Sorting Out Requirements

Identifying the need for a project precedes figuring out what requirements will be fulfilled to determine successful completion of the project.

The homeowner of a heritage house looks at the southeast corner of their front porch and notices the clapboard siding is hanging by friction because the framing behind it has been eaten away by ants. The homeowner realizes the front porch needs repair and initiates a project in consultation with a local handyman. The handyman looks at the front porch and examines the extent of the damage and notifies the homeowner they need to find a general contractor because the repair work exceeds the technical difficulty the handyman is willing to take on. The homeowner consults with a general contractor about how to repair the front porch.

According to the Project Management Institute, requirements are a subset of activities that are part of processes to manage Quality.

In real life project management, requirements are going to be a driving force for conducting the business case analysis that leads to rationalizing the initiation of a project.

Back to our case study. The homeowner of this heritage house has only recently purchased the house. However, they have a history with the property and are prepared to undertake extensive renovations to meet a variety of requirements. These requirements include:

1) legal ceiling height in the basement suite for immediate rental income and future retirement,

2) electrical system upgrade to remove knob and tube wiring,

3) voluntary framing upgrade to move laundry to the second floor,

4) a new kitchen on the main floor,

5) renovate main floor and upstairs bathrooms,

6) remove and replace deteriorating windows – casements, frames, trims,

7) remove and replace exterior shingle finish.

In this context, the repair for the front porch is not a stand-alone project separable from the rest of the house, it becomes part of the overall planning to restore a 1911 house to stand for another 100 years.

Understanding the context for project initiation is essential to formulating correct requirements to fulfil project strategic goals and measurable objectives.

In the case of the disappearing front porch, the general contractor recommended setting aside the immediate concern of ant damage with mitigation response planning to limit further damage while moving ahead with comprehensive planning that addresses the big picture results for the whole restoration.

 

Affording Project Management

Project management skills, knowledge and experience are not specific to the kind of project that is being managed. Although there is domain specific knowledge that is important to successful project completion, in-depth knowledge of how to build and pour a residential foundation does not necessarily translate to in-depth knowledge of how to plan for the pour, and how to generate sufficient project related reports: invoices, progress, status updates, to ensure scope, time, cost, quality and risk are properly managed over the entire project life cycle. The work of project management is not the same as the functional work of completing project deliverables.

Project-management related tasks are not the same as project-related tasks. Consider how project-management related tasks are categorized and organized according to the Project Management Institute.

There are five process groups to organize project work activity:

1. Initiate,
2. Plan,
3. Execute,
4. Monitor and Control, and
5. Close,

These process groups provide a framework for the work of project management.

The topics of project management work are categorized into ten knowledge areas:

1. Integrate,
2. Scope,
3. Time,
4. Cost,
5. Quality,
6. Human Resources,
7. Communication,
8. Risk,
9. Procurement and
10. Stakeholder.

These ten knowledge areas provide a framework for identifying project management-related work in terms of pre-defined categories of work that require specific management-related processes and structure.

These process groups and knowledge areas are combined to identify key areas of project management activity. Combining these key areas of project management activity lead to a burst of 48 deliverables:

process_knowledge 48

The work of project management is further described in terms of the tasks to be completed in order to satisfy project management objectives. These project management tasks show a second burst of project management activity, producing a potential list of 227 actions arising to successfully meet project objectives.

NOTE: In this list I have included 20 actions arising for making the Business Case for rationalizing the project work. These processes focus on needs assessment, strategic goals and financial analysis to provide the foundation for moving forward with the project.

The practice standards of project management are based on these 227 processes of activity that lead to a well-management project.

A certified project manager must meet Project Management Institute qualifications demonstrating a combination of formal training, job experience, and a written examination. The work of a certified project management professional is governed by the ethics, frameworks, and practice standards of the Project Management Institute.

How is a small to medium sized residential construction company to avail themselves of project management expertise? They do not have the monthly stability of consistent billings to hire a project manager full time. What if there was a regional project management office set up as an independent consulting firm that made the services of project management professionals available to these construction professionals on a project basis? In this scenario, the project manager’s fees would simply be included in the pricing structure for the project.

The benefit to the construction professional would be the peace of mind knowing that all project management-related work was being managed by a dedicated professional. The cost of this service would be included in the project budget. The savings of professional risk management, planning, monitoring and control would more than pay for the services, in terms of successful scope, time, cost, quality and risk management. No more homeowners in tears because the project has gone 30, 50, even 100% over the estimate. No more residential renovations hoarded up, unfinished, awaiting homeowner re-financing efforts. No more anxious calls from the homeowner on the weekend questioning whether a trade or subcontractor has performed satisfactorily.

How can a small to mid-sized residential construction company afford not to attach a certified professional project manager to their project?

Re-thinking Approach

I have been working on re-writing my digital management system for managing residential renovations. This will be the fourth significant re-write since I started this project in 2014. This re-write is noteworthy because this time I am basing the system on Project Management Institute practice standards and frameworks.

The previous versions were based on setting up a robust tracking system for real-time project management on site. This system included collecting site data for time and cost on mobile devices. It allowed the contractor to process and issue weekly progress reports and status updates. It also ensured a thorough tracking of project work, making it easy to provide homeowners with a history of project work.

What was missing from this system was rigorous project initiation and planning as a prerequisite to project execution. We did not have a comprehensive system for integrating the processes of identifying the scope, time and cost of a project with a consolidated schedule and estimate. Our estimates were thorough, but they lacked traceability to planning documents and clearly defined deliverables. In addition, the protocols for our change order system were not clearly defined, leading to increases in scope without commensurate sign off on schedule and estimate.

The previous system was a database application, which is great for generating estimates and tracking data, producing invoices and reports. However, the preliminary steps, of initiating the project and planning, do not work in a database application (I have tried!) because the information is in a process of consolidation. Databases are great for pre-defined data collected in custom repositories. Development work needs more flexibility – for concept development, communication, revision, and finalization.

This re-write addresses this issue by creating an ecology of software applications that work across project management functions. My applications right now include: Word, Excel, OmniGraffle, Merlin Project, and Filemaker. I am also working to integrate social media as an integral part of project management activity – using online platforms to communicate, and ensure document versions are managed properly.

I understand now why a typical General Contractor in residential renovations would find it too difficult and time consuming to employ a digital management system in their operations for project management. I think this reluctance can be ascribed to two factors: 1) project management skills, knowledge and technology are a separate realm of function, distinct from construction skills, knowledge and technology; and 2) sophisticated uses of digital management systems for residential renovations exceed the typical level of day to day uses of digital technologies familiar to construction professionals.

In recognition of what I am learning re-writing my new version for a digital management system, and what I observe as realistic assessments of project management and digital management for construction professionals, I am developing a new approach for project management in residential renovations. This new approach would centralize project management activities (practices standards/frameworks, and management systems) as an independent consulting service with an online portal. Construction professionals would be able to hire an independent project manager, who would bring digital management technology as an integral part of of their service package. The construction professional would be free to do what they do best, with the most vexatious and time-consuming aspect of their work taken care of by an integrated professional.

The construction professional would not have to worry about hiring a full time project manager due to the flux of residential projects leading to slow/busy periods. The construction professional could hire a project manager attached to a dedicated project management office specializing in services to the small and mid-sized residential construction company.

The construction professional would have the burden of stress of managing project documents, communication, and reporting lifted from their concerns, while the homeowner would have the comfort and confidence knowing their project was being professionally managed to ensure scope, time, cost and quality were properly planned, executed, monitored and controlled.

Applying project management practice standards and frameworks to residential renovations

When I talk to project managers about applying project management practice standards and frameworks to residential renovations I see an invigorating spark of interest. Who wouldn’t want a better way to manage residential construction and renovations?

When I talk to homeowners and construction professionals I am told, “It will never work. It costs too much. It isn’t worth it.” I find this attitude interesting, in light of the fact that there isn’t a commercial renovation or construction project that would not ensure professional project management to protect investments, expenditures, and results. In residential property, because it is consumer-based clients, rather than industry-based clients, I have found a perplexing attitude toward the homeowner as client. On the one hand, the importance of managing consumer funds for residential projects is not treated with the same diligence and rigour as is applied to commercial funds. On the other hand, the weight of responsibility and risk clearly falls on the homeowner, who is least prepared to understand or manage that responsibility.

The fallacy of thinking is that the cost of managing residential projects is not worth the time and effort to be done professionally. This fallacy has been proven every time a residential construction project went over budget or schedule (ie. unplanned) in excess of 10%. There is no reason this situation has to continue other than misguided assumptions and unrealistic expectations of how residential construction and renovations need to be managed.

 

I respectfully disagree…

I was thrilled last week to set up a calculating table in my database to be able to process Estimate, Period Cost, and Accumulated Cost data in my new version for a digital management system for residential renovations.

This calculating table is at the heart of rigorous project monitoring and control. Collecting and analyzing this data provides information about project progress that is essential for decision support. In the construction industry, it would be unthinkable to implement a commercial or government construction project with a system for these calculations.

There are two situations where these calculations are used, and the ownership of risk is significant with regards to who invests the time and energy into managing them. In a quote or bid contract, the risk is assumed by the contractor. The contract bid reflects this risk, and the contractor uses cost calculation and prediction methodology to monitor and control project progress to ensure there are no issues emerging to jeopardize profitability.

In a cost-plus contract, the client assumes the risk. The client uses cost calculation and prediction to ensure their project is proceeding according to plan and that there is no threat to project completion within the constraints of funds available.

In commercial or government situations, where the client is well-informed and does not hesitate to hire their own project manager, there is no issue with the assignment of the task of collecting data and routinely calculating estimated cost to completion and gain/(loss) values. Whoever assumes the risk assumes the responsibility of protecting their interests in the relationship.

In the private sector, where the homeowner is the client, this system breaks down. In residential renovations, it breaks apart and results in the perpetual problem of project overruns, fund depletion, and homeowner stress. Even when projects are ‘successfully’ completed, it is often because the homeowner was able to access additional funds over and above the worst case scenario predictions.

Even wealthy homeowners can get into trouble funding their custom home build or residential renovation. I have heard stories from more than one contractor of wealthy homeowners, faced with inexorable project overruns, break down in tears when the contractor presented them with a project invoice.

The assumption in the private sector, with residential construction, is that the homeowner is going to: 1) be knowledgeable enough to assess a bid quote for a residential renovation and trust the contractor to assume the risk; or 2) be knowledgeable enough to manage a cost-plus contract and assume the risk. In the first case, a well-known situation arises. The homeowner signs a contract for a bid or quote price. The contractor starts work and discovers a situation that is not covered in the bid/quote price. The contractor has to add scope, time, cost, and risk to the project in order to complete the work in the original contract. The homeowner has no choice but to sign off on the increase. In this situation, the protection from risk for the homeowner is an illusion. If the work is not covered in the original contract, the contractor is under no obligation to increase the scope under the current contract price. However, because there is now a pre-existing agreement and work is underway, the homeowner does not feel they have a choice to seek second opinions or re-bid the original contract.

In the second case, the homeowner is not experienced enough in the residential construction or project management to manage a cost-plus project. The entire contract relationship rests on the homeowner’s trust that the contractor is going to manage the work on their behalf. But rarely has the contractor explicitly priced the work of project management into the cost-plus contract. Because, in this contractual arrangement, the risk is on the homeowner, not the contractor. Technically, the contractor does not have a vested interest in managing the project. In fact, the contractor has a vested interest in not investing time and energy into project management.

At the heart of this situation is the question, “Who is managing the project and who is going to pay for it?” This question leads to additional questions, “What practice standards and frameworks rationalize the project management-related work?” and “What actually work is being done to manage the project?”.

At present, the way the industry is set up, both cases work against the interests of the homeowner. At the same time, according to the CMHC, the homeowner is responsible for managing either of these scenarios in their own interests. What the CMHC does not address is that homeowners are utterly unprepared to manage these relationships and the real project work that needs to be carried out. What the entire industry fails to grasp is that the cost of residential construction, governed by increased labor and materials costs, as well as more stringent building codes goes far beyond a $10,000 deck or a $100,000 new home. Any residential construction project represents a significant outlay of funds and inconvenience to the homeowner.

The argument that residential construction does not need professional project management and rigorous schedule and cost oversight is not supported by the reality of impact of risk to homeowners of unsuccessful residential projects. It is time to change these assumptions. No homeowner should be reduced to tears when they receive the invoice to pay their contractor. And no contractor should have to endure the stress and anxiety of knowing this is going to happen.

 

Beginning at the beginning

I visited a new site yesterday with my colleague, a seasoned contractor in the war against rotting porch framing in Vancouver. The house we visited was built in 1911 and clearly showed its history of budget renovations that did not stand the test of time. The homeowner had called my contractor in to look at a leaking window on the second floor and rotten stair posts at the front of the house.

As we approached the house we could see an orange tarp gently flapping beneath an east facing window. We rounded the corner and could see front porch posts that had originally been built with plywood to replicate heritage style cladding. When we looked up, the deck overhang showed evidence of water flowing into the soffits.

The homeowner came out to meet us. My contractor introduced me as a project manager. The homeowner immediately dismissed the need for my services. In her opinion there were just minor repairs to fix the leaking window, the rotting stair posts and the leaking juliette balcony. I sighed. It reminded me of the time a property owner gestured to a long hallway wall and asked us to put up a row of multiple coat hooks. She asked, “It shouldn’t cost more than a cup of coffee, should it?”

Bringing project management into residential renovations is not going to be an easy process. It involves changing pervasive perceptions about the cost and complexity of completing successful projects. Even though typical residential renovations can cost more than a new car, there is a pervasive attitude that it is not worth it to actually manage a residential renovation. By comparison, people do not hesitate to hire a wedding planner for events that cost far less than a residential renovation. And weddings are not governed by municipal building codes, involve assets in excess of $1 million, or involve the safety and security of shelter, finances and legacy.

The reason this homeowner had called my contractor in to look at her house was because she had seen him working on her neighbour’s house, repairing exactly the same issues. From the predecessor project, we knew how complicated these kinds of repairs can get, when there is water damage inside the roof, decks, soffits, ceilings, and walls; when there is visible rot in framing members, and when there are electrical junction boxes rated for interior use clearly exposed to rain.

In my opinion, there is no project too small that can’t benefit from adequate planning. Certainly the production of documents and analysis for a small project is not going to match what is required for a house lift or raising a roof. At the same time, when water leaks and rotting framing are involved, it is well worth the time and effort to properly plan the life cycle of the project, scope the work and assess the risks before proceeding.

Project Influences over Time

There are well known influence trajectories that play out over the timeline of a project.

If a project timeline is seen as a storyline, it can be understood as having a beginning, middle and end. Each of these phases of the storyline have certain characteristics and qualities associated with them.

In the beginning, stakeholder influence is at its highest. It is essential to understand the strategic goals of the stakeholder to ensure project deliverables fulfill acceptance criteria. Understanding stakeholder acceptance criteria involves thoroughly assessing and analyzing stakeholder needs. This thorough assessment and analysis ensures clear articulation of project goals and objectives, which in turn, determine project deliverables and acceptance criteria. As the project progresses, stakeholder influence decreases because fulfillment of acceptance criteria conforms to stakeholder strategic goals.

In the beginning, likelihood of project success is low because the risk of unknown project impacts is highest. Over time, as project work meets stakeholder acceptance criteria and project work is completed, the likelihood of project success increases due to positive project impacts.

In the beginning, the cost of change is lowest because there is no project work completed. As project work is completed, the cost of change increases because completed project work may need to be revised or removed. The cost of analyzing the impact of changes increases as the project nears completion because there is increasing parts of project work that is likely to be impacted by the change, leading to increased time and effort analyzing and predicting change impacts as well as the possibility that completed project work will have to be re-done to accommodate the change.

In the beginning, cost of staffing is low because the focus of work is on planning, which requires a small team to coordinate plan development. Cost of staffing is at its highest during the middle of the project, when multiple process groups will be overlapping, and multiple knowledge areas will be active at the same time. Cost of staffing decreases at the end of the project as project work wraps up and project activity shuts down.

Based on this analysis of project activity, work put into planning project work at the beginning will have an exponential effect of reducing risk as the project progresses.

Communication Management for Residential Renovations

There are two key areas of activity that project management applies to residential renovations that are not typically explicitly discussed. These two areas make up the majority of project management-related and project-related work activities of the project manager. These two groups of work activities are: communication and documentation. This post discusses the work of communication management as applied to residential renovations.

The definition of a project is a temporary endeavour undertaken to create a unique product, service, or result. In the case of a residential renovation, a project is undertaken to create a unique product – the new build. When planning communication management it is essential to identify all the people who will be impacted by the project. In residential renovations, these people will include the Homeowner (who is both Project Sponsor and End-User), the Project Manager, Construction Professionals (Architect, Engineer, Builder, Contract Labor, Trades, Subcontractors), Suppliers, Equipment Rentals, Municipal Authorities (Community Planners, Heritage, Engineering, Trees, Sidewalks, Street Use, Inspectors), and Neighbours. All of these people will have an interest in the project. They have a ‘stake’ in the project, and, henceforth, are referred to as Stakeholders.

Every Stakeholder, or group of Stakeholders, has their own needs and interests regarding the project and its completion. Stakeholders are defined as people who can say or do things that have a positive or negative impact on project success. Understanding and engaging stakeholders is a critical function of the job of Project Management. The management of these relationships is called Stakeholder Management. Stakeholder management is essential to creating a project communication plan.

The nature of project work is to create change. Change processes require timely and appropriate planning, execution, monitoring and controlling, and finally closing of every phase of project work. These activities all involve communication with stakeholders. Different stakeholders have different needs for information. Accurate and specific communication requires careful documentation throughout the project life cycle. Documentation quantifies project work to ensure high-level project goals and objectives are aligned with detailed project tasks, project work performance is meeting baseline standards, and project product acceptance criteria is clearly measured, evaluated, and accepted.

To summarize, the purpose of a project is to produce change. In residential renovations the change resulting from the project is the new build. The change processes of a residential renovation impact different individuals and groups of people. These people are known as Stakeholders. Managing stakeholder relationships to the project is called Stakeholder Management. Stakeholder management involves communication about project planning, production, change, and final acceptance of the new build. Different stakeholders will have different relationships to the residential renovation, and, as such, have different needs and interests for communication about the project. The project communication plan addresses the needs and interests of the stakeholders.

Planning for a residential renovation

A residential renovation is a private project. It is undertaken at the behest of a consumer, the Homeowner. Because it is a private, consumer-driven project, it has not been afforded the standards and frameworks of oversight that are required for commercial, industrial or institutional projects. This is a glaring deficiency in the field and has put many Homeowners in jeopardy simply because they needed to repair or renovate their property.

Personal anecdote. We had just purchased our heritage home, which we planned to renovate. We had equity in the property we could borrow to finance the renovation. The property had numerous competing issues that demanded attention. We were new to renovations and did not know who to turn to. As we worked through our planning, we were given financial advice by a Construction Professional. Knowing what I know now, that advice was a blatant conflict of interest. First, the Construction Professional was not a professional financial advisor. Second, the Construction Professional stood to profit from the advice as it was used to rationalize financing the renovation project to the benefit of this Construction Professional’s company.

This experience has been a key contributing drive to work toward establishing professional project management in residential renovations. Many Homeowners face the same problem. They own their property and have access to some funds to make improvements. Often they are surprised at the amounts of money they are allowed to borrow. They have no experience managing these sums of money, nor controlling a project to ensure appropriate baselines are set and monitored for compliance.

Outside residential renovations, the protocol for authorizing a project is to produce a Business Case that rationalizes the overall benefit for doing the project. The rational for proceeding with a project includes answers to three key questions: 1) What is the strategic benefit of this project? What problems does it solve, what goals does it attain? 2) What are the risks and opportunities associated with this project? What are the known unknowns? The unknown unknowns? The possibilities? 3) Does financial analysis demonstrate project benefit? How much will it cost? How much will it cost to borrow money? How much will those borrowing costs amount over time? What financial benefits accrue?

Working through answers to these questions has the effect of clarifying project definition and priorities. This work is not easy and it requires a rigorous, honest investigation. It involves research, soul-searching, family interests, employment, property values, lifestyle, risk assessment. A typical Homeowner is not going to have the skill, knowledge or experience to carry out this work. A well-researched Business Case will include expert judgement, environmental conditions, and organizational assets.

Homeowners, need, and deserve, the support of a project management professional to ensure the information they gather and review is valid and verified for decision support. These processes require a systematic approach to managing the processes of questioning, research and data gathering, synthesizing data, identifying key points for discussion, and, eventually coming to their own conclusions about what is their best course of action.

 

Symptoms of communication problems on a residential renovation

The Project Manager is responsible for continuously assessing project communications for signs of breakdown. Typical signs that communication breakdowns are occurring include:

• Lack of clear project charter defining project priorities, vague scope statement, inadequate deliverables definition, problematic schedule sequencing and time allotments and priorities resulting in missed deadlines;
• Regular project meetings are necessary to ensure cohesive project stakeholder relationships and project awareness. Missed meetings are a signal the meeting objectives are not clear and that project priorities are not properly understood;
• It is easy for Homeowners to feel ‘left out’ of their own residential renovation, especially when external requirements have increase project scope, schedule and costs. This feeling is indicative of inadequate communications ensuring Homeowner participation;
• In residential renovations, issues of communication arise from both the use of face to face communications and email. On the one hand, information and decisions from face to face communication needed to be confirmed by email and formal authorization. On the other hand, difficult technical or other project-related issues likely need face to face communication to allow for discussion and problem solving before committing anything to writing. When any stakeholder has a feeling of dread prior to communicating, this is a bad sign for the health and well-being of the project.