18 October 2019

Table of Contents for Project Management





PROJECT MANAGEMENT

Project Efficiency

 

With individual specialisation of various sectors, the efficient progression of a project depends on co-ordination of activities involved in the construction process. This clearly indicates that the construction sector will depend on project management and mechanisation to meet the challenges of cost, quality and time reports
Panjami Vivek.

 

Project Management, a niche skill, has been witnessing increasing demand due to the scale and complex projects undertaken.Regarding countries recovering from global meltdown, there is an amplified demand for project managers to think strategically and execute projects effectively. According to the Project Management Institute, 15.7 million new project management roles to be added globally across seven project-intensive industries by 2020 reaching an economic impact of over $18 trillion, across seven project-intensive industries including Manufacturing, Finance and Insurance, Information Services, Utilities, Oil & Gas, Business Services, and Construction. In India, there is a growing requirement for project managers in IT, Construction and Manufacturing sectors. Certified Project Management Professional (PMP) roles have been growing at over 11 per cent per year for the last seven years. The global construction industry is estimated to increase by more than 70 per cent to $15 trillion by 2025 and it will be concentrated in China, India and the United States. Experienced project managers in the construction industry, have positive prospects in the Asian job market, as Project Management processes are not very mature in Asian countries. India needs approximately 1 million skilled project managers to fill gaps in large construction projects that require knowledge competence and complex regulatory compliance. China boasts of its largest high-speed rail system and is the fastest growing economy in the world. With an annual investment of $100 billion, the country is planning to expand this rail network.

 

Market Compulsions

With rapid development across Tier II and Tier III cities, India will witness acute labour shortages in the coming years. With reduced skilled work force, project management services will provide the customer with a one-stop professionally trained and proven solution that will enable integrated and supervised project implementation, from design to delivery. In 2002, the number of labourers required to build half a million sq. feet was about 700-800 construction workers and in 2012 with gradual mechanisation it had come down to about 200 workers and by 2022, it would reduce further. This is going to drive the industry to go in for large-scale mechanisation and increased use of project management. KPMG – Global IT Project Management Survey 2005 stated that, in just a 12 month period 49 per cent of organizations had suffered a recent project failure. In the same period only 2 per cent of organisations reported that all of their projects achieved the desired benefits. 86 per cent of organisations reported a shortfall of at least 25 per cent of targeted benefits across their portfolio of projects and many organisations failed to measure benefits so they are unaware of their true status in terms of benefits realisation.

 

With India at the cusp of rapid urbanisation and development, there is an ever-increasing demand for commercial and residential space and it could be met only through adoption of mechanisation and project management practices. Additionally, without proper project management practices, that involve design, construction related activities, management of work schedules etc, there could be time overruns in the delivery of the project. This is likely to increase the overall cost of construction. Therefore, the RBI projections not withstanding, the overall project implementation practices also affect the cost, quality and time of projects, particularly the residential and commercial ones.

 

Areas of Focus

Emphasis on project management methodology in the past few years has been an increasing need in the infrastructure arena. As a result, project management roles are becoming increasingly important in the sector. Overall, the percentage of employees in project management roles in the classified sectors is between 10 and 12 per cent with percentage of Project Managers having professional PM certifications varying from 3 – 5 per cent in infrastructure and telecommunications sector to about 40 - 50 per cent in PSU energy companies. Project management skills are particularly important for mega-projects, where time and cost are of utmost importance. Stakeholders in the infrastructure have to deal with skill gaps existing in the industry and require novel methods of addressing them. It has become imperative for companies to hire highly skilled employees and train them on various technical and project management aspects. With an increase in the complexity of the projects, firms will need to focus on addressing skill gaps to improve productivity in say, technical, project management, behavioural and financial skills. PM Solutions maintain that, about 49 per cent organisations have incorporated a project management-training program.

 

The top four key competencies desired by the industry are those of people management, planning, cost management and profit management and there is a need to train employees on project financial skills such as cost management and profit management. This would help ensure that their organisations remain competitive in the era of shrinking margins.

 

Project management — training and certification

The industry traditionally looked to addressthe gaps in skill when it comes to project managementthrough on-the-job, learning by doing methods. Companies are now considering a mix of on-the-job training and third-party certifications. Several global players are encouraging employees to opt for third-party certifications by recompensing the cost of certification upon successful completion. However, the availability of certified project managers in the Indian industry remains low, with less than 5 per cent of the project managers having a professional project management certificate.Apart from external certifications, firms are adopting various other initiatives to train project managers. These procedures include tying up with institutes such as IIMs and NICMAR to allow managers to spend time on the campus and learn about various nuances of project management and attend mentorship sessions with senior project managers. According to Wrike, only 56 per cent of project managers across the globe hold professional certification and about two-thirds of CIO’s consider PMI certification as a valuable benefit, but not a necessity.

 

Challenges and Solutions

Time and cost overruns are the key challenges for the infrastructure industry. About 40 per cent of the ongoing infrastructure projects are running behind schedule. According to project managers, most of the delays are due to extraneous reasons that can be dodged by adhering to appropriate risk management, time management and change management processes. In fact, leading EPC players have already started monitoring their projects through a centralised Project Management Office (PMO). This enables them to execute and review their projects in a more structured manner.

 

Apart from external certifications, firms are adopting various other initiatives to train project managers. The rapidly changing dynamics of the infrastructure industry are giving rise to a number of fundamental challenges in adopting project management methodology. Resistance to change among employees toward adopting a project management framework is a massive challenge to this. Most often, Vendors/Sub-contractors are not well versed in project management and project management tools and techniques. Driving project management in a difficult political and social environment becomes challenging at site locations.

 

One out of six IT projects has an average cost overrun of 200 per cent and a schedule overrun of 70 per cent. Around 45 per cent of companies admit that they are unclear about the business objectives of their IT projects. Harvard Business Review maintains that, according to an IBM study, only about 40 per cent projects meet budget, schedule and quality goals. According to KeyedIN, 50 per cent of all Project Management Offices shut down within three years. Standish Group, asserted that only around one-third of all projects were successfully closed as per the time and budget set, during the past one year.
Despite these challenges, companies have been aggressively promoting project management methodology to improve their overall efficiency and, in turn, giving a boost to their profitability.

 

Many companies have built internal tools to drive project management adherence across the organisation. Companies believe that project management would be essential to stay competitive in coming years, and infrastructure companies must focus on integrating it into their core philosophy.A whopping 97 per cent of companies believe project management is imperative for business performance and organisational success.

 

Summary

The government has identified infrastructure as a key focus area over the coming years. In the backdrop of increasing complexity of infrastructure projects and shrinking timelines, the use of project management would become crucial in the sector. To execute these projects on time, project managers must possess and develop planning, cost management and profit management skills. However, the availability of certified project managers in the industry remains low. Companies are now starting to invest in sponsoring certification for employees and building internal tools to build project management competencies in their organisations.

 

Project Management services include:

  • Program Management / PMO
  • Project Management
  • Financial Management
  • Risk Management
  • Procurement Management
  • Contract Management
  • Design Management
  • Construction Management
  • OHSE Management
  • Quality Management
  • Relocation Management
  • Project Monitoring
  • Project Audits
  • Cost Consultancy
  • Workplace Strategy

 

KEY PLAYERS

  • Colliers International
  • Fluor India
  • L&T Institute of Project Mgmt
  • Mott MacDonald Pvt Ltd
  • NICMAR
  • PMI
  • Sangam Project Consultants
  • STUP Consultants



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