Before we get going, we need to clarify some definitions.
Project, Programme and Portfolio Management (or ‘P3M’)
Let’s start with the definition of a project.
A project is simply a temporary endeavour undertaken to create a unique product, service or result.
A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and resources.
A project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish a singular goal. So, a project team will often include people who don’t usually work together – sometimes from different organisations and from across multiple geographies.
At its simplest level, project management can then be described as …
the application of processes, methods, knowledge, skills and experience to achieve project objectives.
Going one step up, programme management is, then, the coordinated management of multiple projects and change management activities to achieve beneficial change; for now, we will stick to project management as the simplified, summary tag for both highly related aspects.
Going one step up again, portfolio management refers to the centralised management of the aggregate project/ programme collective in order to achieve desired strategic ends. Portfolio management is fixated on project selection (what we choose to do), project prioritisation (an allocation of priority against finite resources) and project execution (how we do it).
Portfolio management as such, involves a deft balancing of strategic financial analysis and human/capacity analysis in the pursuit of optimal return-on-investment (ROI).
Portfolio management may look different for an AEC service business (focused primarily on how many external projects it can service profitably and to high service standards) to an end-client developer or publicly funded capital project office (focused on project affordability, outcome and investment-return).
The term P3M refers to the collective, and clearly highly integrated, concepts of project, programme and portfolio management.
Over the last twenty years, leading organisations have realised that P3M is: (a) very different from every-day, operational management and (b) a critical capability to build as a core, internal competence – as required to innovate, adapt, transform and generally stay ahead of competitors.
For reader ease, this blog series will use the term ‘project’ as a catch-all for the common thrust of this paper i.e. assurance as it pertains to projects and programmes (‘programs’ in the US) universally. Whilst there are practical nuances between applying connected assurance at a project and programme level, they are fringe in the context of the core thesis.
At its simplest definition, project assurance is an independent, unbiased, objective process that assesses the health and viability of a project in order to provide executive decision makers with an objective view on the project’s risks, cost:benefit analysis and predicted likelihood of success.
Figure: Error-related industry costs (Source: Call to Action, Get it Right Initiative)
At its best such regular assessment is timely and action-orientated such that the ‘right decisions are made at the right time’ to either terminate flawed projects or, more hopefully, to recalibrate the flightpath of a project such that corrective actions are taken and planned-for outcomes are optimised.
Connected assurance emphasises the link between sound P3M governance capabilities generally and the sister topic of ‘Information management’ (IM). Fundamentally, project decisions are predicated on data and information (documents, reports, drawings, BIM models etc.) so the collation, curation, dissemination and archiving of such (information management) must go hand in glove with the assurance discipline.
Assurance is only effective if project teams have access to all relevant project information and file-artefact in a timely and high-fidelity manner. This aspect is fundamental and at the core of aspirant digital transformation agendas in the AEC sector.
Further, we would add to this connected emphasis: knowledge management (KM).
Truly unique, behemoth projects are rare; rather the vast majority of AEC project are heavily replicable and even in highly esoteric, technical domains typically of a pareto nature i.e. of 80% common form and 20% contingent. A critical success factor for the vast majority of AEC firms, therefore, lies in executing the common aspects with consistent-excellence thus allowing the professionalism of team members to really focus on an end-client’s genuinely unique requirements. This all talks to the essential topic of knowledge management – the process of creating, sharing, using and managing an organisation’s collective knowledge.
For such organisations, integrating knowledge management and project management is a critical capability because it is essentially the nexus explanation as to how leading firms provide: (a) service level consistency and (b) ever-improving service development.
Simply put, it is the counter mitigation to a situation where firms suffer from: (a) having widely varying service levels – potentially just dependent on the capricious, human idiosyncrasy of the team member delivering it; and, (b) no organisational learning – equals – stagnant delivery models.
Huge demands will be placed on AEC firms over the coming decade; the fast- growing firm exemplars will be ones that understand such integrated KM and P3M and place this strategic capability at the heart of their corporate ambition. Those that don’t understand this aspect, or pay lip service to it, will remain forever amongst the mediocre masses and – ultimately – likely face existential demise.
Finally, connected assurance emphasises an action-orientation; ultimately, sound assurance derives actions (tasks) with clear accountable owners in order that projects can be steered back onto course. Such task allocations also provide an invaluable historical record as to end-to-end project decision making (as aligned to the ‘golden thread’ of information).
In summary, therefore, connected assurance is a holistic integration of:
Up next … Connected Assurance – why so critical?