1.01, 1.02 introduction to real estate project management 1

Trainings by Vidya Bhagwat

Chetan Thakre

PMP, BE, MBA, PGDPC

Real Estate Project Management

Facilities Management Construction Management

Residential Commercial Retail Hospitality Industrial

Effective Project Management

Indian Real Estate Success Stories

OBEROI REALTY

Target : The firm has carved a niche for itself in the Mumbai market with upper end of the market segment.

Strategy : The company extensively out-sources work to leading international and domestic consultants in the areas of architecture, design, engineering and construction to achieve international quality and styling


SOBHA DEVELOPERS

Target : residential projects for families and contractual projects for corporate, especially in the south market.

Strategy : This means that the company has in-house possession of most of the competencies and resources required to deliver a project from conceptualisation to completion. Backward integration includes an interiors division with one of the country’s largest wood working factory, a metal works and glazing factory, and a concrete products factory. These help it to lock in higher margins end-to-end by achieving cost efficiencies.

ASHIANA HOUSING

Target : The company mainly focuses on group housing for the middle-income group and retirement communities for senior citizens in Tier-2 and Tier-3 cities such as Jamshedpur, Jaipur, Bhiwadi and Ghaziabad.

Strategy : Ashiana Housing is near debt-free firm in the real estate sector that records high return ratios. The company’s business model is based on five strategies — low capital employed, land is raw material, in-house construction capabilities, direct sales team and facilities management.


Key Drivers For Professional Approach For Real Estate Project Management

Growing customer expectations

Industry competition and external pressure

Shift from unorganized to organized industry

Entry of foreign players

Inner Drive To Grow

COMMON THREAD Market focus

Successful execution of projects consistently in line with corporate strategy.

Strong brand association and trust that they share with their target customers


Consistent Project Execution In Line With Corporate Strategy Is Key For Successful Real Estate Company

Why You Must Take This Course

Concepts: Project management is the backbone of any real estateindustry. Hence you are directly or indirectly responsible for projectsuccess in your organization.

Uniqueness: Project management processes are different fromconstruction management (technical processes). As a good realestate professional, you must have knowledge both areas.

Interdependence: Project is series of several inter-dependent tasks.You might be responsible for certain task(s) but your actions havewider implications on the project. You must clearly understand thismany to many relationship.

Best Practices: This course material is based on PMI’s ® (ProjectManagement International) best practice framework. This globallyrenowned and widely successful project management methodology.It will give you clear understanding all dimensions of real estateproject management.

How This Study Material Is Going To Help You

This program trains you for leadership in managing real estate and construction projects. You will have far superior project management knowledge than those who have not completed this course. Some of the key benefits :

Effective project phasing to have better management control

Developing work plan and managing resources (time, budget,

information and project staff)

Controlling quality

Effective risk management

Effective allocation of responsibilities and monitoring work

Effective site organization and administration

Effective people management and managing team dynamics

Program Content

Module 1 Fundamentals Of Real Estate Project Management

Chapters

01 Real Estate Project Management Scenario In India

02 Introduction To Real Estate Project Management

03 Project Management Process Groups & Knowledge Areas

Program Content

Module 2 Essential Knowledge Areas For Real Estate Project Management

Chapters

04 Integration Management : One View For Project Success

05 Scope Management : Delivering Promise

06 Time Management : Managing Delays

07 Cost Management : Managing Money

08 Quality Management : Gateway For Customer Satisfaction

09 HR Management : Managing People On Project

10 Communication Management : Right Information At Right Time

11 Risk Management : Proactive Issue Management

12 Procurement Management : Effective Supplier Management

13 Stakeholder Management : Managing People Influencing Project


Chapter 1 Real Estate Project Management Scenario In India

Current status of real estate & construction industry in India

The second largest economic activity after agriculture and provides employment to about 33 million people

India's Construction industry has grown at a Compounded Annual Growth Rate (CAGR) of about 11.1% over the last eight years

Massive infrastructure investment and rapid rise in housing demand are prime movers

Source: Economic Survey 2008-09 and IMaCS analysis

Profile of people employed in the Building, Construction and Real Estate Sector

Forecasted Demand Of Project Management Professionals In Indian Construction Sector

Project management practices in Indian Real Estate and Infrastructure sector are not well developed . Hence the project delivery performance is also low.

Project Success Rate Of Various Key Industry Sectors In India Against Scope, Schedule & Budget

Key Reasons For Failure / Delays In Various Industry Sectors In India


Chapter 2

Introduction To Real Estate Project Management


What Is Project ?

Project is a temporary endeavour undertaken to create a uniqueproduct or service.

• Example : construction of building, construction of fencing ,

installation of facilities management .

• But maintenance work for the building or facilities

management is not project but called operations

management


The temporary nature indicate that a project has

definite beginning and end. Hence meeting dead

lines is extremely important for project success

Temporary dose not necessarily mean that the

project is short. Duration of project depends on

scope and complexity

Temporary dose not refer to product , service or

result created by project.

You can apply learning of this program to any project

management task you are doing in professional or

personal life


Project

Projects

To attain its objectives and

terminate

Start and end date

Operations

To sustain the business

Ongoing

Example

Construction of new

building

Example

Selling apartments in the

building

Strategic Management

Project Management Operational Management

Acquire tools for creation & augmentation of organization value. Bestow tools to worthy

persons to generate profit

Create Desired Value For The Organization Use created value to generate profit & revenue

Three Main Functions In An Organization

Real Estate Project Management is the application of knowledge,

skills, tools and techniques to execute projects effectively.

Project management processes: These processes ensure the effective flow of the project throughout its life cycle.

Ex : Building design & planning must be done before construction

Product oriented processes : These processes specify and create the project’s product. These processes vary by application areas as well as the phase of product life cycle.

Ex. All structural and engineering aspects must be taken into account while designing a building

What Is Real Estate Project Management

Key Project Management Skills

Knowledge : refers to what project manager knows about project management and real estate product management

Performance : refers to what project manager is able to do or accomplish while applying project management knowledge

Personal : refers to project manager’s behaviour when performing the project related activities includes attitudes, personality etc

Interpersonal skills : refers to project manager’s ability to communicate and manage other stake holders

How To Manage Projects Of Different

Complexities

Project Management Small companies managing one or few independent projects at a time.Example – Construction of single building

Program Management

Example - Multiple Projects In A Township"Live the dream“ – DSK Dream City

Program Management is the process of managing several related projects, often with the intention of improving an organization's performance

The action related to these interdependencies may include

• Resolving resource constraints

• Aligning organizational / strategic direction

• Resolving issues and change management

Program Management

Portfolio Management Example - Company Projects Under Various Categories i.e. Residential, Commercial, Industrial , FM etc “Highest quality standards for project execution, materials and services, collaborates only with the best-in-class associate” -Godrej Properties

Portfolio refers to projects, programs , sub portfolios and operations managed as a group to achieve strategic objectives.

The projects and programs or projects of a portfolio may not necessarily interdependent or directly related.

Focuses on ensuring that projects and programs are reviewed to prioritize resource allocation and that the management of portfolio is consistent with and aligned to organizational strategies

.

Portfolio Management

Project Management Office (PMO)

The project management office is a management structure that standardizes the project related governance processes and facilitate sharing of resources , methodologies, tools and techniques.

The primary function may include but not limited to

• Managing all shared resources

• Identify and developing project management methodology, best practices and standards

• Coaching, mentoring, training

• Coordinate communication across projects

• Role : supportive or controlling or directive

Project Management Office

Portfolios, Programs And Projects

PMO

Effective project governance assures constancy in project delivery and quality.

It is an oversight function that is aligned with organization’s governance model and that encompasses the project life cycle.

Example : Company which deliver very high end premium projects will need to make sure that all activities starting from contacting customer, quality of construction up to delivery of the property to customer must follow same high class standards

Importance Of Project Governance

Project governance framework includes

Construction quality acceptance criteria for contractors

Process to identify , escalate & resolve the issues

Formalizing relationship among project team & stakeholders

Project organization chart with well-defined project roles

Processes &procedures for communication

Project change control processes

Guidelines for aligning project governance and organizational strategy

Project life cycle approach

Organizational Influences On Project Management

As projects is delivered by project team using organizational resources, the organization has significant influence on project.

Ability of project team to deliver project successfully is influence by four factors

Organizational Influences On Project Management

Organizational Cultures And Style

Organizational Structures

Organizational process assets (OPAs)

Enterprise Environmental Factors (EEFs)

Organizational Cultures And Styles Shared visions, mission, values & beliefs Ex. Autocratic vs

inclusive management styles

Management cultureEx. Structured vs ad-hoc

Motivation and reward systems Ex. Employee as assets

vs employee as headcount vs mixed

Risk tolerance Ex. Early adopters vs followers of new

ideas

View of leadership, hierarchy & authority

Code of conduct and work ethics

• Organizational Communication Processes

PM AuthorityResource Availability

Project Budget Managed By

PM Role PM Admin Staff

Little Or None Functional Mgr Part Time

Organizational Structure : Functional




Little Or None Functional Mgr Part Time

Organizational Structure : Weak Matrix




Low To Moderate Mixed Full Time Part Time

Organizational Structure : Balanced Matrix




Moderate To High Project Mgr Full Time

Organizational Structure : Strong Matrix




High To Almost Total Project Mgr Full Time

Organizational Structure : Projectised

Organizational process assets (OPA)are the plans , processes, policies, procedures and knowledge bases used by performing organization.

Processes And Procedures : How to effectively manage current project

Corporate Knowledge Base : Stored information from previous projects

Use OPAs to improve the management of your project.

OPAs are often updated for future projects and also in the current projects.

Organizational Process Assets

EEF refers to condition not under the control of project team, that influence, constrain or direct the project. EEF are considered as inputs in most of the planning processes.

Internal or External

Positive or negative influence on the outcome

It is very difficult to change EEF during the course of your project.

You manage project within the constraint and guidelines established by the EEFs

Enterprise Environmental Factors (EEFs)

These include All industry and/or government standards

Company or organization infrastructure

Human resource guidelines and policy.

Authorization systems and guidelines.

Market and overall economic conditions.

Risk tolerance of stakeholders

Political climate

Technology available

Enterprise Environmental Factors

Important Enterprise Environmental Factors & Impact On Real Estate Construction Project Management

Trends – Market Expectations

More open spaces and efficient storage space

The great outdoors and amenities

Smart fittings for residential properties and multi purpose commercial properties

Energy efficiency and green construction

Semi-permanent modular construction

Safe construction

Increased specialization among builders

Joint ventures with land owners and investors to share risk and rewards

Modular construction

Trends -Property Demand & Supply

Impacts pricing and fund flow for project Property location plays important role Future market forecast is important

The government’s to relax FDI rules in the construction sector will increase competition and improve professionalism. FDI in the sector is estimated to grow to USD25 billion in 10 years

Rapid urbanisation bodes well for the sector . The number of Indians living in urban areas will increase from the current 377 million to about 600 million by 2031

India’s construction market is expected to be the world’s third largest by 2020. India construction market is expected to more than double to USD649.5 billion by 2020 from USD360 billion in 2010

Trends - Property Demand & Supply

Advancement In Construction Technology

Impacts

Designs

Methods Used For Construction

Material Used

Equipment Used

Using technologically advanced material in addition to conventional building material with following key considerations: Energy efficient Earthquake resistance Fire resistance Resistant to other natural calamities Environment friendly Good heat and sound insulation Versatility in constructions Rapid installation Lightweight but strong Minimal man power for construction Cost effective

Advancement In Construction Material

Few examples Fly ash bricks Building system using steel mesh, polystyrene core and

chipping concrete Technology using expanded steel mesh panels, polystyrene

beads & alleviated concrete Pre-stressed precast prefab technology using hollow core

slab, beams, columns, solid walls, stairs, etc Monolithic concrete technology using plastic form work Precast concrete panel Gypsum plaster reinforced with glass fibers building system

technology

Advantages of utilizing the modern construction equipments:

Increase the rate of output through work progress with the best effective and efficient methods.

Reduce the overall construction costs especially for large contracts.

Carry out activities which cannot be done manually or to do them more economically and much faster.

Eliminate the heavy manual work by human thus reducing fatigue and eliminates various other hazards and health issues.

Maintain the planned rate of production where there is a shortage of skilled or unskilled labor.

Maintain the high quality standards often required by present-day design and specifications (technical standards).

Advancement In Construction Equipments


Few Important Types Of Construction Equipments

Earthwork Equipments

Concreting Equipments

Hoisting Equipments


Examples Of Earthwork Equipments

Backhoe

Front Shovel

Dozers


Examples Of Concreting Equipments

Concrete Batching And Mixing Plant

Concrete transit mixers`

Concrete pumps


Hoisting Equipments

Boom Hoist

Tower Cranes

Mobile Cranes

Factors Behind The Selection Of Construction Equipments

Economic Considerations : Fund flow, cost vs benefits

Builder’s Organizational Readiness : Skills available to manage new technology, builder’s risk apatite

Site-Specific : Local availability of equipments and material , continuity of operation, weather conditions

Labour Consideration : Availability of right contractor

Company can acquire a construction plant and equipment through

Outright purchase : Long term use, long-term tax benefits

Renting : To meet short-term need to fill in for peak periods, special projects, or broken machinery

Leasing : An attractive option if equipment is needed for long term but don’t have the resources to purchase equipment outright


Green Buildings

Green building management refers to a structure that meet certain standards for reducing natural resource consumption and uses process that are resource-efficient throughout a building's life-cycle.

Efficiently using energy, water, and other resources

Reducing waste, pollution and environmental degradation

Effective management of waste

Restoration and protection of environmental quality

Enhancement and protection of health and indoor environmental quality for occupants

Reinforcement of natural systems

Internationally, voluntary building rating systems have been instrumental in raising awareness and popularizing green design. However, most of the internationally devised rating systems have been tailored to suit the building industry of the country where they were developed. In India a US based LEED (Leadership in Energy and Environmental Design) rating system is under promotion by CII Green Business Centre, Hyderabad which is more on energy efficiency measures in AC buildings.

Keeping in view of the Indian agro-climatic conditions and in particular the preponderance of non-AC buildings, a National Rating System -GRIHA has been developed which is suitable for all kinds of building in different climatic zones of the country. The system was initially conceived and developed by TERI (The Energy & Resource Institute) as TERI-GRIHA which has been modified to GRIHA as National Rating System

Green Building Standards In India

Green Rating for Integrated Habitat Assessment (GRIHA)


Chemical

Physical

Biological

Ergonomic

Construction Health and Safety

Awareness about health and safety is growing among Indian real estate players. Also the regulations are becoming more stringent. Following are key health and safety areas which should be taken into account while managing projects


Chemical Hazards

Protection against

Dusts, fumes, fibers (solids) : asbestos, lead, silica, cadmium

Liquids, mists : spray paints, cutting oil mists, solvents, cleaning acid

Gases, vapors : welding fumes carbon monoxide


Physical Hazards

Following are some examples of physical hazards Noise

Vibration

Temperature extremes and other adverse whether conditions

Locations with history of unrest


Biological Hazards

Exposure may occur during demolition, renovation, sewer work, work on air handling systems, or other construction work from contact with contaminated or disease-carrying Soil

Water

Insects (mosquitoes, ticks)

Bird, bat droppings

Animals

Structures


Ergonomic Hazards

Ergonomic hazards can cause painful and disabling injuries Ex Musculoskeletal Disorders (MSDs) . This following situation may causes these injuries:

Heavy, frequent, or awkward lifting

Repetitive tasks

Awkward grips, postures

Using excessive force, overexertion

Using wrong tools for the job or using tools improperly

Using improperly maintained tools

Hand-intensive work


Other Health Hazards

Living conditions and welfare facilities

Temporary accomodation

Food

Drinking water

Sanitary conveniences

Facility for clothing

Work related mental stresses

Alcoholism and drug addiction


Health & Safety Precausions

Meeting legal requirements

Eye protection

Respiratory protection

Ear protection

Face protection

Head protection

Hand protection

Foot protection

Body protection

Fall protection

Adequate breaks


Direct costsThe direct costs are insurance. These include medical costs and others workers’ compensation insurance benefits as well as liability and property-damage insurance.

Indirect costs Logistics cost to manage injured person Wages paid to injured worker for time not worked Cost incurred because of delays which resulted from accident Loss of efficiency and moral of other workers Costs for clean-up, repair or replacement and stand-by costs

Health & Safety : Costs Of Non-adherence


Reactive measures

Accident recording & reporting

Accident investigations

Proactive measures

H & s safety policy

H & s safety programme/plan

H & s safety induction/training

Health & Safety : Action Plans


IT systems play critical role in all the following areas related to Real Estate Project Management

Structural And Architectural Design

Project Scheduling

Site Operations Management

Communication Management

Financial & Head Office Integration

Customer Relationship Management

Use Of Information Technology In Real Estate Project Management


Many Real Estate companies are adopting construction project management software to Real time information for effective operational and cost control

System document management for effective communication management, access control and management information systems

Process standardization and effective governance

System options for real estate companies :

• Customized in-house system : Can be developed as per company needs but not scalable. Good for small companies

• ERP Systems : Costly but scalable, good for big companies Ex. SAP, Oracle

• Construction Specific Software : Designed for construction industry Ex. Projectmates, BuildTools Construction


Project Management Software

• There are a number of project management software tools available to help in the planning and control of large software development projects. – E.g. MS Project is a CASE software tool for Project Management– This software is available in the main computer room in CSIT

• Most tools include functions to plan, schedule and control, butdecision-making still has to be done by the project manager.


Project Management Software

• Benefits of project management software:– Calculate project schedule– Resource smoothing – Automatic generation of reports and charts

• Limitations of project management software– Allocation of resources to tasks– Estimation of tasks durations– Make decisions


Project Scheduling Software

Helps to define, manage, monitor and control project schedule. Also help to evaluate project scope and cost performance with respect to schedule. Ex. MS Project

Key Features Of Scheduling System:

Task driven schedule management (managing interdependencies, critical path)

Multiple resource views(time, cost, baseline, budget)

Collaborative team planner (access management, portfolio view)

Simulation and scenario analysis

Project information collaboration and reporting

Issue tracking


Site Operations Management Software

Real-time helps to plan, operate, control and analyse construction site operation . It will be a great help if the software is integrated with scheduling and back-office finance system Ex. BuildToolsConstruction , SAP

Key Features Of Scheduling System:

Work flow management (order approvals, issue escalations)

Supplier relationship (bids, contracts, purchase orders)

Work orders, stock and inventory control

Roster management (shifts, time & attendance, job costing)

Document management (store, view, version control , approve)

Integration with financial planning, PM and other systems

Real Estate Construction Related Laws & Regulations In IndiaIt is a complex combination of central, state and local laws and regulation. It is advisable to consult internal or external legal expert if project team need to decide any legal issue. CREDAI (Confederation of Real Estate Developer's Associations of India) is the apex body of the organized real estate developers/builders across India. Following is a list of few important laws which influence to real estate construction projects: Indian Contract Act, 1872

Transfer of Property Act, 1882

Registration Act, 1908

Special Relief Act, 1963

Urban Land (Ceiling And Regulation) Act (ULCRA), 1976

Land Acquisition Act, 1894

The Indian Evidence Act, 1872

Foreign Direct Investment (FDI) law

Each State has its own set of laws, which govern planned development, the two laws that exist in every State are the stamp duty and rent laws

List Of Labour Laws For Building & Construction Industry In India (check amendments also) Trade Union Act, 1926 Children Pledging of Labour Act,1933 Payment of Wages Act, 1936 Employers Liability Act,1938 Industrial Disputes Act, 1947 Employees State Insurance Act,1948 Minimum Wages Act,1948 Factories Act ,1948 Mines Act, 1952 Employee’s Provident Fund and Miscellaneous Provisions Act, 1952 Collection of Statistics Act, 1953 Apprentices Act ,1961 Employment Exchanges( Compulsory Notification of Vacancies) Act,1959 Motor Transport Worker’s Act,1961 Personal Injuries (Compensation Insurance ) Act ,1970 Payment of Bonus Act,1965 Contract Labour(Regulation and Abolition) Act, 1970 Payment of Gratuity Act,1972 Bonded Labour System (abolition) Act,1976 Equal Renumeration Act, 1976 Interstate Migrant Workmen (Regulation of employment and conditions of Service) Act,

1979

Project Life Cycle &

Project Phases In Real Estate Project

Project life cycle is the series of phases that the project passes through from its initiation to its closure.

Each project may be divided into many phases to improve management control.

Collectively, the project phases are known as the project life cycle.

These are unique to the industries

Each phase is marked by completion of one or more deliverables. Phase-end reviews are called phase exits, stage gates, or kill points.

Always Manage Project From Life Cycle Perspective And Not For Individual Phase

Project Life Cycle And Project Phases

Over View : Real Estate Project Life Cycle

The ability to influence the final characteristics of the project’s product without significantly impacting cost is highest at the start and decreases as the project progresses

Phase To Phase Relationships : Sequential

Phase To Phase Relationships : Overlapping

Predictive Life Cycle (Fully Plan Driven) : In this case project scope, time and cost required to deliver the scope are determined as early in the project life cycle as practically possible.

Ex. Single Phase Building Construction

Project Life Cycle And Types Of Project Life Cycle

Iterative And Incremental Life Cycle : Iterative life cycles are one in which project phases (also called iterations) intentionally repeat one or more project activities as the project team’s understanding of the product increases.

Ex. Multiphase building construction

Project Life Cycle And Project PhasesTypes Of Project Life Cycle

• Adaptive Life Cycle ( Change Driven Or Agile Methods) : Intended to respond to high level of change and ongoing stakeholder involvement. Adaptive method is also iterative an incremental but differs in that the iterations are vary rapid (usually within duration of 2 to 4 weeks) and are fixed in time and cost. Adaptive projects generally perform small incremental improvements that will deliver value to stakeholders

Project Life Cycle And Project PhasesTypes Of Project Life Cycle


03 Project Management Process Groups & Knowledge Areas

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Education

1.01, 1.02 introduction to real estate project management 1