The traditional approach

A traditional phased approach identifies a sequence of steps to be completed. In the "traditional

approach", we can distinguish 5 components of a project (4 stages plus control) in the
development of a project:

Typical development phases of a project

• Project initiation stage;
• Project planning or design stage;
• Project execution or production stage;
• Project monitoring and controlling systems;
• Project completion stage.
Not all the projects will visit every stage as projects can be terminated before they reach
completion. Some projects do not follow a structured planning and/or monitoring stages. Some
projects will go through steps 2, 3 and 4 multiple times.
Many industries use variations on these project stages. For example, when working on a brick
and mortar design and construction, projects will typically progress through stages like Pre-
Planning, Conceptual Design, Schematic Design, Design Development, Construction Drawings
(or Contract Documents), and Construction Administration. In software development, this
approach is often known as the waterfall model[16], i.e., one series of tasks after another in linear
sequence. In software development many organizations have adapted the Rational Unified
Process (RUP) to fit this methodology, although RUP does not require or explicitly recommend
this practice. Waterfall development works well for small, well defined projects, but often fails
in larger projects of undefined and ambiguous nature. The Cone of Uncertainty explains some of
this as the planning made on the initial phase of the project suffers from a high degree of
uncertainty. This becomes especially true as software development is often the realization of a
new or novel product. In projects where requirements have not been finalized and can change,
requirements management is used to develop an accurate and complete definition of the behavior
of software that can serve as the basis for software development[17]. While the terms may differ
from industry to industry, the actual stages typically follow common steps to problem solving —
"defining the problem, weighing options, choosing a path, implementation and evaluation."
[edit] Critical Chain Project Management
Critical Chain Project Management (CCPM) is a method of planning and managing projects that
puts more emphasis on the resources (physical and human) needed in order to execute project
tasks. It is an application of the Theory of Constraints (TOC) to projects. The goal is to increase
the rate of throughput (or completion rates) of projects in an organization. Applying the first
three of the five focusing steps of TOC, the system constraint for all projects is identified as are
the resources. To exploit the constraint, tasks on the critical chain are given priority over all other
activities. Finally, projects are planned and managed to ensure that the resources are ready when
the critical chain tasks must start, subordinating all other resources to the critical chain.
Regardless of project type, the project plan should undergo Resource Leveling, and the longest
sequence of resource-constrained tasks should be identified as the critical chain. In multi-project
environments, resource leveling should be performed across projects. However, it is often
enough to identify (or simply select) a single "drum" resource—a resource that acts as a
constraint across projects—and stagger projects based on the availability of that single resource.

Planning and feedback loops in Extreme Programming (XP) with the time frames of the multiple
loops.
[edit] Extreme Project Management
In critical studies of Project Management, it has been noted that several of these fundamentally
PERT-based models are not well suited for the multi-project company environment of today.
[citation needed]
Most of them are aimed at very large-scale, one-time, non-routine projects, and
nowadays all kinds of management are expressed in terms of projects.
Using complex models for "projects" (or rather "tasks") spanning a few weeks has been proven
to cause unnecessary costs and low maneuverability in several cases. Instead, project
management experts try to identify different "lightweight" models, such as Agile Project
Management methods including Extreme Programming for software development and Scrum
techniques.
The generalization of Extreme Programming to other kinds of projects is extreme project
management, which may be used in combination with the process modeling and management
principles of human interaction management.
[edit] Event chain methodology
Event chain methodology is another method that complements critical path method and critical
chain project management methodologies.
Event chain methodology is an uncertainty modeling and schedule network analysis technique
that is focused on identifying and managing events and event chains that affect project schedules.
Event chain methodology helps to mitigate the negative impact of psychological heuristics and
biases, as well as to allow for easy modeling of uncertainties in the project schedules. Event
chain methodology is based on the following principles.
 • Probabilistic moment of risk: An activity (task) in most real life processes is not a
continuous uniform process. Tasks are affected by external events, which can occur at
some point in the middle of the task.
• Event chains: Events can cause other events, which will create event chains. These event
chains can significantly affect the course of the project. Quantitative analysis is used to
determine a cumulative effect of these event chains on the project schedule.
• Critical events or event chains: The single events or the event chains that have the most
potential to affect the projects are the “critical events” or “critical chains of events.” They
can be determined by the analysis.
• Project tracking with events: Even if a project is partially completed and data about the
project duration, cost, and events occurred is available, it is still possible to refine
information about future potential events and helps to forecast future project
performance.
• Event chain visualization: Events and event chains can be visualized using event chain
diagrams on a Gantt chart.
[edit] PRINCE2

The PRINCE2 process model

PRINCE2 is a structured approach to project management, released in 1996 as a generic project
management method.[18] It combined the original PRINCE methodology with IBM's MITP
(managing the implementation of the total project) methodology. PRINCE2 provides a method
for managing projects within a clearly defined framework. PRINCE2 describes procedures to
coordinate people and activities in a project, how to design and supervise the project, and what to
do if the project has to be adjusted if it does not develop as planned.
In the method, each process is specified with its key inputs and outputs and with specific goals
and activities to be carried out. This allows for automatic control of any deviations from the plan.
Divided into manageable stages, the method enables an efficient control of resources. On the
basis of close monitoring, the project can be carried out in a controlled and organized way.
PRINCE2 provides a common language for all participants in the project. The various
management roles and responsibilities involved in a project are fully described and are adaptable
to suit the complexity of the project and skills of the organization.
[edit] Process-based management
Capability Maturity Model, predecessor of the CMMI Model
Also furthering the concept of project control is the incorporation of process-based management.
This area has been driven by the use of Maturity models such as the CMMI (Capability Maturity
Model Integration) and ISO/IEC15504 (SPICE - Software Process Improvement and Capability
Estimation).
Agile Project Management approaches based on the principles of human interaction management
are founded on a process view of human collaboration. This contrasts sharply with the traditional
approach. In the agile software development or flexible product development approach, the
project is seen as a series of relatively small tasks conceived and executed as the situation
demands in an adaptive manner, rather than as a completely pre-planned process.
[edit] Project Management Processes
Traditionally, project management includes a number of elements: four to five process groups,
and a control system. Regardless of the methodology or terminology used, the same basic project
management processes will be used.

The project development stages[19]

Major process groups generally include:
• Initiation
• Planning or development
• Production or execution
• Monitoring and controlling
 • Closing
In project environments with a significant exploratory element (e.g., Research and development),
these stages may be supplemented with decision points (go/no go decisions) at which the
project's continuation is debated and decided. An example is the Stage-Gate model.
[edit] Initiation

Initiating Process Group Processes[19]

The initiation processes determine the nature and scope of the project. If this stage is not
performed well, it is unlikely that the project will be successful in meeting the business’ needs.
The key project controls needed here are an understanding of the business environment and
making sure that all necessary controls are incorporated into the project. Any deficiencies should
be reported and a recommendation should be made to fix them.
The initiation stage should include a plan that encompasses the following areas:
• Analyzing the business needs/requirements in measurable goals
• Reviewing of the current operations
• Financial analysis of the costs and benefits including a budget
• Stakeholder analysis, including users, and support personnel for the project
• Project charter including costs, tasks, deliverables, and schedule
[edit] Planning and design

Planning Process Group Activities[19]

After the initiation stage, the project is planned to an appropriate level of detail. The main
purpose is to plan time, cost and resources adequately to estimate the work needed and to
effectively manage risk during project execution. As with the Initiation process group, a failure
to adequately plan greatly reduces the project's chances of successfully accomplishing its goals.
Project planning generally consists of
 • determining how to plan (e.g. by level of detail or rolling wave);
• developing the scope statement;
• selecting the planning team;
• identifying deliverables and creating the work breakdown structure;
• identifying the activities needed to complete those deliverables and networking the
activities in their logical sequence;
• estimating the resource requirements for the activities;
• estimating time and cost for activities;
• developing the schedule;
• developing the budget;
• risk planning;
• gaining formal approval to begin work.
Additional processes, such as planning for communications and for scope management,
identifying roles and responsibilities, determining what to purchase for the project and holding a
kick-off meeting are also generally advisable.
For new product development projects, conceptual design of the operation of the final product is
may be performed concurrent with the project planning activities, and may help to inform the
planning team when identifying deliverables and planning activities.
[edit] Executing

Executing Process Group Processes[19]

Executing consists of the processes used to complete the work defined in the project
management plan to accomplish the project's requirements. Execution process involves
coordinating people and resources, as well as integrating and performing the activities of the
project in accordance with the project management plan. The deliverables are produced as
outputs from the processes performed as defined in the project management plan.
[edit] Monitoring and Controlling
Monitoring and Controlling consists of those processes performed to observe project execution
so that potential problems can be identified in a timely manner and corrective action can be
taken, when necessary, to control the execution of the project. The key benefit is that project
performance is observed and measured regularly to identify variances from the project
management plan.
Monitoring and Controlling Process Group Processes[19]
Monitoring and Controlling includes:
• Measuring the ongoing project activities (where we are);
• Monitoring the project variables (cost, effort, scope, etc.) against the project management
plan and the project performance baseline (where we should be);
• Identify corrective actions to address issues and risks properly (How can we get on track
again);
• Influencing the factors that could circumvent integrated change control so only approved
changes are implemented
In multi-phase projects, the Monitoring and Controlling process also provides feedback between
project phases, in order to implement corrective or preventive actions to bring the project into
compliance with the project management plan.
Project Maintenance is an ongoing process, and it includes:
• Continuing support of end users
• Correction of errors
• Updates of the software over time

Monitoring and Controlling cycle

In this stage, auditors should pay attention to how effectively and quickly user problems are
resolved.
Over the course of any construction project, the work scope may change. Change is a normal and
expected part of the construction process. Changes can be the result of necessary design
modifications, differing site conditions, material availability, contractor-requested changes, value
engineering and impacts from third parties, to name a few. Beyond executing the change in the
field, the change normally needs to be documented to show what was actually constructed. This
is referred to as Change Management. Hence, the owner usually requires a final record to show
all changes or, more specifically, any change that modifies the tangible portions of the finished
work. The record is made on the contract documents – usually, but not necessarily limited to, the
design drawings. The end product of this effort is what the industry terms as-built drawings, or
more simply, “as built.” The requirement for providing them is a norm in construction contracts.
When changes are introduced to the project, the viability of the project has to be re-assessed. It is
important not to lose sight of the initial goals and targets of the projects. When the changes
accumulate, the forecasted result may not justify the original proposed investment in the project.
[edit] Closing

Closing Process Group Processes.[19]

Closing includes the formal acceptance of the project and the ending thereof. Administrative
activities include the archiving of the files and documenting lessons learned.
This phase consists of:
• Project close: Finalize all activities across all of the process groups to formally close the
project or a project phase
• Contract closure: Complete and settle each contract (including the resolution of any
open items) and close each contract applicable to the project or project phase
[edit] Project control systems
Project control is that element of a project that keeps it on-track, on-time and within budget.
Project control begins early in the project with planning and ends late in the project with post-
implementation review, having a thorough involvement of each step in the process. Each project
should be assessed for the appropriate level of control needed: too much control is too time
consuming, too little control is very risky. If project control is not implemented correctly, the
cost to the business should be clarified in terms of errors, fixes, and additional audit fees.
Control systems are needed for cost, risk, quality, communication, time, change, procurement,
and human resources. In addition, auditors should consider how important the projects are to the
financial statements, how reliant the stakeholders are on controls, and how many controls exist.
Auditors should review the development process and procedures for how they are implemented.
The process of development and the quality of the final product may also be assessed if needed
or requested. A business may want the auditing firm to be involved throughout the process to
catch problems earlier on so that they can be fixed more easily. An auditor can serve as a
controls consultant as part of the development team or as an independent auditor as part of an
audit.
Businesses sometimes use formal systems development processes. These help assure that
systems are developed successfully. A formal process is more effective in creating strong
controls, and auditors should review this process to confirm that it is well designed and is
followed in practice. A good formal systems development plan outlines:
 • A strategy to align development with the organization’s broader objectives
• Standards for new systems
• Project management policies for timing and budgeting
• Procedures describing the process
• Evaluation of quality of change
[edit] Project management topics
[edit] Project managers
A project manager is a professional in the field of project management. Project managers can
have the responsibility of the planning, execution, and closing of any project, typically relating to
construction industry, architecture, computer networking, telecommunications or software
development. Many other fields in the production, design and service industries also have project
managers.
A project manager is the person accountable for accomplishing the stated project objectives. Key
project management responsibilities include creating clear and attainable project objectives,
building the project requirements, and managing the triple constraint for projects, which is cost,
time, and scope.
A project manager is often a client representative and has to determine and implement the exact
needs of the client, based on knowledge of the firm they are representing. The ability to adapt to
the various internal procedures of the contracting party, and to form close links with the
nominated representatives, is essential in ensuring that the key issues of cost, time, quality and
above all, client satisfaction, can be realized.
[edit] Project Management Triangle

The Project Management Triangle.

Like any human undertaking, projects need to be performed and delivered under certain
constraints. Traditionally, these constraints have been listed as "scope," "time," and "cost".[1]
These are also referred to as the "Project Management Triangle," where each side represents a
constraint. One side of the triangle cannot be changed without affecting the others. A further
refinement of the constraints separates product "quality" or "performance" from scope, and turns
quality into a fourth constraint.
The time constraint refers to the amount of time available to complete a project. The cost
constraint refers to the budgeted amount available for the project. The scope constraint refers to
what must be done to produce the project's end result. These three constraints are often
competing constraints: increased scope typically means increased time and increased cost, a tight
time constraint could mean increased costs and reduced scope, and a tight budget could mean
increased time and reduced scope.
The discipline of Project Management is about providing the tools and techniques that enable the
project team (not just the project manager) to organize their work to meet these constraints.
[edit] Work Breakdown Structure

Example of a Work breakdown structure applied in a NASA reporting structure.[20]

The Work Breakdown Structure (WBS) is a tree structure, which shows a subdivision of effort
required to achieve an objective; for example a program, project, and contract. The WBS may be
hardware, product, service, or process oriented.
A WBS can be developed by starting with the end objective and successively subdividing it into
manageable components in terms of size, duration, and responsibility (e.g., systems, subsystems,
components, tasks, subtasks, and work packages), which include all steps necessary to achieve
the objective.[17]
The Work Breakdown Structure provides a common framework for the natural development of
the overall planning and control of a contract and is the basis for dividing work into definable
increments from which the statement of work can be developed and technical, schedule, cost,
and labor hour reporting can be established.[20]
[edit] Project Management Framework
Example of an IT Project Management Framework.[19]
The Program (Investment) Life Cycle integrates the project management and system
development life cycles with the activities directly associated with system deployment and
operation. By design, system operation management and related activities occur after the project
is complete and are not documented within this guide.[19]
For example, see figure, in the US United States Department of Veterans Affairs (VA) the
program management life cycle is depicted and describe in the overall VA IT Project
Management Framework to address the integration of OMB Exhibit 300 project (investment)
management activities and the overall project budgeting process. The VA IT Project
Management Framework diagram illustrates Milestone 4 which occurs following the deployment
of a system and the closing of the project. The project closing phase activities at the VA
continues through system deployment and into system operation for the purpose of illustrating
and describing the system activities the VA considers part of the project. The figure illustrates
the actions and associated artifacts of the VA IT Project and Program Management process.[19]
[edit] International standards
There have been several attempts to develop Project Management standards, such as:
• Capability Maturity Model from the Software Engineering Institute.
• GAPPS, Global Alliance for Project Performance Standards- an open source standard
describing COMPETENCIES for project and program managers.
• A Guide to the Project Management Body of Knowledge
• HERMES method, Swiss general project management method, selected for use in
Luxembourg and international organisations.
• The ISO standards ISO 9000, a family of standards for quality management systems, and
the ISO 10006:2003, for Quality management systems and guidelines for quality
management in projects.
• PRINCE2, PRojects IN Controlled Environments.
• Team Software Process (TSP) from the Software Engineering Institute.
 • Total Cost Management Framework, AACE International's Methodology for Integrated
Portfolio, Program and Project Management)
• V-Modell, an original systems development method.
• The Logical framework approach, which is popular in international development
organisations.
[edit] Project portfolio management
An increasing number of organisations are using, what is referred to as, project portfolio
management (PPM) as a means of selecting the right projects and then using project management
techniques[21] as the means for delivering the outcomes in the form of benefits to the performing
private or not-for-profit organisation.
Project management methods are used 'to do projects right' and the methods used in PPM are
used 'to do the right projects'. In effect PPM is becoming the method of choice for selection and
prioritising among resource inter-related projects in many industries and sectors.
Terminology
Construction management (CM): UK: 1. management of the site. 2. form of delivery (see
presentation Hammond, p. 10) USA: form of delivery (compare above)
Real estate management (REM): professional property advice (as opposed to a project, REM is
an everlasting process with no start and no finish)
Corporate real estate management (CREM): REM focused on a company’s property
Management contracting (MC): UK: form of delivery (see presentation Hammond, p. 11;
“Generalübernehmer”) USA: CM at risk
Programme management (ProgM): UK: 1. programme management is concerned with managing
time in a project and is thereby part of the CPM function. 2. management of a client’s portfolio
(client’s programme in this sense is equivalent to a client’s brief) USA: management of a client’s
portfolio (compare above)
Project control (PC): The PC function is concerned with gathering data regarding project
progress, producing progress reports, monitoring time, cost, and quality. Compared to the CPM
function, the PC function can be characterised to be passive, whereas a construction project
manager needs to take action.
Project leader (PL): The PL is responsible for achieving the project’s objectives. He is the
manager “in line”.
Project director (PD): The PD is the leader of a big project that can be broken down in sub-
projects (e.g. Channel tunnel). He can also be the head of a PM organisation. OR: The OR is the
representative of the owner. This function can be provided either internally or externally.
DC: Document Control - A key function of a Project Manager - One not best to leave with a
humble QS
FBOT: finance build operate transfer
BOT: build operate transfer
DBOT: design build operate transfer
BOO: build own operate
EPC: engineering procurement construction
PFI: private finance initiative
GC: general contractor
MPC: multiple prime contracts: UK: one contractor takes responsibility for the development
(package deal) USA: a client may have 5 or 6 prime contractors
[edit] Study and practice
Construction management education comes in a variety of formats: formal degree programs
(one-year associate degree; four-year baccalaureate degree, masters degree, project management,
operations management engineer degree, doctor of philosophy degree, postdoctoral researcher);
on-job-training; and continuing education / professional development. For information on degree
programs, reference ACCE, the American Council for Construction Education, or ASC, the
Associated Schools of Construction.
The recognized institute for construction management in Great Britain is The Chartered Institute
of Building in Ascot.
According to the American Council for Construction Education (the academic accrediting body
of construction management educational programs in the U.S.), the academic field of
construction management encompasses a wide range of topics. These range from general
management skills, to management skills specifically related to construction, to technical
knowledge of construction methods and practices. There are many schools offering Construction
Management programs, including some that offer a Masters degree.[1][2]
[edit] Business model
Typically the construction industry includes three parties: an owner,a designer (architect or
engineer), the builder (usually called the general contractor). Traditionally, there are two
contracts between these parties as they work together to plan, design, and construct the project.
The first contract is the owner-designer contract, which involves planning, design, and
construction administration. The second contract is the owner-contractor contract, which
involves construction. An indirect, third-party relationship exist between the designer and the
contractor due to these two contracts.
An alternate contract or business model replaces the two traditional contracts with three
contracts: owner-designer, owner-construction project manager, and owner-builder. The
construction project management company becomes an additional party engaged in the project to
act as an advisor to the owner, to which they are contractually tied. The construction manager's
role is to provide construction advice to the designer, on the owner's behalf, design advice to the
constructor, again on the owner's behalf, and other advice as necessary.
[edit] Design Build Contracts
Main article: Design-build

Recently a different business model has become more popular. Many owners - particularly
government agencies have let out contracts which are known as Design-Build contracts. In this
type of contract, the construction team is known as the design-builder. They are responsible for
taking a concept developed by the owner, completing the detailed design, and then pending the
owner's approval on the design, they can proceed with construction. Virtual Design and
Construction technology has enabled much of the ability of contractors to maintain tight
construction time
There are two main advantages to using a design-build contract. First, the construction team is
motivated to work with the design team to develop a design with constructability in mind. In that
way it is possible for the team to creatively find ways to reduce construction costs without
reducing the function of the final product. The owner can expect a reduced price due to the
increased constructability of the design.
The other major advantage involves the schedule. Many projects are given out with an extremely
tight time frame. By letting out the contract as a design-build contract, the contractor is
established, and early mobilization and construction activities are able to proceed concurrently
with the design. Under a traditional contract, construction cannot begin until after the design is
finished, the project is bid and awarded, and the team can mobilize. This type of contract can
take months off the finish date of a project.
[edit] Agency CM
Construction Cost Management is a fee-based service in which the Construction Manager (C.M)
is responsible exclusively to the owner and acts in the owner's interests at every stage of the
project. The construction manager offers advice, uncolored by any conflicting interest, on
matters such as:
• Optimum use of available funds;
• Control of the scope of the work;
• Project scheduling;
• Optimum use of design and construction firms' skills and talents;
• Avoidance of delays, changes and disputes;
• Enhancing project design and construction quality;
• Optimum flexibility in contracting and procurement.
• Cash flow Management.
Comprehensive management of every stage of the project, beginning with the original concept
and project definition, yields the greatest possible benefit to owners from Construction
Management. As time progresses beyond the pre-design phase the CM's ability to effect cost
savings diminishes. The Agency CM can represent the owner by helping to select the design
team as well as the construction team and manage the design preventing scope creep, helping the
owner stay within a pre-determined budget by performing Value Engineering, Cost/Benefit
Analysis and Best Value Comparisons. The Agency CM can even provide oversight services for
a CM At-Risk contract.
[edit] CM At-Risk
CM at-Risk is a delivery method which entails a commitment by the construction manager to
deliver the project within a Guaranteed Maximum Price (GMP), in most cases. The construction
manager acts as consultant to the owner in the development and design phases, (often referred to
as "Preconstruction Services"), but as the equivalent of a general contractor during the
construction phase. When a construction manager is bound to a GMP, the most fundamental
character of the relationship is changed. In addition to acting in the owner's interest, the
construction manager must manage and control construction costs to not exceed the GMP, which
would be a financial hit to the CM company.
CM "At Risk" is a global term referring to a business relationship of Construction contractor,
Owner and Architect / Designer. Typically, a CM At Risk arrangement eliminates a "Low Bid"
construction project. A GMP agreement is a typical part of the CM and Owner agreement
somewhat comparable to a "Low Bid" contract, but with a number of adjustments in
responsibilities required by the CM. Aspects of GMP agreements will be elaborated below. The
following are some primary aspects of the most potential benefits of a CM At Risk arrangement:
Budget management: Before design of a project is completed ( 6 months to 1-1/2 years of
coordination between Designer and Owner), the CM is involved with estimating cost of
constructing a project based on hearing from the designer and Owner (design concept) what is
going / desired to be built. Upon some aspect of desired design raising the cost estimate over the
budget the Owner wants to maintain, a decision can be made to modify the design concept
instead of having to spend a considerable amount of time, effort and money re-designing and/or
modifying completed construction documents, OR, the Owner decides to spend more money or
obtain higher financial support for the project. To manage the budget before design is done,
construction crews are mobilized, CM is spending tens of thousands per week just having onsite
management, major items are purchased, etc, etc,...is an extremely more efficient use of
everyone's time, effort, Architect / Designer's costs, and the CM's General Conditions costs,
AND delivering to the Owner a design within his budget.
Selecting constructor: ( to be elaborated )
Maintaining positive working relationships among the Owner, Architect / Designer and
Constructor: ( to be elaborated )
Maximizes the awareness among Owner, Architect / Designer and CM of all parties needs,
expectations in order to perform their part of the project in the most efficient manner. ( to be
elaborated )
Business model
Typically the construction industry includes three parties: an owner,a designer (architect or
engineer), the builder (usually called the general contractor). Traditionally, there are two
contracts between these parties as they work together to plan, design, and construct the project.
The first contract is the owner-designer contract, which involves planning, design, and
construction administration. The second contract is the owner-contractor contract, which
involves construction. An indirect, third-party relationship exist between the designer and the
contractor due to these two contracts.
An alternate contract or business model replaces the two traditional contracts with three
contracts: owner-designer, owner-construction project manager, and owner-builder. The
construction project management company becomes an additional party engaged in the project to
act as an advisor to the owner, to which they are contractually tied. The construction manager's
role is to provide construction advice to the designer, on the owner's behalf, design advice to the
constructor, again on the owner's behalf, and other advice as necessary.
[edit] Design Build Contracts
Main article: Design-build

Recently a different business model has become more popular. Many owners - particularly
government agencies have let out contracts which are known as Design-Build contracts. In this
type of contract, the construction team is known as the design-builder. They are responsible for
taking a concept developed by the owner, completing the detailed design, and then pending the
owner's approval on the design, they can proceed with construction. Virtual Design and
Construction technology has enabled much of the ability of contractors to maintain tight
construction time
There are two main advantages to using a design-build contract. First, the construction team is
motivated to work with the design team to develop a design with constructability in mind. In that
way it is possible for the team to creatively find ways to reduce construction costs without
reducing the function of the final product. The owner can expect a reduced price due to the
increased constructability of the design.
The other major advantage involves the schedule. Many projects are given out with an extremely
tight time frame. By letting out the contract as a design-build contract, the contractor is
established, and early mobilization and construction activities are able to proceed concurrently
with the design. Under a traditional contract, construction cannot begin until after the design is
finished, the project is bid and awarded, and the team can mobilize. This type of contract can
take months off the finish date of a project.
[edit] Agency CM
Construction Cost Management is a fee-based service in which the Construction Manager (C.M)
is responsible exclusively to the owner and acts in the owner's interests at every stage of the
project. The construction manager offers advice, uncolored by any conflicting interest, on
matters such as:
• Optimum use of available funds;
• Control of the scope of the work;
• Project scheduling;
• Optimum use of design and construction firms' skills and talents;
• Avoidance of delays, changes and disputes;
• Enhancing project design and construction quality;
• Optimum flexibility in contracting and procurement.
• Cash flow Management.
Comprehensive management of every stage of the project, beginning with the original concept
and project definition, yields the greatest possible benefit to owners from Construction
Management. As time progresses beyond the pre-design phase the CM's ability to effect cost
savings diminishes. The Agency CM can represent the owner by helping to select the design
team as well as the construction team and manage the design preventing scope creep, helping the
owner stay within a pre-determined budget by performing Value Engineering, Cost/Benefit
Analysis and Best Value Comparisons. The Agency CM can even provide oversight services for
a CM At-Risk contract.
1. Define the Scope
The first, and most important, step in any project is defining the scope of the project. What is it
you are supposed to accomplish by managing this project? What is the project objective? Equally
important is defining what is not included in the scope of your project. If you don't get enough
definition from your boss, clarify the scope yourself and send it back upstairs for confirmation.

2. Determine Available Resources

What people, equipment, and money will you have available to you to achieve the project
 objectives? As a project manager, you usually will not have direct control of these resources, but
will have to manage them through matrix management. Find out how easy or difficult that will be
to do.

3. Check the Timeline

When does the project have to be completed? As you develop your project plan you may have
some flexibility in how you use time during the project, but deadlines usually are fixed. If you
decide to use overtime hours to meet the schedule, you must weigh that against the limitations
of your budget.

4. Assemble Your Project Team

Get the people on your team together and start a dialog. They are the technical experts. That's
why their functional supervisor assigned them to the project. Your job is to manage the team.

5. List the Big Steps

What are the major pieces of the project? If you don't know, start by asking your team. It is a
good idea to list the steps in chronological order but don't obsess about it; you can always
change the order later.

6. List the Smaller Steps

List the smaller steps in each of the larger steps. Again, it usually helps you remember all the
steps if you list them in chronological order. How many levels deep you go of more and more
detailed steps depends on the size and complexity of your project.

7. Develop a Preliminary Plan

Assemble all your steps into a plan. What happens first? What is the next step? Which steps can
go on at the same time with different resources? Who is going to do each step? How long will it
take? There are many excellent software packages available that can automate a lot of this detail
for you. Ask others in similar positions what they use.

8. Create Your Baseline Plan

Get feedback on your preliminary plan from your team and from any other stakeholders. Adjust
your timelines and work schedules to fit the project into the available time. Make any necessary
adjustments to the preliminary plan to produce a baseline plan.

9. Request Project Adjustments

There is almost never enough time, money or talent assigned to a project. Your job is to do more
with the limited resources than people expect. However, there are often limits placed on a project
that are simply unrealistic. You need to make your case and present it to your boss and request
these unrealistic limits be changed. Ask for the changes at the beginning of the project. Don't
wait until it's in trouble to ask for the changes you need.

10. Work Your Plan, But Don't Die For It

Making the plan is important, but the plan can be changed. You have a plan for driving to work
every morning. If one intersection is blocked by an accident, you change your plan and go a
different way. Do the same with your project plans. Change them as needed, but always keep the
scope and resources in mind.

11. Monitor Your Team's Progress

You will make little progress at the beginning of the project, but start then to monitor what
everyone is doing anyway. That will make it easier to catch issues before they become problems.
 12. Document Everything
Keep records. Every time you change from your baseline plan, write down what the change was
and why it was necessary. Every time a new requirement is added to the project write down
where the requirement came from and how the timeline or budget was adjusted because of it.
You can't remember everything, so write them down so you'll be able to look them up at the end-
of-project review and learn from them.

13. Keep Everyone Informed

Keep all the project stakeholders informed of progress all along. Let them know of your success
as you complete each milestone, but also inform them of problems as soon as they come up. Also
keep you team informed. If changes are being considered, tell the team about them as far ahead
as you can. Make sure everyone on the team is aware of what everyone else is doing.

14. Scope
Project size, goals, requirements

Most literature on project management speaks of the need to manage and balance three elements:
people, time, and money. However, the fourth element is the most important and it is the first and
last task for a successful project manager. First and foremost you have to manage the project scope.

The project scope is the definition of what the project is supposed to accomplish and the budget (of
time and money) that has been created to achieve these objectives. It is absolutely imperative that
any change to the scope of the project have a matching change in budget, either time or resources. If
the project scope is to build a building to house three widgets with a budget of $100,000 the project
manager is expected to do that. However, if the scope is changed to a building for four widgets, the
project manager must obtain an appropriate change in budgeted resources. If the budget is not
adjusted, the smart project manager will avoid the change in scope.

Usually, scope changes occur in the form of "scope creep". Scope creep is the piling up of small
changes that by themselves are manageable, but in agregate are significant. For example, the project
callls for a building to be 80,000 square feet in size. The client wants to add a ten foot long, 4 foot
wide awning over one bay door. That's a pretty minor change. Later the client wants to extend the
awing 8 feet to cover the adjacent bay. Another minor change. Then it's a change to block the upwind
side to the covered area to keep out the wind. Later, it's a request to block the other end to make the
addition more symetrical. Eventually, the client asks for a ceiling under the awning, lights in the
ceiling, electrical outlets, a water faucet for the workers, some sound-proofing, and a security camera.
By now, the minor change has become a major addition. Make sure any requested change, no matter
how small, is accompanied by approval for a change in budget or schedule or both.

You can not effectively manage the resources, time and money in a project unless you actively
manage the project scope.

When you have the project scope clearly identified and associated to the timeline and budget, you can
begin to manage the project resources. These include the people, equipment, and material needed to
complete the project.

A successful Project Manager must effectively manage the resources assigned to the project. This
includes the labor hours of the designers, the builders, the testers and the inspectors on the project
team. It also include managing any labor subcontracts. However, managing project resources
frequently involves more than people management. The project manager must also manage the
equipment used for the project and the material needed by the people and equipment assigned to the
project.
• People
Project employees, vendor staff, subcontract labor
• Equipment
Cranes, trucks, backhoes, other heavy equipment or
Development, test, and staging servers, CD burners or
Recording studio, tape decks, mixers, microphones and speakers
• Material
Concrete, pipe, rebar, insulation or
CD blanks, computers, jewel cases, instruction manuals

Managing the people resources means having the right people, with the right skills and the proper
tools, in the right quantity at the right time. It also means ensuring that they know what needs to be
done, when, and how. And it means motivating them to take ownership in the project too.

Managing direct employees normally means managing the senior person in each group of employees
assigned to your project. Remember that these employees also have a line manager to whom they
report and from whom the usually take technical direction. In a matrix management situation, like a
project team, your job is to provide project direction to them. Managing labor subcontracts usually
means managing the team lead for the subcontracted workers, who in turn manages the workers.

The equipment you have to manage as part of your project depends on the nature of the project. A
project to construct a frozen food warehouse would need earth moving equipment, cranes, and
cement trucks. For a project to release a new version of a computer game, the equipment would
include computers, test equipment, and duplication and packaging machinery. The project
management key for equipment is much like for people resources. You have to make sure you have
the right equipment in the right place at the right time and that it has the supplies it needs to operate
properly.

Most projects involve the purchase of material. For a frozen food warehouse, this would be freezers,
the building HVAC machinery and the material handling equipment. For a project to release a music
CD by a hot new artist, it would include the CD blanks, artwork for the jewel case, and press releases
to be sent to deejays. The project management issue with supplies is to make sure the right supplies
arrive at the right time (we'll talk about the right price later).

All your skill in managing resources won't help, however, unless you can stick to the project schedule.
Time management is critical in successful project management

Time management is a critically important skill for any successful project manager. I have observed
that Project Managers who succeed in meeting their project schedule have a good chance of staying
within their project budget. The most common cause of blown project budgets is lack of schedule
management. Fortunately there is a lot of software on the market today to help you manage your
project schedule or timeline.

• Tasks
Duration, resources, dependencies
• Schedule
Tasks, predecessors, successors
• Critical Path
Changeable, often multiple, float

Any project can be broken down into a number of tasks that have to be performed. To prepare the
project schedule, the project manager has to figure out what the tasks are, how long they will take,
what resources they require, and in what order they should be done. Each of these elements has a
direct bearing on the schedule.

If you omit a task, the project won't be completed. If you underestimate the length of time or the
amount of resources required for the task, you may miss your schedule. The schedule can also be
blown if you make a mistake in the sequencing of the tasks.

Build the project schedule by listing, in order, all the tasks that need to be completed. Assign a
duration to each task. Allocate the required resources. Determine predecessors (what tasks must be
completed before) and successors (tasks that can't start until after) each task. It's pretty simple and
straightforward. For instance, think of a project called "Getting Dressed In The Morning". The task
"put on shirt" may have a longer duration if it is a buttoned dress shirt than if it's a pullover. It doesn't
matter which order you complete the tasks "put on right shoe" and "put on left shoe", but it is
important to complete the "put on pants" task before starting the "put on shoes" task.

The difficulty in managing a project schedule is that there are seldom enough resources and enough
time to complete the tasks sequentially. Therefore, tasks have to be overlapped so several happen at
the same time. Project management software (see sidebar) greatly simplifies the task of creating and
managing the project schedule by handling the iterations in the schedule logic for you.

When all tasks have been listed, resourced, and sequenced, you will see that some tasks have a little
flexibility in their required start and finish date. This is called float. Other tasks have no flexibility, zero
float. A line through all the tasks with zero float is called the critical path. All tasks on this path, and
there can be multiple, parallel paths, must be completed on time if the project is to be completed on
time. The Project Manager's key time management task is to manage the critical path.

Be aware, that items can be added to or removed from the critical path as circumstances change
during the execution of the project. Installation of security cameras may not be on the critical path,
but if the shipment is delayed, it may become part of the critical path. Conversely, pouring the
concrete foundation may be on the critical path, but if the project manager obtains an addition crew
and the pour is completed early it could come off the critical path (or reduce the length of the critical
path).

Regardless of how well you manage the schedule and the resources, there is one more critical element
- managing the budget.

Often a Project Manager is evaluated on his or her ability to complete a project within budget. If you
have effectively managed the project resources and project schedule, this should not be a problem. It
is, however, a task that requires the project manager's careful attention. You can only manage
effectively a limited number of cost items, so focus on the critical ones (see the 80-20 Rule in the
sidebar).

• Costs
Estimated, actual, variability
• Contingencies
Weather, suppliers, design allowance
• Profit
Cost, contingencies, remainder

Each project task will have a cost, whether it is the cost of the labor hours of a computer programmer
or the purchase price of a cubic yard of concrete. In preparing the project budget, each of these costs
is estimated and then totaled. Some of these estimates will be more accurate than others. A company
knows what it will charge each of its projects for different classifications of labor. Commodities like
concrete are priced in a very competitive market so prices are fairly predictable. Other estimates are
less accurate. For instance, the cost of a conveyor system with higher performance specifications that
normal can be estimated to be more expensive, but it is hard to determine whether it will be 10%
more or 15% more. For an expensive item, that can be a significant amount.

When the estimated cost of an item is uncertain, the project budget often includes a design allowance.
This is money that is set aside in the budget "just in case" the actual cost of the item is wildly different
than the estimate.

Unusual weather or problems with suppliers are always a possibility on large projects. Companies
usually include a contingency amount in the project budget to cover these kinds of things.

So a project budget is composed of the estimated cost, plus the contingency and design allowance,
plus any profit. The project manager's job is to keep the actual cost at or below the estimated cost, to
use as little of the design allowance and contingency as possible, and to maximize the profit the
company earns on the project.

To maximize your chances of meeting your project budget, meet your project schedule. The most
common cause of blown budgets is blown schedules. Meeting the project schedule won't guarantee
you will meet the project budget, but it significantly increases your chances. And above all, manage
the project scope. Don't allow the project scope to "creep" upward without getting budget and/or
schedule adjustments to match.

Successful project management is an art and a science that takes practice. The ideas presented above
can give you a basic understanding of project management, but consider it only a beginning. If your
job or career path includes project management, and you want to improve your skills, talk to
successful project managers, read, and practice. Project management can be a very rewarding career.