted in such material. TheInstitute does, however, endorse courses which are aligned

with the NCSPM and the PMBOK. A list of endorsed courseproviders is available form the National Office of the AIPM.

ISSN 1325.8591

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Contents

AIPM news

From the President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2

From the CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Chapter news . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5

Website news . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

Professional and career development

Courses endorsed by the Institute after rigorous assessment to ensure they meet the high AIPM standards . . . . . . . . . . . . . . . . . . . . . . . . . .6

Is there a positive relationship between senior management’s perceptions of workplace performance and project management standards? . . . . . . . . .16

Features

Member profile: building strong teams a key . . . . . . . . . . . . . . . . . . . . . . . .21

Combining value and risk management studies improves functionality and reduces risks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22

Project success

Large Australian organisations are rapidly moving to adopt enterprise project management to improve their business strategies, according to a survey of 100 top companies. . . . . . . . . . . . . . . . . . . . . . . .25

The artificial world of estimates is different to the real world where work is carried out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26

Construction

Energy efficiency standards will be met or exceeded in a residential tower in Melbourne. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27

Legal issues

GST transition period has ended on long-term non-reviewable contracts. . . .14

Re-acquaint yourself with laws governing commercial leases – or risk unwanted tenants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29

Regular columns

Doug Jones discusses the differences between best and reasonable endeavours in contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30

David Baccarini shows how the logical framework method prevents the often confusing mixture of illogically linked statements in a project charter. . .31

Australian Project Manager

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2 P R E S I D E N T ’ S M E S S A G E

President’s messageThank you to those who urged me to run for a second term. I have, however,chosen not to for a number of reasons.

The two main ones are that since my election I have become involved in a multi-billion dollar project and the responsibilities will not allow me to pay justice to theimportant role of the AIPM National President.

Secondly, after two years as President and two as Vice President, it’s time to moveon. I firmly believe these voluntary positions require fresh ideas and new bloodand it would be selfish to occupy them for too long.

At the start of my tenure I promised to treat the presidency as a project andprovide regular updates and performance reviews, as well as a project close offreport. I am dedicating my last president’s message to this. My intention is not selfpromotion, but to provide a scorecard that would ensure growth continues.

Membership

AIPM reached the 5,000 members plus milestone in the last few months, a 39 percent increase last year alone, assisted by the significant increase in corporatemembership, now 116 and a 38 per cent increase last year. RegPM awards havealso reached an all time high of just below 3,000 with a 52 per cent increase lastyear, and the Project Managed Organisation Award has been awarded to about 13organisations.

There is definitely cause to celebrate these. However, the project managementprofession is young and continues to grow quickly, so the AIPM has the potentialto grow even further. Our business plan aims at doubling our membership by2008 – an ambitious target, but one that, if achieved, will highlight even furtherthe value and relevance of the AIPM to project management practitioners.

Some actions put in place to enable us to reach this target are: • appointment of a Marketing Manager to focus on promoting AIPM to

corporations and government agencies• development of a national marketing plan and a communication plan along with

new marketing materials, aimed at explaining the suite of AIPM products andservices to potential members

• improving the website and expanding the Information Resources Centre.

Financial health

It is pleasing to report that the institute has significantly increased its financialhealth with annual turnover (revenue) doubling to just over $2 million in the lastcouple of years. Our total increase in equity (profit) and net assets have also seen ahealthy increase, and our cash reserves are substantial enough to allow us to investin staff, marketing, systems, products and events that will allow us to grow furtherinto the future.

Governance, structure and administration

As a small-to-medium enterprise with an annual turnover in excess of $2 million,our governance charter, policies and codes of conduct that were put in place whenthe institute was originally established were becoming out of date and needed aserious overhaul. This process was undertaken last year. The team at nationaloffice has been replaced and a number of new positions created to ensure theoffice can provide better service to all membership categories.

Incentive based contracts have been set for staff to enforce a customer serviceethos and provide better accessibility to members. An investment was made in new

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P R E S I D E N T ’ S M E S S A G E 3

database, financial, and voicemail systems, as well as officerenovations to house the extended team.

National profile

It is gratifying to see that industry recognition of AIPMproducts is finally flourishing after many years of hard workby what is essentially a volunteer organisation. Manyvolunteer hours have been put into developing our suite ofproducts with the goal of these becoming helpful tools forpracticing project managers and their organisations.

I can proudly say that after all those years of hard work,AIPM has started to achieve that goal. The interest in ourProject Managed Organisation Award is growingsignificantly, and organisations from practically all industriesare recognising it is a key tool in development of their projectmanagement capability.

The RegPM program has also taken off, mainly in thedefence industry through a strategic partnership with theDefence Materiel Organisation and a number of otherdefence industry contractors. The collaborative model thatwas developed for the Defence Materiel Organisation hasexpanded to many other industries, such as insurance, IT,construction, airline, banking, engineering, consulting,education, health, energy and power.

Significant recognition by government agencies at nationaland state levels is also growing with a number stipulatingthat staff and consultants be RegPM award holders. Work inthis area needs to continue to ensure the institute adequatelyserves and represents the breadth of industries practicingproject management.

International profile

The AIPM’s international profile is that of a leading projectmanagement institute, particularly for its world-leadingnational competency standards and RegPM program. Raisingthe AIPM profile has continued during the past couple ofyears through a number of activities, including cooperativeagreements with other institutes, such as HKIPM (HongKong), PMA (India), IMPA (Europe), SPM (Singapore), APM(UK), and a number of associations in China. Theseagreements facilitate the exchange of knowledge and widenthe services and resources we offer members. Participation inglobal forums and high profile international conferences, aswell as the Global Performance Based Standards for ProjectManagement Personnel Working Group, have continued.

Work is also progressing, albeit at a slow pace, on the AsiaPacific front where the AIPM founded the Asia PacificFederation for Project Management (APFPM), which has 10member countries, and is actively seeking reciprocalrecognition of certification programs.

RegPM assessment process

A number of steps have been taken to simplify the RegPMassessment process. These were piloted in our work with theDefence Material Organisation, in conjunction with our networkof assessors. Changes include a revised and more reliableverification process, the development of feedback and grievance

procedures, and the establishment of a continued professionaldevelopment process for registered project managers.

Simplification of the RegPM assessment process is far fromcomplete, particularly in light of the exponential growth andrecognition of the program, and work still needs to be doneto ensure a high level of consistency and integrity.

Collaboration with other institutes

The AIPM played a key role in the development, review andindustry consultation for the revised National CompetencyStandards for Project Management, in conjunction withBusiness Services Training Australia. In the last two years, wealso played an active role with Standards Australia on a numberof standards development committees that represent variousaspects of project management.

Close working relationships are maintained with otherinstitutes, such as the Association of Professional Engineers,Scientists and Managers, Australia (APESMA), the CharteredInstitute of Building, Engineers Australia, and PMI Australiathrough organisation of local events and other joint activities.

Collaboration with academic institutions

Collaboration with academia has developed in the last coupleof years through guest lecturers, seminars and representationon course advisory committees.

Additionally, a close relationship with a number ofuniversities and TAFE institutes was developed to enhancethe ongoing development, adoption and application ofmodern project management practices, and to assist indevelopment of project management courses and centres forproject management studies.

We are also about to launch an Accredited Education andTraining Provider Award to attract, and provide recognition for,exemplary project management training and educationactivities, as well as continued professional development for ourregistered project managers as part of the RegPM program. Arefereed academic journal and an AIPM research scholarshipare still under development.

The future

The AIPM has achieved significant milestones in its historyby reaching a membership size and level of recognition thatwill truly enable the institute to become the main voicerepresenting the project management profession in Australia.

Having realised how quickly my two terms passed,particularly as I was serious about making change, I am veryproud to have played a small role in that development.

I thank all those who have shown me support during mypresidency.

Dr Neveen Moussa

President

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4 A I P M N E W S

From the CEO: An exciting year finishes as a busy year ahead startsWelcome to the first Australian ProjectManager of the new financial year. The2004/2005 year was exciting forproject management and for AIPMwith heightened interest inorganisations seeking to build projectmanagement as a core corporatecompetency in a range of industries.Indications of this are shown in theannual increase of 27 per cent inindividual membership from 4,100 to5,250. The number of individualsrecognised as RegPMs has alsoincreased by 54 per cent. The numberof corporate members has also grownby 27 per cent

AIPM has almost completedimplementation of a new membershipsystem that focuses on increasedvisibility to our membership andallows us to target and increasemembership benefits. This system is afully integrated web based solution,giving members seamless access to arich source of project managementresources and events while allowing asecure space to update and maintainpersonal information. Our website isrecognised globally as one of theleading resources for projectmanagement information and hasmore than 800,000 visitors per month.

We invite you to visit our sitewww.aipm.com.au and take a look atits new features. While there you canlogin to our membership area andupdate your personal details. As anincentive we are offering a prize oftwo fully transferable passes toAIPM’s National Conference inMelbourne from 9-11 October and10 AIPM gift packs, drawn atrandom from Members visiting oursite during September.

AIPM’s National Conference isshaping up to be one of the bestproject management events ever heldin Australia. The theme is ProjectYourself into the Future with keynoteaddresses by:

• Rob Adams, Director of Design andCulture, City of Melbourne

• Norm Gray, Deputy CEO ofDefense Materiel Organisation

• Dr Keith Hampson, CEO of CRCConstruction Innovation

• Andrew Penn, CEO of AXAAustralia

• David Johnson, Chief InformationOffice of ComSuper

• Richard Neville, Practicing Futurist.

At 5:00pm onMonday 10October, AIPMwill hold ourAnnual GeneralMeeting at theNational Conference. The NationalCouncil will be available to answerany questions once formal procedureshave taken place. Two key proceduresare the acceptance of the 2005Annual Report and financials, andthe appointment of the NationalExecutive elected.

Our annual report will be available atwww.aipm.com.au/html/annual_reports.cfm and results of our NationalExecutive election will be availableafter 15 September atwww.aipm.com.au/html/aipm_election_2005.cfm

Lastly, I would like to welcome Jo-Anne Locke to the national office teamas our new Membership Manager. Jo-Anne brings with her a wealth ofexperience in membership relations,having worked at the AustralianInstitute of Company Directors for thelast three and half years.Peter Shears

Peter Shears

New website developments were reduced overall from Aprilto July due to the impending arrival of our new fullyintegrated membership database and website, planning forwhich is still underway.The new system will have many benefits, including:• the ability for members to update their own contact

details and book AIPM events online• introduction of new, improved (and far fewer) online forms• cleaner, more user-friendly navigation buttons• printer friendly, back to top functions, and a new ‘email

this page’ function• more online surveys and quick ‘Vox Pop’ opinion

gathering on topical project management issues • a far better and much more reliable membership database

and CRM system, so AIPM can respond to your needsmore efficiently.

The extremely popular endorsed courses section was tidiedand several new endorsed course providers were added:Codarra Advanced Systems Pty Ltd, iknowma Pty Ltd,

Swinburne University ICS, and Project ManagementPartners Pty Ltd. See www.aipm.com.au/html/aipm_endorsed_courses.cfm

The April edition of PM Select, the IRC’s monthly updateof global project management research, successfully trialeda new method of delivering requested articles to members.This means that when the online copyright declaration isfilled in and sent, the requested document automaticallyuploads to your screen.See www.aipm.com.au/html/pm_select_archive_page.cfm

To help members in the banking and financial sectors finduseful project management related material, a new Bankingand Finance links page has been set upSee www.aipm.com.au/html/your_pm_banking_and_finance.cfm

Check the PMAA portal for winners of the State ChapterProject Management Achievement Awards (PMAA) See www.aipm.com.au/html/pmaa_portal.cfmThere is also the AIPM conference portal for the latest news.

AIPM website news

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A I P M N E W S 5

From the chapters

ACTOver the past six months, the ACTChapter has had an unrivalled growthin membership. This has reflectedsignificantly in the number ofmembers attending the monthlyforums, and using networkingopportunities. We have had a wideselection of guest speakers addressingour forums, including Martin Hooperfrom PCubed, Norm Gray fromDMO, Bryan Ahern from theNational Council of Arbitrators &Mediators Australia, John Robertsonfrom ACT Procurement Solutions andDavid Buckley from GHD. ACTChapter monthly forums are the lastWednesday night of every month andare free. For further details, go to theAIPM website at www.aipm.com.au.

The Chapter has also had a largeteam working on this year’s ProjectManagement Achievement Awards,and their efforts have paid off withthe highest ever number ofsubmissions. The gala presentationnight was on 31 August and we werehonoured to have Raytheon Australiaas Gold Sponsors, with ACTGovernment again sponsoring theACT Community Benefit Award. Inaddition, Kellogg Brown & Root andSinclair Knight Mertz gave support asBronze Sponsors.Paul BlackPresident

New South WalesThere are a few changes to the teamdue to changes in work commitmentsand so on. Now the Chapter is backon track with a new e-newslettereditor who has some great ideas andwould love to hear from all ourmembers with their news...pleaseforward to me and I will ensure theyare passed on. We are finalising anexciting agenda of events, includingtopics covering finance, legal andoverseas work experiences. This yearwe have had an extremely highcalibre of submissions for the ProjectManagement Achievement Awards,

making decisions extremely hard forthe judging panel.Justine Mercer-MoorePresident

VictoriaThe Chapter is hosting the AIPMNational Conference from 9–11October at the Hilton Hotel.Conference preparation hassignificantly progressed. A very goodresponse was received on abstractsubmissions and now papers arebeing developed. The conference hasalso attracted a range of high profilekeynote speakers. I encourage allmembers to register to participate; itis going to be a great event with lotsof learning and networkingopportunities. Registration is nowavailable online.

As a result of the tsunami disasteracross South East Asia at the end oflast year, a project managementresponse interest group has beenestablished. Known as the aiPMiProject Aid group, it has been set up incooperation with the local PMIVictorian Chapter. If members areinterested in knowing more about thisgroup, please make contact withRobert Nieuwenhuis on 0417 362 261,[email protected] or goto the AIPM website link.

We have recently achieved over 1,000Member status in the VictorianChapter and are very pleased ourmembership is steadily growing. Ifyou want more details on what ishappening with the AIPM andVictorian Chapter events, please visitthe AIPM website at:www.aipm.com.au or drop me a line.Bill YoungPresident

South AustraliaI must start with a bigcongratulations to the ASC onwinning the AWD contract and alsoto their current and future partners,they deserve every success. Followingup on this win, MD Greg Tunny

agreed to be our guest speaker at thegala dinner and PMAA presentationon 2 September.

A busy period is approaching withseveral seminars, and a submarinetour for 20 members that was bookedout in the record time of 35 minutes.Nominations for the ProjectManagement Achievement Awardshave closed and judging is under way.Add preparations for the annual galadinner, followed by the OctoberNational Conference in Melbourne -before we know it Christmas will beupon us!

Project management as a career ismaturing in stature and itsdesirability for many graduates isreflected in the growing enrolmentsat UniSA and Adelaide Uni. I wasrecently asked to give a MicrosoftProject introduction tutorial for 50+first year civil engineering studentsso they can use it for their end ofyear design subject. It’s interestingthat the lecturer wants the studentsto run their designs using all thetools and techniques of projectmanagement, based on a four hourpresentation on project managementin general. It’s a good and positivedirection indeed.

Following the last newsletter whereSA Water told us all about theirPMO, this time corporate memberParsons Brinkerhoff have supplied anarticle that is good reading. We alsothank them for sponsoring thenewsletter and printing it for us.

I should also report a disturbingannouncement last week by scientistsabout a new disease that only affectsproject managers. It’s interestingbecause there are no knownsymptoms and no known cure –fortunately no one has contracted thedisease yet.

Stephen Beaty

President

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6 P R O F E S S I O N A L A N D C A R E E R D E V E L O P M E N T

The following list gives details onapproved state and national courseproviders.

STATE PROVIDERS

ACT

AAuussttrraalliiaann IInnssttiittuuttee ooff

MMaannaaggeemmeenntt AACCTT && NNSSWW

215 Pacific Highway, North SydneyNSW 2060 Contact: Wendy McGarvaTel: 02 9956 3921 Fax: 02 9956 3521Email: [email protected] Level 1, Deakin House, 50 Geils Crt,Deakin ACT 2600

Contact: Sabra Veronesi Tel: 02 6282 1914 Fax: 02 6282 3961Email: sabrave.aimcam.com.auWebsite: www.aimnsw.com.au

COURSEProject Management Fundamentals

DETAILSA fundamental approach to projectmanagement for low value, low riskprojects, or multiple, independentprojects.

COURSEAdvanced Project Management

DETAILSThe critical techniques required toplan and organise projects successfully.

COURSE Certificate IV in Project Management

DETAILSA nationally recognised qualification

with a practical approach to the

knowledge areas of project

management to provide competency

in planning, management and control

of projects.

COURSE Diploma of Project Management

DETAILSThe practical elements of the 9

functions of project management for

experienced project managers. A

nationally recognised qualification.

AIPM endorsed project management courses

UNDER ITS CHARTER TO ADVANCE PROFESSIONALISM IN PROJECT MANAGEMENT, THE AUSTRALIAN INSTITUTE OF PROJECT

MANAGEMENT HAS PROVIDED INDUSTRY LEADERSHIP IN THE ESTABLISHMENT OF NATIONAL COMPETENCY STANDARDS FOR PROJECT

MANAGEMENT UNDER THE AUSPICES OF THE AUSTRALIAN NATIONAL TRAINING AUTHORITY AND INDUSTRY TRAINING ADVISORY

BOARD. THE AIPM ALSO ENDORSES TRAINING COURSES THAT ARE CONSIDERED TO MEET THE NATIONAL COMPETENCY STANDARDS

FOR PROJECT MANAGEMENT AND THE GUIDE TO THE PROJECT MANAGEMENT BODY OF KNOWLEDGE.

Information/RegistrationPh: 1800 248 645 Fax: (02) 6772 5230

pr

www.projectmanagementtraining.com.au

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Project Management TrainingNATIONALLY ACCREDITED COURSES FOR ALL LEVELS

A L L P E O P L E , A L L F I E L D S , A L L P R O J E C T S

Effective, up-to-date skills and knowledgeBest practice strategiesImmediate application

• Tutorials

• Distance

• Workshops

• Short courses

• Customised programs/courses

• Consulting design & development

• Pathway to tertiary qualifications

and industry awards

Information/Registration Ph: 1800 066 128 or (02) 6773 0016 • Fax: (02) 6772 5230 • [email protected] • ABN 74 003 099 125

F L E X I BL

ED E L I V E

RY

Certificate IV

Diploma

Advanced Diploma

Visit our stand at the AIPM Conference - October 2005

T h e e d u c a t i o n & t r a i n i n g c o m p a n y o f t h e U n i v e r s i t y o f N e w E n g l a n d

p06-14 2005 course list.qxd 30/08/2005 10:24 AM Page 6

AAuussttrraalliiaann NNaattiioonnaall UUnniivveerrssiittyy

National Graduate School ofManagement Building 120 McCoy Circuit, Acton ACT 0200Tel: 02 6125 8865 Fax: 02 6125 4895Contact: Lucy Agar Email: [email protected] Website: ngsm.anu.edu.au

COURSEA Management Framework forBusiness Projects

DETAILS Contemporary approaches to theconceptualisation, scoping, planning,management and assessment ofbusiness projects. Complementscoverage of the Tools and Techniquesfor Business Project Managementcourse. Both are core courses in theMaster of Management (specialisingin Project Management).

AAuussttrraalliiaann CCoolllleeggee ooff

PPrroojjeecctt MMaannaaggeemmeenntt

10-12 Colbee Crt, Phillip ACT 2600Tel: 1300 138 225 Fax: 1300 138 226Contact: Danielle O’NeillEmail: [email protected]

Websites: http://www.cpmgroup.com.au/|http://www.acpm.act.edu.au/

COURSESCertificate IV in Project Management AQF4Diploma of Project Management AQF5

DETAILSFace-to-face 5 day program based ona work-based project assignment, alsoonline and by distance education.

COURSEAdvanced Diploma of ProjectManagement AQF6

DETAILSFace-to-face 2 day workshop, alsoonline and distance education.

NSW

AAGGSS CCoonnssuullttiinngg && TTrraaiinniinngg

((ddiivviissiioonn ooff

GGrreeccoo SScchhwwaarrttzz PPttyy LLttdd))

2 Longview St, Balmain NSW 2041Contact: Alan Schwartz (Director)Tel: 02 9810 6413 Fax: 02 9810 6419Email: [email protected]: www.agsconsulting.com.au

COURSE Project Management Basics AQF4

DETAILSFor team members with little or noproject management knowledge orexperience. Plus short courses,Diploma of Project Management andRegPM RPM assessments

COURSES Project Management

Program AQF5

Managing Successful Projects and

Leading Teams

DETAILSFor project managers seeking toincrease their capability. Coversmanaging projects in fastchanging/uncertain environments.

COURSE Program Management & Project

Portfolio Management (AQF6)

DETAILSFor project managers seeking tobecome project directors, sponsors,program managers or projectportfolio managers.

P R O F E S S I O N A L A N D C A R E E R D E V E L O P M E N T 7



AAuussttrraalliiaann PPrroojjeecctt

MMaannaaggeemmeenntt GGrroouupp

PO Box 335, Moorebank NSW 2170Contact: Granville May Phone: 02 9755 2979 Fax: 02 9755 4840 Email: [email protected] Website: www.apmsolutions.com.au

COURSE Diploma in Project Management

DETAILSProvides project managers, seniormanagement and project teammembers with the professional skills,and knowledge and coremethodology required for managingprojects.

EESSII IInntteerrnnaattiioonnaall

Level 11, 275 Alfred Street, North Sydney NSW 2060Contact: Anthony CaddenTel: 02 8584 1700 Fax: 02 8584 1799 Email: [email protected]: www.esi-au.com

COURSE Masters Certificate in ProjectManagement

DETAILS Can take courses one by one orpursue a structured program of studyleading to a Masters Certificate inProject Management, awarded byThe George Washington University.

HHaaiinn CCoonnssuullttiinngg PPttyy LLttdd

Level 2, 97 Pacific Highway, North Sydney NSW 2060 Contact: Dr Stephen J Hain Tel: 02 9929 6717 Fax: 02 9929 6720 Email:[email protected] Website: www.hainconsulting.com.au

COURSE Managing Projects and Professional Services

DETAILSModules are: understand the bigpicture, key personal skills, strategicissues in successful projects, plansuccessful projects, deliver successfulprojects, manage individualperformance, manage teamperformance, and case studies.

iikknnoowwmmaa PPttyy LLttdd

Suite 204/184 Blues Point Rd,McMahons Point NSW 2060 Contact: Anne Kirby/John Threlfall

Tel: 02 9966 1411 Fax: 02 9475 1116 Email: [email protected] Website: www.iknowma.com

COURSESShort Course: Best Practice in ProjectManagement Diploma of Project Management Advanced Diploma of ProjectManagement

DETAILSCompetency based programs rangingfrom short courses to advanceddiploma. Establishes the context ofthe client’s projects and adjustslength, content and practicalworkplace-relevant exercises to reflectthe client’s business, corporatestructure, levels of management,methodologies/procedures andtoolsets.

MMBBHH MMaannaaggeemmeenntt PPttyy LLttdd

Suite 7, 25-35a Park Plaza, HurstvilleNSW, 2220Contact: Sarah QuintonTel: 02 9570 3160 Fax: 02 9580 4066Email: [email protected]: www.mbh.com.au

COURSEManaging by Project – Practitioner

DETAILSFor people in a project managementrole or on a project team. Introducesthe concepts of Managing by Projectand the skills for an effective projectmanager. Includes experientiallearning through real-life case studies.

PPllaannppoowweerr

Level 5, 261 George St, Sydney NSW 2000 Contact: Erin SandfordTel: 02 9251 5228 Fax: 02 9251 5338Contact: Erin SandfordEmail: [email protected] Website: www.planpower.com.au

COURSESCertificate IV in Project ManagementDiploma in Project Management

DETAILS Specialists with expertise in projectmanagement, business analysis,organisational and process change.Provides training, coaching andmentoring for organisations wishingto build project managementexpertise inhouse.

PPrroojjeecctt MMaannaaggeerrss

NNeettwwoorrkk PPttyy LLttdd

PO Box 68, Lindfield NSW 2070Contact: John FlynnTel: 02 9924 3530 Fax: 02 9416 1574Email: [email protected]: www.projectalchemy.com.auor www.pmnetwork.com.au

COURSE Project Management for Practitioners

DETAILSAimed at practitioners requiringformal approaches to managingprojects including those withsignificant external dependencies tocontrol. Shorter courses andmentoring available for beginners,team members and programmanagers.

SSiiggmmaa MMaannaaggeemmeenntt

SScciieennccee PPttyy LLiimmiitteedd

PO Box 647, Dee Why NSW 2099 Contact: John Smyrk Tel: 0418 242 804 Fax: 02 9971 4683 Email: [email protected] Website: www.smscience.com

COURSE Managing Projects for Outcomes

DETAILSA powerful, innovative approach toproject management. Using JohnSmyrk’s ground-breaking ITO model,shows how projects are all aboutachieving target outcome rather thanjust complying with the PMBoK.

SSkkiill llSSoofftt AAssiiaa PPaacciiffiicc

Level 1, 71 Epping Rd, North RydeNSW 2113Contact: Daniel MeekTel: 02 9941 6333 Fax: 02 9887 1780Email: [email protected]: www.skillsoft.com

COURSEProject Management Basics forBusiness Professionals

DETAILSOnline. 295 other business andprofessional skills courses to assist aPMP® secure the 60 professionaldevelopment units for certificationmaintenance every 3 years.



TTAAFFEE NNSSWW HHuunntteerr IInnssttiittuuttee

aanndd LLiivviinngg PPllaanniitt

Suite 1802, 109 Pitt St, Sydney NSW 2000Tel: TAFE 1800 620 280 Fax 1800 678 941Email: [email protected]: Living Planit 02 9233 3233 Fax: 02 9231 0208

COURSES Certificate 4 in Project Management Diploma in Business SolutionsThrough Project Competence

DETAILSAll needs addressed. Face-to-face,flexible 1, 2 or 3 days. Coursesunderpin Certificate 4, Diploma andAdvanced Diploma.

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UUNNEEPP

PO Box U199, Armidale NSW 2351Tel: 02 6771 1097 or 1800 066 128Fax: 02 6772 5230 Contact: Danielle Hageman Email:[email protected]: www.unepartnerships.edu.au

COURSECertificate IV in Project Management(AQF 4) BSB41504

DETAILSProvides the skills to plan andcoordinate projects in line with theobjectives of the group.

COURSEDiploma of Project Management(AQF 5) BSB51504

DETAILSProvides skills and knowledge to planand manage projects that achieve thegoals and objectives of project

managers and their organisation,regardless of the business or industry.

COURSEAdvanced Diploma of ProjectManagement (AQF 6) BSB60904

DETAILSFor those with a strong backgroundin project management, provides theskills and knowledge to manage aprogram of works that may involve anumber of separate projects.

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Department of Civil EngineeringSydney NSW 2006Director: A/Professor Chris StevensTel: 02 9351 5560 Fax: 02 9351 8642Email: admin@ pmgp.usyd.edu.auWebsite: www. pmgp.usyd.edu.au

COURSEMaster of Project Management

DETAILSInternet-based and winner of twointernational awards. For thosewishing to be chief project officers,program directors and projectmanagers leading major and complexprojects. The competency-basedcurriculum is suitable for all majorindustry project and programprofessionals.

COURSEGraduate Diploma in ProjectManagement

DETAILSPart of the award winning Mastersdegree program. For projectmanagers aspiring to be programmangers and directors.

COURSEGraduate Certificate in ProjectManagement

DETAILSThe foundation level of theMasters/Graduate Diploma coveringthe PMBOK. Enhances skills forthose new to project management andthose making the field their career.

COURSEContinuing Professional Development

DETAILSUses various units from the Mastersdegree to enhance knowledge andskills of project and programprofessionals, without having toattend a full academic course.

COURSEProfessional Development PlanningWorkshop

DETAILSA comprehensive assessment ofcurrent professional competencies,followed by development of alearning plan and personal missionstatement.

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PO Box 123, Broadway NSW 2007Contact: Course Director, Dr Kaye RemingtonPhone: 02 9514 8882 Fax: 02 9514 8051Email: [email protected]: www.dab.uts.edu.au

COURSEGraduate Certificate in Project

Management

Master of Project Management

Doctor of Project Management

DETAILSA systemic and people centredapproach to project and programmanagement using online, structured

The University of Queensland St Lucia, Brisbane

• AIPM accredited postgraduate programs in project management • Generic PM focus, leading to AIPM Level 5 • Full and part time studies, graduate certificate, diploma and masters • Semester, summer and weekend intensive courses

Details: http://www.uq.edu.au/study/ then enter Program Search for ‘project management’ Contacts: [email protected] Ph: 07 3365 6455 Fx: 07 3365 6899



learning materials together with oneor two intensive block workshops persubject in which project teams applylearning to simulated projects andcase studies.

COURSEShort courses for industry groups.

DETAILSOn demand, contact Dr. KayeRemington.

NORTHERN TERRITORYSee national listing for courseproviders.

QUEENSLAND

AAQQUUAA PPrroojjeeccttss

4 Alkoomi Ave, Ferny HillsQld 4000Contact: Brad CowanTel: 07 3851 4314 Fax: 07 3851 4315Email:[email protected]

COURSES AND DETAILSSuccessfully Managing Projects – the basicsGives current and prospective projectmanagers and team leaders the keysto project success. Experiencedproject managers present this coursewhich uses a case study that can betailored or supplied by participants. The Principles of ProjectManagement for managers, includingProgram and Portfolio Management 1 day induction of seniormanagement team into projectmanagement.Project Managers DevelopmentProgram 6-9 months lectures on the 9functions, workbook exercises onproject of choice, regular individualcoaching/tutoring/mentoring. Ensuresnew project managers, team leadersare effective as quickly as possible.

The Principles of Project

Management for clients, including

Program and Portfolio Management1 day induction into the client’s rolein project management.

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PO Box 9881, Frenchville Qld 4701Contact: Lee Currie Tel: 07 4927 7898 Fax: 07 4927 7858 Email: [email protected] Website: www.currenttraining.com.au

COURSE Certificate IV in Project Management

DETAILSApplies management skills to aproject environment. Classroom orself-paced.

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ooff TTeecchhnnoollooggyy

School of Urban DevelopmentGPO Box 2434, Brisbane QLD 4001Contact: Assoc/Prof Jay YangEmail: [email protected]: 07 3864 1028Fax: 07 3864 1170Enquiries: 07 3864 2678Website:www.bee.qut.edu.au/urbdev/

COURSESMaster of Project Management Graduate Diploma in ProjectManagementGraduate Certificate ProjectManagement

DETAILSProject-related skills for seniormanagers in both private and publicsectors. Provides skills to managemultidisciplinary teams in a projectfocused environment. For the maturepractitioner and focuses on self-pacedand lifelong learning.

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School of Geography, Planning and

Architecture, St Lucia Qld 4072 Contact: Dr David WadleyTel: 07 3365 6455 Fax: 07 3365 6899 Email: [email protected]:www.gpa.uq.edu.au/programs/ProjMan/COURSESGraduate Diploma in ProjectManagementGraduate Certificate of ProjectManagement Masters of Project Management

DETAILSGeneric project managementprograms based on the 9 coreknowledge areas of the PMBOK.

SOUTH AUSTRALIA

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Ground Floor Wolf Blass House, 64 Hindmarsh Sq, Adelaide SA 5000Contact: Estelle FarwellTel: 08 8232 7899 Fax: 08 8232 7599Email: [email protected] Website: www.panurgem.com.au

COURSE The Project Management Framework– A best practice guide to projectdelivery

DETAILSFocuses on the role of the projectmanager, develops the skills toproactively manage projects andapply the knowledge to currentprojects. Uses case studies and coversmanaging contracts, informationflows and formulating risk profiles.Provides a sound knowledgefoundation for assessment in theRegPM program. Offered in house.



UUnniivveerrssiittyy ooff SSoouutthh AAuussttrraalliiaa

School of Natural & BuiltEnvironments, City East Campus,North Terrace, Adelaide SA 5000 Contact: Jeremy CogginsTel: 08 8302 1069 Fax: 08 8302 2252 Email: [email protected] Website:www.unisa.edu.au/nbe/careers/projmanage/default.aspCOURSE Graduate Diploma in ProjectManagement Master of Project Management

DETAILSAdvanced study on international bestpractice for project managementamong various industries. Uses theGuide to the Project ManagementBody of Knowledge as a framework.Available in Hong Kong – contactTony Ma [email protected].

TASMANIASee national listing for courseproviders.

VICTORIA

LLeeaarrnniinngg SSeeaatt

Level 11, 330 Collins St, Melbourne Vic 3000Contact Joseph BruzzanitiTel: 0411-130-909Email: [email protected]: www.learningseat.com

COURSE AQF IV in Project Management

DETAILSGeneric project managementprograms based on the 9 coreknowledge areas.

PPSSAA PPrroojjeecctt MMaannaaggeemmeenntt

620 St Kilda Road, Melbourne Vic 3000Contact: Paul SteinfortTel: 03 9529 7500 Fax: 03 9529 7672Email: [email protected]: www.psaproject.com.au

COURSE Your Project [email protected]

DETAILSReal life projects with emphasis onproject achievement and outcomesthrough a guided structure. Also anadvanced project analysis, planning,risk management and implementationmethodology.

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121 Barringo Road, New Gisborne Vic 3438 Contact: Marianne Grech Tel: 03 5428 2571 Fax: 03 5428 1435 Email: [email protected] Website: www.thomsett.com.au

COURSESProject Management: EssentialTechniques Project Management: AdvancedTechniques Extreme Project Management:Masterclass

DETAILSThe essential models andtechniques that assist in instillingeffective practices for developing a



business case, project planning,specification, control and reportingwithin an organisation’s projectdevelopment areas.

WESTERN AUSTRALIA

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1/20 Mercer Lane, Joondalup WA6027 Contact: Michael MullinTel: 08 9301 2434 Fax: 08 9301 2470 Email: [email protected]: www.apmmgroup.com.au

COURSESCertificate IV in Project Management Diploma in Project Management Advanced Diploma in ProjectManagement

DETAILSCompetency based training programsprovide project managers, projectcoordinators and project teammembers with the required relevantskills in the workplace.

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Faculty of the Built Environment, Artand Design, GPO Box U1987, Perth WA 6845Tel: 08 9266 7357 Fax: 08 9266 2711Contact: Associate Professor David

BaccariniEmail: [email protected]: www.postgraduate.curtin.edu.au

COURSES Master of Science [ProjectManagement]Graduate Diploma in ProjectManagementGraduate Certificate in ProjectManagement

DETAILSA generic approach to projectmanagement for industries such asconstruction, engineering, health,commerce, management, IT andresearch development. Available inHong Kong, Singapore and Sri Lanka.Graduate Certificate and GraduateDiploma have distance-learning option.

NATIONAL PROVIDERSAPMM Group: Qld, SA, Vic – see WA.Aqua Projects: NSW, VIC, SA – see Qld.CPMG: Australiawide – see ACT.Current Training Queensland:Australiawide – see Qld.Hain Consulting: Australiawide – see NSW.iknowma: Australiawide – see NSW.Learning Seat: Australiawide – see Vic.Planpower: Australiawide – see NSW.Sigma Management Science:Australiawide – see NSW.Skillsoft Asia Pacific: Australiawide –see NSW. The Thomsett Company:Australiawide – see Vic.UNE Partnerships: Australiawide –see NSW.Short courses: Australiawide –www.aipm.com.au/html/endorsed_short_courses.cfm

Postgraduate opportunitiesResearch shows an increasing demand for project managementprofessional across all sectors of industry. There is recognition that goodproject management skills and knowledge improves productivity,save resources and creates better outcomes. These skills are not intuitiveand can be developed and further enhanced with study.RMIT University’s Master of Project Management develops the uniqueskills and new knowledge to further your career.Why an RMIT postgraduate degrees?• A recognised leader in project management with undergraduate,

postgraduate and research degrees.• Graduates work in a range of organisations including the ANZ Bank,

Department of Justice, Mirvac and • Our degree is flexible as we recognise the need to combine study with

a career,• Academics, practitioners and external experts work together to deliver

the degree.• Full-time and part-time study available.RMIT also has an undergraduate Bachelor of Applied Science (ProjectManagement) degree for school leavers and those wanting to enter the field.Postgraduate Information evening:Wednesday 19th October - 6 pm, Storey Hall, Swanston Street, MelbourneFor more information contact: Ian McBean, Program Director (03) 9925 3907/2230e-mail [email protected]: www.rmit.edu.au/tce/bce

www.rmit.edu.au

ProjectManagementProfessionals

hmaBlaze 078151

GST on long term contractsLong-term contracts spanning 1 July 2000 were GST free

until 30 June 2005 if they did not have a review

opportunity. When the GST free transition period ended on

30 June 2005, this tax became payable on these contracts.

These contracts are mainly commercial property leases butcan also include infrastructure projects, agriculture managedinvestment schemes and trustee agreements. Suppliers arethose who provide the goods, services or property under thecontracts and recipients are the receiving parties.

These changes to the GST law have been made to helptaxpayers who have contracts affected by the end of thetransition period. From 1 July 2005, suppliers in thesecontracts can pass on the GST by negotiating withrecipients to either accept an increase in the price of thetaxable supply or be liable for the GST themselves.

However, until finalisation of these negotiations suppliersare liable for any GST payable from 1 July 2005 and aren’table to pass it on to the recipients. For this reason, suppliersnot intending to bear the cost of the GST should startnegotiations with recipients as soon as possible.

An independent arbitration process is available to helpsuppliers in negotiations with recipients.

Note that the tax office is not involved in the negotiationsor the arbitration process.

For more information, view the fact sheet, GST and longterm non-reviewable contracts at www.ato.gov.au

by Neil Mann, Deputy Commissioner, Austra l ian Tax Off ice



Senior managementperceptions of top performingproject managers

by Lynn Crawford, Human Systems Internat ional

and Univers i ty of Technology, Sydney

PROJECT MANAGEMENT STANDARDS ARE USED EXTENSIVELY THROUGHOUT THE WORLD IN TRAINING AND DEVELOPMENT,

PROFESSIONAL CERTIFICATION PROGRAMS AND CORPORATE PROJECT MANAGEMENT METHODOLOGIES, BASED ON THE ASSUMPTION

THAT THERE IS A POSITIVE RELATIONSHIP BETWEEN STANDARDS AND EFFECTIVE WORKPLACE PERFORMANCE.

However, there has been no empiricalresearch reported that supports orindeed questions this assumption.

This analysis of data on 208 projectpersonnel from Australia, UK and theUSA explored the perceptions ofsenior management of therelationship between performanceagainst standards and theeffectiveness of project managementperformance in the workplace.

An integrated model of projectmanagement competence

Competence was once a simple termwith dictionary definitions such as“power, ability or capacity (to do, for atask etc.)” and “due qualification orcapacity, adequacy or sufficiency” todo a task. However, the concept ofcompetence has developed differentmeanings, and it remains one of themost diffuse terms in the organisationaland occupational literature.

In the US, a competency model orattribute based competency approachhas prevailed, while competencystandards, or demonstrableperformance approach, is the basisfor national qualificationsframeworks in the UK, Australia,New Zealand and South Africa.

The following framework wasdeveloped to bring together orreconcile the competency or attribute

based model with competencystandards or performance basedapproaches and provide a basis foridentifying and measuring aspects ofcompetence against standards.

The integrated model indicates thatcompetence is not a singleconstruct and is represented asknowledge and skills that can beclassified as input competencies andpersonal competencies.Performance based inference ofcompetence relies on demonstrableperformance or use of practices andis represented in the model as

output competencies. Measurementrequires standards to rate: • knowledge, represented by bodies

of knowledge such as the APMBody of Knowledge, the ICB:IPMA Competence Baseline andPMBOK® Guide

• demonstrable performance or use ofproject management practices,represented by performance basedcompetency standards, such as theAustralian National CompetencyStandards for Project Managementand those developed within theUK’s National VocationalQualification framework.

ProjectManagemen tCompe tence

ProjectPer fo rmance

Organisat ionalPer fo rmance

Relationship between project management competence and organisational performance

Knowledge

CorePersonality

Characteristics

Skills( represented by

qual i f icat ions andexper ience)

DemonstrablePerformance

Attr

ibut

e ba

sed

infe

renc

eof

com

pete

nce

Per

form

ance

bas

edin

fere

nce

of c

ompe

tenc

e

t he knowledge andunderstanding, ski l ls and

abi l i t ies that a personbrings to a job

the core personal i tycharacter ist ics underly ing apersons capabi l i ty to do a

job

the abi l i ty to perform theactivi t ies within an

occupat ional area to thelevels of performance

expected in employment

InputCompetencies

PersonalCompetencies

OutputCompetencies

Competence

Integrated model of competence showing its components.

P15-20 crawford prof career.qxd 19/08/2005 10:43 AM Page 16


The PMBOK® Guide and AustralianNational Competency Standards forProject Managemnt were selected as abasis for testing hypotheses on therelationship between performanceagainst project managementstandards, and perceived effectivenessof performance in the workplace.

Data on performance againststandards was collected using amultiple choice knowledge test basedon the PMBOK® Guide and selfassessment against the AustralianNational Competency Standards forProject Management.

Supervisor perceptions ofworkplace effectiveness

Supervisors/senior management wereasked to rate project personnel infour areas: • their value to clients• their value to the organisation• the effectiveness of their

relationship to peers in achievingproject goals

• their ability inspire and encouragethe performance of others.

Scores above the median wereidentified as top performers andthose below as lower performers.Participants in this study wereconsidered relatively effectiveperformers who were employed inproject roles by organisations thatrecognised the value of projectmanagement sufficiently to supportthe study, and valued theparticipants sufficiently to supportthe time they spent in the datacollection workshops.

Nature and context of projects

Another important issue inconsidering project managementcompetence is the nature of projectsand the context within which they are

conducted. This is the organisationalcontext in which the project, theproject manager, and team arerequired to operate.

The main contextual variables used were:• country• industry sector of organisation• application area of project• project role• organisational project management

competence or maturity.

Variables used to present a picture ofthe degree of complexity in theprojects managed included:• similarity of projects vs differences • degree of definition of the project at

the start • degree of definition of goals at the

start of the project • degree of definition of methods at

the start of the project.

Confirmatory analysis: knowledgeand use of practices

Results of analysis of variance indicatethat there is no statistically significantrelationship between projectmanagement knowledge, demonstratedby total scores on the knowledge testbased on the PMBOK® Guide, and themeasure of perceived effectiveness ofworkplace performance.

Analysis of variance at the level ofoverall use of project managementpractices indicates no statisticallysignificant relationship betweenoverall use of project managementpractices and supervisor ratings.

These results clearly indicate no directrelationship between how well projectmanagers perform against standardsfor knowledge and use of practices,and how well they are perceived toperform by their supervisors.

This suggests that the knowledge andpractices valued by projectmanagement practitioners, andembodied in their professionalstandards, are not the same as theknowledge and practices valued bysenior managers.

In drawing these conclusions,however, it is important to note thatboth competence and perceptions ofworkplace performance are complexand influenced by personality andbehavioural characteristics of boththe project personnel and theirsupervisors, the nature of the contextin which they operate, and the typesof project managed.

Supervisor perceptions

Using logistic regression models,contextual factors of country, projectmanagement role, and level oforganisational project managementmaturity were shown to be moreimportant in terms of predictingsupervisor perceptions of workplaceperformance than variables relatingto performance against the standards.

It is not surprising that those inhigher project management roles(project/program director) are morelikely to be rated highly bysupervisors than project managersand team members. In this sample,31 per cent of team members, 43 percent of project managers and 75 percent of project/program directors arerated top performers.

The effect of country is that projectpersonnel based in the USA are morelikely to be highly rated than those inAustralia or the UK. In this sample,32 per cent based in the UK, 42 percent based in Australia, and 70 percent based in the USA are rated bysupervisors as top performers, despite

95 45.7%

32 15.4%

81 38.9%

208 100.0%

Lower performers

Median performers

Top performers

Total

Count %

Supervisor Rating

Identifying top, median and lower performers

95 54.0%

81 46.0%

176 100.0%

Lower performers

Top performers

Total

Count %

Supervisor Rating

Identifying top and lower performers (median performers removed)

Supervisor rating summary scores

P15-20 crawford prof career.qxd 18/08/2005 12:11 PM Page 17


the UK sample, on average,performing better against thestandards in terms of knowledge anduse of practices.

This suggests that variations due tocountry may have more to do withfactors relating to the supervisors andwith cultural values in terms ofassessment than they do with actualperformance, perceived or otherwise.

An interesting finding is a negativerelationship between level oforganisational project managementmaturity and the odds of beingperceived by supervisors as a topperformer. The higher the reportedlevel of organisational projectmanagement maturity, the lower thelikelihood of being perceived as atop performer.

Although a wide range of contextual,qualifications and experience factorswere screened, only level oforganisational project managementmaturity, country, role, applicationarea of project and industry sector ofthe organisationappeared in the bestreduced models.Examination of othervariables indicatedthat project personnelworking on projectsthat are quitedifferent from oneanother and witheither goals ormethods or both notwell defined at thestart of a project, aremore likely to beperceived bysupervisors as topperformers.

While no statistically significantrelationship between overall scores onthe knowledge test and supervisorperceptions of performance emerged,further analysis showed that totalscores on the knowledge test wereassociated with increasing odds ofbeing perceived by supervisors as atop performer.

Also, higher levels of projectmanagement knowledge appear topositively affect perceptions ofworkplace performance.

Only one of the nine knowledgedomains, quality, had a negativeassociation with supervisorperceptions, while cost, time,procurement and human resourcesknowledge are positive factors inperceptions of workplace performance.

In use of practices, patterns ofpositive and negative influence onperceptions of workplaceperformance emerged. Procurement isparticularly interesting as someaspects appear to increase the

likelihood of being considered a goodperformer, while others are associatedwith decreasing likelihood.

There is evidence that time planningand management practices, an areatraditionally associated with projectmanagement, are generally associatedwith positive perceptions ofworkplace performance.

Although integrative planning is not apositive factor in perceptions ofworkplace performance, integrativemonitoring and controlling alongwith monitoring and controlling oftime and cost are associated withincreased odds of being perceived atop performer in the better logisticregression models.

It is interesting that monitoring andcontrolling scope decreases the oddsof being perceived as a topperformer. Allied to this arecommunication, stakeholdermanagement and project definition.

Supervisors seem to prefer projectmanagers who limit themselves totraditional project managementresponsibilities of time, cost andprocurement and do not trespass intowhat might be considered generalmanagement areas, such asorganisation structure, project andscope definition and control,integration and communication.

There are two notable exceptions.One is human resource management

Application area N Percentage of top performers

IS/IT and telecommunications 31 61

Engineering and construction 22 27

Business services 45 47

Industrial processes 58 36

Missing 20 14

Total 176

Percentage of top performers by application area of project

Ref: Variable Frequency. % 1 Manage contract finalisation procedures 75 29.07 2 Cost knowledge 66 25.58 3 Total score on knowledge test 23 8.91 4 Planning – specialist (time) 22 8.53 5 Assess time management outcomes 18 6.98 6 Time knowledge 13 5.04 7 Procurement knowledge 8 3.10 8 Use of time management practices 7 2.71 9 Monitoring and controlling – integrative 5 1.94 10 Human resources knowledge 4 1.55 11 Procurement activities 4 1.55 12 Establish agreed procurement processes 3 1.16 13 Monitoring and controlling – specialist (cost) 3 1.16 14 Monitoring and controlling – specialist (time) 3 1.16 15 Closing – integrative 2 0.78 16 Use of human resource management practices 1 0.39

Frequency of variables that increase the odds of being perceived as a top performer



knowledge and practicewhich is usuallyconsidered bysupervisors as thedomain of generalmanagement and ispositively associatedwith supervisorperceptions ofperformance.

Another exception isthat program/projectdirectors using higherlevels of integration andscope practices aremore likely to beidentified as top performers thanproject managers or team members.

These results are supported byresearch by the UK Association forProject Management and a number ofleading UK companies (Morris et al,2000) which showed that areas ofknowledge on which there was leastagreement among respondents closelymirrored the knowledge and practicesthis study found to be negativelyassociated with senior managementperceptions of performance.

These results, drawn from twodifferent studies but painting a similarpicture, support the proposition thatthere is senior management resistanceto project manager involvement inpractices related to strategy, projectdefinition, project integration and communication.

To be rated by senior management astop performers, project personnelshould avoid activities that might beinterpreted as encroaching upon theterritory of general management.

The use of strategy, requirementsmanagement, integrativemanagement, performancemeasurement and informationmanagement, and stakeholdermanagement practices is likely tolower perceptions of projectmanagement performance by senior managers.

Both ours and the UK studies indicatethat the knowledge and practicesconsidered important to the success

of projects by project managementpractitioners are different to thosevalued by senior management.

Further support for these differencesin what is valued by project managersand senior managers is provided byother research on selling projectmanagement to senior executives(Thomas et al, 2002). According tothis study, “in all the interviewsconducted, only those at oneprojectised firm consistently describedproject management as providingstrategic benefits” while all othersdescribed it is a “corporate tactic”.

Senior management expectation thatproject managers will concentrate onmonitoring and control of cost andtime and delivery of results issupported by the statement that“executives do not view projectmanagement as useful for more thana control mechanism.” and a quotefrom an executive reported to havesaid “Don’t tell me how it’s done, justshow me the results”.

Perceptions vs expectations

This research suggests there is nostatistically significant relationshipbetween performance against thestandards selected for study, in theirentirety, and perceived effectiveness ofworkplace performance.

Patterns of both positive and negativerelationships between performanceagainst parts of the standards andperceptions of workplaceperformance are evident. Thissuggests a difference in perceptionsand expectations of project

management competence amongproject managers and theirsupervisors, senior management.

It seems that to increase thelikelihood of being perceived as a topperformer by senior management,project personnel should:• be located in the USA• be a project/program director• work in organisations that have a

project management system andplans based on previous experience,equivalent to Level 2 of theSoftware Engineering InstituteCapability Maturity Model

• work on IS/IT andtelecommunications projects thathave high ambiguity (ill definedgoals, methods or both) and arequite different

• have high levels of projectmanagement knowledge especiallyin areas of cost, time, humanresources and procurement

• concentrate on using time, humanresources and procurementpractices, with particular attentionto monitoring and controlling ofcost and time, establishing andnegotiating contracts and managingproject finalisation.

Project personnel who wish to beperceived by senior management astop performers should be very carefulin involving themselves in activitiesthat might be interpreted asencroaching upon the territory ofgeneral management.

Email: [email protected]

Website: www.pmcompetence.net

See over for references

Ref: Variable Freq. % 1 Level of organisational project management maturity 84 40.19 2 Assess communications management outcomes 71 33.97 3 Monitoring and controlling – specialist (scope) 14 6.70 4 Use of communications management practices 8 3.83 5 Assess risk management outcomes 7 3.35 6 Communication activities 7 3.35 7 Organisation structure activities 6 2.87 8 Use of project integration activities 3 1.44 9 Conduct procurement process activities 3 1.44 10 Planning – specialist (cost) 2 0.96 11 Stakeholder management (parent organisation) activities 2 0.96 12 Project definition activities 1 0.48 13 Stakeholder management (client) activities 1 0.48

Frequency variables that decrease the odds of being perceived as a top performer



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Kilcourse, T (1994) Developing CompetentManagers. Journal of European IndustrialTraining 18 (2): 0309-0590.

Larson, E W and Gobeli, DH (1989)Significance of project management structureon development success. IEEE Transactionson Engineering Management 36 (2):119-1215.

Lindsay, P R and Stuart, R (1997)Reconstruing competence. Journal ofEuropean Industrial Training 21 (9):326-332.

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F E A T U R E 21

Member profile: building strong teams a key

Neicia Shaw is managing director ofNS Project Management, a smallbusiness enterprise providing projectmanagement services for businessesundergoing change to their propertyand facilities.

Neicia’s extensive experience is inleading and managing fitout programsin the multi-national corporate projectenvironment. She has delivered projectswith budgets up to $35 million andworked throughout Australia and inChina. A recent assignment was toredefine the brand integrity of anational retailer across 908 outletsthroughout Australia.

“One thing I enjoy about projectmanagement is forming and buildinga strong team of consultants andsuppliers to deliver the client’sbusiness objective.”

Neicia’s approach to excellence isfounded in a relationship model thatachieves ongoing cost savings andservice benefits throughout theproject lifecycle.

“Each and every project is different;you learn something new. Nothing isever wasted.”

Working on significant projects acrosscommercial, retail and communitysectors means managing quitedifferent cultures and structures todrive performance and achievement.

Retail, for example, has a harder andfaster lifecycle than commercialprojects.

However, the same principles ofcommunication and team buildingstill apply and can be only effectively

delivered through excellentrelationship management.

“Clients today demand much morethan cost, time and quality control.Each project or program must achievenot only these first line outcomes, butalso deliver long term corporate successthat adds the ‘wow’ to the business.

“It might be that the client is lookingto achieve uptake in sales, increasedmarket share and brand recognitionacross the network. In a commercialproject, key success factors might beinnovative or safer workingenvironments, or increased capacityfor operations.

“Working with both the client and astrong team, these are the drivers thatmake project management verysatisfying.”

Her most recent work with DigicallAustralia was to manage anaggressive national redevelopmentprogram of approximately 60 newand existing Vodafone retail outlets ina 12 month period, originallyforecasted as a two year program.

The team consisted of suppliers who singularly were competitorsagainst each other in the same field of expertise.

However, her approach to contractmanagement for this programenabled competitors to come togethercollaboratively as partners withoutfear of exchanging and developinginformation; a unique style ofworking not generally seen in retailshop fit.

This strategy resulted in a highlysuccessful program both for the clientand the suppliers.

Neicia’s work has been published inThe Financial Review, TrendsMagazine, and InDesign Magazine.She has been a member since 2001, isa certified Master Program Directorwith the AIPM and holds anAdvanced Diploma of ProjectManagement through the Universityof New England.


ConferenceEnviro 2006 Conference & Exhibition

Melbourne Exhibition & Convention Centre, Victoria Australia8 May 2006 to 11 May 2006 Conference9 May 2006 to 11 May 2006 ExhibitionContact: Rosalind Vrettas, phone 03 9741 4679, email [email protected] www.enviroaust.net

Neicia Shaw

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22 F E A T U R E

A powerful synergy: combining value and riskmanagement studies

by Devender Jain, EZE Solut ions

Pty Ltd, Sydney, Austra l ia

COMBINING VALUE AND RISK MANAGEMENT STUDIES IMPROVES FUNCTIONALITY AND REDUCES RISKS.

The value risk management process minimises project risksas well as indicating the best value for money solution,ensuring projects have appropriately balanced functionality,risk and life cycle cost.

As risk treatment strategies may not be subjected to valueanalysis/management in a standalone risk managementstudy, best value may not be obtained.

Moreover, when using value management during thecreative idea generation and evaluation phase, theidentification and analysis of risks cannot be ignored.

Risk analysis/management

In accordance with AS/NZS 4360 Standard of RiskManagement, the steps in risk management are: establishingthe context, identifying the risk and analysing andevaluating it, followed by risk treatment, action planning,monitoring and review.

Value management

Value management is a structured analytical process thatseeks to achieve value for money by providing all the

necessary functions at the lowest total cost, consistent withrequired levels of quality and performance.

The process separates needs from wants and can be appliedto infrastructure as well as non-infrastructure projects. Thetable shows that project objectives and goals need to be acommon feature.

In risk management, risks have to be identified in thecontext of project goals and objectives, in valuemanagement it is important to identify and evaluate these atthe generation of creative ideas and evaluation stage.

On the other hand, risk treatment options need to besubjected to value analysis/management to get best value formoney. The accompanying case studies illustrate this.

Case study: a car park

A steel framework supports a two storey brick and concretecar park over several freight train lines, a rail junction, acrossover and catch points. The structure is at risk of collapseonto a train if it derails in or around the junction or crossoverand collides with columns supporting the car park.

The objective of the riskmanagement plan was to identifyand analyse the risks andrecommend risk mitigationstrategies.

One of the following four optionsmitigated most risks with high orabove risk levels:• fully protect the columns • selectively protect columns – deflection wall– beams allowing some columns

to be taken out• install guard rails • demolish car park.

The overall goal to was to avoid atrain accident and the objectivewas to mitigate associated risks.

Context Context

Identification of goals/objectivesIdentification of Risks

Functional AnalysisRisk Analysis

Creative idea generation & evaluationTreatment

Action Plan• Action Plan• Monitoring and review

Combining value management and risk management

Risk management Value management

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F E A T U R E 23

These options were evaluated using value management.

In summary, the value management process that followedrisk management processes in this case comprised:1. An evaluation criteria agreed in a stakeholder workshop:

• ensure safety of train operations and publicsafety

• a cost-effective solution• solution provides smooth and efficient train

operations.2. Paired comparison technique and value judgement

weightages were applied to the evaluation criteria on ascale of 1 to 10, with 10 the most preferred.

3. Options were evaluated in a stakeholder workshopagainst the evaluation criteria on a scale of 1 to 10, with10 the option that fully satisfies that criterion.

As a result, demolition of the car park was the mostpreferred option. I might add here that in absence of thevalue management study, site engineers were planning to gofor the option of full protection of columns because thisappeared the best engineering solution.

In this case, the outcome clearly reduced safety risks, capitalcost and design and construction time while increasing thesafety of train operations and functional efficiencies becausespeed restrictions on trains were removed.

This approach also ensured:• input by all stakeholders• acceptance by train operators• optimisation of resources used.

Clearly, using value management in tandem with riskmanagement opened the process to stimulate ideas, improvefunctionality and result in building value and reducing cost.

Case study: an electrical upgrade

In the early 1950s, progressive electrification of a railwaycorridor was undertaken. Substations and sectioning huts were constructed using equipment and construction strategies that suited operationalrequirements of the era. Transmission lines built in thelate 1930s were relocated when required to suit the newsubstations. At that time, they traversed areas ofrelatively low population.

Today, the life of the original equipment has expired. Forexample, some direct current circuit breakers exceeded themanufacturer’s design life of 2,000 operations by a factor offour. Spare parts can only be procured through special, highcost, limited production runs, or by cannibalising otherequipment. Because of population growth, the transmissionline traverses a heavily populated area that is also prone tosevere bushfires.


24 F E A T U R E

The operational and protection methods of the high voltagetransmission lines needed immediate review to minimise therisk exposure to:• a line fault starting a bushfire, and/or electrocuting the

public• re-closing to sectionalise a fault on the line in heavily

populated areas.

A value management study was commissioned to identifythe optimal solution of these problems.

An analysis of core functional requirements resulted inidentifying the need to supply traction power and protectthe line by sectionalising its faulty portion.

Major risks in upgrading and maintenance of the electricalsystem were identified:• bushfires caused by fallen conductors • damage to equipment by a lightening strike, its age or

surges caused by supply interruptions• loss of supply to traction system would stop trains and

lose customers• community costs were $7.10 per hour delay per customer

and adverse political/media exposure• protection risks of a fault in one part of the system

affecting the whole system, the protection scheme notmeeting current operating practice, and requiring toomany re-closings to locate a fault.

It was established that six sectioning huts were affected bythe proposal to upgrade. Four options were considered:1. Do nothing.2. Repair existing hut + new equipment + brick cubicles

between direct current circuit breakers.3. Repair existing hut + new equipment + sheeting between

direct current circuit breakers.4. New sectioning huts + all new equipment.

Evaluation of these options was carried out using valuemanagement and focusing on the need to minimise risks.

Options were preferred in the following order:1. Option 4 – most preferred as it minimised the risks and

provided best value for money.2. Option 2.3. Option 3 – least preferred.

Seven options were considered for the substations:1. New substations, including pilot wire protection of the

66kV transmission lines.

2. Repair existing building + all new equipment, includingpilot wire protection of the 66kV transmission lines.

3. Pilot wire protection only.4. Replace DC switchgear only.5. Options 3 + 4.6. Replace 66kV HV switchgear, including pilot wire

protection of the 66kV transmission lines.7. Do nothing.

Options were ranked in order of preference:1. Option 1 – most preferred as minimised the risk and

provided best value for money.2. Option 2.3. Option 5.4. Option 6.5. Option 3.6. Option 4 – least preferred.

The optimal solution

Clearly the two case studies established that neither riskmanagement nor value management alone can provide thebest solution. A combination of the two results in the bestsolution, providing the greatest value for money atminimum risk.

In the car park, full protection of columns that was plannedin absence of value management would have been muchcostlier and still require speed restrictions on trains underthe car park. Demolishing the car park was cheaper andensured 100 per cent mitigation of risk.

In the electrical upgrade, value management alone may haveensured all functionality was met at least possible cost, butin absence of risk management input, the option selectedmay not have been the one with the least risks.


Website: www.ezesolutions.com.au

ReferencesCowan, B & Dr Danaher, B Managing Risk on Projects Using aStandard Approach, AQUA Project Consulting, Queensland, Australia

Prof Ireland, V “Organisations Entrance Project Management”,Technologies Business Review, Australia May 2001.

Bushell, J “Value Management – Structural Innovation”, TechnologyBusiness Review, Australia May 2002.

Adam, E Value management – Cost Reduction Strategies for the 1990s,1993.

NSW Government Total Asset Management Manual, 1993.

Australian Standards Association Australian Standard AS 4183 “ValueManagement” 1994.

Australian/New Zealand Standard AS/NZS 4360 “Risk Management 1999.


P R O J E C T S U C C E S S 25

Project management proving a vital strategic tool

by Colin Stewart, Managing

Director, EQuest Consul t ing

Large Australian organisations are rapidly moving to adoptenterprise project management to improve their businessstrategies, according to our survey of 100 top companies.

The survey found that 38 per cent of organisations havecreated enterprise project management offices in the financialservices, telecommunications, utilities, education, government,transport, manufacturing and IT services sectors.

Many of these companies, aware of high failure ratesamong past large-scale projects, are now managing theirreporting processes, governance, process development,resource management, project selection, and benefitmeasurement across the enterprise from a central office.

Establishment of enterprise project management offices inthe upper echelon of large corporations sends a strongsignal that chief and senior executives view projectmanagement as a strategic tool.

The survey also found an increasing trend towards projectswith a duration of more than six months and budgets ofmore than $1 million, pointing to an increase in investment.Other findings included: • two thirds of organisations manage more than 25 projects

at the same time, and more than half the companiesemploy more than 25 project managers

• nearly half of projects involve between two and fivedepartments and 80 per cent of projects involve multipledepartments within the organisation, reflecting increasedcomplexity and more enterprise-wide projects

• almost half the enterprises surveyed find their projectmanagement tools are not effective. There is a small takeup of enterprise project management tools, but it is earlydays and many organisations lack the maturity to usethem effectively

• organisations need to focus on people capabilities and fitfor purpose process development to enable effective use ofproject management tools

• 68 per cent of enterprises are now undertaking projectportfolio management, up from 65 per cent last year,indicating a shift towards the centralised alignment ofprojects to strategy

• large companies are viewing benefits realisation as the

key method for getting projects to deliver organisational goals.

Enterprise project management is now considered astrategic initiative within large enterprises and chiefexecutives and senior management are recognising itsimportance in executing key business strategies.

Despite this, many large corporations have a long way to goin terms of their project management capabilities. Oftentheir skill level in managing projects does not match therequirements of their business.

Enterprises are still struggling with the silo approach, a lackof sufficient resources to properly support new projects, andduplication across competing business units.Implementation of an enterprise project management officeis considered a key step in moving towards creation of thecollaborative enterprise.

An enterprise project management office can reduce waste,kill unnecessary projects before they are approved and focuson the organisation’s objectives, rather than serve theagendas of competing interests within the company.

The holy grail is to have a series of project deliverables thatproduce deliberate outcomes which enable strategic goals tobe reached.

Most companies are not effective in managing projectsacross an enterprise and many large organisations attemptto use technology to improve their project managementcapability. Instead, companies should develop processes thatsuit the organisation, and conduct change managementprograms that allow employees to attain the capabilities toadopt the new processes.

Benefits realisation is emerging as an essential componentfor achieving project success because it is no longer enoughto deliver a project on time and to budget. Outputs fromthe project must also bring measurable benefits to theorganisation if the project is to be deemed a success.

Website:eqc.com.au

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26 P R O J E C T S U C C E S S

Why do we say estimate when we mean exact?

by Ivan Kenna, Managing by Project,

f rom 2004 AIPM Conference paper

THE ARTIFICIAL WORLD WHERE ESTIMATES ARE OFTEN MADE CAN BE AND USUALLY IS QUITE DIFFERENT TO THE REAL WORLD WHERE

WORK IS CARRIED OUT.

Often, estimates are put together before we know who isgoing to do the work, so the skills of the person doing thework are not considered. Even after work is assigned,estimates are not revised to take the skill level intoconsideration. This assumes we all have the same skills, afalse assumption that often leads to project overruns.

It is not uncommon for inexperienced estimators to assumea relationship between one’s position within an organisationand their set of skills, and a higher level within theorganisation automatically means higher skills. This may betrue for specialised skills within that industry and in certaininstances, but it is certainly not automatically true.

Often, team members depart a project and we assume thenew member has the same skills and can finish the task inthe same time as the original member, had they remained onthe team.

We ‘reward’ for finishing before the estimate and ‘punish’for finishing after the estimate. But was the estimateaccurate? The estimate may have been so grossly over-estimated that a known non-performer could havecompleted the task in half the time or, alternatively, theestimate may have been so unrealistic and under-estimatedthat even Superman couldn’t do it in the time. Is it fair tomeasure individual performance based on estimates alone?

What degree of accuracy is assumed in an estimate by thereceiver? If the receiver assumes 100 per cent, then wehad better ensure the estimate contains heaps of safety(critical chain).

How often do we include the accuracy of estimates in ourrisk management plans?

Our Gantt charts tell us that the instant a task is finishedthe person to do the next task in the sequence is waiting inthe wings ready to start. How often does this happen, andwhat does it mean when actuals do not equal estimates?

With all the estimating and simulation tools available to us,how much confidence can we have in the accuracy ofestimates? When projects run late, is it because ofinaccurate estimates or the method used in converting it toa duration, based on resource availability?

Assuming a team member is working exclusively on onetask, how many hours in an eight hour day are reasonable

to devote to that task? I would suggest a maximum of 4.5hours. You can work team members six hours a day forshort periods (10 consecutive days) to get back on track,but after that you will burn them out. You certainly do notwant to base your project on achieving six or moreproductive hours a day for the life of the project. You arejust not going to make it if you do.

How do we ‘prove’ the accuracy of our estimates. I am nottalking about critical chain and removing the safety fromour estimates along with the removal of task milestones,etc. with the intention of maintaining focus.

I do not necessarily believe that with milestones Parkinson’sLaw comes into play. Most tasks are late than exactly ontime. However, I believe we often miss the opportunitiescreated by early completion of tasks and this needs to beaddressed. I believe we need milestones to keep us focused.

There is the issue of efficiency of work time. How long doesit take you to regain your thoughts and get back to whereyou were before that 10 minute interruption?

What about rework, do we plan for it?

The real world

We must have in place a flexible system that allows us toadjust estimates, based on the skills of the person whoeventually does the work. Negotiation commences at thecompletion of estimation.

Apply a weighting to the estimate, based on the assessedskill level of the person doing the work and reflecting theirassessment of their skill, not yours.

Do not rely heavily on estimates being accurate.

Do not base measurement of individual performance oncomparing actuals with estimates unless you are certain thatthe estimate was fair and reasonably achievable. Projectmanagement is all about people and for successful projectsyou need a motivated team. This will not be achieved ifimpossible deadlines caused by impossible estimates havebeen imposed. The team will just give up.

Make certain your estimates take the real world intoconsideration. People are not computers. They are notperfect. They make mistakes.

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C O N S T R U C T I O N 27

Freshwater sets new standardsin energy efficiency

by Bernard Gillis, Project Manager, Austra land

THE RESIDENTIAL TOWER FRESHWATER PLACE AT MELBOURNE’S SOUTHBANK WILL ESTABLISH A LANDMARK IN ENERGY EFFICIENT

DESIGN BY MEETING OR EXCEEDING FUTURE EFFICIENCY STANDARDS AND DEMONSTRATING THAT COMFORT AND QUALITY CAN BE

INTEGRAL TO ENERGY EFFICIENT BUILDINGS.

The $450 million two stageresidential and commercialdevelopment’s north-facing positionwill occupy the final site on thesouthern bank of the Yarra Riverbetween Southgate and Crown.

The main challenges in constructingan energy efficient building are:• minimising heat loss or gain

through the façade• selecting materials with low

embedded energy levels• minimising maintenance and

running costs for both the bodycorporate and individual property owners.

Once you overcome these, you haveto communicate to potentialcustomers and other stakeholders thatthe building offers long-term energysavings while maximising the views ofthe river, parks and city.

You must also show the widercommunity that the developmentimproves the street scape whileproviding an enjoyable, functionalenvironment in which to live and work.

Keep in mind that residential andcommercial markets do not yet fullyappreciate the benefits of energyefficient design and buyers are oftennot willing to pay the true cost ofconstructing energy efficientbuildings.

You must demonstrate that althoughan energy efficient building is moreexpensive to build, over its lifecyclethere are considerable savings due tolower energy consumption.

Because of this, Australand bore thedevelopment risk of increasedconstruction costs.

As in all developments, we deal withthe creation and appreciation ofvalue. This means that in this high-rise residential development, thebenefits of energy saving featuresincorporated during design andconstruction are enjoyed by futurepurchasers.

Therefore, it is important thatpotential buyers understand thebenefits they will enjoy if theybecome owners.

Energy efficiency performance

The installation of energy efficientglass has enabled Freshwater Place tomaximise efficiency and guaranteespectacular views from theapartments’ floor to ceiling windowsthat have high performance glazingsystems to avoid excessive solar heatgain, winter heat loss, and thermaldiscomfort near the glazing.

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28 C O N T R A C T I S S U E S

Double-glazing with a grey tint and alow emissivity coating to the outerpane provides excellent solar heatcontrol and thermal insulationwithout compromising visible lighttransmittance.

The glazing system provides thefacade with the performance requiredto manage the conflict betweennatural daylight (visible lighttransmittance) and energy efficiency(thermal comfort).

Preliminary rating assessments basedon a sample of the apartments haverevealed that, due to the energyefficient glass, Freshwater Place islikely to achieve an averageapartment performance rating inexcess of four stars with manyexceeding five stars under theNational House Energy RatingScheme (NatHERS).

When taking all factors into account,a rating of greater than five stars willbe achieved under the current scheme.

Under this scheme, the three mainfactors in determining an efficiencyrating star are the area of glass, the

direction windows face, and theperformance of the glazing system.

The preliminary assessment has alsorevealed that without energy efficientglazing systems, apartments wouldachieve an overall average NatHERSrating of 2.5 stars with manyachieving zero or only a single star.

Furthermore, the low emissivitydouble-glazing is expected to reduceannual heating and cooling energyconsumption by approximately 30per cent.

Single glazing would not achieve thislevel of efficiency as it eithertransmits or absorbs a large portionof the sun’s radiant heat.

This leads to discomfort caused byhot internal glazing surfaces anddirectly transmitted solar radiation.

Similarly, during winter days andespecially at night, the cold internalsurfaces of single glazing increaseradiant heat loss.

The delivery of energy efficientdesign solutions, especially in

respect to window glazing, is adeveloping science.

A developing science

As the construction industrycontinues to respond to the need forenergy efficient products, economiesof scale will improve and assist inthe development of more costeffective products.

Our construction team managed thelogistics of delivering the façadesystem as well as balancing acousticand thermal performance.

Major milestones of the projectwere developing the concept andassessing thermal and acousticperformance requirements, followedby establishing the specification anddeveloping prototype façade panelsand performance testing the installation.

The aim was to create a building thatwould not only be a Melbourne iconbut would set a new benchmark inenergy efficient construction.


The Australian Institute of Project Management warmly congratulates

the Chapter and Category Winners of the

2005 Project Management Achievement Awards.

AIPM extends its thanks and appreciation to all entrants for theirsubmissions and their effort. Our thanks also to all our sponsors and the numerous organisations and individuals for their support.

www.aipm.com.au/html/2005_pmaa_winners.cfm

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L E G A L I S S U E S 29

by Richard McNeil, Partner, Cowel l

Clarke Commercia l Lawyer, Adela ide

This advice is particularly pertinentfollowing a recent court decision, andsubsequent appeal in the SupremeCourt. While this process occurred inSouth Australia, it has potentialnational ramifications as it isgenerally accepted in all jurisdictionsof Australia that a minimum term forwhich a lease should be entered intoby a tenant, inclusive of options forrenewal, is five years.

There are differences between thestates as to how the minimum five-year term is achieved, however, theyare much of a muchness. In SouthAustralia, it is achieved throughsection 20B(1) of the Retail andCommercial Leases Act 1995 whichstates: “The term for which a retailshop lease is entered into must be atleast five years”.

Subsection 2 of section 20B thenstates that a shorter lease will not beinvalid, but its term can be extendedto five years. In other words, thelegislation can operate to amend theterm of a lease, and will do so unlesscertain exceptions apply. The currentlegislation has potential to createuncertainty and, at times, some ratherstrange results. If a lease is granted to atenant with no specified term then,contrary to what the landlord mightexpect, the tenant may be entitled to aterm of five years.

One might expect the landlord whogranted the lease to be aware of thelegislation, and have no cause forcomplaint if the tenant insists on itsrights to a five-year term. However,care needs to be taken by a purchaserof a property that is already the subjectof a lease. A new purchaser may beprovided with a copy of a three-yearlease or be told by the vendor that thetenant is a monthly tenant with nospecified term, but this may not reflectthe actual rights of the tenant.

The purchaser may receive anunwelcome shock when it discovers,

after purchasing a property, that thetenant has a five-year tenure. Such asituation unfolded during proceedingsin the South Australian MagistratesCourt recently. A purchaser of someretail shop premises had been told bythe vendor that the occupier was amonthly tenant whose lease could beterminated at any time by the landlord.

After purchasing the property andgiving notice of termination to thetenant, the tenant refused to vacate,claiming the right to a five-year lease.

The purchaser/landlord sought ouradvice. This particular tenant hadtaken an assignment of the balance ofa five-year lease. At the expiry of thefive years, the tenant ‘held over’ andremained in the shop, effectivelybecoming a monthly tenant.

By the time the property was sold, thetenant had been ‘holding over’ fortwo years, but had been inoccupation for about three and a halfyears in total. The tenant claimed itwas entitled to a new five-year leasefrom the commencement of the‘holding over’, because it had beendoing so for more than six months.

The Magistrate accepted theargument of the tenant, on the basisthat none of the exceptions in section20B(3) to the minimum five-year termrequirement applied.

Under Section 3 of the Act, “lessee”is defined to include “the formerlessee”, so we argued the assignorwas a former lessee, and the period ofoccupation for the assignor and theexisting tenant was greater than fiveyears and the exception in section20B(3)(d) should apply.

This was rejected by the Magistrate.Following the ruling, the new landlordapplied to the Court for an orderincreasing the rent – still at the level setby the old lease entered into in 1995.One might expect that a Magistrate

would not interfere with any of theterms of the lease, including rentpayments. However, he directed that avaluer be appointed to determine acurrent market rental which wouldthen apply for the extended five-yearperiod. The Magistrate considered hehad the power to do so pursuant to thewide powers granted to a Magistrateunder Section 68 of the Act.

This decision represents uncharteredterritory for the courts, and it is byno means clear that other Magistratesor higher courts would take theapproach adopted by this particularMagistrate. In our appeal in theSupreme Court, Justice Grayoverturned the Magistrate’s decisionto extend the lease.

Justice Gray confirmed that no newlease is created by a “holding over”or an assignment. Consequently, thenotice of termination given by thelandlord was valid.

In conclusion, case law dealing withthe statutory entitlement to a five-year lease is still developing, and thepractical ramifications of such anentitlement will not always be clear.

In summary:• a retail shop tenant will be entitled

to a lease for a term of five years,unless one of the statutoryexceptions apply

• due diligence by a purchaser ofproperty which is subject to a leaseshould include detailed enquiriesabout the status of the tenant

• no new lease is created by anassignment or holding over onunchanged terms

• landlords need to consider theconsequences of allowing a tenantto hold over for more than sixmonths

• the Act does not operate to grantan assignee of a lease a further termof five years.


Website: www.cowellclarke.com.au

Property managers beware!RE-ACQUAINT YOURSELVES WITH LAWS GOVERNING COMMERCIAL LEASES – OR RISK THE PERILS OF UNWANTED TENANTS.

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30 L E G A L E A G L E

Best v reasonable endeavours:is there any difference?

Doug Jones AM, Head Major Projects Group,

Clayton Utz, d iscusses the di f ferences between

best and reasonable endeavours.

CONTRACTS COMMONLY INCLUDE CLAUSES REQUIRING ONE OR BOTH PARTIES TO USE THEIR BEST OR REASONABLE ENDEAVOURS

TO PERFORM THE TERMS OF THE CONTRACT OR TO REACH A CONTRACTUAL OBJECTIVE.

These clauses, either express orimplied, are typical in constructioncontracts when there is someuncertainty about a party’s ability toachieve a specific objective. Duringthe drafting process, a lot of time may be spent negotiatingwhether best, reasonable or allreasonable endeavours is the mostappropriate term.

The choice is deemed importantbecause a breach will result only fromfailure to reach the appropriatestandard of endeavour, not from afailure to fulfil the actual objectiveitself. In recent years, Australianjudicial opinion on endeavoursclauses has shifted away fromEngland. There, endeavours clausesremain differentiated according to thestandard of difficulty in fulfilling therelevant obligation.

This means that a best endeavoursclause requires a party to do all that ispossible without unreasonablydamaging its own business to achievethe contractual objective,1 whilereasonable endeavours simply requiresa party not to hinder or preventfulfilment of the contractual purpose.

Best endeavours

The High Court of Australia has heldthat a best endeavours clause “ismeasured by what is reasonable inthe circumstances, having regard tothe nature, capacity, qualifications,and responsibilities of the [promisee]viewed in the light of the particularcontract.”2

Accordingly, Australian courts willnot require a party subject to a bestendeavours clause to do anythingbeyond what is reasonable in order tosatisfy its obligations, and give “anhonest try”.3

Reasonable endeavours

Although subject to less judicialcomment than best endeavours clauses,reasonable endeavours has beendefined in Australia as “a fair, proper,and due degree of care and ability asmight be expected from an ordinarilyprudent person with the sameknowledge and experience as thedefendant, engaging in the defendant’sparticular conduct or omission underthe particular circumstances.”4

Thus in a 1993 case, a reasonableendeavours clause required a party tospend $270,000 for a Water Boardapproval5 because the significantmonetary outlay was foreseeable(although unknown) at the date ofthe contract.

Best v reasonable endeavours

Although no judge has actually statedthat best endeavours and reasonableendeavours create the same obligationand there is no substantive differencebetween the two, it is evident from ananalysis of recent case law that that isthe current interpretation withinAustralia.

The cases establish that a party’s self-interest, or the conflicting interests ofthird parties, may take precedenceover the best endeavours obligationwhen it would be beyond the boundsof reasonableness to give priority tothe other party’s interests.

If complying with either clause wouldbe unprofitable for the obligor, theobligor can refuse to engage in thefutile exercise of committing itsresources to achieve the contractualpurpose.

The main limitation, or characterisingfeature, of a best endeavours clause isthe constraint of reasonableness.

From case law in Australia it isevident that courts will read down abest endeavours clause in commercialagreements so it is no more onerousthan a reasonable endeavours clause.

Consequently, it would appear thatthe all reasonable endeavours clause,rather than falling between best andreasonable endeavours, issynonymous with both.

Nevertheless, it may be that whenboth terms are used for differentobligations in the one contract, thecourt will construe best endeavours ascreating a greater obligation thanreasonable endeavours.

Practical implications

Some writers recommend thatendeavours clauses should not beused in contractual drafting. Otherssuggest that if one must be used,reasonable endeavours should bechosen to avoid unrealisticexpectations by either party.

Ideally, when an endeavours clauseappears in a contract, it should referto objective criteria to measure them.When possible, the parties’ shoulddescribe exactly what they mean bybest or reasonable endeavours, andwhich considerations ought to beweighed in determining whether theobligation has been satisfied.

Email:[email protected]

References1Sheffield District Railway Co v Great CentralRailway Co (1922) 27 TLR 4512 Transfield Pty Ltd v Arlo International Ltd(1980) 144 CLR 83 per Mason J3 Hospital Products Ltd v United StatesSurgical Corporation (1984) 156 CLR 41 perGibbs J4 Australian Securities Commission vGallagher (1994) 11 WAR 1055 Graeme Webb Investments Pty Ltd vSoerpyk Pty Ltd (1993) NSW ConvR 55-661

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F R O M T H E I V O R Y T O W E R 31

Articulating your project scope – logically

David Baccarini, Curt in Univers i ty of Technology

PROJECTS MUST COMMENCE WITH A FORMAL STATEMENT OF PROJECT OBJECTIVES, TYPICALLY IN THE FORM OF A PROJECT

CHARTER WHICH OFTEN CONTAINS A CONFUSING MIXTURE OF ILLOGICALLY LINKED STATEMENTS.

A useful tool for properly articulatingthe project objectives for a projectcharter and scope statement is thelogical framework method whichestablishes in the project charter ahierarchy of four linked projectobjectives:• strategic contribution – all projects

arise from a need to fulfil specificstrategic objectives2. The strategiccontribution articulates the strategicrationale behind the project andmust be consistent with the strategicplans of the sponsoringorganisation

• benefits – projects are created todeliver benefits in terms of either aproblem to be solved or anopportunity to be exploited. Thebenefits describe the intended nearterm beneficial impact of using theproject’s outputs. The benefitsprovide the means to establish thestrategic contribution and determinethe required project outputs

• output – the project deliverable,which is any unique and verifiableproduct, result, or capability toperform a service that must beproduced to complete a process,phase or project1

• inputs –the resources and tasks todeliver the outputs.

Checking the logic

These four project objectives form ahierarchy of project objectives thatdisplays a series of cause-and-effectlinks between one level of objectiveand the next. The project objectivesare related to each other by a ‘means-end’ or ‘how-why’ logic, which isapplied as follows:

• start with strategic contribution Ask “how is this to be achieved?”The answer should be “benefit”.Then ask, “how is the benefit to beachieved?” The answer should be“project output” and so on

• working backwards from theinputs, check the logic. “Why dowe want to achieve this objective?”The answer should be the nexthigher objective.

This ‘how-why’ interrogation helpsto ensure a correct and logicalarticulation of the project objectives.Youker3 provides the followingsimple example that shows that all projects have a hierarchy of objectives.

Stonemasons are working on acathedral. The first one, when askedwhat he is doing, said “hitting stoneswith a hammer”. The second, “makingsquare stones”. The third, “building awall”. The fourth, “building acathedral”. The fifth “giving praise tothe greater glory of God”.

Each is giving an objective for thesame project, but at a different levelof the hierarchy of objectives. Theseobjectives can be verified by applyingthe how-why logic. The hierarchy ofobjectives has two levels:• strategic contribution and benefits:

these are strategic objectives, sitoutside the project and answer thequestion “Are we doing the rightproject?”

• outputs and inputs: these areoperational objectives and sitwithin the project. These answer

the question “Are we doing theproject right?”

The purpose of identifying ahierarchy of objectives is to:• establish a clear understanding and

statement of the project objectives.It avoids the problem of producingvague statements for the projectobjectives or scattering projectobjectives across project documents.It also prevents flaws in logic, suchas combining different levels ofobjectives because means and endsare often confusingly combined inproject documents. It provides anintegrated concise statement of theproject objectives

• structure logical thought andjudgement of the appropriateness ofthe stated project objectives, whichis particularly useful for softprojects. It also helps preventomission by oversight andencourages thought not only aboutthe project objectives but,importantly, links between them

• appropriately allocateresponsibilities for the achievement of the various levels ofproject objectives.


References1 PMI [Project Management Institute] (2004).A Guide to the Project Management Body ofKnowledge (PMBOK) 3rd Edition. PMI,

2 Turner, J R (1999). The Handbook ofProject-based Management – Improving theProcesses for Achieving Strategic Objectives.McGraw-Hill, London. 2nd Ed.

3 Youker, R (1998). “Defining the Hierarchyof Project Objectives” 14th World Congresson Project Management, IPMA, Ljubljana,Slovenia, 10-13 June, 347-353

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AIPMcontactsNATIONAL EXECUTIVEPresident Dr Neveen Moussa 0402 963 439 [email protected]

Vice President Granville May 0410 508 607 [email protected]

Treasurer Stuart Hughson (03) 6271 0340 [email protected]

Secretary Dr David Domkins 0417 492 870 [email protected]

CEO Peter Shears (02) 8288 8750 [email protected]

CHAPTERSACT ChapterPresident Paul Black [email protected] 0418 626 333

Administrator Helen Briggs [email protected] (02) 6258 0344

NSW ChapterPresident Justine Mercer-Moore [email protected] 0410 130 416

Administrator Wayne Miller [email protected] 0403 111 495

Northern Territory ChapterPresident Craig Forster [email protected] 0410 512 568

Administrator Sue Pratt [email protected] (08) 8981 4137

Queensland ChapterPresident Alan Tupicoff [email protected] 0412 056 683

Administrator Lorelei Broadbent [email protected] (07) 3211 4966

South Australian ChapterPresident Stephen Beaty [email protected] (08) 8221 5151

Administrator Skye Colquhoun [email protected] (08) 8332 9411

Tasmanian ChapterPresident Stuart Hughson [email protected] (03) 6271 0340

Administrator Maria Skillern [email protected] (03) 6233 7247

Victorian ChapterPresident Bill Young [email protected] 0409 337 718

Administrator Anne Phillips [email protected] 0417 400 843

Western Australia ChapterPresident David Baccarini [email protected] (08) 9266 7357

Administrator Karen Stevens [email protected] (08) 9311 7111

Editorial contributionsAs the official magazine of the AustralianInstitute of Project Management, the AustralianProject Manager quarterly publication aims toadvance the standing of the project managementprofession by reporting on advances in its bodyof knowledge, professional achievements onadvances in its body of knowledge, professionalachievements that illustrate the application ofthat body of knowledge, and supporting servicesand products that may enhance the practice ofthe profession. Project managers control theprocess of creating new products, new systems,new structures and new environments. Theirdecisions influence the selection and applicationof products, services, contractors and materialsof all kinds. Professional project managementtechniques apply equally to managementconsultancy projects, product developmentprojects, marketing projects, human resourcesdevelopment projects, social policy developmentprojects, research projects, computer systemdevelopment projects, as well as engineering andconstruction projects.The Australian Project Manager welcomeseditorial contributions that advance the body ofknowledge of the project managementprofession, foster cross-fertilisation between themany fields within which that body ofknowledge is applied, and illustrate aspects of itspractical application.Future issues of the magazine will, withinlimits, include regular single page features onproject management law, finance, news,professional practice, industry trends,education, IT and matters of interest to AIPMmembers. Contributions on these topics areespecially welcome.

Information for contributorsContributors submitting articles forpublication should supply the complete article(hard copy and on disk in Word for PC or textonly from Macintosh). Articles can be up totwo pages – 1600 words, and photos anddiagrams are welcome.

Address contributions to:The Chairperson, Editorial Subcommittee,

The Australian Institute of Project Management,c/- Kay Fay, Editor, Unit 1002, Solander,

42 Refinery Drive, PYRMONT NSW 2009or email to [email protected]

National Office:Level 9, 139 Macquarie Street Sydney NSW 2000Phone (02) 8288 8700 Fax (02) 8288 8711Website www.aipm.com.au

p32 contacts page sep05.qxd 30/08/2005 11:10 AM Page 32

Australian Project Manager sep05 web.pdfexemplary project management training and education activities, as well as continued professional development for our registered project managers

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