The Handbook of Integrated Business and Project Management, Volume 2. Business and Project Management Framework and Processes

By Ali Jaafari

The Handbook of Integrated Business and Project Management (IBPM) aims to achieve a paradigm shift in the current precepts and models applied to planning and management of projects and programs. It presents a body of knowledge that effectively restructures the approach to project and program management, with particular focus on the strategic phases, and redefinition of objectives, including integration of business and project management functions within an extended project life cycle architecture. The IBPM model presents a new perspective and comprises the following:

• A set of objectives that transcend the traditional project management objectives, with focus on the subject project’s end value and its fitness for purpose, its environmental sustainability and performance, as well as the benefits flowing to broader stakeholders;
• An integrated project lifecycle architecture, embodying both front-end business and strategic phases and implementation phases; and
• A set of (17) functions (characterised by 69 indicators) to plan and deliver projects from creation to definition, design, planning, execution, commissioning and start-up in a holistic manner.
Based on the realities of projects on the ground there is an urgent need for re-examining the foundation concepts of project and program management. In particular, there is an urgent need to shift the focus to the business and strategic phases of projects, integrate and manage both downstream and upstream phases, and deliver solutions that are fit for purpose, and meet or exceed stated business and strategic objectives. This book provides a framework and the associated body of knowledge to facilitate holistic planning and management of projects and programs of significant size, including infrastructure and industrial projects.
Volume 2 has 9 chapters. Each chapter presents an integrated framework, including 6 processes for the integrated planning and management of each functional area. The frameworks and the associated processes cover all 17 core functions (69 variables) that are critical to the holistic planning and delivery of projects and programs of significant size. Functional planning is conducted concurrently, considering proximity and cross influences of the functions and the need for the integration of the phase deliverables.

• Language: English
• Publisher: Lulu.com
• Release date: Jan 6, 2023
• ISBN: 9781470905538

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The Handbook of Integrated Business and Project Management, Volume 2. Business and Project Management Framework and Processes

Ali Jaafari, PhD

First Edition

ISBN: 978-1-4709-0553-8

Published by Lulu Publishing

Copyright © 2022 by Ali Jaafari. All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system in any form, including recording, scanning or otherwise shared without prior permission of the author, unless permitted under Section 107 or 108 of the 1976 United States Copyright Act.

While the author has used his best endeavour in writing this book, he makes no representation or warranties, with respect to the accuracy or completeness of the contents, or their suitability for application in general or in specific cases. All users should evaluate the contents of this book prior to utilising any part. Where the author has referred to any third party copyright material, the user will need to obtain permission from the copyright holders concerned. Any person or organisation relying on this Handbook does so at their own risk; no responsibility is accepted by the author or the publisher for any loss or liability which may arise from such uses directly or indirectly.

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Acknowledgement

The contents of this book are unique, and are based on my insights gained over the last 4 decades of research, teaching, and professional practice in this field. I have accessed and cited many sources to validate and/or compare the concepts I have advocated in this book. I would like to acknowledge these sources (too numerous to include in this space). Special mention is necessary regarding the following sources: The APMG Public-Private Partnership (PPP) Certification Guide; numerous publications by the Infrastructure and Projects Authority (UK); and the following publications by the Grattan Institute: The rise of megaprojects: counting the costs (by Marion Terrill, Owain Emslie, and Greg Moran) and Megabang for megabucks: Driving a harder bargain on megaprojects (by Marion Terrill, Owain Emslie, and Lachlan Fox). The coverage of project finance risks in Chapter 13 has benefited from Identifying and managing project finance risks: overview (UK) by Phillip Fletcher, Partner, and Andrew Pendleton, Associate, Milbank, Tweed, Hadley & McCloy LLP.

I would like to thank Dr Alireza Abbasi, who reviewed and contributed to the initial draft of 4 chapters. Honorary Associate Professor Rob Wheen reviewed Chapters 1 and 11 (Volumes 1 and 2 respectively), and provided valuable feedback.

A Note from the Author

Hundreds of billions of dollars are lost globally each year due to project and program failures in virtually all fields. Continued project failures, setbacks and losses have prompted me to question the adequacy of the current concepts, models and practices of project and program management, and to explore opportunities for change. In my view the contemporary approaches do not adequately address the real challenges of planning and delivery of projects and programs of significant size. Evidence from numerous field studies shows that projects and programs continue to underperform, or fail with massive losses and disillusioned clients and sponsors. Clearly, a fresh perspective and approach is needed to ensure that projects will deliver the outcomes that the stakeholders aspire to. For this to realise, it is imperative that client and sponsor organisations adopt a new mindset, and a vastly different approach to management of projects and programs. It is incumbent upon all client bodies to exercise a hands-on proactive approach, ensure that they understand complexities, and invest in creating the requisite capabilities for planning and management of projects and programs.

I have written this book, together with Volume 1, in a style that can assist both scholars and practitioners to adopt and tailor the contents to suit their needs. My main motivation is to promote a more strategic and integrative approach to planning and delivery of projects and programs of significant size. I have attempted to bring the key elements of knowledge related to project business and project management together, and present these in a consistent and coherent framework, coupled with the relevant processes needed for their practical application. The integrated business and project management (IBPM) approach embodies a fresh perspective, frameworks, processes and tools for strategic planning, development and management of projects and programs of significant size.

Author Biography

Dr Jaafari is an author, academic, practitioner and consultant, recognised internationally, particularly in management of large complex projects and programs. He served as an academic and researcher at the University of Sydney in Australia for 24 years, and was appointed to a Professorial Chair in 2000, in recognition of his contributions to the research and education of students and practitioners, as well as his widespread global contribution to knowledge in this field.  He has delivered courses and training workshops to thousands of professionals and executives globally, including major public and private sector organisations, and government agencies. Dr Jaafari has published widely in major international journals and conferences, books and monographs. He has been at the forefront of research and development of project, program and organisation management. Currently, he acts as a consultant in the field of project and program management, though he has held leadership positions in higher education for over 15 years. Dr Jaafari has an extensive professional track record in business and project management, and is known as an authority internationally. He has a Master of Civil Engineering from the University of Tehran, a Master of Highway Engineering and a PhD in Quantitative Business Methods from Surrey University in the UK.

VOLUME 2 PREFACE

IBPM Scope

The Handbook of Integrated Business and Project Management (IBPM) aims to achieve a paradigm shift in the current precepts and models applied to planning and management of projects and programs of significant size. It presents a body of knowledge that effectively restructures the approach to project and program management, with particular focus on the strategic phases, and redefinition of objectives, as well as integration of business and project management functions within an extended project life cycle architecture. It has been organised in 2 volumes.

Volume 1 addresses the fundamental concepts, structure and methodologies that underpin the integrated business and project management model. It describes the overall approach and its philosophical underpinnings, as well as the framework and life cycle phases of projects and programs of significant size. Volume 2 provides frameworks and processes for the integrated planning and delivery of core business and project management functions, organised into 9 functional areas. Volume 2 builds on Volume 1. While Volume 1 describes the method of approach to each of the project life cycle phases, including functional integration of the deliverables at each phase, Volume 2 offers a framework for integrated planning and management of each functional area, spanning the entire project life cycle. As such, it can be argued that Volume 2 is more detailed.

The IBPM model developed by the author, underpins both volumes. There are 3 main components in the IBPM model:

Project Objectives: A set of objectives that transcend the traditional project management objectives, with focus on the subject project’s end value and its fitness for purpose, its environmental sustainability and operational performance, as well as the benefits flowing to broader stakeholders. Each class of objectives will include a number of indicators, and their corresponding threshold values that are used to guide the decision-making and optimisation efforts. They are applied as criteria for performance assessment over the project life;

Extended Project Life Cycle: An integrated project life cycle architecture, embodying both the business and strategic phases, and the implementation phases; and

Recognition and Inclusion of Business and Project Management Functions: A set of functions (enablers) that are applied to plan and deliver projects and programs, from the creation phase, through to the definition, design, planning, execution, commissioning and start-up phases, in a holistic manner.

Volume 2 covers planning and management of the business and project management functions over a 6-phase life cycle framework, consistent with the phase methodologies, described in Volume 1.

As noted from Figure II-1, typically, there are 5 groups of participants in projects of significant size, namely: (a) sponsor/operator; (b) client/PM team; (c) designers and advisors; (d) contractors; and (e) vendors/suppliers. The client/PM team is collectively responsible for driving the project from creation to completion, and hand-over to the sponsor/operator organisation. The term ‘client’ is a specific and contractual role distinct from the sponsor role. As explained in Volume 1, the client role is critical to the project success. Typically, this role is performed by an arm of the sponsor organisation, though it can also be delegated to an entity outside the sponsor. Project manager is typically an outside firm hired to assist the client body with the definition, planning and implementation of the project under consideration.

The client/PM team needs to manage the project systematically, deliver the business case and meet the threshold values set for project objectives within the project context and constraints. They need to build up capabilities and apply prudent practices to define, plan, design, procure and execute the project. Functional area plans are tools or means in the hands of the client/PM team to achieve the above goals. For the sake of clarity, the underpinning processes, methods and techniques pertinent to each functional area have been included in a separate Chapter. However, all functional plans need to be considered concurrently. Their deliverables should be integrated in each phase, i.e. the outcomes from the application of functional plans in each phase should be forged into the respective phase deliverable. For example, the planning outcomes in the implementation masterplanning phase, resulting from individual functional areas, are consolidated into the Project Implementation Masterplan.

Fig. II-1: Typical Project Participants

Functional Area Life Cycle Management

Figure II-2 shows in generic terms the approach to functional area planning and management over the project life cycle. The process starts by considering the criticality of the relevant functions, assigning performance targets and documenting the needs, requirements and standards to be met. The business case/solution that is developed subsequently needs to meet the respective requirements and standards. As part of the project definition phase, an optimal strategy/approach is developed to meet the respective requirements and standards. In the project implementation masterplanning phase a high level functional plan is prepared to realise the selected approach/strategy.

At the outset of the project implementation, the high level plan for each functional area is turned into a detailed integrated activity-based plan, which will be the basis for management of the design, procurement, execution and commissioning phases. Detailed functional area plans are incorporated into the project execution plan. Care must be taken in setting targets for, and management of the functions and/or the associated variables. Resources are limited and it is important to allocate more resources to management of critical functions so that these can be planned and executed at the desired level of performance.

Some functions in some projects may be found to be less significant. For example, on a repeat project undertaken by the sponsor organisation purely to add an additional unit to increase the production capacity, some of the variables related to ‘Technology’ and ‘Learning and Innovation’ may not be significant. Therefore, when determining targets for management of each function or variable, it is essential to focus on the critical and significant variables following the 20:80 rule. It is worth stating that setting an initial low target for a function does not mean a complete neglect of that function. Projects are dynamic in nature, and change with time or in response to changes in the project business, economic, physical and political environments. A seemingly insignificant function at a particular point in the life of a project may become critical later on, due to unexpected changes experienced in the external and or internal project dynamics. Thus, it is imperative that all functions and variables are closely tracked throughout the project life, and action taken to address any performance shortcomings.

Framework for Functional Area Management

Figure II-3 is a schematic representation of the generic framework adopted by the author for planning and management of each of the 9 functional areas covered in this volume and listed in Table II-1.

The framework comprises 6 interrelated processes, as follows:

Process A

Document goals, requirements and standards, and set performance targets for the functional area under consideration.

Process B

Develop strategy/approach for the optimum management of the functional area. Integrate it into the project business case/plan.

Process C

Create a high level plan to cover management of the functional area over the project life in broad terms. Integrate this into the PIM.

Manage the functional area scope pertinent to the project implementation masterplanning phase.

Process D

Create a detailed plan for the functional area. Integrate the functional area plans into the PEP.

Manage the functional area scope in the design and procurement phase, per the PEP.

Process E

Manage the functional area scope in the execution phase, per the PEP.

Process F

Manage the functional area scope in the commissioning and hand-over phase.

Verify the outcomes, assess the functional performance and close out.

Each process has its own inputs, tools and techniques and outputs/outcomes. As noted from Figure II-3, the processes are aligned to the project life cycle phases. As stated already, all functional areas will need to be planned concurrently in an integrated approach.

Functional area plans are instruments for management of the project by the client/PM team. Functional management defines the tasks to be performed by the client/PM in order to plan, orchestrate, facilitate and direct performance by all project participants to complete each project phase, and achieve the respective project deliverables. For example, project quality management is a functional area which needs to be performed systematically over the project life to provide assurance that the completed project will meet the respective quality requirements, standards and criteria. Note that all the planned quality-related activities to be performed by the client/PM team need to be incorporated into an integrated plan, namely Project Execution Plan (PEP). This will ensure that these activities will be performed at the predetermined points in time in tandem with others.

Volume 1 includes Chapters 1 to 9. Volume 2 continues from Volume 1. It includes Chapters 10 to 18. Chapter titles are cited in Table II-1. As noted, each chapter covers a particular functional area.

Each chapter starts by giving a brief introduction to the functional area it addresses, including an outline of the associated functions and variables. It then proceeds to present a framework based on the generic model shown in Figure II-3. The framework details 6 interlinked processes, each aligned to a specific project phase. As noted from Figures II-2 and II-3, the planning and delivery of all functional areas take place within an integrated architecture. A sample of current approaches is also included in each chapter for comparison purposes.

CHAPTER 10. PROJECT STRATEGIC ALIGNMENT AND MANAGEMENT

Introduction and Scope

The aim of project strategic alignment and management is to make sure that the completed project can meet the strategic, business and operational requirements. It seeks to incorporate the business and strategic competitiveness into the project scope and design, assess and realign the project continuously over its planning and execution phases to attain the desired outcomes. Project strategic alignment and management functions and variables are shown in Table 10-1.

It must be stressed that the above functions and variables should not be considered in isolation. They must be considered in tandem with all other functions and variables. The method of approach to the delivery of the scope in each project phase, which was presented in Chapters 4 to 9 (Volume 1), reflects this philosophy, viz.

All needs and requirements should be mapped, analysed and grouped together in a single document (Project Brief). The targets adopted for planning, performance assessment and management of each of the significant functions and variables should also be included in the Project Brief.

The solution derived and documented in the project definition phase needs to respond to all requirements across all functions. It is expedient to consider those functions and variables which have close affinity to each other as a group.

The project implementation masterplan (PIM) must reflect the high level plans derived for management of each of the functional areas and their associated variables.

The project execution plan (PEP) should incorporate all activities to be performed by the client/PM team to manage all functions during the project design and procurement, execution and commissioning phases, in line with the PIM.

Table 10-2 shows the broad (thumbnail) scope of the project strategic alignment and management over the project life. As noted, project strategic alignment functions cover the strategic context, business and stakeholders’ requirements, supply chain system and offsite projects. Each function and its associated indicators (variables) are discussed below. 

Figure 10-1 shows the stages in project strategic alignment and management, and how each stage links to a particular project phase. This diagram is intended to convey that:

The project strategic alignment and management requirements, performance targets and standards should be derived and included in the project brief;

The broad brush approach/concept for achieving project strategic alignment and management should be incorporated into the project definition report;

The broad scope of the required elements, features and functions, should be incorporated into the project scope statement;

The high level plan for the execution of the project strategic alignment scope should be incorporated into the project implementation masterplan;

The detailed plan for the coordination of the project strategic alignment and management activities during the implementation phases should be incorporated into the project execution plan;

The design scope and contract should specify the required elements, features and functions. These should be correctly interpreted and reflected in the designer’s workplan;

The contractor’s workplan should include the designed elements, features and functions, and demonstrate their planned execution; and

The commissioning and hand-over scope and activities should include the commissioning and demonstration of performance of the actual elements, features and functions delivered to meet the strategic alignment requirements.

Functions and Indicators for Project Strategic Alignment and Management

Customers and Markets

Many projects are conceptualised and delivered to win or maintain market share, and satisfy emerging or unmet customer needs. In the case of public sector projects, the aim is to deliver new or enhanced services to citizens, in compliance with the respective legislative mandates. In order to do this, the client/PM team must distil the key information and requirements explicitly, then seek to deliver the project in such a manner that it can fulfil the stated needs and requirements. Judgement is needed as to the criticality of all, or a selection of the requirements, and what level of management attention should be allocated to each requirement, as resources are limited. The process starts by setting goals for, and planning for integrated management of the scope related to customers and markets. Indicators are: (i) business priorities, branding and innovation; (ii) alignment with organisation's strategy; (iii) building of distinctive capabilities; (iv) customer vision, values and culture; and (v) existing operational support.

Business priorities, innovation and branding

Fulfilling the sponsor’s business priorities, innovation and branding requirements is of critical importance in terms of commercial or operational success of a project. The strategy and scope to fulfil these requirements will need to be crafted as part of the front-end engineering of the project, and then incorporated into the project design, and implemented. Throughout the project design and implementation phases, it is necessary to ascertain if the project continues to meet the business priorities, innovation and branding requirements, or adjustments need to be made to the project to achieve the desired outcomes.

Because of the dynamic nature of business and project context, priorities can change, or project scope may change during the implementation phases, or the project may experience other changes with the potential to impact the project’s capacity to fulfil the business priorities, innovation and branding requirements. Also, there may be changes to the regulatory requirements, which may necessitate revision to the business priorities, innovation and branding scope. The project scope and design must then be readjusted, and changes introduced to meet the revised business priorities, innovation and branding requirements. Thus, it is incumbent upon the PM team to monitor the project’s standing with regard to business priorities, innovation and branding requirements, and initiate action to address any identified concerns.

Alignment with sponsor organisation's strategy

Projects are typically planned and executed to fulfil the sponsor's organisation's strategy. However, the sponsor’s strategy can change over time, particularly with projects that have a long gestation and delivery timeframe. A project that is conceptualised to respond to a particular market opportunity or niche product or service, may face difficulty if the original strategy giving rise to the project changes too. In today’s dynamic business environment and technological innovations, it is not uncommon to see disruptions and discontinuities that can derail the project completely. In some cases, it is not possible, nor economical to change the project solution/design once the project has made significant progress. In other cases, it may be feasible to realign the project to fit the changes in the sponsor’s business strategy, though this may lead to significant disruption to project progress, and result in time and cost overruns.

Building of distinctive capabilities

It is not uncommon for a sponsor organisation to create a project in order to acquire distinctive capabilities, e.g. to upscale/automate its production processes/facilities, or implement a new business model, or enter a new market by offering enhanced services or a combination of these. It is critical that the project delivers the required capabilities to the sponsor organisation once completed and commissioned. The scope includes identification of the requirements related to the target capabilities, development and implementation of a solution to furnish the target capabilities. It is thus incumbent upon the PM team to identify the scope for achieving the required capabilities, and to ensure it is reflected in the design, and incorporated into the contract scope, then executed and verified to fulfil the requirements. Thus, and in order to ensure the project will be able to furnish the required capabilities, the PM team will need to periodically review the project artefacts and deliverables, and initiate action to address any concerns identified.

Customer vision, values and culture

The success of a project, once it enters the operation phase, depends on the extent to which it can satisfy the requirements related to customer vision, values and culture, as without customers no business can survive in today’s customer-centric and service-oriented economy. Typically, projects are created to make a difference in customers’ business, social or personal lives. Typical KPIs include: (i) meeting customer needs; (ii) improving quality of service to customers; (iii) saving customers cost and time; (iv) improving quality and functionality of products or services for customers; (v) increasing utility of products/services to customers; and (vi) increasing customer loyalty. While these may sound outside the traditional remit of project management, it is imperative that customer vision, value and culture considerations are explicitly recognised, itemised and designed into the project concept and its business case, then implemented and tracked to ensure that the project will meet the required attributes. In short, projects must be conceptualised, planned, designed and executed to achieve the goals and requirements set by the sponsor organisation for customer vision, values and culture. This includes identification of the requirements related to customer vision, values and culture, as well as development and implementation of a solution to realise the target requirements.

Existing operational support

Projects must be planned and executed to achieve the requirements set by the sponsor organisation for the completed project in terms of supporting the existing operations. It is imperative that the project team gains an in-depth understanding of the underlying business sector, and the aspirations of the sponsor organisation with regard to the project’s relationship to the existing operations early in the project life so that the project can be crafted and delivered to achieve those aspirations. The scope includes consultation with the existing operational units, ascertaining and prioritising the requirements related to the existing operations, shaping the project concept design and business case, as well as tracking of the project during the execution phase to ensure it meets the target requirements.

Stakeholders

A coalition of entities is normally engaged to plan and deliver a significant project, i.e. client, project manager, contractor, designer, vendors and subcontractors. Their relationships are governed by terms and conditions of the respective contracts. They are designated as project participants (or project teams) in this book and not stakeholders. The stakeholders considered here relate to the operation phase of the project, and include business partners, suppliers, customers and project operator. The purpose of this function is to determine their needs and requirements in the operation phase. Naturally, the project should determine the needs and requirements of stakeholders in advance, and set goals for their achievement, i.e. the project should seek to create competitive advantages in relation to stakeholders, and ensure that the project decisions, strategies, design and plans reflect cutting edge innovations for competiveness. The project’s performance with respect to the adopted goals and requirements will need to be tracked throughout the design and delivery phases, and verified during the commissioning, hand-over and close-out phase. Indicators are: (i) operators support; (ii) customers experience; (iii) suppliers and partners experience; and (iv) external stakeholders.

Operators support

The operator normally takes over the project at the end of the commissioning phase with the responsibility to run it, produce and deliver the proposed goods and services to the target customers, meet the project’s financial commitments, and attain commercial and operational success. In order to fulfil their role effectively, operators may specify certain requirements or features and functions needed to enable them to run the project effectively and meet the respective customers’ needs and aspirations. It is thus critical that the project team gains a close understanding of the operators’ requirements and determines the related features and functions, reflecting these in the concept design and the project business case. A performance target should also be adopted based on the criticality of this indicator to the business success. A high target will indicate that meeting the operator’s requirements is pivotal to the project commercial and operational success. The project team will need to ensure that the scope for the operator’s support is properly defined and implemented during the design and execution phases. The actual performance with respect to meeting the operator’s requirements should be documented and verified during the commissioning, hand-over and close-out phase.

Customers experience

Every project will have customers or end users whose experience during the operation phase will have a profound influence on the project’s success or failure. A project that is created to provide a new experience to existing customers, including addressing the bottlenecks and shortcomings frequently experienced by them, will need to pay a high degree of attention to the customers’ feedbacks, complaints or emerging needs and requirements from the start. Customer satisfaction is also a key success factor in projects that aim to improve the sponsor’s business competitiveness by providing new choices to their customers, or improving their experience in other ways. Thus, it is imperative that the project team gains an in-depth understanding of the requirements for meeting the planned customers’ experience and the related performance target, then proceeds to ensure that these requirements are reflected in the project concept design and its business case, followed by tracking their fulfilment during the design, procurement and execution phases. As an illustration, in a toll road project, it is far more convenient for the road users to travel through toll gates unhindered and pay the toll electronically. The scope for e-toll collection needs to be defined and incorporated into the project business case/plan. In general, the scope includes consultation with the sponsor (or current operators), customers and expert consultants, followed by articulation of the related requirements, development and execution of a solution to satisfy the requirements, and meet the respective performance target.

Suppliers and partners experience

Most industrial projects need supplies during the operation phase in order to produce the proposed goods and services, and deliver these to their customers. They also need to work with a selection of partners, such as distributors, resellers, agents and so on. Some projects are in fact created to fit into an existing supply system or be part of an existing network of partner operations. Even if the project does not seem to have an explicit view of suppliers or partners (e.g. where projects are first of their kind), it is incumbent upon the project team to determine who should be considered as target suppliers and partners, what sort of experience will be provided for them, what will be the key factors to entice them to forge commercial relationship with the project, and so on. For example, an airport must plan the sort of experience it wishes to provide to airlines who could be considered their partners. The project will need to carefully consider the sort of experience they wish to provide to their suppliers and partners (e.g. seamless digital integration of the supply chain), and respond to the respective requirements right from the outset. The scope includes consultation with the sponsor, suppliers, and partners, identification of needs and requirements, development and execution of a solution to satisfy these needs. The project’s performance with respect to suppliers’ and partners’ experience should be assessed and verified during the commissioning, hand-over and close-out phase.

External stakeholders

Typical external stakeholders during the operation phase are product or facility users, government agencies, the media, local community and various interest groups. For example, a major urban highway will impact the road users, the neighbouring residents, and the local environment; also, it has ramifications in terms of the local economy. To be a good corporate citizen, the road operator must take into account the views of the motorists, as well as the local community, the media and relevant interest groups. Many of the demands and expectations expressed by the external stakeholders may relate to the actual operation; some will relate to the project’s existence (the underpinning facility). It may not be feasible to meet all demands and expectations of external stakeholders. Besides, some of the demands and expectations may be found to be opposite to others. The project team needs to identify and balance the external stakeholders’ requirements, prioritise these and set goals for their delivery in an optimum manner. The scope includes consultation with the key external stakeholders, identification of demands and expectations, balancing and prioritising the needs and requirements, development and execution of a solution to satisfy these needs (with particular focus on meeting the statutory and legal obligations). The project’s performance with respect to meeting external stakeholders’ needs and requirements should be assessed and verified during the commissioning, hand-over and close-out phase.

Supply Chain System

The focus of this function is on planning and establishing the supply chain system for the operation phase so that the project can start operating after commissioning. The supply chain system needs to integrate with the production system. The design of the onsite facilities to accommodate the delivery of supplies, including components, raw materials, fuel, catalysts and feedstock, form a core component of the project design. It is important for the sponsor/operator to outline the goals and performance requirements of the supply chain system at the outset (project creation phase), and include these in the project brief. This information will guide the project team to synthesise an optimum supply chain system, based on research and investigation of the available options. The concept design will illustrate the components of the supply chain system that form part of the project scope. The supply chain system is then defined further in the project implementation masterplanning phase, and its scope incorporated into the delivery contracts. During the execution phase, the supply chain system takes shape progressively until completion. The supply chain system is tested when completed, and its performance evaluated against the target adopted earlier. Indicators are: (i) project supplies; and (ii) warehousing & inventory management.

Project supplies

Project supplies include the following: (a) ongoing provision of the actual supplies of components, raw materials, fuel, catalysts and feedstock, as well as spare parts from the nominated suppliers; and (b) provision of onsite facilities to receive, process, store and feed the necessary supplies to the production system in a predetermined order. The onsite facilities needed will be dependent on the project design and the requirements specified by the project suppliers for each supply category.

Project supplies can be secured through supply contracts signed in advance with selected suppliers. Note that entrusting the supplies to a third party supplier does not remove the need for the onsite facilities, which forms a core part of the project. The onsite design of the supply system should be part of the project lay-out as a whole; it should define connection or receiving points, storage, sorting and handling arrangements, and so on. It is imperative that the sponsor/operator specifies the requirements, as well as performance specifications for the project supplies, at the outset so that the project team can search, develop and implement an optimum system, including consideration of the supply sources, design and construction of the onsite facilities, and training of the respective crews to manage the supplies and logistics.

Warehousing & inventory management

On many projects it will not be feasible, nor advisable, to apply a just-in-time process for the delivery and uptake of the supplies. A manufacturer may prefer to have supplies of components to cover at least a few weeks of production on their premises, as a risk mitigation strategy. This is particularly significant in terms of critical items, such as microchips or command systems, or engine parts, and so on. In today’s globalised supply chains, disruptions to supplies cannot be avoided. Even in the case of raw materials, some companies prefer to have enough supplies on site as a buffer against unexpected supply disruptions.

Thus, the warehousing and inventory management system is considered a core component of the supply chain system. Each project is unique; it must design and implement a warehousing and inventory management system that is fit for its needs. The design team will need to draw up performance requirements for the whole supply system, then proceed to design it holistically, and as part of that design define the warehousing and inventory management in line with the overall project design. The scope for warehousing and inventory management is then included in the project scope and delivered alongside other parts. The performance of the actual supply chain system, including warehousing and inventory management, is assessed during the commissioning phase.

Offsite Management

Successful operation of a project may be contingent upon parallel completion of all related offsite works, so that the project can be commissioned and start operating as scheduled. Identification, systematic planning and execution of the offsite works is a core component of the project strategic management. It may be assigned to a different team within the sponsor organisation, though in most cases, it constitutes part of the client/PM team’s responsibility. Indicators: (i) utilities and support projects; and (ii) training and induction of users/operators.

Utilities and support projects

Support projects comprise the works that are executed outside the project boundaries but critically impact the project under consideration. An example is the feedstock pipeline for a process plant, which may constitute a project in its own right, executed by a different team in coordination with the main project. Support projects typically relate to the supply of raw materials/feedstock, consumables, energy, water, telecommunications, transport links, workers’ camps and those that will take the output of the project to the customers, as well as treat and remove its waste and by-products.

The client/PM team must ensure that these works are completed in a timely fashion, in accordance with the project priorities. For this reason, coordination and management of this function is typically given to a manager for continued focus, and follow up with the respective teams in charge of such works, as well as suppliers, utilities, customers and authorities. In addition, the subject works and services must be performed as designed, and meet the relevant quality standards and the schedule. The role of the project team/offsite manager is to organise connection to the utilities, and engage contractors to perform the offsite works, including monitoring progress and quality of the works, continually liaising with the respective entities and managing the whole process, ensuring that offsite works will be completed and ready to come online in time for the project commissioning and start-up activities. The offsite manager will need to ensure that the agreed quality control/assurance processes and procedures are applied rigorously, and that the quality of the works and services delivered conforms to the specifications and the related contractual requirements.

Training and induction of users/operators

Training and induction of users/operators can be conducted in parallel to the project completion timeline. It can form the responsibility of a different team outside the project organisation. Prior to the completion of the project, the designated operating team should have received appropriate training, and be ready to participate in the commissioning and start-up activities as outlined already in Chapter 9 (Volume 1). Ideally, the operating team should have experience of operating similar facilities, and be receptive to hands-on training on similar projects being operated by the operator or others. Training can also be enhanced using simulators. The training scope must include the optimum operation of the facilities and systems, as well as quality assurance of the products and services, workplace health and safety, and environmental protection.

Project Strategic Alignment and Management Overview

Generally speaking, most projects embody new features and innovations that underpin their viability and sustainability. Such features often rely on cutting edge technologies embedded in the concept design and the project business case/plan. The project must deliver these features to satisfy the business and strategic requirements, and meet the project objectives. Not all projects succeed in achieving their target innovations for a variety of reasons, such as over ambitious goals, issues with technology scale up and other challenges. The project may also fail to focus on the realisation of the desired solution. Large projects are complex and multidimensional. Many assume a life of their own during the implementation phase, as the delivery dynamics tend to occupy the minds of the key managers and decision makers (Terrill, Emslie, & Fox, 2021; Terrill, Emslie, & Moran, 2020). The approach presented in this book should address many of these concerns if applied systematically. Figure 10-2 is a schematic representation of the method of approach to project strategic alignment and management in broad terms.

There is a risk that the ultimate solution delivered may well fall short of meeting the core requirements or aspirations of the sponsor organisation or the project owner. To mitigate such risks, it is imperative to plan and systemically execute the scope for project strategic alignment and management over the project life within an integrated framework. The client/PM team must also track the realisation of the solution progressively over the project life to ensure that the completed project is able to fulfil the business and strategic requirements (APMBoK7, 2019; Jaafari, 2004; Shimizu, 2012).

The framework in Figures 10-2 is further expanded into 6 interlinked processes to ensure the continuity of planning and delivery, i.e. from the initial analysis and documentation of the strategic needs and requirements, through to the actual scoping and its delivery, and verification to confirm that the requirements have been met. The framework acts as a dynamic recursive system, as the conduct of the scope in a given phase will yield new information that may require revision to the work done in preceding phases. While a certain amount of recursive activity is inevitable, it is not ideal to revise the work done in preceding phases routinely, as it creates confusion and leads to errors. When the project is rushed through its phases, recursive activities will tend to increase significantly.

Method of Approach to Project Strategic Alignment and Management

As stated already, many of the variables within this cluster are interrelated; a decision on one variable will impact the status of other variables. It is thus important to consider these variables collectively, and evaluate their cross impacts at each stage of the elaboration in the project life cycle. For example, customers vision, values and culture, existing operational support, operators support, customers experience, and suppliers and partners experience cross impact; these collectively form part of the project’s business model and its competitive strategy. The solution adopted must consider these variables collectively, and as part of a holistic approach. Such considerations must also guide the approach to planning and management of other functional areas.

The following processes will ensure that the project strategic alignment and management will achieve the required goals and targets:

Process A: Project Strategic Alignment Requirements, Standards and Performance Targets (Figure 10-3A)

Process B: Approach to Project Strategic Alignment (Figure 10-3B)

Process C: High Level Plan and Strategic Alignment (Figure 10-3C)

Process D: Strategic Alignment and Management, Design and Procurement Phase (Figure 10-3D)

Process E: Strategic Alignment and Management, Project Execution Phase (Figure 10-3E)

Process F: Strategic Alignment, Commissioning and Hand-over Phase (Figure 10-3F)

A brief description of each process is provided subsequently. It includes typical inputs, nominated tools and techniques and typical outputs. Figure 10-2 is intended to show the interrelationship of the processes within the life cycle framework for this functional area.

Requirements, Standards and Performance Targets

Figure 10-3A is a generic process for identifying, classifying and documenting the requirements, as well as adopting standards and setting performance targets for management of customers and markets, stakeholders, supply chain system and offsite projects. The process acts as a guide.

Inputs

The process starts by reviewing the strategic context, business goals and the sponsor’s aspirations, which may be extracted from the portfolio plan or from the sponsor’s strategic plan. Key information includes needs, requirements and expectations, project objectives and the related threshold values (financial, performance, and environment), perceived risks and constraints, enterprise environment factors, relevant organisation process assets, as well as regulatory requirements.

Various techniques are applied to research and document the business and strategic requirements under each of the following key result area:

business priorities, innovation and branding

alignment with the sponsor organisation's strategy

building of distinctive capabilities

customers vision, values and culture

existing operational support

operators support

customers experience

suppliers and partners experience

external stakeholders

project supplies

warehousing and inventory management

utilities and support projects

training and induction of users/operators

It is critical that the enterprise environment factors (EEFs) are researched and documented early in this process, as these have a critical bearing on how the project is shaped and delivered. Typical EEFs include the following:

Organisational context and culture (mission, values, ethics, policies and code of conduct)

Business processes and managerial infrastructure

Product performance and quality standards

Customers and market dynamics

Procurement and acquisition policies

Regulatory framework, health, safety and environmental standards

Labour laws and employment guidelines

Decision-making and governance framework

Risk management policies and databases

Preferred project information and documents management frameworks

The EEFs are particularly relevant to those projects that are initiated and executed within the sponsor organisation. Organisation process assets (OPAs) are also important, particularly in the case of large organisations with a regular portfolio of projects who typically have an in-house Project Management Office (PMO) with mandated approaches to project conceptualisation, planning and implementation. The OPAs include templates, contract models, risk and issue registers, and performance assessment tools that will facilitate a streamlined or standardised approach to management of projects. In some cases, the organisation’s PMO may provide a complete guide and a suite of policies and templates that need to be followed to plan and deliver projects, including processes, procedures and online tools. Many of the mandatory processes are often included in the organisation’s procurement guidelines. Typical OPAs comprise the following:

Frameworks and guidelines for different classes of projects, including approach to their definition, planning, approval, delivery and management;

Decision evaluation and criteria (e.g. triple objectives and the related threshold values), for each class of project;

Standards and regulations that must be complied with in all project endeavours;

Templates for scope statement, work breakdown structure, cost estimation, scheduling, risk analysis and reporting, and so on;

Standardised project implementation procedures and contract models; and

Project interface management procedures, covering accounting, human resources, legal and security requirements.

The OPAs provide the administrative framework within which a project can defined, approved, financed and implemented. The OPAs are generally intended to streamline and standardise the delivery of small to medium size projects. However, all or a selection of the OPAs may also be adopted for management of large complex projects.  In the case of major public sector projects, there are legislative and mandatory requirements in respect of governance, procurement, and contract management processes. Typically, government agencies need to demonstrate transparency, probity, anti-discrimination, commitment to environmental standards and information sharing. The suite of policies, processes and mandatory requirements will materially influence the manner a project can be conceptualised, planned and delivered. The strategic framework will need to be mapped and tracked according to the respective requirements (Government of South Australia, 2015; Alberta Health Services, 2005; NSW Government, 2021).

Tools and Techniques

Business model canvas

Research and analytical techniques

Interview and group brainstorming

Mapping techniques

Influence diagrams

SWOT and risk analysis methods

Expert judgement

As already described in Chapter 4 (Volume 1), a business model canvas (BMC) is created to characterise the underpinning business model of the project. The BMC provides a visual representation of the components of a business model that can aid the front-end planning of projects. It provides headings for gathering and processing information from the available sources (see Figure 4-3 in Volume 1 for an example BMC template). Typical section headings include the following (not exhaustive):

Value Propositions

Customer Segments

Channels

Customer Relationships

Revenue Streams

Resources

Key Partners

Key Activities

Cost Structure

The BMC creates a structured understanding of where the project sits in terms of the strategic context and business requirements. Ordinarily, much of the information required to draw up a BMC can be extracted from the sponsor’s strategic plan or portfolio plan (Osterwalder & Pigneu, 2010). The BMC can be updated regularly, and used as a reference document for tracking changes over the project life.

Outputs

Statement of requirements with respect to customers and markets, stakeholders, supply chain system and offsite management;

Targets set for management of customers and markets, stakeholders, supply chain system and offsite management and/or the associated variables; and

Recommendation on integration of the requirements into the project brief.

Performance Targets for Project Strategic Alignment and Management

Performance targets for project strategic alignment and management cover customers and markets, stakeholders, supply chain system and offsite management. At this stage, such targets are notional and aspirational. The targets will have to be confirmed during the project definition studies. Some of these functions, or the associated variables, may turn out as critical in specific cases, and thus may need a high performance target. For example, if customers and markets are pivotal to the project success, then a high target will be assigned to it, to ensure it will be managed proactively and systematically so that when the project starts operating it can fulfil the respective requirements. As stated before, the higher the assigned performance target, the higher is the capability required to meet that target. That is why it is important that the notional targets set in this phase are critically reviewed and adjusted later on, when conducting project definition studies and project implementation masterplanning. Targets should also reflect the characteristics of the project solution/business case, and the relevant situational factors.

Technical and Operational Performance Targets

Threshold values assigned to KPIs in each category of project objectives will serve as the technical and operational performance targets. For example, in a thermal power plant project, the maximum permitted stack emission of particulate matter or a specific pollutant (such as Sulphur Dioxide, SO2) can be specified as x parts per million, which the plant must meet in order to obtain an operating license from the relevant authorities. Alternatively, compliance with specific standards or regulations can be cited, instead of a specific emission target. Note that most standards often specify the minimum performance to be met. The project can adopt a higher performance target, e.g. a zero emission target, or a target that will be similar to the levels found in the ambient air, or those specified as safe levels by the World Health Organisation (WHO). See for example, the WHO Air Quality Guidelines (WHO, 2018).

Approach to Project Strategic Alignment and Management

Figure 10-3B is a generic process for developing an optimum strategy/approach to project strategic alignment and management. The approach should cover the life cycle management of the following functions: customers and markets, stakeholders, supply chain system and offsite management. The output from the preceding process is input to this process, as noted from Figure 10-3B. The suggested process is generic, and should be treated as a guide. The solution or approach to strategic alignment and management developed in this phase should be incorporated into the project business/case plan. It serves as a road map to meeting or exceeding the sponsor organisation’s needs, requirements and expectations.

Inputs

Typical inputs comprise the following:

Project objectives and threshold values

Enterprise environment factors

Organisational process assets

Statement of requirements on customers and markets, stakeholders, supply chain system and offsite management

Targets for managing the above functions

Opportunities for meeting these requirements

Perceived risks and constraints

Portfolio alignment considerations

Standards, laws, regulations and compliance requirements

Governance and reporting requirements

Policies and procedures (organisation process assets)

Timeline and milestones

Budget and finance considerations

Tools and Techniques

Typical tools and techniques are:

SWOT analysis

Conceptualising and design techniques

Planning and mapping techniques

Risk assessment

Benchmarking

Evaluation techniques

Expert judgement

Outputs

Critical review and adjustment of performance targets set for the functions and variables related to project strategic alignment and management

Strategy/solution to satisfy the customers and markets, stakeholders, supply chain system and offsite management requirements

Recommendation on applying the strategy, and its integration into the project business case/plan (solution)

Concept design

Provisional project budget and timeline

Performance targets assigned to each function or variable guides the formation of the strategy/solution for project strategic alignment and management. The devised solution should strike a balance in respect of meeting the targets adopted for individual functions and/or variables. As an example, if the project is designed to win market share and acquire a new class of customers by providing a unique experience to them, then the strategy should focus on its realisation, while also reflecting the other requirements. The solution developed should be reviewed by experts to ensure it will be able to win the target market share and new customers, aided by the activation and utilisation of the embedded innovative features and functions.

High Level Plan and Strategic Alignment

Figure 10-3C is intended to assist with the development of a high level plan (work package level) to realise the adopted strategy/solution. The outputs from the preceding process are input to this process, as noted from Figure 10-3C. The high level plan for strategic alignment and management constitutes a component plan of the project implementation masterplan (PIM).

Inputs

Typical inputs comprise the following:

Project objectives

Project business case

EEFs and OPAs

Performance targets

Concept design

Recommended strategy and its realisation

Project budget and timeline

Opportunities, perceived risks and constraints

Applicable laws and regulations

Standards and compliance

Governance and reporting requirements

Tools and Techniques

Typical tools and techniques are as follows:

Review of historical information

Review of applicable laws and regulations

Planning and coordination techniques

Mapping techniques and influence diagrams

SWOT and risk analysis methods

Procurement options analysis

Value management techniques

Expert judgement

Outputs

Strategic alignment and management of the project in this phase

Review and adjustment of concept design and approach

Basic design and specification, incorporating the respective features and