By Manjunath R, PMP
When people talk about project management in construction industry, they will be most likely referring to the Project Management Consultants (PMC). Unfortunately, PMCs lack knowledge, information and experience. Most of the PMCs concentrate on paperwork rather than actual work. The transition from one process to other is not controlled by PMCs; sometimes they don’t even notice the transition! PMCs limit their roles to mere documentation like checklists,work orders, bill of quantities (BOQ) and Schedules. The organizations lack information and knowledge about the actual functioning of PMC. They just deploy people at site who run around preparing checklists. Middle management will be focused on the schedules. Top management will be taking care of work orders and payments.
Nevertheless, there are PMCs, who undoubtedly work professionally. They are usually engaged by big developers. The overheads required to accommodate the required infrastructure is little more, which can be absorbed by big project budgets. Surely, this is an investment, which will eventually have a remarkable value addition for the project as well as the performing organization. Generally, the project management offices (PMO) in these organizations will be handling portfolio and program management to share the overheads. However, it doesn’t mean the smaller projects can’t be carried out professionally. It needs custom tailored processes to suit the size of the infrastructure and overhead cost.
One more big misconception in construction industry is this: Project management is limited to PMCs. Developers often deploy the PMCs and then doze off. They usually wake up when they realize that the projects are off track – from schedule or cost or other perspectives.
It is important to know that the project management is required for the whole team. And the team includes developer, PMCs, contractors and other vendors. All have to play their role to make the project a successful endeavour.
I’ve outlined a few reasons why many construction projects fail in India.
Reason #1: No understanding of Stakeholder and Stakeholder Management
The term “stakeholder” is a highly misunderstood term in construction industry. People who invest capital or end users are only considered to be stakeholders. Nothing can be further from truth. The identification of stakeholders is the most neglected thing. Even a small vendor who delays the supply of materials can make an impact on critical path of the schedule. He is also a stakeholder. Secondly, identification of stakeholders is a continuous process throughout the lifecycle of the project. The levels of stakeholder engagement keep on changing from time to time. Stakeholders who are ‘neutral ‘may suddenly start ‘leading’ the project. People who are’ unaware’ may become ‘resistant’. This happens most of the time in construction industry.
One more important fact is politics. Handling politics is inevitable part of stakeholder management. People fail to understand this. This is one of the reasons why projects end up being over budgeted or getting delivered beyond the timelines.
Stakeholders have a direct impact on the project constraints. The whole of the project team should be made aware of this. They should be educated about this primarily. The next level is to make them accountable. Even the end user has to be educated about their role and the processes involved.
If case of small projects, usually team buy in is taken before any decision is made. this motivates the team to contribute. But, in case of bigger projects, the decision is made and passed on to the lower levels, not giving any room for discussion or brainstorming thus lacking team buy in.
Reason #2: Unrealistic Budget with No Reserves and No Earned Value Management (EVM)
Usually, no contingencies or management reserves are planned in the cost budget, which makes it vulnerable.
The quantities in the BOQ will not be peer reviewed, which makes the BOQ uncertain. The rates are only looked into for awarding purpose. When the project completes, there will be usually variances in the actual and planned due to the above mentioned reasons.
Biggest reason why earned value management can’t be applied to projects is the difference in BOQ and actual quantities. There is always a variance, if the BOQ quantities are not weighted properly.
Reason # 3: The Forbidden Kingdom of Risk Management
Risk management is a forbidden kingdom. Construction industry is not aware of this aspect of project management. Projects are planned considering most positive situations. The threats and opportunities are never thought about while planning the project. Of course, the subjective and objective analysis is never looked into. This makes the projects vulnerable and projects will be at mercy of God.
Reason #4: Lack of Fact Driven Decision Making in Change Control Boards
In Indian construction industry, this is a virtual board comprising of top management people who take decisions based of artefacts. The basis of decisions will be generally over shadowed by the influential personalities may be CEO/CFO/MD/Chairman of the organization. This will not make the decision unbiased.
Reason # 5: Quality Management and Schedule Management are 180 degrees apart
Quality and schedule don’t go hand in hand. Unrealistic timelines will be agreed to the end user, which makes it impossible to take care of quality aspects. For example, the curing period of 28 days for the slab as mentioned in the quality assurance can’t be followed, since, next level slab have to be caste within 7 days as per the agreed schedule. Of course, other methods of curing are adopted to compensate, but, it’s just a compromise again.
Reason # 6: Project Charter is Unheard-Of
Most of the Project managers/Organizations haven’t heard of project charter. Believe it or not!Even if it is prepared, they might never refer back to it. In the sense, they don’t understand the significance of the project charter. Generally, top management authorizes the project manager to take over the project and an organization chart is submitted to the client/developer. The initial sign off will just be an agreement associated with BOQ. Sometimes, the special clauses will be missing in the contract agreement. Templates used for agreement are same for all the projects.
Reason #7: Unprofessional Communications Management
This is not listed out professionally. Instead, project directory is referred. Communication is the main aspect of any project. Most of the project manager’s time is spent in communicating. If a project manager fails to keep the stakeholders in loop or to cascade any important message, the results may be awry.
Reason # 8: High Scope Creep
In other industries, scope is validated by the customer or end user after it is thoroughly inspected by project team. But, in construction industry (most organizations), client is free to walk in his apartment during construction and advise changes/customizations which is technically a scope creep. This will have a tangible negative impact on the cost baseline as well as the schedule base line. Few organizations don’t allow customization. They don’t even allow customers in the construction zone unnecessarily. Client relationship management has to be in place and has to function properly to avoid the scope issues.
Reason #9: Lessons Are Never Learned
This has to be recorded by all of the project team and has to be stored a part of organizational process assets. With this, lessons learned can be archived by the project managers, to take benefit of the experiences of the project team from previous projects. This is never done in construction industry.
Conclusion: Construction projects in India fail due to unprofessional and unscientific approach. A system has to be created and followed to get desired results. The major drawback in Indian construction industry is people find their own via media for every process. They don’t even standardize it. Short cuts may yield short term results. Long term benefits can be yielded by proper Project Management. It’s truly a value addition.
Author: Manjunath R
Manjunath R is a project management professional in construction industry . He is a graduate Civil Engineer.He is passed out from BIET (VTU) Davanagere in year 2005.He has been involved in construction industry as Deputy General Manager working for PDD Infratech. He has worked with several reputed organizations in Bangalore. He is having 12 plus years of hands on experience .He is a certified Project Management Professional (PMP) from Project Management Institute (PMI).
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Nevertheless, there are PMCs, who undoubtedly work professionally. They are usually engaged by big developers. The overheads required to accommodate the required infrastructure is little more, which can be absorbed by big project budgets. Surely, this is an investment, which will eventually have a remarkable value addition for the project as well as the performing organization. Generally, the project management offices (PMO) in these organizations will be handling portfolio and program management to share the overheads. However, it doesn’t mean the smaller projects can’t be carried out professionally. It needs custom tailored processes to suit the size of the infrastructure and overhead cost.
It is important to know that the project management is required for the whole team. And the team includes developer, PMCs, contractors and other vendors. All have to play their role to make the project a successful endeavour.
I’ve outlined a few reasons why many construction projects fail in India.
Reason #1: No understanding of Stakeholder and Stakeholder Management
The term “stakeholder” is a highly misunderstood term in construction industry. People who invest capital or end users are only considered to be stakeholders. Nothing can be further from truth. The identification of stakeholders is the most neglected thing. Even a small vendor who delays the supply of materials can make an impact on critical path of the schedule. He is also a stakeholder. Secondly, identification of stakeholders is a continuous process throughout the lifecycle of the project. The levels of stakeholder engagement keep on changing from time to time. Stakeholders who are ‘neutral ‘may suddenly start ‘leading’ the project. People who are’ unaware’ may become ‘resistant’. This happens most of the time in construction industry.
One more important fact is politics. Handling politics is inevitable part of stakeholder management. People fail to understand this. This is one of the reasons why projects end up being over budgeted or getting delivered beyond the timelines.
Stakeholders have a direct impact on the project constraints. The whole of the project team should be made aware of this. They should be educated about this primarily. The next level is to make them accountable. Even the end user has to be educated about their role and the processes involved.
If case of small projects, usually team buy in is taken before any decision is made. this motivates the team to contribute. But, in case of bigger projects, the decision is made and passed on to the lower levels, not giving any room for discussion or brainstorming thus lacking team buy in.
Reason #2: Unrealistic Budget with No Reserves and No Earned Value Management (EVM)
Usually, no contingencies or management reserves are planned in the cost budget, which makes it vulnerable.
The quantities in the BOQ will not be peer reviewed, which makes the BOQ uncertain. The rates are only looked into for awarding purpose. When the project completes, there will be usually variances in the actual and planned due to the above mentioned reasons.
Biggest reason why earned value management can’t be applied to projects is the difference in BOQ and actual quantities. There is always a variance, if the BOQ quantities are not weighted properly.
Reason # 3: The Forbidden Kingdom of Risk Management
Risk management is a forbidden kingdom. Construction industry is not aware of this aspect of project management. Projects are planned considering most positive situations. The threats and opportunities are never thought about while planning the project. Of course, the subjective and objective analysis is never looked into. This makes the projects vulnerable and projects will be at mercy of God.
Reason #4: Lack of Fact Driven Decision Making in Change Control Boards
In Indian construction industry, this is a virtual board comprising of top management people who take decisions based of artefacts. The basis of decisions will be generally over shadowed by the influential personalities may be CEO/CFO/MD/Chairman of the organization. This will not make the decision unbiased.
Reason # 5: Quality Management and Schedule Management are 180 degrees apart
Quality and schedule don’t go hand in hand. Unrealistic timelines will be agreed to the end user, which makes it impossible to take care of quality aspects. For example, the curing period of 28 days for the slab as mentioned in the quality assurance can’t be followed, since, next level slab have to be caste within 7 days as per the agreed schedule. Of course, other methods of curing are adopted to compensate, but, it’s just a compromise again.
Reason # 6: Project Charter is Unheard-Of
Most of the Project managers/Organizations haven’t heard of project charter. Believe it or not!Even if it is prepared, they might never refer back to it. In the sense, they don’t understand the significance of the project charter. Generally, top management authorizes the project manager to take over the project and an organization chart is submitted to the client/developer. The initial sign off will just be an agreement associated with BOQ. Sometimes, the special clauses will be missing in the contract agreement. Templates used for agreement are same for all the projects.
Reason #7: Unprofessional Communications Management
This is not listed out professionally. Instead, project directory is referred. Communication is the main aspect of any project. Most of the project manager’s time is spent in communicating. If a project manager fails to keep the stakeholders in loop or to cascade any important message, the results may be awry.
Reason # 8: High Scope Creep
In other industries, scope is validated by the customer or end user after it is thoroughly inspected by project team. But, in construction industry (most organizations), client is free to walk in his apartment during construction and advise changes/customizations which is technically a scope creep. This will have a tangible negative impact on the cost baseline as well as the schedule base line. Few organizations don’t allow customization. They don’t even allow customers in the construction zone unnecessarily. Client relationship management has to be in place and has to function properly to avoid the scope issues.
Reason #9: Lessons Are Never Learned
This has to be recorded by all of the project team and has to be stored a part of organizational process assets. With this, lessons learned can be archived by the project managers, to take benefit of the experiences of the project team from previous projects. This is never done in construction industry.
Conclusion: Construction projects in India fail due to unprofessional and unscientific approach. A system has to be created and followed to get desired results. The major drawback in Indian construction industry is people find their own via media for every process. They don’t even standardize it. Short cuts may yield short term results. Long term benefits can be yielded by proper Project Management. It’s truly a value addition.
Author: Manjunath R
Manjunath R is a project management professional in construction industry . He is a graduate Civil Engineer.He is passed out from BIET (VTU) Davanagere in year 2005.He has been involved in construction industry as Deputy General Manager working for PDD Infratech. He has worked with several reputed organizations in Bangalore. He is having 12 plus years of hands on experience .He is a certified Project Management Professional (PMP) from Project Management Institute (PMI).
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Dear Manjunath
ReplyDeleteYou have touched upon the right points in a practical environment. Thanks for the article. It is an eye opener for all the people involved in construction field.
Thank you so much Sir. its very motivating to hear such an appreciation from you. thanks a ton Sir
DeleteNice article. Liked the high scope creep part and reason 9, and completely agree. I can relate a big part of the whole idea to my research industry wrt management. Thank you ��
ReplyDeleteThank you so much Shambu, I am glad you can connect the same to your research.
DeleteVery appropriately said manjunath, to be a successful project, if project management team follow these points then I think it is surely a winning mantra..
ReplyDeleteThank you so much Kadar, I am truly honored.
DeleteHi, Your article is useful to highlight bottleneck in construction industry. But we cant say that applies to whole industry. there are organisations and projects which follow best project management procedures for example, Delhi Metro, Airports, Harbors, Nuclear Plants, Dams & Heavy Infrastructures follow best practices even before IT industry. Most of lean management and PMP syllabus are incorporated from these old practices of India. Imagine how the Bandra-Worli sea link will be possible without having Proper Project Management Practices, so lets us not blame whole industry for some private developers mistakes. This industry has lot of best practices in PMP to offer for other industry.
ReplyDeleteHi Thank for your comments. I would like to clarify that I am not blaming the whole industry here if you read the article carefully. I have tried to portray the Project Management practices of small and medium scale construction companies. if you look back at second paragraph, I have clearly mentioned it. of course, as mentioned by you, most of the big players in the market have proper project management in place and have delivered number of projects successfully. These companies have even contributed for standardizing the best practices. The sole purpose of this article is to bring awareness about proper Project management in construction industry, which is often neglected.
Delete