Cost Overruns and Overdue Projects: The Solution

Introduction

A Canadian division of a large American engineering company wanted to solve the following problems:

1. Reduce cost overruns and overdue projects
2. Standardize practices to facilitate the integration of new managers
3. Increase the level of customer satisfaction
4. Reduce risk-related planning deviations

Projects in the division of the engineering enterprise were classified into three categories according to duration, size, number of disciplines involved and engineering fees. As illustrated in table 1, over 95% of the projects fall in the small- and medium-scale categories.

Table 1: Classification of the division’s projects (in Canadian Dollar)

The engineering division was already using a robust project management process for their large-scale projects, but needed to implement project management processes for their small-scale and medium-scale projects. The decision was made to implement the ISO / IEC 29110 standard to fulfill these objectives.

Management process of the engineering organization

The project management (PM) practices used by the engineering division’s project managers were assessed against the ISO / IEC 29110.

Figure 1 shows the overall results of the assessment of the activities of the PM process of the Basic profile. The figure displays the percentage of the tasks performed for each of the following activities:

Figure 1 Performance assessment against the ISO / IEC 29110.

The evaluation found that:

• PM tasks were not performed systematically
• PM practices varied from project manager to project manager
• No guideline had been defined for a few tasks
• The completion dates are often too short to set-up a complex project management structure
• The number of projects executed in parallel has a significant impact on the human resources assigned to them
• Some project managers do not necessarily have all the required project management knowledge

Pilot projects have been carried out to test the solutions developed.

The solution

The development of processes and tools, such as checklists, templates and forms, was the central element of the solution to the problems identified. Within the scope of this program to improve project management practices, the following five checklists were developed:

1. Small-project management process
2. Medium-project management process
3. Major-project management process
4. Drafting of service proposals
5. Detailed project planning

All developed solutions are composed of processes supplemented with checklists, forms and templates.

Deployment Strategy

Once the final adjustments were made to the project management process and tools, a strategy was developed for the deployment of these solutions to all project managers of the division, i.e. about thirty persons. The strategy consisted of the following  components:

1. Communication
2. Training and diffusion of the processes and their supporting documents

The first phase was to inform project managers. In order to reduce questioning and to mitigate the negative impacts that ‘unknown’ can generate project changes, various means have been implemented to inform all managers. One-day training sessions have been prepared for project managers. The second phase was used to distribute documents to all managers located in ten offices of the company in Canada.

Conclusion

For the first time, the company has documented management processes for their small-scale projects. ISO / IEC 29110 enabled a division of a large engineering consulting firm to develop project management processes for their small-scale and medium-scale projects that offered a structured approach to its project managers. Cost overruns and overdue projects have decreased significantly.

The improvement program was so successful that managers of the company’s other divisions have shown an interest in learning this approach in order to implement it within their respective divisions. One division of the enterprise is now planning to review its process for the engineering activities.

Additional Information

We invite you to read the following research paper to get more information regarding this project: Laporte, C.Y., Chevalier, F. 2015. An Innovative Approach to the Development of Project Management Processes for Small-scale Projects in a large Engineering Company. 25th Annual INCOSE International Symposium (IS2015). Seattle, July 13-16, 2015.