Managing cost rather than project value
The Art of Setting Project Expectations
Behavioral research shows that when faced with a choice between options that we have no previous experience of, under pressure our unconscious mind will make a decision by answering a similar but different question. For example, some might select equipment based on purchase price rather than the total value to the organisation. Low capital cost can result in later operational problems which cost more in the long run. The pitfall here is to assume that the specification can be defined in detail at the start of a project.
In reality, every initial project specification is a work in progress. Even specifications for similar projects will differ due to the unique circumstances of different sites and the desire to apply improvements due to lessons learned. Be clear about what decisions need to be taken at each step of the capital project journey and make only those that are necessary to progress to the next milestone. At concept step, we need to select the right type of solution (get the right design) at the high-level design we work with a vendor(s) to get the design right. That is where the detailed plan is defined. The delivery steps will add further detail to how the organisation can deliver the full potential of that solution
Once the desired outcome has been defined (See pitfall 1) set out a stepwise milestone plan with clear expectations for each milestone. Add detail to the path between each milestone as more is learned about the options and a preferred solution is revealed.
Milestone plans include the definition of criteria to confirm that the desired outcome has been achieved before progressing to the next step.
For example, do we have buy-in from all stakeholders to the High-Level Design specification which will be used to develop the ITT (Invitation to Tender) document?
Once past the stage gate, we can then circulate it with confidence. These milestone exit criteria provide project quality assurance framework.
The use of milestone plans provides a framework for project governance to manage the iterative, evolutionary linkages between the people, procedural and process related development activities of part 1 of the project journey.
The Science of Setting Project Expectations
Use Milestone plans to set out the signposts of the project journey.
Start with a preferred concept based on an evaluation of at least 3 options. Add detail to that to create a high-level design which makes clear the benefits sought and the cost justification. Use this to explore what vendors have to offer and what they can provide. Work with the vendor to develop a realistic and achievable project quality plan to:
- Support the identification of skills and resource levels for each supporting activity/task;
- Allow detailed planning to be left as late as possible;
- Simplify progress measurement and reporting;
- Confirm progress.
- Support the milestone planning activity with:
Activity schedules which define what has to be achieved to progress to the next milestone;
- Tasks which set out how the activities will be completed. These are also used to identify skills and resources levels;
- Briefing notes set out guidelines for the aims, approach, and outputs for activities /tasks.
These are techniques are covered as part of the Manufacturing Project Management and Early Equipment Management Courses.
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