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Construction : Focus | August 2015 | Source : Infrastructure Today

Ready? Fire! Aim!

As project managers rush headlong into implementation without planning and carrying out pre-project activities, it´s a case of putting the cart before the horse. No wonder catastrophic delays and bungled projects are the order of the day. Fortunately, both government and industry are showing a keen interest to learn as they play catch-up in adopting best practices in project management.

Some years back, Raj Kalady, Managing Director, Project Management Institute (PMI), was visiting the Netherlands. A fair distance from Schiphol Amsterdam Airport, he saw a passing sign on a stretch of road that said it was scheduled to close for repairs in 75 more days.

Intrigued, Kalady zoomed in with the camera of his mobile phone and saw on the signboard the start and end dates for the repairs along with other project details that were mentioned.

It´s no exaggeration to say he was flabbergasted. ¨What planning!¨ Kalady still marvels. However, the point, he adds, is ¨the kind of planning they are known for is so good that they had informed all the stakeholders well in advance. They had even suggested alternate routes so that people were well aware and did not get a nasty surprise.¨

Providing more than adequate notice and warning to commuters, no doubt, examples of such planning and efficiency sound totally utopian in India. After all, how many times have we seen such signboards on our own roads! To be fair, though, the regulatory and political environment in most of those countries are also far better than they are in our country. Certainly, India´s infrastructure companies cannot be blamed for delays from land acquisition problems, bureaucratic hurdles, environmental clearance difficulties and the lack of a real single-window project clearance mechanism, factors contributing to a highly uncertain, complex regulatory and working environment.

With that particular caveat out of the way, however, there still exists many differences in the way that India´s infrastructure companies approach projects compared with companies in more developed markets.

To start with, planning - the key element in project management - is a weak point. ¨Contractors in India are very poor at planning,¨ says Jairam Panch, VP and MD, Turner Project Management India. He adds ¨I have never seen a contractor here who can really plan things. And once you plan, you need to stick to a timing and follow it. I would only insist, plan the job well and then put a good team around it.¨ ¨Most project managers in this country get bogged down with several co-ordination type of work activities with various agencies (which are typical in India) and start hurrying the vendors/contractors. In the process they start fire-fighting when an issue becomes serious. The moment you do that, you obviously won´t have the time to think of the broader picture and overall planning and management of the project,¨ says DK Julka, Executive Director (Implementation) at ThyssenKrupp Industrial Solutions (India), (TKIS).

If, in simple terms, as Kalady says, ¨project management is all about planning your work and working your plan,¨ then infra companies here have much to learn.

DELAYED PROJECTS
No wonder then, delayed projects are the order of the day. According to data from the Ministry of Statistics and Implementation, at the end of the fourth quarter of 2014-15, 763 projects were under implementation by various ministries, departments and central public sector undertakings. Of these, only three projects were ahead of schedule. Projects on schedule numbered 128 while 349 projects were delayed with respect to their original schedule of completion. The most number of delays is seen in roads and highways projects with 109 delays followed by power projects with 68 delays.

Of the 349 delayed projects, what boggles the mind is 283 projects did not even report their start and end dates! Clearly, the gross absence of accountability is a problem. In stark contrast, what is striking about the successful mega projects in developed countries is the enormous amount of precision with which the purpose and scope of projects are worked out in the beginning, resulting in their timely completion.

In India, this lack of understanding, that as the purpose of a project changes, so does its scope, or content, has proved very costly for the nation over the years. For instance, the original purpose of the National Highways Development Project was to connect India´s four metro cities as a quadrilateral. In its current avatar with phases VI and VII of the project under implementation, the purpose of the project has changed tremendously and so has its scope, impacting time and cost. The first part of Pulse of the Profession report, a biannual study done by PMI found a clear correlation between failed projects and the lack in project management. ¨You may do every other activity but if you do not have qualified project managers in your team, there is that much risk in getting projects to complete on time,¨ says Kalady. And so, PMI is working with the Ministry of Statistics and Implementation, various ministries, the newly set up NITI Ayog and the Project Monitoring Group (PMG) to help them understand project management skills and its importance. It seems the government is taking cognisance.

Minister of State for Statistics and Programme Implementation VK Singh said recently the steps taken by the government to ensure timely completion of projects include rigorous project appraisals, and monitoring specifically for time and cost overruns.

PMG, on its website says of the 665 projects it has accepted for consideration till date, it has facilitated the resolution of all issues in 278 stalled projects worth Rs 9,49,694.4753 crore.

While these are broad measures for clearing stalled projects, it may not be too long before the government considers project management consultants as a norm in all new projects in order to avoid such emergency measures.

Explaining the reasons for the dismal state of affairs, Dr. Mangesh Korgaonker, Director General, National Institute of Construction Management and Research (NICMAR), says, ¨In the past, the precedence used to be cost, time and quality.¨ He adds, ¨They´ve since realised this sequence doesn´t work. People have understood the precedence should really be quality, time and cost. If you have the right quality and time, you have perhaps a better probability of right cost. If you work it out the other way, neither will our time be assured, nor will quality. While we may technically say the project is completed, it will certainly create problems over the long run.¨

GROWING INTEREST
EPC companies, too, are showing an increasing interest in adopting a formal and disciplined approach as they look to leave their unstructured methods behind them. ¨Organisations wanting to work abroad have realised that if they do not have qualified project managers such as Project Management Professional (PMP) certified managers, they are not going to even get the project in the first place. It´s a clear requirement in the tender document for most foreign projects. This is going to happen in India also sooner or later as we are working with the government, making it clear to them it is important to have qualified project managers,¨ informs Kalady.

Indeed, companies such as ONGC, GAIL, Engineers India, Essar Projects and Reliance Infrastructure are all currently on the path of setting processes in place and adopting recognised project management standards.

ALL ABOUT PROJECTS
While there exists a tremendous body of knowledge for companies to draw from, Korgoanker says, however, there are large gaps in specific areas within project management.

For instance, an important knowledge area is the field of integration. ¨In complex, mega projects,¨ says Korgaonker, ¨there needs to be a sound approach to integrate all that happens. If we are not knowledgeable enough about how to integrate, the project will fall apart. Although this is critical, we have a very low body of knowledge in this field. In contrast, we have a very high body of knowledge in schedule management.¨

Another important knowledge area Korgaonker highlights is cost accounting. ¨There´s a lot that is known about cost accounting as applicable in business management,¨ he says, ¨but how sophisticated are we insofar as cost management in projects is concerned? We don´t know that great a deal how to scientifically estimate or control project costs.¨

A lifelong student and a doctorate in project management, Korgaonker would love to research such topics. ¨We have a few approaches which are available but those approaches are also drawn more from our empirical experiences rather than a sound theoretical approach,¨ he says. While the best known methodology today for monitoring costs is the EVM (Earned Value Management) approach, Korgaonker says ¨even that approach today has serious shortcomings and needs to improve further.¨ He adds, ¨We have a long way to go in understanding how project costs can be reduced. Reduction does not mean cutting corners, but how we can innovate, improve our methods and productivity, reduce wastages.¨

While the idea of reducing wastages, and concepts such as Lean Project Management are only just gaining recognition in India, it is already a well-established religion in developed markets. ¨If we were able to adopt a concept like ´Lean´, we would have been able to reduce costs because we eliminate the waste in whatever form it is generated,¨ says Korgaonker.

Panch agrees. ¨These concepts have started to come. ´Lean´ is also being done but one has to consciously do it.¨ However, for Panch, that´s easier said than done. As Turner brings to India its global expertise, vast knowledge base, standard procedures and global best practices in project management, a lot of this is new ground for the Indian government and for Turner´s Indian clients. It is for this reason Panch is selective in deciding what projects he wants to take up. ¨We are looking at jobs where we have a relatively greater authority on managing the projects from start to finish,¨ he says, as he doesn´t want to be caught out midway.

Just ask Julka of TKIS. Working on a mega project with a particular client has been a particularly sticky issue. ¨The contract awarded to us on a LSTK-EPC (lump sum turn key - engineering, procurement and construction) basis was completed much ahead of those units/contracts awarded on EPCM (engineering, procurement and construction management) basis. The latter are delayed inordinately as the construction contractors are not able to deliver as per schedule. There is very little choice left with the customer for looking out for other alternatives due to their internal procedures,¨ laments Julka.

SOFT SKILLS
Across the industry and at TKIS, too, soft skills and stakeholder management in a project are assuming greater importance. In the nuts-and-bolts world of engineers and projects, good communication and negotiation skills have become an essential requirement. For instance, Julka is evaluating two candidates for approval for the most elite ´A´ level project manager status. (To gain the A-level status within Thyssenkrupp, the final approval must come from the parent company in Germany and qualifies the candidate for all A-level global mega projects). However, Julka has reservations over one of the candidates, and not on the technical front. ¨He is an excellent fellow all-round, but when it comes to his soft skills, I have some problems,¨ reveals Julka. While the candidate in question has been told to work on his communications skills with his own team members, Panch elaborates that communication takes up 80-90 per cent of a project manager´s time. ¨Managing the scope between different stakeholders is very important because each one comes with a different scope and it is the project manager who ties everything together and makes sure there are no gaps,¨ says Panch.

¨Today, the ability for leadership, negotiations, communications, risk awareness and stakeholder management are areas seeing increased requirements,¨ adds Kalady. He explains that soft skills are becoming increasingly important as compared to the importance of technical skills. While the importance of technical skills such as drawing the Gantt chart, critical path or Work Breakdown Structure (WBS) were more important 20 years ago, today, a number of software tools exist to help with these aspects.

PROJECT MONITORING TOOLS
In fact, the importance of software tools is central to the success of a large and complex project.

Many of the traditional approaches or principles of project management such as PERT (Programme Evaluation and Review Technique), CPM (Critical Path Method), or the S-curve, very amenable for computerisation, now have software to back them up.

With project management being a challenging job with many inter-dependent activities and complex responsibilities, Prosenjit Dutta, Executive Director, PS Digitech-HR (INDIA) says computerised tools today assist with accomplishing those tasks and executing those responsibilities. Dutta says, ¨Software tools allow multiple teams to collaborate, delegate tasks, stay on schedule, provide snapshots of the project, track progress, assign resources, communicate with vendors and clients over a single platform and help a project manager stay organised.¨ With the use of these modern tools, the industry today knows what the critical success factors for a project are and what constitutes success based on empirical evidence.

Dutta explains MS Project is the most popular software for project management in India since it is easy to use and mainly meant for small to medium-sized projects. Primavera from Oracle is meant for large projects, requires extensive hardware and investments both in terms of time and money. Kolkata-based Digitech-HR (INDIA), a specialised project management and engineering services company with about 60 employees at present, uses both MS Projects and Primavera although it favours the former due to its popularity with their clients. ¨The people we employ are also comfortable using MS Projects. Primavera requires a very high level of software handling skill,¨ says Dutta.

As every software comes with its own set of strengths and weaknesses, Dutta says it is important for the user to have a clear idea of these parameters before he chooses one and begins using it.

By way of advice to project managers, he suggests they may find ¨specialised project management software actually prompts them toward best practices by way of integrated features. Assigning responsibility, estimating task completion times, and maintaining communication can all be easier to remember to do if there´s a tool walking you through the motions,¨ says Dutta. He adds, ¨There are many more tools to use or co-opt when managing a project, and sometimes the simplest ones get the job done more efficiently than the robust, full-featured ones. Also, understand that the best software in the world will not help your organisation complete projects faster or more efficiently if employees don´t or won´t believe in it.¨

MANPOWER SHORTAGE & TRAINING
As per the Anderson Economic Group Report 2012, India requires about 400,000 project management professionals every year up to 2020 across industries. In comparison, there are less than 10 institutions that offer full-time programmes in project management. One can imagine the shortfall in manpower.

While L&T set up its institute about five years ago in Vadodara, Gujarat, another instance of the industry also involved in academia is the Institute of Project Planning & Management in Kolkata set up by PS Digitech-HR (INDIA) Pvt Ltd. Such steps are welcome, says Panch as this will help improve the industry-university interface which is much required. Korgaonker believes a ¨close academia-industry linkage will enable academics to learn what is happening on the field and develop a useful knowledge base. There is a lot happening on the field that we in the academic world aren´t even exposed to,¨ says Korgaonker. He adds, ¨Therefore, the potential to create the knowledge of the future across many of these areas in project management rests much more with the industry and people directly associated with projects.¨

The need for skills is heightened when one considers the fact that organisations in India waste an average of $71 million for every $1 billion spent, as per PMI´s Pulse of the Profession report 2015.

Nevertheless, says Kalady, it is very difficult to quantify the rupee or dollar benefit of project management. ¨It is like asking if you can quantify the benefit of a leadership training programme,¨ he says.

What did come out in PMI´s study, though, was the moment organisations started investing in project management training and adoption, they started realising the benefits of lower wastage, better HR climate and better completion of projects. They also found that the moment they withdrew the support, believing they were mature in their processes, the decline began.

¨The great finding is that the presence of project management is felt in its absence,¨ says Kalady.

CONCLUSION
While that may be construed as being a little abstract, what is clear is the increased emphasis companies in India will have to lay on a structured approach to managing their projects. This article began with the caveat about an uncertain regulatory environment and bureaucratic muck ups. To be sure, grave issues remain and business enterprises are not entirely free of red tape.

What needs must be remembered is also the fact India´s experience to get into projects in a big way is of relatively recent origin. Private sector involvement in public projects is of even more recent origin. Times have changed since when projects over Rs 100 crore used to be classified as large projects and those over Rs 500 crore as mega projects. Even those took years to complete.

The emphasis on infrastructure since the start of the century has changed the mindset of an entire country and there is now a definite attempt to bring about a change in governance systems. For sure, the learning curve, at least within the tenure of the Narendra Modi government, is going to be far steeper for all stakeholders.

A closure to the challenges posed by inefficient or unfriendly regulation may soon be found as the year-old government gets fully into its stride in the next couple of years. At least, that´s what the industry believes. ¨You and I could be having a very different conversation five years from now,¨ says Panch. If true, India´s infrastructure companies could break free from the restrictive environment they find themselves in and really evolve as professional project management companies with capabilities even in design.

And while we may not be hoisting a signboard the likes of which greeted Kalady on his arrival in the Netherlands, the focus will increasingly shift to the real issues of quality, time management, cost control and accountability. That wouldn´t be bad at all.

 
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