Project Management Change Management Presentation

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Project Management Change Management Presentation Powered By Docstoc
					  Change Management
     Brett Kligerman
        CDP, Inc.
bkligerman@cdp-inc.com
      800-290-8478
   Implementing An Effective Change
             g
        Management Process:
Five Key Steps to Fewer Claims and Consistent Project
                     Success
                             Agenda

Agenda
•   Introductions
•                   j
    State of the Project World
•   Project Industry Crisis: Change Management
•   Proactive Project Management
    What You Will Learn




What You Will Learn

•   The importance of capturing, standardizing and automating the
    change management process

•   How a rigorous change management process can improve business
    performance

•   The use of collaboration and proactive p j
                                 p                     g
                                           project management to
    reduce claims

•   Primavera Contract Manager and P6 Scheduling Integrated
    Program M
    P                   t l ti
            Management solutions
CDP Oracle/Primavera Authorized Representative
    A Total Solutions Provider:
       R     i d      h
        Recognized as the second l
                               d largest P i
                                         Primavera P       in North America
                                                   Partner i N h A      i
        2008
        Recognized in 2007 as fastest growing Primavera Partner
        Authorized Primavera Representative for 25 Years
        4 offices servicing NC, SC, VA, DC, MD, WV, PA
        Oracle Advantage Partner
        Dexter + Chaney, eTimeMachine, Archibus
                       y,             ,
        Training Services – Authorized Primavera Training Center
        Implementation Services
        Support Services
        Active member of PMI, AGC, DBIA, ABC
      Current Short Term Trends

• The Downturn
  • Project starts slumping
  • Margins tightening further
  • Each project counts                                                                            p     g
                                                                                U.S. Construction Spending

• The Upturn?                                                      500
                                                                   450
  •   Optimize performance                                         400




                                                          ollars
  •   Reduce costs                                                 350



                                        Billions of U.S. Do
                                                                   300
  •   Quick project collaborations                                 250
                                                                   200
  •   Clear project tracking                                       150
                                                                   100
                                                                    50
                                                                     0
                                                                         2005   2006   2007   2008   2009    2010
                                                                                 Heavy Engineering

                                     Market Insights - Reed Construction Data, February, 2009
    Longer Term Trends


•            g
    Increasing demand
•   Loss of intellectual capital
•   Increasing regulatory demands
•   Increasing project complexity
•   Alternative project delivery methods
•   Technology adoption
E&C Productivity
     Primavera Standardization Survey
  • 94% of respondent firms do not deliver all of their
    projects on time or on budget
  • Of the projects that go over schedule or budget:
       •   64% were late by a month or more
       •   76% were over budget by 6% or more
  • Primary drivers cited for overruns:
       •   4% Uncontrollable factors
       •   18% subcontractor and supply chain
       •   15% subcontractor performance
       •   40-
           40-60% owner or contractor change
Results are not mutually exclusive: see www.cdp-inc.com/changepmi1216.html for full report.
  Challenges Facing Projects

• Race to the bottom
• Fragmented Industry
    •   Many stakeholders on every
        project
  No        j      k h ld
• N two project stakeholders
  are alike
    •                  y
        Zero scalability
    •   Efficiency gains lost
• Difficult collaboration
       i
  environment   t
    •   Document driven processes
   Throw In A Little Change…


Thousands of Documents + No Defined, Enforceable Processes + Change
                                =
Lost Accountability + Badly Managed Change + Conflict
                           =
Claims + Failed Projects + Declining Productivity
                                =
                Inefficient Industry
Managing Change is About Changing Behavior

                             “It is not the strongest of the
                             species that survives, nor the most
                               p
                             intelligent that survives. It is the
                             one that is the most adaptable to
                             change.”
                                       –Charles Darwin




In the last ten years, how many of you have
    adopted online banking and bill paying?
 So, To Beat Change We Need To:
First:
Fi t
Protect ourselves, our projects, and our clients with a rigorous and clearly
defined Change Management Process


                y         g
Then break the cycle through:
  •      Collaboration
  •      Standardization
  •      Bid Validation


To Achieve: Proactive Project Management
     To Beat Change We Need To:
     Move From A
                          Move to database models with Web access
    Document-
 based, antagonistic      Track all documents in one place
      culture             Access the documents instantaneously

                          Enhance communication and collaboration

        To A              Ensure functional and technical
                          interoperability

         Data-            React to changes more effectively
oriented, collaborative   Eliminate disputes
           lt
        culture
                          Consistently deliver successful projects
People + Process + Technology
              =
                   j
Collaboration + Project Success
 Standardized Best Practices


Why A Standardized Change Management
Process?

Avoid Disputes            Zero Claims

D        Waste
Decrease W            Stronger Profitability

Reduce Stress        100% Project Success
  What is a Change?

• The Contract is an agreement between two
  parties
• It forms the basis of the project scope, schedule
  and budget
• A change is a requirement that differs from the
     t t( j t            )
  contract (project scope)
          Every Contract Is Unique

• Changes are inevitable
  The O    h th i ht to      k h
• Th Owner has the right t make changes
• Consequently, projects must have a thorough and
  workable process to identify and manage changes …

               AS THEY OCCUR
  Five-Step Change Management

1. Identify the contract requirements (SOW)
          y     potential change and create a Potential
2. Identify the p             g
   Change Order (PCO) file
3. Determine the impact and price of the change
4. Negotiate and execute the change order
5. Maintain complete records of the executed change
  Step 1: Identify Contract Requirements
• Know the full Contract
   •   Contracts include all addenda, agreements, & special provisions
       (terms and conditions)
       (t       d     diti   )
   •   Specifications including general and supplemental
       provisions, technical specifications, and referenced standards
   •   Plans including drawings, boring logs, and other information
       depicting the work to be performed

• Read the contract as a whole
• Follow the order-of-precedence lause
  Sources of Changes

• Contract ambiguities, conflicts, errors &
  omissions
• New requirements, program, or mission
• Unexpected / Unforeseen conditions
       suspensions, acceleration,
• Work suspensions acceleration or restrictions
• Regulatory changes
       Change Management Starts With The
       Contract

• Changes Clause – the most important
   •    Allows owner to make changes necessary to complete work
   •    Obligates contractor to execute the requested changes
   •    Governs extensions of time and compensation
                                          p

• Contractor Notice Clause – forces collaboration
   •                            pp       y        g ,       g ,
        Provides owner with an opportunity investigate, mitigate, and
        document the change
   •    Contractor’s failure to comply could result in forfeiture of rights
  Step 2: Identify Change and Create PCO
• Identify and classify the potential change
• Public contracts recognize common types of changes with
  provisions governing each one:
   •   Changes in the Character of Work
   •   Differing Site Conditions
   •   Suspensions of Work
   •   Extra W k
       E t Work
   •   Elimination of Work
    Purpose of the PCO
•   Document a potential change as early as possible
•   Create the PCO prior to determining if it’s really a change
•   A holding place for all relevant information related to a change
•   It can be regularly updated and sent to the parties involved
•   Allows anyone to initiate communication about a potential change
     •   Owner issues directed change “Stop Work Order”
     •   Contractor provides notice to owner of differing site condition
     •   Design consultant revises plans in response to RFI
   PCO Information
• Sub file 1: Contract information governing type of change
  identified
• Sub file 2: Description of what was encountered and caused the
  potential change
• Sub file 3: Analysis of the impact of the change – “net difference”
  b                    d h
  between contract and what was encountered   d
• Sub file 4: Schedule delay and mitigating alternatives
• Sub file 5: Estimated or documented actual costs
  Initiating the Change Order
• All project parties must be able to initiate changes
• Owner’s processes must be flexible enough to
  accommodate multiple points of origin
• Tracking of change information must be consistent
  regardless of origin
   •   It is critical for only one party to track all PCOs on a project
   •   Unique PCO identifier links individual PCOs to particular project
• Creation of PCO file starts paper / audit trail for change
  order process
  Requests for Information (RFIs)

• Not necessarily indicative of a change, but may
  lead to need for a change
• RFIs should be rigorously tracked, especially when
     y
  they indicate a PCO
• In the event of a disagreement, contractor should
  start PCO process
  RFIs (cont’d)
  The t d d       f     h ld include, t   i i
• Th standard RFI form should i l d at a minimum:
   •   RFI number and date generated
   •   Issuer name
   •   The RFI question written clearly and concisely
   •     y
       Any reference documents
   •   Anticipated costs or delays
   •   Response due date
• RFIs should be tracked in a log that is regularly updated
  and transmitted to the responsible parties
      l     h ld be     i   d t          j t     ti to
• RFI logs should b reviewed at every project meeting t
  ensure process is being managed effectively
Change                     (1)                        (2)                                              (4)
Management
                                                                               (3)
Process Flow Chart
                        Design                                                                      Contractor
Steps 2-5                                                                  Contractor
                       Consultant                    Owner                                        Time Extension
                       or Agency                                              RFI                   or Overtime
   STEP 2




                       Create PCO                   Create PCO                                       Create PCO
                          File                         File                                             File
                                                                             Design
   S




                                                                            Cons ltant
                                                                            Consultant
                                                                           Response to
                                                                               RFI
                Revised Plans/                                                                         Owner
                                                             Possible                   No Cost
                Specs from Design                                                                      Review
                                                             Cost or                    or Time
                Consultant                                   Time                       Impact
                                                             Impact

                                                              Create PCO        Supplemental
                                                                 File          Instruction from
                                    p        q
                                 Proposal Request                             Design Consultant
                                 from Design
                                 Consultant/Owner
                               From Step 2



  STEP 3 & 4
                    Contractor
                 Receives Proposal
                     Request
     PS


                   Contractor
                 Submits Change
                 Order Proposal
                                       Disagree on Cost and/or Time or 30
                                           Days Past RFI Response or
                                               Proposal Request




                  Process Change                                        Construction      CCD Obtain
                  Order & Obtain                                       Change Directive
                                                                           g              Appropriate
                   Change Order                                          T&M - NTE          Signoff
STEP 5




               Complete Checklist &
S




                 Transmit Change
                      Order
  Step 3: Determine Impact of Change

 • Determine entitlement
     •   Has  h
         H a change actually h
                      t ll happened b
                                  d based on th contract?
                                        d    the   t t?
     •   Does contract provide remedies for additional time and cost?

 • t              effect of the change
C Measure the d owners who commit t collaborating
        t
Contractors and                  h            it to ll b ti
    • phase stand provision, if appropriate, change order
at thisUse time extensionto get through the or
                 process more smoothly
    • Forensic schedule analysis to determine critical delay

 • Calculate the cost
     •   F ll      t t       i     t           t t it i
         Follow contract requirements; e.g. contract unit price
     •   Time and Materials or “Force Account” provisions
 Step 4: Negotiate & Execute Change Order

• Parties must adhere to time deadlines
              g     (owner)
      • Issuing RFP (     )
      • Calculating the time and cost of the work (contractor)
• Whether owner accepts or rejects, response should
  be in writing
• Owner can issue a Construction Change Directive
  to expedite process
      • Time and materials basis (“force account” for highway
        construction)
      • Follows literal interpretation of change clause in
        contract
    Step 5: Maintain Complete Records of Changes
•    Should be the responsibility of ALL project participants –
     perform periodic audits to ensure approved process is used
•    Capture key business processes in standardized forms and
     workflows
•    Maintain detailed records and track all document changes –
                                         followed.
     records will be found if process is followed
     •   Contract documents log
     •            g
         Issues log
     •   RFI log
     •   PCO log
     •   Changes log
  Latency: The Hidden Project Killer
• Ability to quickly identify a potential change AND
  determine the time and cost impacts of the potential
  change is very powerful
• Effective project management needs a powerful
     d l i technology platform (P6 & C t t M
  underlying t h l       l tf                        )
                                     Contract Manager)
• Communication and collaboration are the critical
  ingredients
• The change management process is based on traditional
            y                                y    j
  contract types, but it can be applied to any project
  delivery methodology
Why Contract Manager Was Selected
by W k County P bli School System
b Wake C     t Public S h l S t


•   Security through access rights
•   File retrieval / historical information
•   Work efficiencies
•   Real time information
•   Reduced paperwork
•   Available information / analyzing data
•   St d d and procedures
    Standards d              d
•   Reporting
www.cdp-inc.com/changepmi1216.html

				
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