Professional Documents
Culture Documents
Operational
Excellence
Document No.
06/2000
PRM-001
Revision
S&TIS/17498
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Contents
Page
SECTION 1
INTRODUCTION ..................................................................................................................................... 3
2
2.1
2.2
2.3
2.4
2.5
2.6
2.7
2.8
3
3.1
3.2
4
4.1
4.2
4.3
4.4
4.5
5
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.9
5.10
6
6.1
6.2
7
7.1
7.2
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FIGURES
1
PROJECT PROCESS ............................................................................................................................. 4
2
COMMERCIAL STRATEGY & RISK RELATIONSHIP ......................................................................... 12
3
ICI RISK MANAGEMENT PROCESS ................................................................................................... 22
SECTION 2
9
9.1
9.2
9.3
9.4
9.5
9.6
9.7
9.8
10
10.1
10.2
10.3
10.4
PROJECT IMPLEMENTATION............................................................................................................. 51
Cost Management ................................................................................................................................. 51
Change Control...................................................................................................................................... 53
Document Management ........................................................................................................................ 54
Construction Management..................................................................................................................... 55
11
PROJECT REVIEW CHECKLISTS ....................................................................................................... 56
11.1 Project Review, Reporting and Close-Out............................................................................................. 56
11.2 Measurement (Learning Log) ................................................................................................................ 57
12
REFERENCES ...................................................................................................................................... 58
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SECTION ONE
0
INTRODUCTION
2.1
Introduction
The ICI Project Process is part of a total business investment process whose prime aim is helping to ensure
that capital and revenue resources within the company are spent effectively and that key safety, health and
environmental standards are met. The Project Process is set out in Figure 1 and defines the key stages and
decision points that are required for all projects. It does not prescribe the way in which those stages are
undertaken, this will normally be done by local project procedures appropriate to the nature and size of the
project as well as the local business and regional context. For larger or more complex projects, additional
decision gates may well be required. Business and project strategy usually determines how the Project
Process is applied.
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FIGURE 1
PROJECT PROCESS
OWNERSHIP AND MANAGEMENT
Decision
Gates
Project
Project
Project
Project
Opportunity
Definition
Implementation
Benefit
Deliverables
MEASUREMENT AND AUDITING
Project Review
2.2
Project Opportunity
The Business identifies the opportunities and their nature, reviews alternatives and identifies the potential
risks and benefits before defining the business objectives for the project and appointing a Business owner.
The decision to proceed with the project and to provide appropriate resources is recorded.
2.3
Project Definition
The project definition stage tests that the business objectives are clear and establishes critical success
criteria for the project. The scope of the project is defined in sufficient detail to satisfy the sanctioning
criteria; and planning of the execution of the project is completed in order to define roles and responsibilities
and resourcing requirements; schedules are produced which are based on an appropriate work breakdown
structure and estimation of costs. A defined project strategy, definition package, project schedule and
sanction cost estimate are produced at this stage.
2.4
Project Implementation
Following the sanction decision, project implementation proceeds in accordance with the defined project
strategy and scope. The stages of implementation vary with the nature of the project but typically include
detailed design, procurement, construction and start-up. Appropriate monitoring, validation and control
measures are employed to track progress, control costs, ensure safety and limit change to ensure the project
objectives are achieved. The deliverable at the end of this stage is a productive asset, which meets the
business objectives.
2.5
Project Benefit
The Business ensures that the project benefits defined at the outset of the project continue to be realised
throughout the operating life of the asset.
2.6
Project Review
All projects complete an appropriate review process, which ensures that learning from the project, both
positive and negative, is captured and recorded. This includes both project learning and business learning in
terms of whether business objectives have been achieved by the investment. Appropriate mechanisms are
put in place to ensure such learning is disseminated throughout the Business and project communities to
maintain effective feedback for future improvement.
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2.7
Business Ownership
Each ICI project has an identified Business owner responsible for delivery of the project benefit and
accountable for managing the integration of activities from identification of project opportunity through to
delivery of project benefit and completion of project review. The Business owner has responsibility for
ensuring that the capability is in place for the effective delivery of all stages of the project process. This
usually requires the appointment of a suitably qualified Project Manager. The Business owner also has
responsibility for ensuring that essential safety, health and environmental requirements are met throughout
the project process.
2.8
Each stage of the ICI Project Process includes the definition of key deliverables. These deliverables form
the basis on which decisions will be made to proceed, or otherwise, to the next stage of the project process.
It is important that these deliverables are measurable and that suitable audits or project assessments are
carried out from time to time to ensure that the process is being effectively and consistently applied. These
can take the form of self-assessments or may be peer assessments or independent audits. It is particularly
important that regular assurance of SHE compliance on projects is undertaken.
KEY CAPABILITIES
In order to successfully complete projects there are a number of key competencies and skills that are
required within the project team. If the team is lacking in any of these capability areas, the project may still
be successful but the risk of failure is greatly increased. Project management is both an art and a science,
combining a structured logical approach, which requires discipline with a range of skills which require
experience and judgement. The need for these key skills and competencies is not reduced merely because
the project is small.
3.1
General Skills
Adoption of a project process and appropriate procedures to ensure that objectives are understood,
scope defined and strategy planned before implementation takes place. The ICI Project Process is
defined in Section 2. It is part of the responsibility of the Project Manager to ensure that the discipline of
the process is applied throughout the project.
The project team needs clearly defined roles and responsibilities, which cover all the project
requirements. The internal interfaces between project team members need to be clear as well as the
interfaces outside the project team (e.g. with the Business, works, other projects, etc.). The interfaces
with contractors and suppliers are especially important and need to be properly managed.
The Project Manager must ensure that all the appropriate skills are available and harnessed at the right
time. Unlike many line management jobs, the Project Manager will often need to draw upon the skills of
people who have other accountabilities in the organization. Access to resources is a key requirement of
project management.
Since projects usually involve the integration of related activities in a defined time frame, good team
building and communications skills are required by the Project Manager. Similarly, good projects depend
heavily upon planning and preparation and it is essential that those skills are available within the project
team.
It is a key requirement in all projects that knowledge in the technology is available to the project team.
For the core skills of project management, process and engineering design, knowledge of hazards and
statutory requirements, operational knowledge, construction management, purchasing and contract
management etc., these will often exist within the project team. There are, however, other knowledge
and skills which may be required to ensure a successful project, such as risk management, scientific
know-how, legal and financial knowledge, and the project team needs to have access to these where
appropriate.
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Some knowledge and skills can be developed through training and education, others are only developed
by practice and experience. It is important that all members of the team have been trained to a level that
enables them to discharge their responsibilities and have the appropriate level of experience where skill
and judgement is required. It is the responsibility of the Project Manager to ensure that the skill balance
in the team is sufficient to enable the project to be successfully completed.
3.2
Personal Competencies
The following make up the basic personal competencies required by the Project Manager and they also need
to exist to some extent or another within the rest of the project team.
3.2.1 Defining
This is about helping customers, suppliers and the project team, make up their minds and be aware of the
consequences of their decisions.
3.2.2 Scanning
This is surveying the totality of the project including such things as business politics, the market, goals,
technology and progress against plans and budgets, whilst maintaining a clear appreciation of the whole
project.
3.2.4 Selecting
This is differentiating between those issues having a potentially great impact on the project and those not so
important.
3.2.5 Resourcing
This is finding the necessary resources to take advantage of an opportunity or to resolve an issue or
problem.
3.2.6 Influencing
This is using personal skills to get things done.
3.2.7 Interfacing
This is making sure that intergroup relationships promote the project rather than draining its energy.
4.1
A successful project not only meets its own targets but delivers a benefit and acceptable rate of return for the
Business. It thus follows that both the project objectives and the underlying Business drivers must be fully
aligned, developed and understood. If the latter have not been thoroughly developed, then the expenditure
incurred by the project team is likely to be abortive or wasted. Further, it is difficult for a Project Manager to
set the project objectives if there is limited clarity around the reason for proceeding with the project and the
issues that affect it.
Hence it follows that the Project Manager needs to establish the background to the project when they first
becomes involved and certainly before committing significant expenditure or other key resource. There are a
number of key questions (see Section 2 checklists) which can aid this process.
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Having answered these questions, the Project Manager can then develop the project strategy and
objectives. This is sometimes best achieved by working backwards from the end of the project and
questioning what each stage of the project requires from the preceding stage (i.e. what do commissioning
require from construction)? What do construction need from design and procurement to achieve this, and in
turn, what do procurement require from design? The Project Manager then can set objectives for each area
and stage of the project which are consistent with the overall direction of the work. They can then use these
objectives to determine and select the relevant resources and services for the project.
4.2
4.2.1 Introduction
Successful projects are categorised by good early definition, enabling only viable business options to be
evaluated, approved and implemented.
The Project Definition stage is concerned with developing definition, identifying and assessing options,
evaluating and recycling them through a series of decision stages. Only viable proposals are then taken
forward and considered for approval by the sanctioning authority concerned.
There are 3 key phases during definition (i.e. Assessment, Optimisation and Development). Normally, 2 key
documents are produced:
Project Proposal;
Project Specification and Strategy.
These are used to describe for example project boundaries, scope, cost and timing. They are key
documents and are used to drive out issues and ensure alignment between the client, engineering and
operational stakeholders.
The Project Manager takes the project team through the 3 important and distinct phases, assessment,
optimisation and development, which systematically and progressively improves definition and limits costly
re-cycle and re-work. Poor definition leads to a poor project outcome. Throughout, the project proposal and
project specification are re-visited, improved and re-issued.
Perhaps only the more complex of small projects will involve these 3 discrete definition and re-cycle phases.
However, following such systematic discipline is good practice and can only help in improving the
completeness of the scope and the viability of the overall investment (not just the project).
By reviewing the project proposal and specification documents with the client it confirms correct
interpretation of Design Brief by the Project Manager. Also:
Becomes the official record of agreement between client and Project Manager;
Serves as a base case from which to control change;
Ensures a consistent understanding of the brief across the project team;
Is the basis for the estimate;
Is the basis for the programme;
As new people are brought into the Project Team this is where they start;
They are key documents in the Project Review, which is an important part of the Project Process.
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Business.
Marketing.
Engineering, Design and Construction.
Purchasing, Tax positions for overseas projects.
Commissioning.
Operations.
Maintenance.
Environmental.
Safety.
Occupational Health.
4.2.4 Value Improving Practices (VIPs)
Studies of past projects have shown that applying VIPs at the right stage will enhance the quality of the
project scope. Value improving practice is covered in Section 7 of this document. However, the following
are examples of those deployed during Project Definition:
Value Analysis:
Breaks the scope down into its functional elements and allocates the estimated costs allowing
judgements to be made on value for money.
Conceptual Analysis:
Similar to above but carried out earlier in the project process using a conceptual or very preliminary
estimate.
Risk Management:
Identifies project risks and develops a risk management process to manage through the project.
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Optimisation:
This involves further developing understanding and optimising the project economics. It is the phase, for
example, where such things as the site would normally be confirmed and process design and layouts
optimised. Alternative technologies are evaluated and VIP practices are applied such as VA. If this
phase is carried out properly, costs can be reduced considerably and/or operability improved.
Optimisation and risk mitigation are the key drivers. The likely outcome at the end of this phase is that an
optimal solution is developed, confidence in the outcome increased considerably, scope fixed and key
project strategies in place which will exist through to completion.
Only fully optimised and viable investments are taken forward to the development phase. Costs will be
evaluated to 20% confidence. If this is completed then the client will have reworked economics and be
in the position to consider commitments to increased pre-sanction funds.
Development:
This is concerned with developing definition, improving implementation strategies and commercial
arrangements to a point where the implementation phase can be initiated. It helps reduce risk by
increasing knowledge/definition and starts the preparation for implementation.
At the end of development the project will have been defined to a point where delivery, in accordance
with the investment case, can be formally assured. Costs are evaluated to 10% confidence and a firm
project schedule is available. Contractual/commercial strategies and arrangements will also be fully
developed.
4.3
Project Strategies
4.3.1 Introduction
To meet the business objectives and to provide a firm basis for management and control requires a project
strategy to be established as an early and key part of project definition. The project strategy considers, for
example, such things as purchasing and contracting options, project organization roles and responsibilities,
timing and budgeting, information management, how the project is to be designed, constructed and
commissioned, role of the client, communications and much more. Formulating the project strategy involves
considering all issues likely to affect the project and the way in which they can be satisfied; the outcome
provides a framework for carrying out all subsequent project activities. As such, the project strategy provides
alignment of business objectives with those of the project and this is therefore central to the successful
outcome of the project.
"A Contractor selected with the appropriate skills for the scope of works required, and with appropriate
reward for the complexity of the work and the market conditions prevailing at the time, will perform to the
standard required by the terms of engagement".
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A comprehensive contracting strategy is therefore essential for all projects and it needs to cover all
"procurement" activities. This is the foundation for effective contract management and formulation
commences during Project Definition. The key to a successful outcome is a strategy that is aligned with the
overall investment objectives of the project and the aspirations of the contractor or supplier. The contracting
strategy defines the number of different contracts, the scope of work of the contracts, the structure of the
contracts, the timing of contractors and so forth.
Choosing the contract type should be based on sound objectives with respect to such things as
performance, time schedule, quality, scope, flexibility of design, the clients involvement and risk allocation.
The way in which you engage and manage the contractor is therefore extremely important. A "win - win"
approach which embodies appropriate incentives balanced with associated risk is the most likely route to
success. The type of contract that emerges will then help to deliver the required outcomes for ICI in terms of
efficiency, scope, cost and time and will also be aligned to the aspirations of the contractor or supplier.
Careful planning is essential, and preparing a contract plan which embodies the key elements to be
contracted out, the preferred strategy and a related schedule is good practice. Having enough time to
complete contract negotiations is key to getting the strategy you need, and making sure that you have
enough time for all the steps is essential.
It is essential to reflect the kind of constraints (some of which are identified below) the project is facing in
the strategy. Identifying these as soon as possible during project definition, as part of the overall process
for formulating overall project strategy, will help you.
Consider and promote strategy that includes innovative approaches to incentives as far as you can. For
instance, these could be based upon schedule, total project cost, quality, man-hours, client satisfaction
and so on.
If the project is part of a joint venture or other type of co-operative alliance, this will have significant
impact on the contract strategy. The joint venture partners, or similar, will have specific objectives of their
own in addition to the overall product strategy, this also needs to be incorporated and you will need to
plan for a long lead time to complete the strategy stage.
A key output of the strategy is the decision on the type of contract. There are a number of contract
options. All arrangements bring with them different risks, advantages and, importantly, dictate the need
for different levels of contribution and hence responsibility from the client.
A project is different from a manufacturing operation. In addition to direct labour and direct materials a
project organization may involve multiple layers of management for example, as subcontractors work
under larger contractors and vendors. The result being mark ups for overhead and profit and
contingencies have a great effect on the final cost. The Project Manager is however expected to achieve
efficiencies through the selection of an appropriate contract strategy and, specifically, thereby:
Eliminating mark ups by eliminating layers of subcontracting;
Eliminating mark ups through selection of competitive bidders who are matched to the size of the
project;
Eliminating mark ups for contingency during the bidding and procurement cycles through good scope
definition;
Reducing construction costs through proper evaluation and selection of alternatives;
Reducing engineering design costs through leadership and complimentary services.
The Project Manager, specialists within the project team and the Project Owner are jointly involved and
responsible for the development of the contract strategy. Examples of the constraints that the projects
face that need to be taken into account are as follows:
Flexibility in execution;
Time schedule;
Client involvement;
Project budget;
Availability of client personnel;
Risks connected with the project;
Technical complexity of the project;
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Management by Client:
Each complete work package is contracted separately. The commercial basis for the different contracts
is variable. The client supervises the contracts and manages the contractors. This type involves a high
management overhead for the client in terms of the management effort needed to control the individual
contract interfaces
Turn Key:
The scope of works normally comprises detailed engineering, procurement and construction up to and
including commissioning. The commercial basis for the total project is always a lump sum price. A Main
contractor handles the contract and may sub-contract specialist works to appropriate subcontractors.
Complete turnkey contracting involving little or no client involvement up to take-over has not been widely
used by ICI.
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execution. Each contractor is responsible for and carries the financial risk for its own scope of work.
The commercial basis for the contracts is variable. This approach usually also requires a higher level
of client management activity.
Construction Management:
Similar to co-ordinating contractor, with the difference being that the construction management
contractor performs construction management only and no actual construction. Contracts are placed
in the name and on behalf of the client with installation contractors by the construction management
contractor. The construction management contractor carries financial risk for its own scope of
services. The commercial basis for the contracts is variable.
4.3.2.3 Commercial Considerations
The key to commercial success must be in acquiring commercial awareness. This is a subject in itself and
too large to be covered in detail here. Help is available through both internal and external courses that are
designed to reinforce practical experience.
Contracts are classified by the price type, examples being, firm and fixed price, cost plus, reimbursable and
incentive. You cant rely too heavily on this terminology, for example some of these are sometimes
transposed in trade practices and combined as fixed firm price or firm fixed price etc. leading to confusion.
The degree to which cost, time, performance and profit is linked is reflected by the type of contract selected
and needs to be resolved as part of the contract strategy.
In addition, payment and the mechanisms involved is an exceedingly important part of the commercial
considerations. Performance driven contracts will often, for example, benefit by payment being linked to
completion of specific deliverables or other specific milestone achievements. This greatly improves the
likelihood for control and helps to mitigate against risk.
4.3.2.4 Commercial Arrangements
The two extremes of the wide variety of commercial arrangement available are:
(1)
(2)
The variations between Lump Sum and Reimbursable are almost limitless. For each project the optimum
commercial basis has to be developed based on the project objectives, client requirements and specific
circumstances. The commercial strategy should be developed by a team including the Project Owner, where
appropriate the Commercial Manager and the Project Manager. Figure 2 illustrates the decision process.
The commercial strategy reflects on the commercial basis of the contract and is independent of its scope of
work.
FIGURE 2
Definitive and
detailed scope
of work and
confidence in
price
Lump Sum
Price
Guaranteed
Maximum Price
Unit
Rates
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Fixed
Fee
Fully
Reimbursable
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contracting and purchasing strategies and is likely to be refined and developed during the time these are
being considered and when detail design is being carried out.
Some key aspects of this strategy will include considerations for site establishment, resourcing, contracts,
construction SHE, off-site assemblies, construction risk and arrangements during the hand-over to
operations. Additional items for consideration are included within the checklists.
The Project Manager, in conjunction with construction, formulates and establishes the appropriate
construction strategy.
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4.4
4.4.1 Introduction
The project organization and its roles and responsibilities is a key ingredient for the success a project. The
organization and certain of the roles and responsibilities vary from project to project depending on such
things as complexity and size. Smaller and less complex projects are less likely to require as many of the
roles needed by larger and more complex projects. Multi-discipline projects, for example, will have matrix
organizations, whereas single discipline projects may not. The organizational model chosen will reflect such
considerations whilst avoiding the need for overly complex interfaces roles and responsibilities.
Studies show that team integration is an important characteristic of particularly successful smaller projects.
Projects with truly integrated teams cost less than projects without and implement the project around 20%
faster. Project Managers often find themselves responsible for multiple smaller projects, and studies show
that for each additional project managed the schedule grows longer by 4% and definition worsens. However,
setting pacesetter targets, achieving business buy-in and support and communicating effectively the
importance of the project on the project team improves cost performance. In addition, results also show that
defining the business and project objectives (and communicating these effectively within the project team)
clearly and resisting changes can double cost performance. These are key considerations to take on board
when building and developing your project team.
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The person responsible for overall project finance and ensuring that there is a Business case for the
project.
The person managing the R & T effort which affects the project.
The person accountable for closing the project and preparing the closure report.
(as above) the person who co-ordinates the various Business functions involved in the project, ensures
that the project is in the Capital programme and who prepares the Expenditure Proposal.
(as above) the person responsible for managing the execution phase of the project.
The person responsible for preparing and maintaining the project plan, and communicating and agreeing
it with all interested parties.
The person responsible for estimating, preparing and maintaining cost reports, tracking costs and
communicating these as required.
The Chemical Engineer who specifies the process requirements for the project and who underwrites the
process engineering.
Engineers with the knowledge and experience to lead the design work and who underwrite the
engineering in their respective disciplines.
The person from the Works which will receive the asset, who ensures that operational and Works needs
are incorporated into the project design and execution, and who communicates project information to the
Works.
The person who develops the procurement strategy with the Project Manager and assists with its
execution.
The person responsible for site work aspects of the project.
The person responsible for managing the commissioning of the new asset and its hand-over to the
Works.
In addition to the above, the Engineering Project Manager needs to appoint the following:
Design Authorities.
Design Verification Authorities.
Hazard Study Leader.
All of these are defined in the ICI Group Engineering Procedures.
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The organizational model selected to deliver it is likely to vary from project to project depending upon
characteristics such as size, technology, complexity, degree of contractor involvement, role of external
authorities, joint venture considerations and many more. Good practice will involve making sure that the
organization has clear and unambiguous lines of accountability and reporting, avoids duplication and has
uncomplicated interfaces as far as is practicable.
4.5
4.5.1 Introduction
Planning typically involves deciding what needs to be done, how it should be done and whos responsible.
Estimating and planning involves deciding how long it is going to take and when it is best to do it. Monitoring
provides the feedback loop required for effecting control by checking whether plans and schedules are being
achieved and, if they are not, what forecasts can be made and what re-planning is needed for the future to
take corrective action. Good planning relies upon the establishment of project strategy, definition,
deliverables, allocation of responsibilities and subsequent management of the overall project process.
The Work Breakdown Structure (WBS) is a key tool for identifying and displaying the basic elements of the
project deliverables. The plan and the WBS often develop simultaneously.
4.5.3 Estimating
It may seem a statement of the obvious, but the key to accurate estimating is to ensure that everything
that is required from the project has been considered. The best opportunity for this is within the WBS.
Where possible, the production of the estimate should be a team effort with production of various sections
in line with accountabilities within the WBS. In some cases, particularly when developing very early order
of cost estimates, the Project Manager/Engineer may have to rely on their own experience to produce the
estimate; in such cases the value of a comprehensive WBS will become apparent.
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The first stage in producing the estimate is the identification of the individual resources needed to
complete the deliverables as displayed in the final elements of the WBS. The typical resource types
which may be required include:
Human - designers, planners, construction management;
Facilities - buildings, furniture, team accommodation;
Equipment - types, hire/purchase;
Materials - bulk, one-off, specialist, MPI.
Having identified the types of resources needed, the next step is to identify the unit rate of each resource
and how much of each resource is needed.
Use of Value Analysis allows for future decision making against Change Requests to be based on sound
cost information.
At the earliest stage of project definition, identification of resource requirements will facilitate ball-park or
Order of Cost estimates to be produced. As the definition develops, the same process can be used to
produce grade 'B'(10%) estimates for sanction. Though this level of estimate will normally be produced
within a functional group such as piping, vessels etc. it may be expected that each function has
considered its own WBS for its contribution.
As definition improves, uncertainty and risk will, in general, reduce. However, it is very important that the
potential impact of individual risks are assessed when considering the level of contingency required within
a sanction estimate. It is entirely legitimate to have a general level of contingency below 10% and in
addition to have a specifically defined contingency for an individual risk.
4.5.4 Planning
This involves deciding and recording what needs to be done, how it should be done, how long it will take,
who should do it and how many resources are needed. The purpose of planning is to organise the delivery
of the project and the resources required for delivery in order to avoid future problems.
The WBS is the tool which shows WHAT must be done to complete a project; however, in order to plan
WHEN it must be done, it is necessary to combine both availability of resources (WHO) required to achieve
the task and the logical sequencing of those tasks.
Deciding project strategy is an essential element of planning, and establishing this as early as possible is
good practice, providing a firm basis for detailed planning, scheduling and subsequent project control.
Establishing appropriate measures of project performance as early as possible (and agreeing these with
the project owner), likely based upon critical success factors, will help in benchmarking the delivery of
benefit at completion.
Deciding and establishing as early as possible, systems for managing hand-overs will help the effective
and efficient hand-over of design packages to construction, equipment and process system packages to
commissioning, operating asset to operating management.
Typically, one integrated project master plan is needed covering all project stages. From this a hierarchy
of plans can be produced of increasing levels of detail to meet the requirements for effective project
control (Critical path analysis for planning and Gantt bar charts for scheduling, monitoring and control, are
good practice planning techniques).
Resource management is an essential part of planning. People are the most common type of resource
for whom resource planning is carried out. However, it may be necessary sometimes to look also at other
critical resources like equipment. (Resource planning techniques are often embodied in computer
software planning packages and can be usefully used to provide indications of resource requirements).
Agreeing and recording responsibilities and requirements for planning and control (particularly with a
contractor), is important to do and record as early as possible
Having the plan formally approved by the Project Owner and Project Manager will engender joint
ownership, commitment and provide a firm basis for effective control.
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When a contractor is employed, it is essential that a contract master schedule is produced identifying key
contract milestones (payment or critical interface milestones, for example). Detailed planning and
scheduling is the responsibility of the contractor down to whatever level is appropriate for effective
control.
In order to be able to organise resources, it is necessary to ensure that responsibility for completing final
element tasks is clear. It is essential that only one person is given the prime responsibility for completing
a final element deliverable in order to avoid confusion amongst team members and ensure delivery.
In assigning responsibility it is important to consider the skills and knowledge that may be required to
complete the task. If resources are not available within the immediate project team, the Project Manager
ensures an external supply is made available.
There are many different scheduling techniques such as Programme Evaluation and Review Technique
(PERT)) and Critical Path Method (CPM). Choice of technique will depend on project complexity and
personal choice; however, project scheduling is now almost universally carried out on PC based planning
tools.
All planning techniques and tools require knowledge of:
(a) the dependencies and precedence of each task (i.e. what other activities have to happen before a
particular task can start/finish);
(b) the duration of each task;
(c) the resources involved in each task.
It is common practice to display the output from the planning tool in the form of Gantt (or bar chart) which
shows activities organised against a calendar timeline. In order to interpret and use the plan it is
important to know whether Earliest or Latest Start and Completion dates are being used and therefore
where float exists.
Having established a plan it is then useful to review the output for potential Threats and Opportunities.
For example, if a single specialist resource or piece of equipment is on the Critical Path or several other
key activities depend upon it, the project team might wish to take specific Preventative action to ensure
availability. Where appropriate, Contingency action may also be put in place.
In such cases the project team must remember to include the activity in the WBS and incorporate its cost
within the estimate.
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5.1
Project Managers have long known that building a cohesive, motivated and focused project team is a key
step towards achieving a successful outcome. Sadly, however, effective groups or teams do not just
coalesce as soon as people are brought together. Effective means working together towards common
objectives, without interpersonal or intergroup conflict and with satisfied members. Thus it takes time and
leadership to develop an effective group; but time, of course, is something which a dynamic group such as a
project team, likely doesnt have. The Project Manager therefore must be a leader who commands the
respect of the team and can effectively bring and hold it together through the probable conflicts that a
change management organization will face. An open and participative management style is important to
building an effective project team culture. The development of mutual acceptance, trust, co-operation and
open communication style can be hampered by the project management style. However, one essential
factor is the perceptive capabilities of the Project Manager and their ability to recognise early and resolve
conflict within the team. The Project Manager cant however perform all the leadership roles all the time, and
leadership responsibilities must be delegated, often within the team.
A common feature of successful projects is that the team members have enjoyed working together. This is
especially so when they have experienced challenges together and still won through. In essence, they have
faced adversity and bonded together as a real team. Another feature is that teams must be built that have a
high degree of confidence in their individual and collective abilities.
This in itself establishes high self-esteem, mutual respect and collaboration. These are the common
requirements of a group of individuals who need to work successfully together towards a common objective.
Conflict both within and without, is a key thing which undermines the success of a project team and rapid
resolution is always important. The Project Manager, as well as being the leader, is the mentor and
psychologist all rolled into one! Interpersonal skills such as this will play a key part in the selection of the
right man for the job.
Larger projects where staff are working fulltime on that project, are usually set up for that project and as such
develop a culture of their own often heavily influenced by the Project Manager and his supporting senior
staff. Where project staff are resident in a more stable project group (e.g. manufacturing site) the culture is
driven by the local site management. Not all project teams are successful. So how do we ensure we work in
the successful team mode?
By taking example from successful teams we can identify behaviours to encourage Characteristic
Behaviours:
Mutual respect for each other as people and workers.
Good communications across the team.
Project Goals are known, understood and supported.
Project Goals remain consistent and steady. Occasionally they do need to change for business or other
reasons. In this case, the changes are communicated throughout the team with the reason why.
A Management structure that is understood by all and behaves in a firm yet fair manner.
The team is involved in decision making on local and project issues wherever practicable.
Roles for each member of the team are understood by all.
Skills within the team are appropriate to the task in hand.
Skill levels of individuals are recognised by management and colleagues.
Rewards for good performance are team rather than individually based.
Personal and team development is valued by management and staff.
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5.2
Risk Management
5.2.1 Introduction
Risk Management is a structured approach to improve the likelihood of having a successful Project. Risk is
any area of uncertainty with the potential to have significant impact on the achievement of the project
objectives. These can generally be grouped into:
Business or Strategic Risk:
Probably with 5/10 years perspective; and would address such questions as "Are we in the right
business, region or technology"?
Investment Risk:
Probably 3/5 years perspective; and would address whether the investment was likely to be successful,
(e.g. IRR or RONA).
Project Risk:
Will address the project period only; and will raise issues like capital cost, time to beneficial operation and
plant capacity. SHE is usually a feature.
FIGURE 3
Identify
Risk
Quantify
Risk
Risk
Schedule
Model
Impact
Prioritised
Risk
Schedule
Manage
Risk
Confidence
Levels on
Programme
or Cost
Process Review
5.2.3 Identify Risks
A team based process: Agree level of scope of review, consider appropriate range of risks.
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5.3
Design Management
Effective management of the design process is an essential part of successful project implementation. The
design process is characterised by the decisions made and the deliverables produced, right through to
information required for operating and maintaining the asset. The main objective for managing the process
is to ensure that correct design information of adequate quality and in the appropriate form is produced at the
right moment. If this happens effectively, then the success of subsequent procurement, construction and
commissioning activities is more likely.
Responsibilities at every phase of the design process are defined as early as possible during definition as
part of the project strategy. It is essential where contractors are being used, that responsibilities between
ICI and the contractors are clearly defined, recorded and communicated within the project team. These
are normally defined in terms of who is managing the various design activities (particularly, for example,
design and safety reviews, design verification) and the deliverables themselves (for example, flowsheets,
P & I diagrams, data sheets).
The quality of the output is very much dependent upon the calibre of the people employed, and the
Project Manager needs to take this into account particularly when building his project team and also
during the selection of contractors and their specific resources.
It is important to identify the sources of, and availability, timing, and contributions from ICI resources as
early as possible at the start of the project. For example, these may come from different organizations
such as Business and works, particularly where process engineers are concerned. The characteristics of
small projects will inevitably mean that these resources will face conflicts of priorities with concurrent
demands from numerous sources.
Production works, construction and commissioning are specialist inputs required at an early stage of the
project, and it is important that resources such as these are identified and recruited into the team, either
part or fulltime, as early as possible.
The relevant engineering standards and specifications to be used need to be agreed at the project
strategy stage. These need to take into account the requirements of ICIs Group Engineering Procedures
and Guides appropriate to the specific project. (In addition, there may also be other ICI standards
appropriate such as site, mandatory or national requirements, which need to be identified and followed).
Key safety and design reviews are identified at the earliest stage of the project. This involves:
procedures to be used (for example ICI, contractors or combination), responsibilities for organising and
leading reviews should be agreed and recorded. Reviews are also normally scheduled and recorded
within the project plan. It is also important that appropriate information of adequate quality is available
prior to the reviews and the right individuals are involved and available.
Checking and approval arrangements for design information are normally agreed early as part of project
strategy and included within the requirements for project information and document management. (See
the section on information and document management for good practice procedure and responsibilities).
Where contractors are involved, procedures to be used together with format must be agreed with them
and recorded at an early stage. (This is particularly important for design verification, e.g.: relief systems,
pressure systems, critical machines etc.).
Design information required to be updated as part of as-built information at the end of the project, needs
to be identified and agreed with the production works/site as early as possible as part of project strategy.
Other information required by the operations team for maintenance purposes also needs to be identified
at this stage and confirmed, if involved, with the contractor.
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Where verification of design is needed, requirements should be agreed with the appropriate design
authority as early as possible.
Where contractors are involved, the production of a project contract co-ordination procedure is good
practice and is produced as part of the contract documentation.
5.4
Contract Management
5.4.1 Introduction
If you are using contractors, the way you use them will probably vary from Business to Business, site to site
and country to country. The use of contractors to execute projects within ICI is increasing; for example,
evidence from some recent ICI projects around the world shows that around 80 - 90% of the value has been
sourced from a single contractor. These suppliers of goods and services include both global multi-nationals
and smaller local contractors, but the need for expertise and good practice when engaging and managing
each is no less important. The successful use of contractors, whatever the size or complexity of the project,
is critical to successfully achieving the investment objectives. Following good practice from the point of
formulating contract strategy through to closing the contract is an essential part of this.
It is essential that all work done under the contract is consistent with the strategies developed by the Project
Manager prior to the letting of the contract. In particular, the Project Manager should ensure that the
objectives of the Contractor are aligned with those of himself, and the project, with efficiency of execution
paramount.
Where a fixed price contract has been agreed with the Contractor, it is the Contractors responsibility to
ensure that the execution of the project is in accordance with the strategies identified in the contract. In a
reimbursable contract, the Contractor may be required to act in accordance with a strategy developed by the
Project team, of which they form a part.
In either case, the Project Manager will have determined the following detailed functional strategies prior to
defining the scope and objectives of the contract:
Design Strategy.
Procurement Strategy.
Construction Strategy.
Commissioning Strategy.
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5.4.3 Insurance
Huge risks are involved in the execution of projects. For example, the prices of items of equipment can be in
the order of 500,000 and any damage occurring during construction or transportation can result in a serious
financial loss. Also, financial liabilities for personal injuries during construction can be substantial. It is
therefore important to have these risks covered by insurances. It is the Project Manager's responsibility to
ensure that all parties carry the required insurance.
After hand-over of the project, the coverage of ICI Technology's property is automatically provided under the
ICI Technology Property Insurance Programme and will be included in the annual current replacement value
(CRV) statement to the insurance division.
ICI Technology's policy on insurance is based on an active risk management approach. It is most cost
effective to take account of loss prevention in the design phase. Advice on risk management should be
sought by the Project Manager from the Risk Management facility at the Corporate Centre.
The contract defines the liabilities of both parties and the insurances they are obliged to maintain. The
following insurances are likely to play a role in a project:
Transportation Insurance:
This can be covered by suppliers when delivering to factory/site or place of embarkation. If company
blanket insurance for transportation already exists, then suppliers should be advised accordingly.
Professional Liability/Indemnity Insurance:
Insurance for contractor/consultant against direct financial (not consequential) losses as a result of errors
in design or execution.
Construction (Contractors) All Risk (CAR) Insurance:
It is ICI Technology's policy to maintain an overall insurance for each project that protects ICI
Technology's interest against physical loss or damage from the time the (building) materials and
plant/equipment arrive at the project site until final completion and hand-over of the project as a whole.
This insurance may be either on a project by project basis or a continuous blanket insurance, depending
upon the strategy of the operating company. (Sub) contractors, architects, engineers, and so forth are
co-insured. Contractor's equipment is only covered if explicitly agreed.
Third Party Liability Insurance:
During the course of the project, client and contractor are exposed to legal claims from third parties for
death, injury or damage to property arising from the carrying out of the project. Again, it is ICI
Technology's policy to cover these risks by incorporating this liability as part of the CAR insurance
providing protection to all interested parties.
In addition, contractors are often required to maintain employers' liability insurance and motor vehicle
insurance.
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5.5
Construction Management
Although dependent upon the project strategy selected for construction, in most cases, construction and the
management of construction is carried out on behalf of ICI by contractors. Construction management is
increasingly being carried out as part of the duties of a main or prime contractor, although this is obviously
not the only model. This contractor will also have the task of managing the activities of relevant
subcontractors. This further minimises interfaces and reduces the management work for ICI. Construction
is another key stage in the project process, and the Project Manager is responsible for ensuring that it is
completed safely and in accordance with the project scope and schedule and cost requirements.
Smaller or less complex projects and particular sites may operate different management models, this is
much dependent upon the local circumstances. For example, the presence of term agreements with local
suppliers or contractors will influence the construction management model; however, the following are some
principles of good practice for the Project Manager to follow whatever the circumstances:
The quality and success of construction and its management is largely dependent upon the calibre of all
contractors selected. Site safety cant be compromised or traded in the search for lower costs or earlier
completion dates and the Project Managers needs. The calibre of the contractor needs to be examined
and determined carefully during contractor pre-qualification, and subsequent tender/bid analysis
activities.
The Project Manager needs to assure himself throughout that the contractors management team is
handling the contract in the interests of ICI. This needs to be done, but without there being a duplicate
ICI management team (even if this is a credible option). The Project Manager needs to ensure, however,
that adequate management and supervision arrangements are in place to safeguard ICI's interests
(particularly for SHE) during construction. In particular, responsibilities/resource for handling technical
queries, handling any necessary change, safety issues are also important and need to be identified and
addressed as early as possible.
The extent of construction assistance during commissioning needs to be identified and agreed with
commissioning as early as possible. This may require resource from the contractor or specialist suppliers
and, if so, these need to be incorporated into relevant contracts.
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The construction safety plan is an essential part of site management activities. The site contractor needs
to develop this and get agreement to it from site management. The Project Manager needs to set up
appropriate checks and controls to assure compliance by the contractor and relevant subcontractors
Interfaces arrangements are a key ingredient for successful construction management. These need to be
defined as early as possible as part of the project strategy. Construction and commissioning interfaces
are important, particularly the timing and sequence for the transfer of systems needs to be established as
early as possible as part of project strategy and included in relevant contracts.
Effective project management control arrangements need to be in place during construction, for example:
Progress and cost monitoring and control;
Formal change control, particularly process for managing technical queries.
Inspection, such as eye-witness testing, is often required by ICI to ensure the quality of workmanship.
This needs to be defined as early as possible during project definition and certainly built into relevant
contracts. In addition, a control system will need to be set up to assure these standards are maintained.
Document and information management arrangements need to be defined and established as early as
possible. In particular, a control system for managing the transfer of information (and hardware) from
design to construction to commissioning is essential.
5.6
Commissioning Management
The commissioning strategy selected sets the extent of commissioning. It is not solely about the activities
that follow on from construction of the plant at the tail end of the project. The contribution from
commissioning starts early in the life of the project during definition and extends through to the plant start-up
and sometimes beyond.
A Commissioning Manager or someone responsible for commissioning is usually appointed by the Project
Manager as early as practicable in the life of the Project, although this of course is dependent upon the
characteristics of the project. (Not all small projects will require all of the activities below).
The typical commissioning activities might include:
Defining and agreeing the responsibility in the project strategy for safe operation and compliance with
statutory & local requirements throughout Commissioning.
Contributing to the Project Strategy and Organization and providing input on method of Commissioning,
resourcing, costs and timetable.
Initiating and completing Hazard Studies in accordance with PSG-001 and meeting all other requirements
of ICI GEPs associated with completing commissioning and hand-over.
Attending the various design and Project Reviews and supporting the design process as required.
Producing specific written Commissioning procedures to deliver the Commissioning Philosophy covering
all activities involved in Commissioning the asset, for each plant and system.
Ensuring that specified Commissioning activities are carried out to validate the objectives for Project
performance and meet requirements of ICI Group SSHE Standards & Guidelines.
Ensuring information, resources and systems are available to an agreed timetable and cost to help
deliver the commissioning activities.
Preparing estimates for commissioning and carrying out commissioning Planning and Cost Control.
Agreeing the process for acceptance testing and including it in the Project Strategy statement along with
production of test schedules. When acceptance testing is required, agreeing the detailed requirements
for testing with the Project Owner to verify that the project will achieve its performance objectives.
This includes for example:
Legal/statutory requirements;
Responsibilities for preparing the Test Schedule;
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5.7
Change Control
5.7.1 Introduction
Fighting a tendency for scope "growth" following project sanction or approval is a common pastime for a
Project Manager. There is industry evidence that changes can add anything up to 50% to the cost of a
project and it is not unusual for it to be more. Thus, one of the most important and, unfortunately, unpleasant
and difficult functions of a Project Manager is to control the changes to a project. Changes have the
following detrimental effect on project performance: they increase the cost, cause delay, reduce morale and
worsen relationships among those involved. Technical Queries are often the start of the opportunity for
scope growth (they are changes sometimes just waiting to happen) and good practice will include a process
for managing Technical Queries as part of the overall change management process.
A formal system for identifying and recording a design change, or change of intent, to an agreed scope of
work is therefore essential for effective management control. It provides a means to control changes and
their effect on Project scope, cost and schedule by requiring formal authorisation before acceptance. The
process needs to be in place at the onset of the project and operate through to closure.
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5.7.5 Reporting
Formal status reporting of change is essential to maintaining effective project control. The minimum may
typically include routinely publishing the Change/Technical Query registers along with a cost/schedule
impact report, and it is important to distinguish between approved and unapproved (pending authorisation)
change. However, look for local examples of good practice to follow.
It is good practice to decide the reporting requirements for change management as part of the project
strategy.
5.8
Cost Management
5.8.1 Introduction
Good cost control needs the early establishment of project strategy, definition, deliverables, allocation of
responsibilities and subsequent management of the overall project process.
The effects of poor cost control can be catastrophic, particularly when using a contractor or supplier. When
using a contractor or supplier, behave as though they know exactly where their money is at all times (they
invariably do!), how they can make profit, what their margins are and when these might be at risk.
Therefore, for effective cost management, the emphasis at all times must be on being commercially aware.
ICI's overall aim must be to be better at cost management than the contractor or supplier.
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Maintenance of project cost management systems has, historically, consumed a significant amount of time
and resource, therefore a key aim for cost management systems should certainly be to avoid this.
The following are some of the key components of good cost management practice.
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Cost control can be improved if a performance payment approach is used, and there is often wider
benefit to the project from offering such incentives. For example, if the work is being carried out under a
contract, consider opportunities for tying payment to the completion of deliverables (e.g. no deliverable no
payment).
A means of capturing the cost impact of scope growth (from technical queries through formal change
control) linked into the cost control system, will provide a better understanding and means of forecasting
the potential cost of the project. This will also help provide a firm basis for updating the AFC and remove
the element of surprise
It is important that for contract final accounts and particularly to provide defence against possible contract
claims, an audit trail is kept of key cost management information such as through the technical
query/change control route.
5.9
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effective monitoring and control typically include, physical % complete (earned value) against that
planned, and achieved schedule or milestone dates versus planned.
Integrating schedule with cost, and quality (project scope development [% complete and growth]) will
provide the best basis for monitoring and effective overall project control.
Monitoring specifically key deliverables, milestones and interfaces greatly enhances prospects for
achieving control.
The plan/schedule for control should not be fundamentally changed (e.g. activities, logic or milestones,
likely to affect project objectives) without the formal agreement of the Project Manager (this is particularly
important when in contractual situations). It is therefore good practice to apply appropriate Document
Management methods to plans and schedules.
Recording and analysing progress trends improves the effectiveness of forecasting.
5.10
5.10.1 Introduction
Project Documentation is information, either in paper or electronic form, which is required for the
specification, design, procurement, construction and commissioning of a project. It includes both design
information (including correspondence) and instructions/procedures required for management and control.
Managing this information effectively throughout the lifetime of the project, is essential for the efficient
operation of the project.
It is good practice to specify the requirements (including roles and responsibilities) for effective control of all
project documentation throughout the lifetime of the Project (including archiving at Project Closure), at the
project strategy stage. These requirements typically cover identification, authorisation, revision,
issue/transmittal, storage and disposal of both electronic and paper information and all associated
responsibilities.
If a sensible approach is taken to Document Management (whatever the scale or cost of project), the result
will be not a bureaucracy, but a significant benefit to the effectiveness of Project Management.
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5.10.5 Filing
Regarded much as a chore by many but is central to the Project Document Management system. It is
sometimes under resourced, its structure too individually orientated and therefore not widely understood and
often too complicated: to the extent that documents take a lot of time and effort to retrieve.
Important components for a successful filing system include an appropriate structure (which enables
effective storage and retrieval) and discipline to keep it maintained. The use of electronic systems, such
as Lotus Notes, is increasing the effectiveness of Project Filing systems (particularly in distributed
organizations and even on projects at the lower end of the value range) by improving discipline,
efficiencies, and productivity.
It is strongly recommended that the number of individual file codes is limited to create an effective filing
system that reflects the size and content of the project. Once agreed, the selected coding system should
be communicated throughout the project team and subsequently maintained. Look for examples of local
good practice to help with structuring/coding the filing system effectively.
For access and maintenance considerations, a key decision is the choice of location for the files. This is
often a particular problem for projects where the team is distributed. Consideration in this situation of an
electronic system with multi-user access is beneficial, and Lotus Notes or a proprietary document
management system are examples. (Electronic systems obviously require careful consideration of backup requirements and the potential for loss of access to information during off-line periods. However, the
increasing integrity of hardware and telecommunications is reducing this concern, and reducing software
costs make them increasingly attractive even to projects at the lower end of the cost scale).
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Including a file reference in the document registration system and as part of the identification attributes, is
strongly recommended. It helps both efficient filing and retrieval.
Large documents such as operating manuals and contracts, for example, which cant be incorporated
easily into the project filing system, should be filed separately with cross-indexing to help describe them
and their location.
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6.1
6.1.1 Introduction
The final stage of the project is that of Review and Close-out. The purpose of this stage is to test whether
the project objectives were met, complete and close the project financial accounts and to gather and share
learning for application on future projects.
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6.2
6.2.1 Introduction
Measurement provides a means for collecting learning, improving performance and raising shareholder
value. Sadly, it is sometimes low on priority when pressured with completing projects to tight targets.
Collecting learning takes effort and money and often projects do not allocate much, if anything, to it.
However, at the start of a project there is often a large demand for information that will help test a business
case, validate an estimate and schedule, remind how things were done before or compare performance with
the competition. The reality is that this data and learning does not often exist and we rely on our informal
networks to provide it at the expense, for instance, of time.
However, the issue is not only money and effort, it is also about having a process and measuring the right
things. Measurement should focus on the critical drivers for improvement and distinguish between the
desirable and the essential. The failure of most performance measurement systems is that they often lack a
clarity of focus; leading to significant amounts of measures being taken, things taking too long, too expensive
and lacking an effective feedback loop for analysis, learning and communication.
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Producing an end of project report will help structure and formalise the project learning. You will also
need to refer to appropriate local arrangements for storing the report and transferring the knowledge and
learning as widely as appropriate. Also refer to local good practice for examples of the structure, content
and distribution.
Where the project has been carried out by a contractor, learning from contract performance is extremely
valuable particularly to assist in decisions relating to future use of the same contractor and also in
assistance with potential claims.
Some of ICIs projects require a project post event review to be completed. If this is the case, it will be
required typically within 6 months of project completion and the Business owner may call upon the Project
Manager to provide certain information for this. It is good practice to plan this requirement into project
schedules at the project strategy stage.
7.1
Introduction
Value Improving Practices (VIPs) are activities/techniques used during Project Definition aimed at reducing
absolute costs, thereby improving capital productivity. They are intended to increase the value of the plant
by reducing non-critical scope items, increasing reliability, simplifying the process and generally facilitating
project implementation. Some of these are fairly generic such as Value Engineering for example but
perhaps not all of them will be appropriate to your project and the extent to which you apply these techniques
will depend upon such factors as the process, technology that you are involved with.
Projects that make extensive use of VIPs are much more likely than others to meet their business
objectives, particularly if the use of VIPs is combined with well defined definition.
The following are categorised as "value engineering" practices and are defined as follows:
7.2
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SECTION 2
8
The aims and objectives of Section 2 are consistent with those of Section 1, as is the scope of application.
Overall, Section 2 supports and is complimentary to Section 1. The content of Section 2 is made up of
helpful checklists, references and information about deliverables and other examples, all of which will
provide practical help to Project Managers and their project teams.
For a new Project Manager the checklists will help them carry out projects to a standard expected within ICI.
For a seasoned Project Manger it is hoped that they will provide a useful reminder.
However, whatever your role in the project process, we hope that you will find it interesting and useful
and a helpful support in carrying through your responsibilities towards a successful project outcome.
9.1
9.1.1 Aims
To help align the project objectives and Business drivers.
To help reduce abortive work to a minimum.
To help the project meet both its own targets whilst delivering a benefit and acceptable rate of Business
return.
9.1.2 Responsibilities
Driven by the Project Manager supported by the Venture Manager and representatives of the Business.
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Whether there are political pressures within the Business driving or seeking to halt the project?
Whether there are political pressures within the Business to hold cost and programme below realistic
limits?
The ultimate benefit the project is expected to deliver?
Whether the project and the envisaged benefit are consistent with the overall Business direction?
Whether the Business has considered other solutions to achieve the envisaged benefit?
If these other solutions have been adequately analysed?
If the Business expectations for the project cost, programme and technical aspects are realistic?
If the project is expected to deliver the envisaged benefit, is it to deliver a facility, which will enable the
Business to realise the benefit? (i.e. is the project required to deliver performance or simply hardware?)
If the project is to deliver the latter, then who is accountable for the delivery of the actual benefit?
Whether the envisaged benefit can only be realised within a given time window?
How much involvement is envisaged from Business personnel? Is this consistent with anticipated
Business expectations at the time of delivery?
What the Businesss track record is on delivering projects of this kind?
Whether the operational and maintenance organizations that will receive the project delivery have been
consulted and have their views been fully expounded?
Once the Business background is fully understood, project issues can be explored and objectives set.
Useful questions at this stage include:
What are the hold points on the project?
At what level will these hold points be released and how long will the Business take to release them?
Does the Business recognise the implications of the stop/go nature of clearing hold points? How does
the Business wish to manage this?
What constraints are the Business imposing on the project or its organization?
Have all key Business project personnel been identified and appointed?
Are Business/steering committee roles and responsibilities clear and have they been agreed and
communicated?
Is the project primarily sensitive to cost, programme or technical performance?
What internal and external political issues could affect the ability of the project team to deliver?
What are Businesss requirements for reporting during the life of the project?
9.2
9.2.1 Aims
To ensure that only viable business options are implemented.
To ensure business objectives are aligned with project objectives.
To establish and develop the project strategies, objectives, organization and resourcing.
To establish the correct level of technical scope definition.
The stages included within project definition of assessment, optimisation and development, although
described sequentially, they will involve perhaps considerable re-cycle as definition is developed
progressively towards the necessary level of confidence required for sanction approval.
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9.2.2 Responsibilities
The Project Manager in collaboration with the Venture Manager and the project team.
9.2.4 Deliverables
Project scope document.
Project strategy document.
Project definition package.
Project estimates.
Project schedules, progress and cost reports.
Documentation for sanction approval.
Contract enquiry package.
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9.3
Project Strategies
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9.3.2.2 Responsibilities
Driven by the Project Manager in collaboration with the project team.
9.3.2.3 Project Checklist
Have you:
Identified the necessary availability, levels and sources of in-house resources and skills to complete the
definition?
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Requirements arising out of the extent of off-site assembly, such as specialist lifting equipment?
Implications of the construction programme and key milestones and any site schedule constraints?
Hand-over arrangements?
9.3.3.4 Deliverables
A construction strategy which maximises available resource both within and external to ICI, aligns with the
business and project objectives and enables site works to be completed safely within scope, time and cost
targets.
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9.3.4.4 Deliverables
A commissioning strategy, which ensures commissioning is safely and effectively completed, meeting
business and project objectives.
9.4
9.4.1 Aims
To establish and develop a project organization with clear roles and individual responsibilities defined and
which will successfully deliver the project objectives.
9.4.2 Responsibilities
The Project Manager in collaboration with Venture Manager.
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The person from the works which will receive the asset, who ensures that the operational and works
needs are incorporated into the project design and execution, and who communicates project information
to the works?
The individuals who will develop the procurement strategy and assist with its execution?
The person responsible for the site work aspects of the project?
The person responsible for managing the commissioning of the new asset and its hand-over to the works?
9.4.4 Deliverables
An effective and integrated project organization containing identified individuals who have clearly defined
roles and responsibilities.
9.5
Cost Estimating
9.5.1 Aims
To produce a statement of project costs against a specific scope of work which will provide the basis for
investment decisions, gaining authorisation to proceed and subsequent cost control.
9.5.2 Responsibilities
The Project Manager with contributions from relevant specialists within the project team.
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9.5.4 Deliverables
An all-inclusive project estimate which will provide the basis for investment decisions, gaining authorisation
to proceed and subsequent project cost control.
9.6
Contractor Selection
9.6.1 Aims
To pre-qualify appropriate contractors.
To select the correct contractors for the specific contract.
9.6.2 Responsibilities
Project Manager in conjunction with appropriate specialist technical and commercial staff.
9.6.3 Process
A typical selection process is as follows:
(1)
(2)
Pre-selection.
(3)
(4)
(5)
(6)
Pre-selection process.
(7)
(8)
Final selection.
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ICI requirements:
Site rules;
SHE standards.
9.7
9.7.1 Aims
To identify specific outputs/deliverables required at the end of the project.
To determine the resource requirements and their associated costs, timing and duration.
9.7.2 Responsibilities
Driven by the Project Manager in conjunction with the project team.
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9.7.4 Communications
Have you:
Agreed ownership with those responsible for the WBS elements?
Issued WBS to the Project Team?
Agreed budgetary control with WBS element owners?
Reviewed and agreed the project plan with the project team and client?
Been clear and open with the Venture Manager about the residual risks?
Been clear and open with the Venture Manager about the estimate accuracy?
9.7.5 Deliverables
Work Breakdown Structure; Simple List or Organization Chart format.
9.8
9.8.1 Aims
To produce a plan and schedule for the project to help bring about management control.
To establish levels of project resourcing required.
To establish effective monitoring, reporting and control.
9.8.2 Responsibilities
Driven by the Project Manager in conjunction with the Venture Manager.
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9.8.4 Communications
Have you:
Consulted (and agreed) on project strategies with the Venture Manager?
Confirmed the overall project plan/WBS with the Venture Manager?
Consulted with the project team and confirmed the level of resources (including source, level and type)
required for the project?
Consulted (and agreed) project performance outcomes/measures/key deliverables with the project
owner?
Agreed the scope of detailed planning (including resources, responsibilities, tools and techniques),
monitoring and reporting appropriate to the project and confirmed the level of planning services required
with the contractor?
Prepared the overall project control plan and associated in-house control plans?
Established responsibility/ownership for the activities identified in the plans?
Estimated durations for the activities on the plans and gained commitment to these?
Confirmed the use (or not) and choice of computer planning systems?
Checked (and agreed) the contractors schedule, particularly that it contains all work included under the
contract?
Distributed the Project Plan, schedules, progress reports and meeting notes?
Consulted regularly with the Venture Manager on critical issues, contingencies available and potential
changes to plan and schedules?
9.8.5 Deliverables
Project master plan/performance measures/key deliverables.
Project strategy statement.
Detailed plans.
Control schedules for managing deliverables/milestones/hand-overs.
Timetable for progress review meetings.
Progress and critical activity exception reports.
Notes of progress review meetings.
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10.1
Cost Management
10.1.1 Aims
To account for all project costs.
Ensure that only legitimate costs are allocated to the project.
Ensure that invoices are validated.
To establish effective cost monitoring, control and reporting.
10.1.2 Responsibilities
Driven by the Project Manager supported by the project team.
10.1.4 Communications
Have you:
Shared your requirements for the project cost structure with the project team?
Agreed the policy for management and use of contingency?
Gained a working knowledge of the contractors cost management systems?
Agreed the type and extent of computer cost management systems to be used?
Agreed the scope of contractors cost management services to the project?
Agreed the format/frequency of cost reports required from the contractor?
Consulted with the client and agreed the scope, format and frequency of cost reporting required?
Consulted with the client on (potential) movements in AFC's?
Agreed a schedule for production of cost reports?
Agreed a timetable for cost review meetings?
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10.1.5 Deliverables
Contractors cost/exception reports.
Project cost/exception reports.
Client cost/exception reports.
Notes from project cost review meetings.
Timetable for production of cost reports.
Timetable for cost review meeting.
10.2
Change Control
10.2.1 Aims
To help manage change, avoiding uncontrolled growth in scope and also supporting effective cost and
schedule control.
Formalise recording and reporting of changes including Technical Queries.
10.2.2 Responsibilities
Driven by the Project Manager supported by the project team.
10.2.4 Communications
Have you:
Consulted with the Venture Manager client and confirmed strategy for managing project change
appropriate to the project?
Checked the contractors internal change management/technical query system and confirmed they will
operate within the project system?
Agreed responsibilities for levels of authorisation of change with the Venture Manager and within the
project team?
Agreed arrangements for rapid response to requests in emergency circumstances?
Agreed arrangements for authorising Technical Queries?
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10.2.5 Deliverables
Project specific Change and Technical Query control process statement.
Change log/register.
Technical Query log/register.
Proforma for Change and Technical Queries.
Change and Technical Query reports.
10.3
Document Management
10.3.1 Aims
To help manage approval of, and change to, documents throughout the lifetime of a Project.
Provide for security of electronic and paper and electronic information.
To define requirements for storage, recovery, distribution and archiving/disposal of documents.
10.3.2 Responsibilities
Driven by the Project Manager in conjunction with the project team.
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Established the location of the project archive and archive retention time?
On completion of the project, stripped the project file, transferred key documents to the client and
securely disposed of all others?
10.3.4 Communications
Have you:
Identified applicable sources of local good practice?
Referred to ICI Standing Instructions on security of documentation?
Agreed system, responsibilities and nominated the individuals involved in document checking and
approval?
Agreed document management requirements with external organizations?
Agreed the requirements for archiving documents with the Venture Manager?
Issued the list of file codes and revision references?
Issued the pre-allocated document numbers?
Issued the (up to date) document register?
Issued the document transmittal proforma?
Distributed the list of documents requiring design calculations and external approval?
Issued the document distribution chart?
10.3.5 Deliverables
Document filing structure.
Hard copy files / electronic system.
Distribution chart.
Document register.
Document management strategy.
List of documents requiring critical approval/design calculations.
List of pre-allocated document numbers.
Transmittal proforma.
10.4
Construction Management
10.4.1 Aims
To ensure that appropriate ICI standards for SHE and specific construction health and safety requirements
are met.
To manage and control change and technical queries.
To ensure ICIs interests in terms of business and project objectives are achieved during construction.
10.4.2 Responsibilities
The Project Manager in collaboration with site construction management.
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10.4.4 Deliverables
An installed and tested plant which fully meets the business and project objectives.
11
11.1
11.1.1 Aims
To ensure the project is financially closed with all records complete.
To review beneficial operation, including examination of identified deliverables.
To review effectiveness of project delivery strategy, including control of design, construction and
commissioning.
11.1.2 Responsibilities
Venture Manager in conjunction with the Project Manager and the project team.
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Reviewed actual savings against any Value Analysis savings identified pre-sanction?
Analysed working relationships with all groups/contractors involved in the project?
Reviewed the quality of workmanship throughout the project?
Reviewed the scale and effect of post-sanction change on the project?
Reviewed the extent to which the project/business objectives have been met?
Completed hazard studies 4, 5 and 6 and produced a SHE Dossier?
11.1.4 Communications
Have you:
Completed hand-over documentation?
Updated project documentation to as-built status as required?
Updated works record systems to incorporate the new project?
11.1.5 Deliverables
You must have produced:
Hazard Study 4, 5 and 6 reports.
A SSHE Dossier.
Project closure report.
Project acceptance certificate.
Updated works records.
Financial closure request forms.
11.2
11.2.1 Aims
To collect project information to help increase learning and improve performance.
To test the viability of a project at critical stages in its development.
To carry out specialist project audits and objective performance bench-marking.
11.2.2 Responsibilities
Driven by the Project Manager in conjunction with the Venture Manager and supported by appropriate
specialist auditors.
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Completed the performance measurement and auditing activities including production and submission of
information?
Carried out appropriate validation of estimates and quotations?
Prepared and submitted the end of project report?
Provided the project contribution to the post event review?
11.2.4 Communications
Have you:
Accessed the ICI Project Management good practice databases on Lotus Notes for good practice
references?
Made certain that you know what specialist (SHE) audits are required on your project?
Determined whether the project is to be carried out under a local QA registered system and, if it is, what
procedures are applicable?
Consulted and confirmed with the client on the form of measurement and auditing appropriate to the
project (including the key project stage gates)?
Consulted with the client and confirmed the project contribution to the post event review?
Confirmed validation requirements?
Agreed the measures of project performance that are to be made?
Agreed the form and structure of the end of project report?
Compared project measures with best (external) practice?
Consulted with the client and confirmed the project requirements for the post event review?
11.2.5 Deliverables
12
(i)
(ii)
Factors Affecting Small Projects in Asia Pacific; R. Levine/S. D. Price, Cranfield University 1997
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PSG-001
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