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Failures in construction due to ineffective project management information systems

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The flow of information in projects can be a significant driver to project success, or to project failure. As in all projects, there are different layers of communications and each requires its own approach, skills, and tools. Communicating work directions to the construction crews is simply telling them what to do, when to do it, and identifying other parallel work that may impact their own. The construction trades are generally skilled enough they can determine for themselves how to do the job.

Published in: Leadership & Management
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Failures in construction due to ineffective project management information systems

  1. 1. Failures in Construction Due to Ineffective Project Management Information Systems Essam Mohamed Lotffy, PMP, CCP MEP-Construction Manager, Trojan Holding P.O. Box 7856, Abu Dhabi UAE esam_mese@hotmail.com Frank R. Parth, MS, MSSM, MBA, PMP CEO Project Auditors P.O. Box 80688, Rancho Santa Margarita, CA, USA fparth@projectauditors.com Introduction “Companies risk $135 million for every $1 billion spent on a project, and new research indicates that $75 million of that $135 million (56 percent) is put at risk by ineffective communications, indicating a critical need for organizations to address communications deficiencies at the enterprise level.” The flow of information in projects can be a significant driver to project success, or to project failure. As in all projects, there are different layers of communications and each requires its own approach, skills, and tools. Communicating work directions to the construction crews is simply telling them what to do, when to do it, and identifying other parallel work that may impact their own. The construction trades are generally skilled enough they can determine for themselves how to do the job. Communicating information to the owners or financers requires a completely different approach. Their interests are in the overall project status, completion forecasts, and risks. Project managers in all fields and perhaps more so in construction, are neither trained in effective communications nor do they have the time to identify the detailed information needs of all stakeholders and create custom formats for each on. So how do they approach communications? They use the default reports built into Primavera, Prism, Aurora, or whatever the scheduling tool is. Rather than spend precious time customizing the reports, project managers operate on the philosophy that if some information is good, more is better. More dials, more color, more data on the screen to the point where there is so much clutter on the dashboard that it is impossible to tell quickly the status of the project. Performing organizations should have, but virtually never do have, a pre-defined format for exactly what data is presented and how it is shown. This lack of standards allows the project manager to selectively report the project in the best light, glossing over schedule slippages, cost overruns, and increasing risks. If the project is high priority or appears to be running into problems the situation is made worse by upper management asking for more and more reports and more frequent updates without adding the resources needed to implement the change reporting requirements.
  2. 2. The Project Information Management System (PMIS) PMI describes the PMIS as follows: The project management information system … provides access to tools, such as a scheduling tool, a work authorization system, a configuration management system, and information collection and distribution system, or interfaces to other online automated systems. It consists of the tools and techniques used to gather, integrate, and disseminate the outputs of project management processes. It supports all aspects of the project from initiating through closing, and can include both manual and automated systems. A core competency for a project manager throughout a construction project is to assure that the proper information is flowing to the stakeholders in the most effective and efficient manner possible. In the middle of a construction project this is not a high priority for a typical construction project manager when day to day work has to be juggled and arranged. He, or she, will simply utilize whatever approaches were quickly decided on at the beginning of the project. To a person in this position, communicating with the trades working on site is of much more immediate importance than a schedule update to higher level management. Unfortunately the performing organization often pays little more attention to the information being presented them than the project manager does. Management tends to assume that the project manager is giving them accurate, unbiased, and thorough information. This assumption continues until they become aware of a major problem on the project that they feel they should have known about earlier. At this point their trust in the project manager is lost and they will start demanding additional information, which forces the project manager to spend more time communicating and less time managing. A much better approach is to set up an effective project management information system (PMIS) at the beginning of the project that the project manager can easily utilize and that gives the management in the performing organization the information they need. If the PMIS is set as a standard then they are receiving consistent information from all projects and that it provides them the early warning data they need for effective decision making. The PMIS, which can be managed centrally by the PMO for all projects or dedicated to a specific program, should be both thorough and efficient. It should include not only regular status reports but all documentation related to the project, keep them under configuration management, and make them accessible to all who are authorized access to them. For a construction project this can include architectural and engineering drawings as well as shop drawing control logs, procurement control logs, subcontractors’ prequalification’s control logs, change control logs, RFI logs, etc. Project management academics, theorists, and bloggers know what should be done. Experienced project managers also know how to effectively communicate. But when a construction project is started out there is little time or priority to setting up an effective PMIS. The project manager is willing to adopt whatever the controlling organization already has in place. But unless there is an effective PMO to develop and maintain the PMIS, it often does not exist. Management expects the project managers to know how to communicate, but they are often much too busy to spend time developing the most efficient approach for their project. There are other priorities. The end result is that the existing PMIS is often not used effectively and communications on a project ends up being very poor. Figure 1, shows a proper communications flow and should be the core element of a successful project information system.
  3. 3. Figure (1) The communications flow illustrated here demonstrates how the information is first identified and how it is delivered to the project’s team members without any discrepancies. A single source of the information should be identified and this will vary depending on the information being communicated. There should be a single source of approval before information is distributed to avoid duplication or wasted efforts. This avoids the common problem of different sources of information delivering different messages. The same message should be delivered whether the information comes from schedule reports, Earned Value reports, weekly budget reports, or status meetings. “Ineffective communications is the primary contributor to project failure one third of the time, and had a negative impact on project success more than half the time.”
  4. 4. Lack of Information Management System and collaboration As mentioned in the previous part of this technical paper about Information management system and as illustrated in Figure (1), we have to iterate again that performing organization and project manager accordingly should ensure that all project stakeholders are using up to date information’s, By giving all project team members the best quality information when they need it, team members become more productive and are able to support project success without loss of control. A lack of availability of an integrated information system with proper communication process will lead to the lack of the information provided by it which consequently impact the project success and lead to its failure. A glaring example of lack of information management system is that most of project team members use email to communicate project updates and data like shop drawing control logs, procurement control logs, subcontractors’ prequalification’s control logs, RFI logs, etc., and the biggest complaint here is that project information resides in each project team member’s email box, so if new information or updates relevant to any of the aforementioned control logs exist there will not be any centralized view of the current information. From the above it is obvious without a well defined communication process and project information management system to regulate project information and communication this will contribute to project failure. The following findings will show the effect of lack of projects’ information management system: High-performing organizations (those completing an average of 80 percent or more of projects on time, on budget and within goals) create formal communications plans for nearly twice as many projects as their lower performing counterparts (which complete fewer than 60 percent of projects on time, on budget, and within goals).” It is also obvious that performing organizations lose significant amounts of money due to ineffective communication. A missing or poorly designed information management system will affect the project success and increase the risk and threats to the performing organization and their strategic plans. Here a question arises about the relationship between the project’s information management system and “Construction collaboration” terminology. Effective construction collaboration between the project’s stakeholders and/or performing organization team members provides a full sharing of project information and knowledge. Sharing information will replace the project data held by individual team members with a centralized and robust storage of data and information related to the project. The data can now be accessed by stakeholders with the appropriate authorization level. The main feature of effective construction collaboration is the communication and information management that it facilitates. Establishing an effective project information management system As mentioned in earlier sections, a project manager usually spends more effort to introduce a variety of colored reports to top management to show-off his communications abilities without giving timely and accurate reports that reflect how the project is progressing, neglecting the fact that all these silly reports
  5. 5. are consuming a lot of effort by the project’s team members which consequently impacts project progress and ultimately can lead to project failure. The fact is that any performing organization should have an effective project information management system that provides a multi-project analysis and reporting capability to enable top management to compare the project’s actual status to the baseline. An integrated and comprehensive project information management system improves the project’s information flow and accuracy to eliminate redundant files and poor data and consequently reduces time and effort being spent to obtain timely and accurate status. Figure (2) shows a cause-effect diagram illustrating the requirement of having an Integrated Information management system globally accessible across all stakeholders with regular updates and data. Figure (2) This diagram shows that the main challenge for any performing organization is to have a cohesive project information management system that globally accessible by all project stakeholders with regular updates to assure the project success. The objective is to have an effective communication process. A PMIS is often thought of as just a software tool that the organization buys to track schedule. But it is actually a system of tools and processes to collect data, analyze it, and communicate it. Schedule and cost
  6. 6. tracking tools are part of it, but so are the project manager’s weekly status updates, the IT infrastructure in the organization, and the communications tools. If the project manager puts on a hard hat and walks the construction site to collect information on current status, he’s collecting information that will be fed into the software tools and analyzed to understand where the project is. The earned value management reports are part of data analysis and reporting. As in any system, the more effectively the tools and the manual process work together the more effective the entire system is. A construction project manager that is using the desktop version of MS Project 2007 to manage a set of 5,000 activities will quickly find the tool is completely inadequate for the job. The tools, processes, and approaches must be appropriate for the project’s size and complexity. The PMIS is part of the project’s overall control approach. While the project manager should take advantage of the tools available in the organization he should be most interested in making the PMIS as effective as possible for the project. The Association for the Advancement of Cost Engineering (AACE) in Recommended Practice RP60R-10 offers strong advice on how the project controls approach should be designed and implemented. The right tools, data, and processes are crucial in successfully managing projects. Conclusion The goal of this technical paper was to gain a better understanding of effectiveness of project management information system (PMIS) in construction, and its contribution in adequate decision making using proper information flow throughout the project stakeholders, which is a core competency for any project manager. The study was tending to assure that the most significant approach is the setting up and effective project management information system (PMIS) to avoid spending more time communicating rather than managing. Every performing organization should have standards and per-defined format for project data presentations to prevent project manager’s form implementing best light, glossing selectivity reports.
  7. 7. About Authors: Essam Lottfy PMP, CCP is a Construction Manager-MEP at Trojan general contracting in Abu Dhabi, UAE. He received his BSc. degree in Electrical Engineering (Major) and Power Distribution (Minor) through Zagazig University, Zagazig, Egypt since 2001. Pursued and achieved his certificates in Project Management (PMP®) from PMI-USA since 2013, and certificate in Cost Management (CCP®) from AACE International since june-2014. He does claim 13 years extensive hands on experience in various aspects of projects and project management within maintenance, power distribution networks monitoring and supervision and construction projects as well. During his employment tenure with his past employers Suez Canal Electrical Distribution Company, United Engineering & Trading Company – ENTRACO, and TROJAN General Contracting, he has successfully managed various projects, in addition enhancing the process capabilities and organization performance as well. Essam Lotffy is actively pursuing potential opportunities in the project management field, where a room of growth and opportunities for advancement exists.
  8. 8. Frank Parth, MS, MSSM, MBA, PMP is the President of Project Auditors LLC, a past member of PMI’s Board of Directors, and is currently on the core management team for PMI’s PMBOK Guide version 6. Mr. Parth brings 35 years experience in project and program management to his teaching and consulting work. He had a first career designing satellite systems for the US government and in 1993 he set up a consultancy and began consulting in program management and systems engineering. He has created PMOs for several Fortune 1000 companies and for companies internationally. He consults to clients in multiple industry sectors, including telecom, construction, high tech, chemical processing, utilities, government, healthcare, mining, financial services, and aerospace. He is currently supporting Saudi Arabia’s Saline Water Conversion Corporation in improving their project management processes and in developing a PMO. Mr. Parth teaches project management courses throughout the world and has taught over 4000 students worlwide in preparing for the PMP certification exam. He is a guest lecturer at USC’s Marshall School of Business, the University of California, Irvine, and at the American University of Sharjah (AUS) in the UAE, is an accomplished international speaker, and does pro bono teaching of project management in Vietnam. He has co-authored or contributed to multiple books in project management and has published numerous papers in project management and systems engineering. He is actively involved with PMI, serving on local and national committees and was PMI’s Project Manager for the Standard for Program Management, 2nd edition published in 2008

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