PROCEEDINGS OF GOVERNMENT/INDUSTRY FORUM: HE OWNER’S ROLE IN PROJECT MANAGEMENT AND PREPROJECT PLANNING
[PROCEEDINGS] Recurrent problems with project performance in the U.S. Department of Energy (DOE) in the 1990s raised questions in Congress about the practices and processes used by the department to manage projects. The 105th Committee of Conference on Energy and Water Resources directed DOE to investigate establishing a project review process. DOE requested the assistance of the National Research Council (NRC), which resulted in the publication of the report Assessing the Need for Independent Project Reviews in the Department of Energy.
Congress subsequently directed DOE to undertake a review and assessment of its overall management structure and process for identifying, managing, designing, and constructing facilities, and the DOE asked the NRC to conduct an independent review and to develop recommendations to improve DOE’s management of projects. The NRC published the report Improving Project Management in the Department of Energy, which provided a set of findings and recommendations for improving project management and noted that improvement would require a program of reform for the entire project management process. These issues were followed up and expanded in the subsequent reports, Characteristics of Successful Megaprojects, Improving Project Management in the Department of Energy, and Progress in Improving Project Management at the Department of Energy: 2001 Assessment.
Many of the findings and recommendations in this series of reports identified the need for improved planning in the early project stages (front-end planning) to get the project off to the right start, and the continuous monitoring of projects by senior management to make sure the project stays on course. These reports also stressed the need for DOE to act as an owner, not a contractor, and to train its personnel to function not as traditional project managers but as knowledgeable owner’s representatives in dealing with projects and contractors. The NRC Committee for Oversight and Assessment of Department of Energy Project Management determined that it would be helpful for DOE to sponsor a forum in which representatives from DOE and from leading corporations with large, successful construction programs would discuss how the owner’s role is conducted in government and in industry. In so doing, the committee does not claim that all industrial firms are better at project management than the DOE. Far from it—the case studies represented at this forum were selected specifically because these firms were perceived by the committee to be exemplars of the very best practices in project management. Nor is it implied that reaching this level is easy; the industry speakers themselves show that excellence in project management is difficult to achieve and perhaps even more difficult to maintain. Nevertheless, they have been successful in doing so, through constant attention by senior management.
Through this forum, the committee hoped to reinforce some of the other general points made in the above-cited earlier reports. The points include the following:
- Successful project management requires the institution of a project management discipline that encompasses all projects. It is not sufficient to do some projects well; what is needed is consistency. All the firms represented in the forum have well-defined, disciplined project processes, with buy-in and active participation by senior management.
- There is an absolute requirement for emphasis on project justification and identification of business or (in the case of DOE) mission need early in every project, even before a project is formalized. Senior corporate (agency) management must be closely involved in this process, as it is their responsibility to identify and interpret business or mission needs.
- Decision points with options for project approval, go-ahead, change, rework, or termination must be clearly identified. These decisions must be made by appropriate senior managers. The view that the need for senior management decisions slows down good projects is explicitly rejected. A good decision process actually expedites projects, in that it assures that they have the necessary resources, support, and direction to go to successful completion and operation not merely to the next phase.
- Accountability and responsibility for project performance must be made clear and well defined across the enterprise. For the enterprise to succeed, all elements must succeed.
- A corporate organizational structure for project management must be established and maintained.
- There must be continual, formal project reviews by responsible management.
- Expectations, products, and metrics must be clearly defined for the entire process.
- There is no substitute for thorough front-end planning. This is true even (better, especially) for first-of-a-kind and one-of-a-kind projects.
- A successful project-management improvement process requires a cultural change, and cultural change is driven from the top.
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