Pre-Project PlanningPre-Project Planning

Lessons from theLessons from the Construction Industry InstituteConstruction Industry Institute

Michael Davis, P. Eng, PMPMichael Davis, P. Eng, PMPOntario Power GenerationOntario Power Generation

ObjectivesObjectives

Demonstrate the importance of pre-project Demonstrate the importance of pre-project planningplanning

Describe a pre-project planning processDescribe a pre-project planning process

Review some CII planning toolsReview some CII planning tools

Construction Industry Construction Industry InstituteInstitute

The Construction Industry InstituteThe Construction Industry Institute

Unique organizational modelUnique organizational model– 90 to 100 corporate members90 to 100 corporate members– Owners and contractorsOwners and contractors

Conducts research into best practices for Conducts research into best practices for construction projectsconstruction projects– Research done by academics under guidance of Research done by academics under guidance of

member project teamsmember project teams

Assists in moving the research into practice with Assists in moving the research into practice with implementation toolsimplementation toolsAll information is available in the public domain:All information is available in the public domain: www.construction-institute.orgwww.construction-institute.org

What is a Best Practice?What is a Best Practice?

A process or method that, A process or method that, when executed when executed effectivelyeffectively, leads to superior project , leads to superior project performanceperformance

CII Validated Best PracticesCII Validated Best Practices

Pre-Project PlanningPre-Project Planning

AlignmentAlignment

ConstructabilityConstructability

Design EffectivenessDesign Effectiveness

Materials Materials ManagementManagement

Team BuildingTeam Building

PartneringPartnering

Planning for StartupPlanning for Startup

Quality ManagementQuality Management

Change ManagementChange Management

Disputes ResolutionDisputes Resolution

Zero Accidents Zero Accidents TechniquesTechniques

Value of Best Practices:Value of Best Practices:Project Cost PerformanceProject Cost Performance

N=73 N=74 N=71 N=75

Cost Category: Greater than $5MM

Project Budget Factor vs. Practices Use Index

By Practices Use Index

Value of best practices:Value of best practices:Project Schedule PerformanceProject Schedule Performance

N=60 N=55 N=65 N=57

Cost Category: Greater than $5MM

Project Schedule Growth vs. Practices Use Index

By Practices Use Index

““Best” Best PracticesBest” Best Practices

Pre-project Pre-project

planning planning

Change controlChange control

Planning for Planning for startupstartup

Low Impact High Impact

LowImpact

Pre-Project Planning

Constructability

Design/InformationTechnology

Zero Accident Technique

Project ChangeManagement

Cost Savings

Schedule ReductionHighImpact

Cost Savings

Sch

edu

le R

edu

ctio

ns

Average Project Cost : $79MMAverage Project Duration : 99Weeks

Team Building

Medium Impact

MediumImpact

MaterialsManagement

Planning forStartup

Low Impact High Impact

LowImpact

Pre-Project Planning

Constructability

Design/InformationTechnology

Zero Accident Technique

Project ChangeManagement

Cost Savings

Schedule ReductionHighImpact

Cost Savings

Sch

edu

le R

edu

ctio

ns

Average Project Cost : $79MMAverage Project Duration : 99Weeks

Team Building

Medium Impact

MediumImpact

MaterialsManagement

Planning forStartup

Impact of Best PracticesImpact of Best Practices

Pre-Project PlanningPre-Project Planning

Pre-Project PlanningPre-Project Planning

That part of the project planning process That part of the project planning process that takes place that takes place beforebefore the project is the project is authorized to proceedauthorized to proceedSometimes called “front-end loading”Sometimes called “front-end loading”An An OwnerOwner responsibility responsibilityExpect to spend 10-25% of engineering Expect to spend 10-25% of engineering cost (up to 8% of total project cost)cost (up to 8% of total project cost)Assign project manager and best staffAssign project manager and best staffHave key stakeholders representedHave key stakeholders represented

Major Influence

Rapidly DecreasingInfluence

LowInfluence

Scope

Definition

Influence Expenditures

ConceptualAnalysisand R&D

Pre-ProjectPlanning

BasicData andScoping

ProjectAuthorization

ProductionEngineering

andProcurement

Construction EngineeringComplete

Turnoverand

Start-up

Le

vel o

f In

flu

en

ce

Pro

jec

t E

xpe

nd

itu

res

Project Life Cycle

Opportunity for InfluenceOpportunity for InfluenceOpportunity for InfluenceOpportunity for Influence

Pre-Project PlanningPre-Project Planning

Provides a basis for:Provides a basis for:

Informed business Informed business decisions – “doing the decisions – “doing the right project”right project”

Efficient project Efficient project delivery – “doing the delivery – “doing the project right”project right”

CII Pre-Project Planning CII Pre-Project Planning ProcessProcess

ORGANIZE

PRE-PROJECTPLANNING

SELECT

ALTERNATIVE(S)

DEVELOP APROJECT

DEFINITIONPACKAGE

DECIDEWHETHER TO

PROCEEDWITH PROJECT

Prepare

AnalyzeTechnology

EvaluateSite(s)

PrepareConceptual Scopes andEstimates

EvaluateAlternatives

AnalyzeProjectRisks

DocumentProject Scope

and Design

Define ProjectExecutionApproach

EstablishProject Control

Guidelines

CompileDefinitionPackage

Make

Decision

Select Team

DraftCharter

Pre-ProjectPlanning

Plan

Project

FORPROJECT

BusinessCase

Key ElementsKey ElementsKey ElementsKey Elements

Organize for pre-project planning– Create a team– Draft the charter for the planning phase– Plan the planning: tasks, deliverables, responsibilities, etc.

Select the alternative– Alternatives definition– Technology– Site/location– Conceptual scopes, estimates (-30 to +50%)– Evaluate the alternatives

FinancialHigh level risk analysis

Key ElementsKey Elements

Create project definition package– Project objectives and priorities– Scope and preliminary design– Risk analysis– Project delivery strategies– Project Execution Plan

Prepare the business caseSubmit package to approval authorityDecide whether to proceed or not

Project ObjectivesProject ObjectivesProject ObjectivesProject Objectives

Establish project success criteria - define the target

Sets priorities consistent with business drivers

Basis for decision making

Refined as project progresses

Conceive Develop Execute

+100%+100%

Ex

pe

cte

d

Pe

rce

nt

Va

rian

ce

Ex

clu

din

g C

on

tin

gen

cy

-50%-50%

Order of Order of MagnitudeMagnitude

ReleaseRelease DefinitiveDefinitive(Detailed(Detailed))

Most Probable Cost

+15%+15%

-10%-10%

+5%+5%

-2.5%-2.5%

Pre-Fund Authorization Post Fund Authorization

Scope Definition - Estimating AccuracyScope Definition - Estimating AccuracyScope Definition - Estimating AccuracyScope Definition - Estimating Accuracy

Elements of a Elements of a Project Execution PlanProject Execution Plan

Objectives & prioritiesObjectives & priorities

Scope and deliverablesScope and deliverables

Execution and delivery Execution and delivery strategiesstrategies

Organization and Organization and responsibilitiesresponsibilities

Cost estimate & budgetCost estimate & budget

Schedule & milestonesSchedule & milestones

PermittingPermitting

Safety, quality, Safety, quality, environmentenvironment

ProcurementProcurement

CommunicationsCommunications

Project controlsProject controls

Risk assessment and Risk assessment and managementmanagement

Commissioning and start-Commissioning and start-upup

CloseoutCloseout

Sponsor’s RoleSponsor’s Role

Verify correctness of objectives, priorities and Verify correctness of objectives, priorities and scopescopeReview and concur with execution strategyReview and concur with execution strategyVerify assignment of roles & responsibilitiesVerify assignment of roles & responsibilitiesConcur with estimate and contingencyConcur with estimate and contingencyConcur with schedule milestones and Concur with schedule milestones and completion datecompletion dateVerify acceptability of project controls and Verify acceptability of project controls and change management processchange management processReview and concur with risk management planReview and concur with risk management planApprove significant changes to the PEPApprove significant changes to the PEP

Planning OutcomesPlanning Outcomes

Understanding of objectives & prioritiesUnderstanding of objectives & prioritiesOptimum solution identifiedOptimum solution identifiedProject scope defined - what’s in/outProject scope defined - what’s in/outAlignment of participants and stakeholdersAlignment of participants and stakeholdersKnowledge of risksKnowledge of risksCredibleCredible estimate and schedule estimate and scheduleSound business caseSound business caseEffective, achievable project planEffective, achievable project plan

Pre-Project Planning ToolsPre-Project Planning Tools

PDRIPDRI

PProject roject DDefinition efinition RRating ating IIndexndex

Planning assessment tool developed by CII Planning assessment tool developed by CII through extensive research through extensive research

Evaluates how well the scope definition and pre-Evaluates how well the scope definition and pre-project planning has been carried outproject planning has been carried out

Provides an early indication of the probability Provides an early indication of the probability of project successof project success

Validated - tested against actual project resultsValidated - tested against actual project results

Proven effective on both small and large projectsProven effective on both small and large projects

PDRIPDRI

70 elements are grouped into 3 categories: 70 elements are grouped into 3 categories: – Basis of decision/scope (50%)Basis of decision/scope (50%)– Front-end definition/preliminary design (42%)Front-end definition/preliminary design (42%)– Execution approach (8%)Execution approach (8%)

Each element is given a weighted scoreEach element is given a weighted scoreThe more completely an element has been The more completely an element has been addressed, the addressed, the lowerlower its score. (Similar to golf: its score. (Similar to golf: lower is betterlower is better))Maximum score of 1000 Maximum score of 1000 Score of <200 correlates with more successful Score of <200 correlates with more successful projectsprojects

PDRI Score sheetPDRI Score sheet

Project AlignmentProject Alignment

Common, clearly Common, clearly understood set of understood set of project objectives is in project objectives is in placeplace

All project team All project team members working members working toward the toward the samesame set set of objectivesof objectives

Alignment ToolAlignment Tool

Developed from workshops, surveys, Developed from workshops, surveys, interviewsinterviews

Involved more than 100 experienced Involved more than 100 experienced individuals at all levelsindividuals at all levels

66 alignment issues analyzed for 66 alignment issues analyzed for correlation with project success over 20 correlation with project success over 20 projects projects 10 key factors identified 10 key factors identified

Factors Affecting AlignmentFactors Affecting Alignment

Stakeholders are appropriately represented on the project teamProject leadership is defined, effective, and accountableThe priority between cost, schedule, and required project features is clearCommunication within the team and with stakeholders is open and effectiveTeam meetings are timely and productive

Factors Affecting AlignmentFactors Affecting Alignment

The team culture fosters trust, honesty, and shared valuesThe pre-project planning process includes sufficient funding, schedule, and scope to meet objectivesThe reward and recognition system promotes meeting project objectivesTeamwork and team building programs are effectivePlanning tools (e.g., checklists, simulations, and work flow diagrams) are effectively used

Alignment ThermometerAlignment Thermometer

QuestionnaireQuestionnaire

Alignment ThermometerAlignment Thermometer

Other CII ResourcesOther CII Resources

Team BuildingTeam Building

PartneringPartnering

Change ManagementChange Management

Project Delivery and Contracting Project Delivery and Contracting StrategiesStrategies

Zero Accident TechniquesZero Accident Techniques

Benefits of Pre-Project PlanningBenefits of Pre-Project Planning

Fewer scope changesFewer scope changes

Increased predictability of cost & scheduleIncreased predictability of cost & schedule

Better definition of risksBetter definition of risks

Reduced probability of project failuresReduced probability of project failures

Improved operational performanceImproved operational performance

Better achievement of business goals Better achievement of business goals

By the time a project is released, the conditions for its success or failure are essentially established.

QuestionsQuestions