Procept - Lessons Learned: Project Management Case Study

Procept Associates Ltd

25 Mar 201406:17

Summary

TLDRThe transcript recounts a construction project in Northern Ontario's boreal forest, highlighting critical project management missteps. Initial underestimations led to escalating costs and delays. Key lessons include the importance of thorough planning, early budget monitoring, proactive reporting of issues, and strict scope control. The project's overshoot served as a catalyst for the organization to enhance its project management practices.

Takeaways

📘 Comprehensive Planning: The importance of thorough planning and site visits before project commencement was highlighted, as initial assumptions were proven incorrect upon the first site visit.
🔍 Identifying Requirements: The need to gather and understand all requirements from the start, including those from internal customers, was emphasized to prevent scope creep and budget overruns.
💰 Budget Overruns: The story illustrates the risk of not identifying budget overruns early, with the project reaching 80% of its budget before a reassessment was mandated.
🗓️ Reporting Regularly: The value of regular reporting on project progress, budget, and timeline was stressed to identify issues early and take corrective actions.
🚫 Scope Control: The necessity of a scope control process to manage changes and additional requirements was underscored to maintain project cost and schedule integrity.
🔄 Adapting to Changes: The project team's adaptability to include additional requirements from another internal customer was noted, although it led to increased costs and delays.
🔄 Quality Focus: Despite challenges, the organization's commitment to quality was evident as they ensured the product met the customers' requirements, even if it meant going over budget.
🔄 Stakeholder Management: The need to identify and manage all stakeholders, including internal ones with potentially conflicting or additional requirements, was a key learning point.
📈 Cost Curve Awareness: The cumulative cost curve was used to track spending, which should have been monitored more closely to prevent significant budget overruns.
🛑 Early Intervention: The story suggests that early intervention when issues are identified is crucial for project success, rather than waiting until financial constraints are hit.
📚 Lessons Learned: The organization used this project as a catalyst for improving their project management practices, demonstrating a commitment to learning from past experiences.

Q & A

What was the location of the construction project described in the story?
-The project was located in the boreal woods of Northern Ontario.
Why did the project team initially believe the project would be straightforward?
-The conceptual engineering, project planning, and business case were all prepared in the big city, and it seemed clear to those people preparing those documents.
What was the first indication that the project would be more expensive than planned?
-When the engineers in the Design Group visited the site for the first time, they realized that the site conditions were different from what they had expected.
How did the organization's quality orientation affect the project's cost?
-The organization was quality-oriented, so they continued with the project, ensuring that the product met the requirements of their customers, which led to increased costs.
What was the nature of the customers for this project?
-The customers were internal customers, not external clients.
Why did the project scope grow beyond the original plan?
-The project scope grew because additional requirements from another internal customer came to light during the design and site preparation phase.
At what point in the project did the team realize they needed to revisit the budget?
-The team realized they needed to revisit the budget when they reached 80% of the initial budget, which triggered a mandated requirement by the Board of Directors.
What was the final outcome of the project in terms of budget and schedule?
-The project was completed significantly over-budget and behind schedule.
What are some project management lessons that can be learned from this story?
-Lessons include the importance of more time and planning, early identification of budget overruns, reporting bad news early, and proper scope control.
What principle of project management is suggested for reporting on project progress and potential issues?
-The principle suggested is to report not only on progress against the plan but also on the expected time and cost at every reporting period.
How should the project team have handled the additional requirements from internal customers?
-The team should have followed a scope control process, identifying the requirements as proposed changes, assessing their impact on cost and schedule, documenting them, and getting them approved or rejected based on a justified business case.
What did the organization do after learning from this project?
-The organization used this project as a catalyst for significant improvements in their project management practices.

Outlines

00:00

🏗️ Project Planning and Execution Challenges

This paragraph narrates the story of a construction project in Northern Ontario, highlighting the importance of thorough planning and stakeholder engagement in project management. The project, initially deemed straightforward, encountered unexpected challenges and costs upon the engineers' first site visit. The organization, committed to quality, adapted to additional requirements from internal customers, leading to a project that significantly exceeded the original budget and timeline. Key lessons include the necessity for comprehensive planning, early identification of budget overruns, and the importance of stakeholder involvement from the outset.

05:01

📈 Scope Control and Project Management Improvements

The second paragraph delves into the consequences of poor scope control and the need for a structured approach to managing project changes. It emphasizes the importance of documenting and evaluating the impact of proposed changes on cost, schedule, and other project aspects. The organization learned from this experience, using it as a catalyst for improving their project management practices. The narrative suggests that early and regular reporting on project status, including potential overruns, is crucial for timely corrective action and maintaining project integrity.

Mindmap

Keywords

💡Construction Project

A construction project refers to the process of creating a new structure or improving an existing one. In the video's narrative, the construction project is set in the boreal woods of Northern Ontario, highlighting the challenges faced due to inadequate planning and understanding of the site conditions, which ultimately led to cost overruns and delays.

💡Conceptual Engineering

Conceptual engineering is the initial phase of a project where the basic design and feasibility of a project are determined. In the script, the project's conceptual engineering was prepared in a big city, far from the actual site, which may have contributed to the underestimation of the project's complexity and costs.

💡Project Planning

Project planning involves the organization and scheduling of project tasks. The video emphasizes that the project was approved with seemingly straightforward planning, but the lack of detailed planning and site visits led to unforeseen expenses and the discovery of additional requirements.

💡Business Case

A business case is a document that outlines the rationale for a project, including its costs, benefits, and risks. The script mentions that the business case for the project was prepared without full consideration of the site's conditions or additional stakeholders, leading to an inaccurate cost estimation.

💡Quality Oriented Organization

A quality-oriented organization is one that prioritizes the production of high-quality products or services. In the context of the video, despite realizing the project would be more expensive, the organization committed to delivering a quality product, which influenced their decision to incorporate additional requirements.

💡Internal Customers

Internal customers are departments or individuals within an organization who use the services or products created by other departments. The script reveals that the project team initially planned for one set of internal customers but later discovered another with different requirements, expanding the project's scope.

💡Cumulative Cost Curve

A cumulative cost curve is a graphical representation of the total costs incurred over the life of a project. The video uses this concept to illustrate how the project's costs escalated as more requirements were discovered and incorporated, deviating from the original budget.

💡Scope Creep

Scope creep refers to the uncontrolled growth of a project's scope, often leading to increased costs and delays. The script describes how the project's scope grew as additional requirements from internal customers were identified, contributing to the project going over budget.

💡Budget Overrun

A budget overrun occurs when a project's actual costs exceed its planned budget. The video script describes how the project reached 80% of its budget before a mandated review, leading to the realization of a significant budget overrun and the need for additional funds.

💡Reporting Bad News

Reporting bad news early is a principle that emphasizes the importance of timely communication of issues or problems in a project. The script suggests that if the project team had reported the potential for budget overruns earlier, they might have been able to take corrective action sooner.

💡Scope Control

Scope control is the process of managing changes to the project's scope to ensure it remains within the approved boundaries. The video script indicates that the project team lacked scope control, as they continually added new requirements without proper evaluation and approval, leading to cost and schedule overruns.

💡Project Management Practices

Project management practices refer to the methodologies and techniques used to plan, execute, and close projects. The script concludes with the organization using the lessons learned from this project to improve their overall project management practices, emphasizing the importance of continuous improvement in project management.

Highlights

The construction project was located in the boreal woods of Northern Ontario.

Conceptual engineering, project planning, and business case were prepared in a big city far from the actual site.

Engineers visited the site for the first time after project approval, realizing it would be more expensive than planned.

The organization prioritized quality, ensuring the product met customer requirements despite increased costs.

The project had internal customers with additional, unanticipated requirements.

The project scope grew due to new requirements, impacting the budget and schedule.

The project reached 80% of the budget, triggering a mandated reassessment by the Board of Directors.

A budget increase was approved, but the project still exceeded the revised budget and schedule.

The project completed significantly over-budget and behind schedule.

Lesson learned: More time and planning could have helped gather more requirements and stakeholders.

Identifying budget overruns at 80% is too late; monthly reporting should include future cost and time estimates.

Reporting bad news early allows for timely action and is considered good practice.

Scope control is crucial; each new requirement should be treated as a change request with an impact assessment.

The organization used this project as a catalyst for improving project management practices.

The importance of justifying additional requirements with a business case before integrating them into the project.

The project's challenges highlighted the need for better stakeholder engagement and requirement gathering.

The story emphasizes the value of early identification of project issues and the proactive management of scope changes.