The Project Environment

The Projects: Projects are products of ideas initiated to fulfill a need or exploit an opportunity.

The Project Environment also known as Project World are the external factors influencing projects.

The single most important influence on any project is whether or not it is being carried out by Public Sector usually undertaken by government to provide public service or Private Sector usually undertaken by individual companies or consortia to make a profit.

In the past, clients have taken many of the risks, recently; alternative types of procurement strategy has been introduced, depending on the attitudes toward the risk analysis usually adopted in the project life cycle.

The Project Constitution: this also influences a project; it’s a set of rules stating the roles and responsibilities of team members and stakeholders. It could either be simple or complex depending on the nature and size of the project. The constitution is important because the client is responsible for making the key decisions and any constraints on his ability to do so must be clearly stated, as client decisiveness is crucial to the speed and success of the project.

Project Organization: means the way in which the project implementation team is established and who the participants are. It could either be single-discipline or multi-discipline projects depending on nature and size. To minimize risk and ensure the objective of improving the chances of successful delivering of project on time, to budget and to specification; clients in the building industry – especially developers have moved to other forms of procurement rather than the traditional method that often split responsibility in an unrealistic and arbitrary way. It is observed that single-discipline project has lesser risk to multi-discipline project, as individuals are more aware of risk than group of people.

Project Phases: These are the various stages of project life cycle, project stages are: Pre-feasibility stage, Feasibility stage, Design stage, Contract/Procurement stage, Implementation stage, Commissioning, Handing Over and Operation stage. Different parties may be responsible for different stages; the client is largely responsible for the pre-feasibility stage and if decision to proceed is made, then a consultant, usually an Architect or Engineer is appointed to conduct a feasibility study. The objective of which is to compare alternative ways of implementing the project. If at the conclusion of this feasibility stage; the project is viable, considering the costs, benefits and risk, then the other phases now continue.

Effects of Project Phase on Risk: As project is divided into a number of separate phases, it is therefore required that at the end of each phase, an appraisal is made and assessment of the risk involved in proceeding with the project, therefore making the management of risk a continuous process spanning all the phases of the project. Due to the dynamic nature of risk; a risk assessment must be carried out at the end of each phase prior to proceeding to the next phase.

Generally speaking, the earliest phases of the project are concerned with value management to improve the definition of design objectives; the design stage is concerned more with value engineering to achieve necessary function at minimum cost; and the construction phase is centred on quality management to ensure that design is constructed correctly without the need for costly rework.

It is important also to know that each phase will contain a number of key assumptions made to allow the project to continue. As the project progresses, firm information will be available to replace these assumptions. Sometimes, this information will differ from the original assumption which it supplants. It is therefore important to reassess the project and see if this fundamentally changes the basis for the previous work and also what impact this could have upon the future development of the project. From time to time; completely new risk may arise. It is however believed that risks should diminish as the project progresses. It is necessary to ensure that risks which have not occurred and can no longer occur are removed from future assessment and analysis.

Note also that in reality; projects are not always continuous, so there are breaks and discontinuities in the life cycle, frequently occasioned by lack of funds, market changes or other circumstances. The last two can occur even if there are no discontinuities in the project and this necessitates the periodic reviews of project. There are also fast-track projects, where the normal phases are compressed and overlapped to some extent.

Project Appraisal: Appraisal is the process of first defining the alternative ways of achieving the project’s objectives; that is to say defining the available options and choosing between them, taking into consideration the objective of the project. From the view point of risk management, the appraisal phase is the most crucial, because here, the key decision regarding the choice of option is made. Appraisal maybe cyclic process repeated as new ideas are developed, additional information is received and uncertainty reduced, until the promoter is able to make critical decision to sanction implementation of the project and commit the investment in anticipation of the predicted return.

Conclusion: it must be note that the application of risk management techniques is likely to result in an increase in the project’s capital cost and implementation programme. This is because estimates and plans prepared during the pre-feasibility phase of projects are likely to be low, because little detail exists and it is human nature to be optimistic at the start of any new enterprise.

Investment decisions maybe constrained by non-monetary factors such as: (1) Organizational Policy, Strategy and Objectives (2)
Availability of Resources such as Manpower, Management or Technology

The key to realistic appraisal is to create a level and unbiased basis for all the options to be compared.

Abstract : Today’s technological disciplines responsible for new facility and infrastructural projects are now becoming seriously attuned to the idea of concern for the physical environment. Certainly, the project managers of such projects need to be similarly aware of these concerns and manage their projects accordingly. This applies to both the project’s long term impacts arising out of the project’s conceptual formulation, as well as its shorter term construction impacts arising during execution. However, today’s project manager also needs to be attuned to the cultural, organizational and social environments surrounding the project. Understanding this environment includes identifying the project stakeholders and their ability to affect its successful outcome. This leads to the possibility of influencing this environment in a positive way, for the better reception of the change which the project is designed to introduce. Thus, the influencable risks involved may be significantly reduced, and failure to take such an approach will inevitably lead to a less than satisfactory outcome.

This paper discusses various aspects of the project environment, and suggests ways in which it may be influenced in order to increase the probability of a successful outcome. “The art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, quality, time, cost and participant [stakeholder] satisfaction.” Note the reference to “participant satisfaction”. Thus, the degree of success of a project may be said to reflect the combined degree of satisfaction of all the participants, customers or stakeholders. Where construction projects are concerned, the stakeholders are usually many and various, frequently with opposing interests. Indeed, the cynic might say that the most successful project is one in which all the stakeholders are about equally dissatisfied! These stakeholders may participate in the project directly or indirectly, closely or remotely, and collectively their attitudes, understandings, or particular vested interests, all contribute to the environment in which a project is created. This environment can and needs to be managed just as surely as every other aspect of the project can be managed towards success.

What is the Project Environment?

Today, there is a growing awareness and concern for the impact of infrastructure and facility construction on the physical environment. Fortunately, today’s technological disciplines responsible for such work are becoming attuned to the idea of mitigating the adverse impacts of their projects. Certainly the project manager needs to be similarly concerned about the project’s technology, and manage accordingly. This applies to both the implementation and shorter term practical construction impacts of the project as well as its conceptual development and consequent long term impacts. However, today’s project manager also needs to be attuned to the cultural, organizational and social environments of the project. Understanding this environment includes identifying the project stakeholders and their ability to affect its successful outcome.

This means working with people to achieve the best results, especially in the highly technical and complex environments such as those involving modern day construction projects. Therefore, it is essential that the project manager and his or her project team are comfortable with, and sympathetic towards, their cultural, organizational and social surroundings. This leads to the possibility of influencing the project environment in a positive way, for the better reception of the change which the project is designed to introduce. For example, peoples’ typical resistance to change will no doubt be evident amongst some of the stakeholders. Others may have vested interests or personal or group agendas which are only indirectly related to the project. If these can be identified in good time, they may be dealt with proactively and in such a way that the corresponding risks, which are otherwise likely to undermine the success of the project, can be significantly reduced. Failure to take such an approach will inevitably lead to a less than optimum project outcome.

Dimensions of the Project Environment

For convenience, and working outwards, the project environment may be thought of in terms of the project time environment, the internal project culture, the original corporate culture, and the external social surroundings. For those who have not had experience of a construction project “in the trenches” so to speak, it is sometimes difficult to capture the feeling of pressure, stress and ultimate satisfaction of a project well accomplished, which the construction project management process offers. For the first timers, many experience a bewilderment as to what is really happening around them. Yet, most projects, if they are well run, exhibit some very typical but distinguishing features as they run their course.

The Project Time Environment -æ Four Distinct Project Phases

Figure 1: Project Life Cycle – Four Basic Phases

From the figure it will be seen that there are, or should be, four distinct project periods which make up the typical life span of a well run project. These phases are shown as
• Concept
• Planning
• Execution
• Transfer.

As an aid to memory, these phases may be readily recalled by the letters C-D-E-F standing for: Conceive Develop Execute, and Finish. Figure 1 also shows typical activities which are required within each phase for building, say, a process facility. Of course, within each phase a number of sub-phases or stages can be identified, which relate to the typical construction project. But for our purposes, the four phases shown are generic to any type of construction project, and serve to underline the vital importance of progression from concept to planning, if the project is to be successfully implemented. Thus, these first two phases, often referred to as the feasibility and engineering phases, are the opportunity to “build the project on paper”, while the third and fourth phases, which include preparing detailed drawings and specifications, encompass the physical implementation of the project.

Note particularly that submission approvals are called for at the end of each of the first two phases, and commissioning and completion approvals are typically required towards the ends of the latter two phases. Thus, each phase is like a mini-project with its own objectives and constraints. And so it should be seen to be, and conducted accordingly. The successful conclusion of each of the phases are major milestones, which are really like “gates” between the phases, and which perform the function of major “Executive Control Points”. Some projects somehow manage to slip through these gates without being in full compliance with project requirements to that point. Inevitably, such projects find themselves being re-cycled back to the earlier phase – to the detriment of the final project cost and schedule.

The Level-of-Effort Curve

Also of special significance is the variation in the level-of-effort (LoE), which is associated with these project phases, and which is required to conduct a project through its life cycle. The LoE curve represents the number of people dedicated to the project on a full or part time basis. It will be seen from Figure 1 that, typically, the number of people involved rises steadily through the first two phases, but increases dramatically in the execution phase. It is at this time that difficulties of communication and coordination are experienced, with consequent high levels of stress, and/or shortages of materials and equipment, or other unnecessary delays. The success of the execution phase is therefore highly dependent upon the quality of the planning in the prior planning phase. The finishing phase is equally dramatic – some might say traumatic. At the peak, there must be a careful balancing act between maintaining full steam ahead to accomplish all the work required, and being ready to cut the throttle as soon as sufficient work is no longer accessible to maintain the productivity of those on the project. A major lag in this decision frequently accounts for serious cost overruns. Again, if the original planning has been in anyway inadequate, changes at this point can have serious impacts on cost, schedule and the satisfaction of the participants. Failure to follow these simple steps, is a failure in managing the project time environment.