STRATEGIES OF EFFECTIVE PROJECT DELIVERY SYSTEMS by YBhg

STRATEGIES OF EFFECTIVE PROJECT DELIVERY SYSTEMS by YBhg. Capt. Dato’ Seri Prof. Ir. Dr. Judin Abd. Karim Director General Public Works Department Malaysia 17 December 2008

Project delivery system 2 • formalized approach of implementing projects • customer satisfaction in meeting project schedule, quality and cost

Background 3 • Malaysia’s five year planning system – a leading strategy • Issues relating to limitations and inefficiencies in the project delivery systems have raised much concern from various parties • Need to make changes to the project implementation system to significantly improve the delivery of projects and their strategic impact.

Lessons from 8 th Malaysian Plan 4 Average length of delays per project: 171 days or ± 6 months 78% of these projects could not be handed over on schedule.

Factors contributing to delays • Land acquisition, relocation of squatters and utilities • Unsuitable sites • Lack of equipment, material & manpower • Variation orders • Delays in decision making • Problematic contractors 5

Lessons from 8 th Malaysian Plan • Recent study on project cost: cost overruns of 2, 541 projects of total value RM 8. 037 billion account for 3. 6% of the total value. • Study on causes of 229 VOs issued 6

7

Lessons from 8 th Malaysian Plan 8 • Many projects were approved and contracted with inadequate project briefs due to poor coordination among key stakeholders. • This led to changes in scope, which in turn, led to delays and cost overruns, poor quality, and operability of the completed infrastructure.

Lessons from 8 th Malaysian Plan • Individuals and firms with no or inadequate project management skills have been appointed by the Government to manage projects. This is because there were no competency standards for project management in Malaysia. 9

Lessons from 8 th Malaysian Plan • Wrong selection of project implementation strategies led to – poor quality, – lack of alignment between the parties, – over emphasis on contract management rather than delivery of project outcomes, – excessive claims for loss and expense – invariably long delays. 10

Experience in 9 th Malaysian Plan 11 • JKR encountered difficulties in obtaining the list of projects from client ministries • Coming up with a master schedule and resources planning was a problem • Delays at the pre-planning stage led to missed deadlines in launching of projects. • many projects had to be tendered out urgently based on Design & Build.

12 Strategies and Initiatives to enhance effectiveness of project delivery system • Strategies and initiatives focussed on removing key systemic issues which impair the Government’s capability to achieve strategic impact from projects • Acquisition Categorisation (ACAT), Gateway, PM Competency Framework, PM tools and Methodologies and Project Implementation Strategies

STRATEGIES AND INITIATIVES

14 Acquisition Categorisation (ACAT) Framework • methodology for categorising projects according to the project management complexity, technical difficulty, schedule, political importance, etc. • categorised either as complex or traditional projects • Most complex - ACAT I, ACAT II and ACAT III • Less complex – ACAT IV and ACAT V

15 Acquisition Categorisation (ACAT) Framework • six major attributes – Acquisition Cost – Project Management Complexity – Schedule Complexity – Technical Complexity – Operation and Maintenance; and – Industry readiness.

16 Acquisition Categorisation (ACAT) Framework • ACAT level to which the project is assigned has implications on – resource planning – delivery strategies – appropriate procurement and contracting strategies

Acquisition Categorisation (ACAT) Framework • align experience and competencies of project managers to the complexity and scale of projects • selection of contractors also to consider the competency level requirements of the project as determined by the ACAT Framework 17

18 Acquisition Categorisation (ACAT) Framework • Benefits: – optimise usage of resources – most appropriate project implementation strategy – increase level of transparency and integrity – increase maturity level of project management in Malaysia.

Gateway • trademark name belonging to the Office of Government Commerce (OGC), United Kingdom • developed to improve the delivery of major projects and program in UK. 19

Gateway 20 • a project assurance methodology that involves short, intensive reviews at up to six critical stages of the project/program lifecycle • Reviews undertaken by team of experienced peer reviewers who are not associated with the project • assess the project against its specified objectives at a particular stage in the project’s lifecycle 20

GATEWAY AND PROJECT LIFE CYCLE

Gateway • Reviews help to identify areas that may require corrective action before the project enters the next phase • validate the ability of the project to progress successfully to the next stage. • Reviews by external independent parties improve project governance. 22

Gateway • The World Bank, and many governments including United Kingdom, Norway, and Australia, have already put in place such systems 23

Project Management Competency Standards and Framework • project management widely practised, but yet to be established as a profession in Malaysia • no mechanisms to regulate the profession • no standards for project management • no means of assessing the competency levels of project managers 24

Project Management Competency Standards and Framework • project management need to be established as a profession within Malaysia. • UK, Japan, Singapore, India, Australia and Germany, have established PM competency standards that specify required competencies for traditional projects. • US, UK, and Australian Governments have recently developed internationally recognised competency standards for complex projects. 25

Project Management Competency Standards and Framework • JKR PM Competency Framework (PMCF) includes: – adoption of internationally recognised PM competency standards – establishment of Malaysian Project Management Association (MPMA) – establishment of PM a formally recognised profession with a career pathway 26

Project Management Competency Standards and Framework JKR Certifcation Level: - Qualified Project Practitioner - Registered Project Manager - Master Program Director JKR Standards: » adopting the AIPM standards » incorporation of JKR specific requirements, such as specific experience, training, seniority, and competency level 27

Project Management Competency Standards and Framework 28 PMCF – attempts to link ACAT with PM certification and with specific requirements – defines the level of certification required for each ACAT project type and specific requirements – establishes and defines the roles and responsibilities of PM and the career pathway for PM within JKR.

Project Management Competency Standards and Framework 29 • A formal plan for PM professional training and development that links to the competency levels is required in Malaysia. • Individuals involved in projects may not need to be formally certified as PM but do need the basic training in project management.

Project Management Competency Standards and Framework • JKR has initiated a short term program to overcome shortages of certified project managers • Officers in the higher management group to be Certified Project Manager Level 6 i. e the Master Program Director level • Some are also trained to be certified assessors to support the PM certification programme. 30

Project Management Competency Standards and Framework • As long term goal, a structured career management and development for the profession from fresh entry to the highest level in PM will be established • JKR professionals who have attained Level 4 Competency Assessment will be given the option to pursue their careers in PM at Level 5 and above. 31

JKR CAREER PATHWAY IN PM Competency Grade of service PMCF Certification Level Assessment Level 1 J 41 Level 2 J 41 Knowledge based exam Level 3 J 44 Level 4 (QPP) Level 4 J 48 Level 5 J 52 Level 6 J 54 Level 5 (RPM) Level 6 (MPD)

Project Management Competency Standards and Framework 33 • Succession plan is essential to maintain continuity in projects • Succession planning will be used to identify and accelerate the development of the candidates for the upgrading of their competency level • Pool of competent project managers to be created

Project Management Competency Standards and Framework 34 • Formation of MAPMA as a regulatory body of the PM profession to ensure PM services is provided by capable, competent and responsible professionals • MAPMA to own the Malaysian PM competency standards and responsible for PM certification • MAPMA to drive the professionalism of PM in Malaysia.

Project Management Tools and Methodologies 35 • JKR has benchmarked existing project implementation system in Malaysia against international best practices • Developed a range of PM and asset management tools, competencies, and methodologies to fill in gaps in the existing system

Project Management Tools and Methodologies 36 (1) Strategic Human Resource Management - matching human resources and skills available with the number, types and category of projects (2) Risk Management Methodology - based upon the Australian and New Zealand Standards AS/NZS 4360: 2004

Project Management Tools and Methodologies (3) 37 Communications Management - integrated approach to ensure clear, consistent and timely information conveyed to project stakeholders (4) Performance Reporting - use SKALA to monitor performance

Project Management Tools and Methodologies (5) 38 Customer Service Improvement Plan - to facilitate information exchanges between all stakeholders involved in the execution of projects - to drive improvements and the change processes within JKR

Project Management Tools and Methodologies (6) 39 Project Management Methodology Matrix - developed to suit JKR PM practices and will be the standard PM methodology in prescribing activities and tasks covering all the PM functions - provides a useful guide and checklist for PM

Project Management Tools and Methodologies 40 (7) Partnering - based upon trust, dedication to common goals, and understanding each other’s individual expectations and values

Project Implementation Strategy 41 • Design Construct and Maintain (DCM) – Contractor takes responsibility for design, construction and maintenance for five to ten years. – remove the problems of poor quality, schedule delays, and significant scope changes.

42 Project Implementation Strategy • Alliancing Contracts – a form of Public Private Partnership – Contractor works in an alliance relationship (one integrated team) with the client – Contractor’s profit is fully subject to his performance measured by Key Performance Indicators (KPIs)

Project Implementation Strategy

Implementation of strategies 44 • Established a Complex Project Management Division in JKR, known as PROKOM – to provide overall functional leadership in PM and to develop the key systems, processes and tools, and a change strategy to implement them in JKR.

Implementation of strategies 45 • Staged Roll Out - uses pilot projects to establish and prove the initiative - focus on initiatives that have the greatest impact

Implementation of strategies 46 • Expedite the central agency approval of the Alliancing and PPP contract • Use ACAT project classification system to classify projects at their initial approval in EPU and have the ACAT classification reviewed at key Gateway points

Implementation of strategies 47 • Formally establish Gateway process and pilot its use on high impact and complex projects. • Establish Malaysian competency standards for PM and formal recognition of PM as a profession. • Provide direct Government sponsorship and funding for the establishment of a Malaysian Asset & Project Management Association (MAPMA).

Implementation of strategies • Provide PM fundamental trainings to all Government employees involved in project management • Establish PROKOM project management office (PMO) to provide support in project implementation 48

Conclusion 49 • Present project delivery system need to be changed in order to minimise the possibility of project failure with respect to time, cost, quality, function and value for money • existing PM system is missing a number of key tools like Risk Management, Partnering, Alliancing contracts, ACAT classification system, Customer Service Improvement Plan, and Gateway

Conclusion 50 • Establishment of a supporting PMO to Strategic Business Units within JKR, Government Departments and Agencies will be the tipping point for – standardisation of systems and methodologies in implementation of projects, – simplification of project implementation process, – adoption of best practices to all projects, and – reduction of implementation risks.

Conclusion 51 • Government agencies, the private sector and individuals involved in the project delivery systems are important “actors” in realizing the objectives in any development plan. • Their strength, knowledge, ideas, experiences and skills must be synergised to ensure effectiveness of project delivery systems.