Project Management Impact on Business - esaa.org · Project Management Impact on Business “The P in PM is as much about people management as it is about project ... PM Triangle

Project Management

Impact on Business

“The P in PM is as much about people management as it is about project management”

-Cornelius Fichtner

Project

Management

Impacts of Good PM

• Happy Client

• Repeat business

• Profitable Projects

• Positive Workplace

• Brand recognition

Clients

Projects• Technical Deliverables

Project

Management

Clients

Projects• Technical Deliverables

Impacts of Poor PM

• Legal liability

• Financial liability

• Brand impact

• HR Impact

• Business impact

• Staff Moral

Key Reasons

Projects Fail

Poor CommunicationLack of Planning

No Quality Control

Milestones Not Met

Poor Resource Control

Poor Cost Control

Progress Mismanagement

Poor Management

Overstretch of Supplier Skills

Supplier Under-Resourced

Insufficient Measureables

Inconsistent Suppliers

57%39%

35%

34%

29%

26%

20%

17%

13%

12%

11%

4%

What is the most common issue that

causes projects to fail?

PM Goals and

Objectives

What are key client objectives?

Financial?

Technical?

Contractual?

Regulatory?

Timeline?

Legal?

Overall business?

Project Management Objectives

Initial

Response

to RFP

Proposal

Phase

Contract

Negotiation

Growth

Phase

Maturity

Phase

Demand

Decline

Closure

Phase

Project

Execution

OVERHEAD

REVENUE

PROFIT

Multi-Tasking

Interactions

Project

Manager

Client

Project

Team

Legal

QA/QCPublic

Relations

Contracting

Department

Stakeholders

Consultants &

Contractors

Senior

Management

PM

Triangle

Scope

Budget Schedule

Nearly Any Project Has Three

Basic Constraints

PM

Triangle

Scope

Budget Schedule

Each side represents a constraint -

one side of the triangle cannot be

changed without affecting the others.

PM

Triangle

Scope

Budget Schedule

Project Management is about providing the tools

and techniques that enable the project team to

organize their work to meet these constraints.

PM

Triangle

Scope

Budget Schedule

Fourth PM Constraint

Quality

PM

Triangle

Poor Communication

Lack of Planning

No Quality Control

Milestones Not Met

Poor Resource Control

Poor Cost Control

Progress Mismanagement

Poor Management

Overstretch of Supplier Skills

Supplier Under-Resourced

Insufficient Measureables

Inconsistent Suppliers

57%39%

35%

34%

29%

26%

20%17%

13%

12%

11%

4%

A key reason for project failure: not

understanding the scope

= Failure to communicate scope

Outline

PM

Triangle

Scope

Budget Schedule

A plan is required to manage key

project constraints

PM

Framework

Scope

Budget Schedule

Project Charter

Scope Management Plan

Work Breakdown Structure

Schedule Management Plan

Project Schedule

Cost Management Plan

Project Budget

PMFramework

PM

Framework

Scope

Budget Schedule

Quality Management

Plan

Risk

Management

Project Risks don’t “disappear”

Accept consequences of the risk

Accept

Eliminate the root causes of risk

Eliminate

Minimize the probability of occurrence and impact

Mitigate

Pass the risk to other party

Transfer

Contract

BudgetSchedule

QualityDeliverables

ProfessionalServicesAgreement

Page1of6

ProfessionalServicesAgreement.docx Initials:Consultant:____________

Revision0 Client:___________

RefNumber:yyAAxxxxDate:ddMonthyyyyThisServicesAgreement(this“Agreement”)byandbetween

Clickheretoenterclient’sname(“Client”),havinganofficeatClick here to enter location and Consultant Limited(“Consultant”),havinganofficeatClickheretoenterlocation,ismadeeffectiveasofClickheretoenterdate.In consideration of the mutual covenants and conditionscontainedherein,ClientandConsultant (the“Parties”)do

herebymutuallyagreeasfollows:

Article1: Services

Consultant agrees to perform services in the nature ofpreliminaryengineering,projectdesign,technicalservicesandother services (the “Services”) in connectionwith Client’sproject(the“Project”),allasdescribedintheScopeoftheWorkcontainedinExhibit“1"attachedhereto.

ClientshallpromptlyprovideConsultantwithallinformationanddata,includingrelevantbudgetaryinformation,aswellas,allreviewsandapprovalsrequiredbyConsultanttocompletetheServices.ConsultantshallbeentitledtorelyontheaccuracyandcompletenessofallinformationanddataprovidedbyClientorotherconsultantsorcontractorsengagedbyClient.

ClientshallarrangeandmakeprovisionforConsultant’stimelyentryandreadyaccesstotheProjectasrequiredbyConsultanttoperformtheServices.

Article2: Compensation

ClientshallpayConsultantfortheServicesintheamountsandthemannersetforthinExhibit“2”withoutdelay,deductionorset-off.Allamountsnotpaidwithinthirty(30)daysfromthe

dateofinvoiceshallaccrueinterestattherateequivalenttotheprimeinterestratethenquotedbyRoyalBankofCanadaplusoneandonehalfpercent(1.5%)perannum,calculateddailyandcompoundedmonthly,untilpaid.Client shall reimburse Consultant for all reasonable, pre-approvedthirdpartycostsincurredtocarryouttheServices,

includingaccountingandinsuranceservices.

Article3: Estimates

If the Services require Consultant to perform estimates,including Consultant’s estimates of probable costs of theServices,staffingrequirements,scheduling,completiondateand/orconstructioncostsorrequirements,suchestimatesshallbebasedonConsultant’sexperienceandinformationavailable

toConsultantatthetimesuchestimatesaremade.ClientacknowledgesthatassumptionsmustbemadetopreparesuchestimatesandConsultantshallnotbeliablefortheaccuracyofsuchestimates.

Article4: Adjustments

Consultantshallbeentitledtoanadjustmenttotheschedule,

completiondate,priceand/ormaximumcostfortheServicesupontheoccurrenceofanyofthefollowing:(1)theadditionto,modificationofordeletionfromtheServicesbyClient;(2)thediscoveryofanysubsurface,climaticorotherconditionswhich

differfromthoseshowninorreasonablyinferablefromthedataandinformationprovidedbyClienttoConsultantpriortothecommencementoftheServices;(3)amodificationofapplicablelawwhichincreasesthecostofortimerequiredforperforming

theServices;(4)delayorsuspensionof,orinterferencewith,theServicesbyClientorbyanythirdpartyinvolvedintheProject;(5)Client’smodificationtoordelayinprovidingtoConsultantdesign criteria, decisions or other information needed byConsultant; (6) a change in the Services to addressenvironmentaland/orsafetyconcerns(asreferencedinArticle

8)or(7)anyincreaseinConsultant’scosts,orthetimerequiredfor completion of the Services due to any cause beyondConsultant’s reasonable control. Consultant shall promptlycommunicateallchangestotheServicestoClientinwriting.Adjustmentstotheperformancescheduleand/orcompletiondateshallbeforsuchreasonabletime(s)asConsultantmayrecommendafterconsultationwithClient.Adjustmentstothe

priceand/ormaximumcostfortheServicesshallbedeterminedinaccordancewiththefeeschedulecontainedinExhibit2.

Article5: StandardofPractice

ServicesperformedbyConsultantshallbeconducted inamannerconsistentwiththatlevelofcareandskillordinarilyexercisedbymembersoftheengineeringprofessioncurrently

practicinginthesamelocalityundersimilarconditions.Nootherrepresentation,warrantyorguarantee,expressorimplied,ismadeorintendedinthisAgreement,orinanyreport,opinion,documentorotherwise.Consultantshallprovidequalifiedand,whererequired,suitablylicensedpersonneltoperformtheServices.

Article6: IndependentConsultant

ConsultantshallserveasanindependentconsultanttoClientandshallhavecontroloverandberesponsibleforthemeansandmethodsforcompletingtheServices.InrenderingtheServices,Consultantmayatanytimeengagesub-consultant(s)asdeemednecessaryandsubjecttoapprovalbyClient,tocarryouttheServices.

DefectsintheServices

ClientshallitselfandshallinstructitsothercontractorstopromptlynotifyConsultantinwritingofanyobserveddefectordeficiency in theServicesoranynon-conformitywith therequirements of this Agreement and allow Consultant areasonableperiodoftimetoremedysuchdefects,deficiencyornon-conformity.

Article7: EnvironmentalandSafety

Clientshallhavetitleto,ownershipof,legalresponsibilityforandliabilityforanyhazardousortoxicsubstance(including,withoutlimitation,asbestos)presentattheProjectworksite(s),andnot introducedbyConsultantduringprovisionof theServices.ClientshallberesponsiblefortheProject’scompliance

withapplicablesafetyandenvironmentallaws,rules,regulationsandordinances.IfConsultantdeterminesachangeintheServicesisrequiredtoaddressenvironmentaland/orsafetyconcerns,Consultantshall

Change

Orders

Impacts of

Poor PM

• Deliverable Quality

• WIP / AR / DSO : Cash Flow

• Project Profit Margin

• Balance Sheet

• Income Statement

• Banking Governance

• Corporate Governance

• Short & Long Term Liabilities

• HR Turnover

• Shareholders ROI

Projects

Gone Wrong

Denver Airport BC Fast Ferries

Montreal Stadium Deepwater Horizon

Project

Management

Clients

Projects• Technical Deliverables

Communicate!

• Scope

• Schedule

• Budget

• Quality Objectives

Project Management

Impact on Business

Thank-you