Articles
"Program
Management Changes the Owner’s Role in Project
Execution", (c) Robert Prieto -
Flour , Construction Trends.com,
02/23/2008
The selection of a Program Management approach
to deliver a major capital facility program
modifies the role of the Owner in program
execution in several significant ways. Each change
involves a significant departure from established
methodologies for management, commercial and other
processes the Owner had evolved over a
Series of capital delivery projects in the
past.
The Owner’s organization must evolve without sacrificing the skills and
capabilities of the current team or their delivery excellence. The shift to a
new program execution methodology must still capture the lessons learned in the
past while at the same time building a new larger, more diverse organization to
achieve the higher level of performance the new program will require.
This organizational transformation involves change that must be managed in
order to effect the strategic change that is the goal in the decision to shift
from a multi-project to program based delivery.
Evolution of the Owner’s Role
A program management approach typically involves an Owner engaging the
services of a Program Manager to support his efforts. Under a Program Management
approach many of the responsibilities and associated processes of the Owner are
transferred to the Program Manager. The Owner takes on new and changed
responsibilities. This shift in focus is key for the Owner’s organization to
recognize at the outset of the program in order to avoid duplication of efforts
between the Owner and the Program Manager. More important, the Owner must assure
that the new areas purely within his purview are adequately performed.
The following sections look at some changes in the Owner’s focus when he has
chosen to employ a program management approach. The activities that follow
reflect many of the major activities that shift under a program management
delivery approach. The actual allocation of responsibilities between Owner and
Program Manager may vary from what is shown.
“C”-Level Executive Sponsorship
Traditional Owner Role
“C”-Level Executive has direct management oversight of executive in charge of
program delivery and oversight. Executive interaction will vary broadly based on
styles and competencies of the Program Level Executive and the “C”-Level
Executive
Owner Role Under Program Management
“C”-Level Executive gains improved separation of delivery and oversight
vectors enhancing the probability for earlier identification and resolution of
issues. “C”-Level day-to-day interaction will likely be reduced in the execution
area and quality of assessment of program progress strengthened. Interactions
with Program Manager will be focused on areas requiring strategic shift by
Program Manager; review of any significant performance issues as reinforcement
of the Program Level Executive’s own findings and conflict resolution of issues
not resolvable at the Program Executive’s Level. This later category of issues
will be required to be at a threshold level in order to engender “C”-Level
Executive Involvement. Interaction in these settings with Program Manager’s
representatives will be above the Program Director’s level.
Program Manager’s Role Under Program Management
Executive sponsor for the Program Manager will interact with the Owner’s
Program Level Executive on a periodic basis to ensure performance objectives of
the Program Management team are being met. Quarterly-type meetings with the
Owner’s “C”-Level Executive and the Program Level Executive will focus on
strategic issues; program level change management, including organizational
change management; contract administration issues and any areas of dispute.
Program Level Executive
Traditional Owner Role
Responsible for both direct management of all program execution activities as
well as overall program oversight and assurance activities.
Principal point of interface with other Owner organizational elements and
third party stakeholders.
Owner Role Under Program Management
Continuing overall owner execution responsibility but role transitions to
more of an executive level as it relates to the project execution activities and
responsibilities assigned to the Program Director.
Leads organizational change management within the Owner’s organization as
roles transition from direct execution to oversight, audit and interface
management in those areas under the Program Manager control.
Increasingly assumes roles and responsibilities related to overall program
delivery that previously had more active engagement of the “C”-Level executive.
Direction related to activities under the Program Manager’s control will be
formally provided by the Program Level Executive to the Program Director as part
of an overall change control and contract administration authority. Certain
authorities formerly the purview of the Program Level Executive will be
delegated to the Program Manager with strengthened audit and oversight under the
control of the Program Level Executive.
Program Manager’s Role Under Program Management
Program Director (Program Manager’s lead representative responsible for day
to day execution of the program) will assume leadership of many of the project
execution responsibilities and activities previously under the direct day to day
management of the Owner’s Program Level Executive. Areas of program execution
not under the Program Director’s direct day to day control will include clearly
defined owner’s activities and the independent oversight and audit of the
Program Manager’s own activities and the adequacy of the processes, systems,
procedures, controls and reporting required to assure the performance and
payments related to activities under his management.
Scope
Traditional Owner Role
Overall program objectives are defined at the “C”-Level and translation of
those objectives into a definitive program description is carried out under the
Program Level Executive. Definition of specific projects including associated
trade-off studies are led by the Owner organization with strong support from
requisite external resources. Optimization often focuses on project by project
optimization.
Owner Role Under Program Management
Overall program objectives are defined at the “C”-Level and translation of
those objectives into a definitive program description is carried out under the
Program Level Executive. Definition of specific projects including associated
trade-off studies are led by the Owner organization with strong support from
requisite external resources, including resources not traditionally engaged, but
with the additional involvement of the Program Manager in order to ensure that
standardization across all projects within the program is maximized and that
overall optimization is focused on programmatic versus project by project
optimization.
Program Manager’s Role Under Program Management
Participates with the Owner in top level program definition and tradeoff
activities, providing added specialty resources not traditionally engaged by the
Owner organization and bringing a programmatic focus to assessing strategies and
impacts on overall program schedule and cost. Works in support of the Owner to
define the level of scope definition required at the study phase while avoiding
prescriptive definitions that undermine overall programmatic standardization and
procurement leverage activities.
Schedule
Traditional Owner Role
Detailed project based schedules to meet individual intermediate milestones.
Compilation of project level schedules and select program-wide activities such
as environmental, stakeholder outreach etc.
Owner Role Under Program Management
Review and acceptance of integrated schedules prepared by the program manager
reflecting Owner led activities retained by the Owner. Integrated schedules will
reflect required timeframes for various Owner approvals or hold points and will
take a more programmatic view reflecting any changed delivery or procurement
strategies implemented by the Program Manager.
Assess the adequacy of schedule measurement systems implemented by the
Program Manager and review overall progress against the Master Schedule.
Program Manager’s Role Under Program Management
Program Manager prepares an integrated Master Schedule clearly reflecting
Owner activities impacting activities under his control. The Master Schedule
will reflect a clear programmatic view showing interfaces between various
projects, allocation of resources across individual projects and to programmatic
activities and changed delivery and procurement activities conducted on a
programmatic basis across all projects in the program.
Risk Assessment & Contingency
Traditional Owner Role
Risk assessment activities are often conducted on a rule-of-thumb basis at
the earliest program stages with more detailed risk assessments performed for
discrete projects or project phases. Owner relies on inputs from others under
his direct management.
Contingencies established as a result of these risk assessments are under the
control of the Owner.
Owner Role Under Program Management
Overall risk assessment activities are strengthened at an earlier stage to
reflect the added complexity of a large scale program including the increased
complexity associated with a reconfigured supply chain and internal program
competition for limited resources and increased interface management. Owner will
utilize the Program Manger to undertake a significantly more robust risk
assessment on a programmatic as well as a project by project basis. Increased
emphasis will be placed on interface risks across all program elements as well
as event driven risks that arise out of the scope of the overall program. Risks
associated with scale will take on increased importance.
Contingency management will be partitioned between the Owner and Program
Manager with certain contingency elements retained by the Owner, reflecting his
ability to best manage the associated risks, and other elements of contingency
either under shared management of the Owner and Program Manager.
Program Manager’s Role Under Program Management
Program Manger will undertake a significantly more robust risk assessment on
a programmatic as well as a project by project basis. Increased emphasis will be
placed on interface risks across all program elements as well as event driven
risks that arise out of the scope of the overall program. Risks associated with
scale will take on increased importance.
Contingency management will be partitioned between the Owner and Program
Manager with certain contingency elements retained by the Owner, reflecting his
ability to best manage the associated risks, and other elements of contingency
either under shared management of the Owner and Program Manager. Contingency
management by the Program Manager will be accomplished under a well structured
process, any contingency releases reported to the Owner as part of periodic
reporting and appropriate thresholds established for releases of contingency
above which Owner concurrence is required.
Budget
Traditional Owner Role
Budget requests including anticipated cash disbursements are prepared by the
Program Level Executive and approved for Board Level submission by the “C”-Level
Executive. Owner’s staff leads budget preparation in consideration of risk
assessments performed.
Budget performance is tracked by the Owner’s staff at varying levels of
detail. Such tracking is traditionally against individual projects or project
phases and consolidated on a program basis.
Owner Role Under Program Management
Budget request processes are fundamentally unchanged but build upon more
robust and comprehensive risk assessments led by the Program Manager. Budget
requests by the Program Manager are independently reviewed by the Owner’s staff
as opposed to being developed by the Owner’s staff under more traditional
approaches.
Overall budget performance assessment remains with the Owner organization
with the Program Manager taking on a large portion of the day to day management
and oversight of budget related performance consistent with those activities and
program elements under his purview. Owner’s efforts related to activities
managed by the Program Manager will require strengthened audit capability and
assessment of programmatic trend analyses to be prepared by the Program Manager
(examples include labor forecasts, material price forecasts and trends).
Program Manager’s Role Under Program Management
Program Manager provides robust and comprehensive risk assessments; prepares
budget requests that are independently reviewed by the Owner’s staff, budget
performance assessment for activities under the Program Manager’s purview, audit
of invoices and other expenditures of costs incurred, and augmented forecasting
activities when compared to project based approaches.
Project Management
Traditional Owner Role
Extensive ongoing involvement in the oversight and direction of various third
party contractors engaged to execute specific project elements. Heavily involved
in day to day management of individual project elements.
Owner Role Under Program Management
Owner’s project management role migrates to one more focused on strategic and
executive guidance of many activities previously directly managed. Owner’s
project managers assess overall progress, robustness of execution managed by the
Program Manager, emerging risks and Program Manager’s strategies to address, and
authorize releases as appropriate from shared contingency pools.
Program Manager’s Role Under Program Management
Program Manager provides direct management of all projects and program
activities within his scope of work. Project management activities are
accomplished with a heavy emphasis or identifying opportunities for
multi-project sharing and leveraging of resources. Management reporting is
consolidated on a programmatic basis and provides both project performance as
well as programmatic views.
Project and programmatic reviews is conducted on a scheduled basis with both
individual Owner project managers as well as Owner functional leadership.
Engineering
Traditional Owner Role
Engineering management and leadership of study and initial scoping
activities; packaging of engineering work packages for execution by others;
review of intermediate design products and direction on specific design
features.
Owner Role Under Program Management
Engineering management and leadership of study and initial scoping activities
with extensive involvement of Program Manager’s functional team. Review and
acceptance of programmatic engineering design standards and concurrence on third
party engineering design resources above threshold levels. Quality assurance
reviews of Program Manager’s design processes, procedures and standards to
assure agreed to engineering design standards are being employed and defined
scope being comprehensively addressed.
Program Manager’s Role Under Program Management
Increased input of standardization, consolidated procurement and
constructability considerations into definitional and trade-off studies
conducted under the Owner’s leadership but employing enhanced sets of planning
tools.
Packaging, procurement and management of engineering work packages to be
provided by third parties in addition to work performed directly by the Program
Manager.
Third party engineering procurements above a threshold level require Owner
concurrence. Program Manager provides consolidated resource management in
constrained situations, design processes, standards and procedures to be
utilized across all projects comprising the program. Interface management takes
on increased importance as does assurance of comprehensive implementation of
programmatic engineering standards.
Procurement
Traditional Owner Role
Owner’s procurement responsibilities encompass development of contract
packages, applicable terms and conditions, advertising and conduct of
solicitation processes, bid evaluation, negotiation and issuance of contracts.
Contract change processes typically require additional procurement support in
the evaluation of contractor requests for financial or other contract
modifications
Owner Role Under Program Management
Owner’s procurement responsibilities will be limited to development of very
select, major contract packages. Owner will work with Program Manager to develop
standard program terms and conditions.
Owner would approve procurements over threshold values with other procurement
authority traditionally delegated to the Program Manager. Direct procurement by
the Program Manager on his own commercial paper and with the Program Manager’s
standard terms and conditions augmented by special provisions Owner may require
may be utilized as part of transitioning the majority of procurement efforts to
the Program Manager.
Owner’s activities under program management transition to a strengthened
audit and oversight role with respect to activities undertaken by the Program
Manager
Program Manager’s Role Under Program Management
Program Manager will lead all procurement activities within the scope he is
responsible for except as otherwise reserved by the Owner. Approval and
authority to execute contracts on the Owner’s behalf may be delegated up to a
threshold level directly to the Program Manager |
