Part 1

Project management for built environment businesses — The 4 pains (and how to cure them) 

Welcome to part one of our new series on project management. In this five-part series, we’ll focus on the key challenges architecture, engineering and construction design (AEC) businesses face when managing design projects for the built environment. 

Starting here with the main pain points we all face, in coming editions we’ll break these out and talk about why they’re important, their AEC-specific issues, and most importantly, how to solve them. 

Scroll down to read the whitepaper in full or download a free PDF.

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What’s in the whitepaper?

1

Portfolio planning — how to ensure you have enough staff for your work, and enough work for your staff, to meet the objectives and goals of your business as a whole

 

2

Project setup — the ability to quickly establish a meaningful skeleton of project information that will grow the body and muscle of the project in the right way

 

 

3

Resource and task management — the features of your management and reporting tools needed to ensure the anticipated utilization of your staff is achieved 

 

4

Project performance — the importance of measuring your projects’ progress through time, budget, and profit — in real time 

 

What’s better than designing the built environment? I think we can all agree, apart from cake and cuddles perhaps, that the answer is nothing. Architecture, engineering, and construction design businesses create our physical world and give us places to make the cake and have the cuddles anyway, so, you know.

That said, the nature of this industry is that it’s one driven entirely by projects. Projects are our business. And very detailed, very complex projects at that. Here, we’re going to check out the four big pain points of managing built environment projects, and what’s needed to ease them.

Portfolio planning

Portfolio planning can mean a lot of different things to a lot of different people. In this instance we’re going to think about it in terms of grasping your entire portfolio of projects and what that means to your architectural, engineering, or construction design (AEC) business as whole.

Firstly, there’s a need to be able to visualize and report on the particular elements of an operating AEC business. These elements are commonly broken down into:

  • Your opportunity pipeline
  • Your current work
  • Your ability to report on and analyze the work you’ve completed

So, we need some tools that help us quickly establish where the opportunities are — because you don’t know that much about them in their early phases. Then, as an opportunity progresses, we need to be able to embellish the project data with what we’re learning along the way. And eventually develop it to the point where we can establish a ‘go/no go’ on whether we actually pursue that project by submitting a proposal or a tender.

That’s really important because an AEC business is predominantly labor driven. You have to be able to project your labor capacity-loads into the future as accurately as you can. You need to be able to do that so you have sufficient lead times to hire suitable staff for the envisaged work to come.

For our built environment businesses, lead times to secure suitable staff typically take anywhere from six to 12 weeks. You need to know that well in advance so you can initiate the actual hiring of those people or reach the point where you can decide you need to outsource that work. You need to make an informed decision about it.

The crux of this pain point is that the AEC industry, by nature, requires you to have an understanding of your current portfolio and where it stands — because this is an industry that is project oriented and labor driven.

Your business is made up of projects, you need to know what those projects’ needs are, and the needs typically revolve around your labor and your sub-contracted labor. There are things like supplies to be considered every now and again, but it’s a very much labor driven business. Now, that’s good because it employs lots of people. But it’s also bad from the point of view that it means you have a heavy reliance on access to those personnel or staff that are needed. You need to ensure you’ve got people when you need them — that’s the whole deal.

Conversely, you need to be able to have a look at the labor capacity on the other side and say, ‘have I got enough work for the people I have?’ Both sides of the question are equally important to your business. Because you need to know how to gear the management drive of the practice so that you achieve what you’re looking to do. Maybe that’s growth. Maybe that’s maintaining the status quo of your business. And if you want to ensure that your practice doesn’t contract, you need to make sure that you can supply ample work for the staff you have.

That’s pain one — portfolio planning so that you have enough staff for your work, and enough work for your staff, to meet the objectives and goals of your business as a whole.

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Project setup 

In terms of the way you execute your project setup there are a few potential pain points you need to address. Firstly, your set up has to enable tracking the project from inception to completion. That’s tricky because, at project inception, there are varying levels of knowledge about the job you’re setting up.

The project may well be a lead you have through some association with someone and there’s a very small likelihood of that coming to fruition. However, you still need to know that, and you need to put it in the system.

Likewise, as you encounter projects you have a more detailed knowledge of, you need to have the facility to be able to store that knowledge in the database so you can then retrieve it in any way you wish in the future. That knowledge storage system needs to part of your project set up. So, it may be that:

  • You don’t actually know exactly where the project’s supposed to take place, but you’ve got an approximate price
  • You don’t know the pertinent details you use for analysis of existing engaged jobs, but you’ve got a location
  • You know when the project is planned to commence, and the location, but you have no idea of the scale and cost

Whatever the case may be, you need to have the ability — on every project you enter into your management system — to optionally track information, mandatorily track information, and ensure that all that information is in a format you can analyze. You need your project setup to have avenues in there to suit how much you know about the job. You also need to set up the project in such a way that you can divide or report on that information in myriad ways as the information appears. And that needs to be a nice, quick process. As quick as possible, in fact.

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As one example, if you’re a director and you’ve just been to lunch with a developer, — the developer’s talking about this shopping center that they’re looking to do, they’ve got funding available and all that sort of stuff. It’s promising enough that you need to track this project, but you know very little about it. It hasn’t even got a formal name at the moment; it just happens to be in a particular suburb and on some particular road. And so, you set up the project in your system, you name it, you put in what you know — which is not much. It’s how much that developer thinks your contract value would be worth.

In this case you’ve got an approximate start date, which could be massively out, but regardless of that, you want to be able to establish it in the system so it’s there with an associated likelihood — this means you can show the potential revenue and/or labor loads that may come off as a result of that job happening.

That’s a really quick setup that you need. Then, as another example, the antithesis of that is where you have a job where you know all the details. You know the full scope of work that you need to submit for it — either through your analysis of what’s required or the client’s requirements. Here, it needs to be fully set up even prior to your engagement of the project itself. As a proposal, it has to be pretty much ready to go.

On the other hand, this project might be within market sectors you’re looking to break into. Sectors that are new to you. Therefore, you don’t expect a very high win rate initially. And therefore, you don’t want to invest a whole lot of time on the project that you’re proposing.

 

Essentially, you want to be able to establish a meaningful skeleton of information for the project that gives you enough to review internally and is still enough to submit the appropriate documentation to the potential customers you have out there. So, in each of the cases above, set up has to be as quick and efficient as possible.

Additionally, that project needs to gradually conform to the shape of the project information you want by the time it becomes active (where practical and possible). That could quite likely be an incremental flow of information. It might be an initial flood of information. But in any particular way it’s forming, you need the ability to establish that quickly and then build on it as required. You want to be able to grow the body and muscle of the project on that initial skeleton in the right way.

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Resource and task management

The whole point of good resource and task management is to ensure the anticipated utilization of your staff is achieved. That utilization may well be calculated based on your need to make a desired level of profit, or to best cover the costs of the practice. Whichever it is, you need to ensure people are busy enough to make that happen.

You also want to try and make that resourcing — that allocation of work to people — as easy as possible. Because it’s an ever-moving target in the AEC sector. Our built environment industry is more than a little prone to things like delays and projects being brought forward. Hence, you also want to make sure your resourcing is able to cope with those project changes. It needs to have elasticity to cater for things like that.

Let’s say you’ve established the appropriate timings of the major parts of each of the jobs in your portfolio. You now need to have the ability to detail the internal and external outcomes/deliverables you want to achieve in the execution of each stage of each job. That not only gives you a way to track progress through those stages, it also gives you a way to ensure the quality completion of the work you need to do for each stage.

The other thing is, your resource and task management needs to be as visual as possible. Because you need to be able to read the data as easily and quickly as possible, and you need to be able to report on that as well.

I know, it’s a lot. But we are dealing with the major pains here, and they need to be addressed so we can get on with our built environment designing. So just breathe with me here.

So, what other wonders does your resource and task management system require? Well, to be good, it also needs to be capable of reflecting the collaboration that you want across different sections of your business. That might be between:

  • Business units
  • Physical offices
  • Different disciplines or role types
  • Etc.

You need to be able to allow that collaboration to happen, particularly as we move more and more into a global working world — which Covid had brought upon us pretty quickly.

If you don’t have staff in offices, if everybody’s working from home, there’s not that much difference between using somebody in Adelaide or using somebody in Brisbane. Likewise, the difference between using someone in London or someone in Edinburgh is very low. Not much chop between New York and Nevada. You get the drift. Time differences aside, there’s not a great deal to it. To cater for that, you need to know where you can locate staff that have the suitable availability for the work that you need done.

You also need to be able see which staff, with which skills, are where, from a couple of points of view:

  • From a project perspective — you need to be able to go into your resource management system and have an anticipated labor load done at a stage level so that you can:
    • look to satisfy that load across the areas of collaboration you have within your practice
    • see what burden that anticipated labor load has on the projected success of the job (if you’re going to go over budget, over schedule, etc.)
  • From an individual perspective — you need to look at your resourcing by person, because once you establish that there’s a particular staff member needed for a particular job, if that person is otherwise occupied, you need to see what’s occupying them in order to work out which work is the priority

Lastly, you need an ability for people to sit together (even if that’s virtually) and work on your resourcing, because there are many constraints to the allocation of staff. And typically, it’s a process that has to be governed. It’s often the call of the executive of a practice to decide whose project gets a particular, valuable resource, if there are two jobs they’re wanted for.

You need to be able to track the success and progress of all that, in detail, and on a per-project basis so you can see that you’re hitting milestones and you’re actually progressing through the micro level.

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Project performance

In the built environment industry, a successful project wants to hit three points. Those points form what I like to call ‘the project triangle’. Each corner represents:

  • Being on budget
  • Being on time
  • Being on profit

You want to hit all three of these corners otherwise you end up with a lopsided, structurally unsound (pun intended) shape. You want to achieve a budget and you want to achieve a scheduled timeframe and you also want to achieve a certain profit on your job.

Given that, any project performance measures you have in place need to show you the balance of all three elements and show them to you in real time.

As we all know, when you’ve got that triangle of work, you’re typically swaying between two of the three — budget sliding out because of schedule, profit being eaten up by budget blow-outs, you know the drill. You’re obviously trying to hit all three, but there’s usually sway between two of them.

So, you need tools to tell you how the job’s going in terms of its progress against the budget that you’ve got, and ideally those tools should be granular enough for you to pick up what goes wrong, if and when it does.

You also want to see the potential of the project and its stages to happen on time, that’s particularly necessary, where there are any sort of penalties, etc., that have to be paid for going overtime. Penalties mean your project starts to become an extremely expensive exercise, extremely quickly.

If you have a project performance measure like this in place and things start to slip, then it’s up to the management that relates to that project to decide whether it’s better, in fact, to throw resources at it to try and get back to your schedule, or to wear the financial penalties for short time.

As I said, you need to be able to see that quite quickly and easily so that you can course-correct in a timely way — of course, there are things like reputation, brand, and client relationships that need to be considered as well, but knowing what you’re dealing with in the performance triangle is paramount.

As much as possible that needs to be visual. It needs to be quick. It needs to be real time. You need to be able to jump into your project performance system and say, ‘Well, how are things looking so far? If I look for a lead indicator or I try and look into the future, with my work that’s happened today and the work that I’m projecting through my resourcing to happen — tell me, excellent project performance system, is it possible for me to achieve the budget, profit, and scheduled parameters that I’ve got in mind to achieve for this job?’

In the next part of the series, we’ll dive into the detail of portfolio planning. If you haven’t already, sign up to our newsletter to get it as soon as it comes out. 

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Scroll to the top to read the whole whitepaper now, or download the PDF of The 4 pains of project management for built environment businesses (and how to cure them) — Part 1 using this form.

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Read part 2 of this series:

Project management for built environment businesses — Proper portfolio planning

In this whitepaper we zoom out to take a look at the importance of portfolio planning to your project management. We’re going macro to see its impact on the micro, and how actually, you can’t understand one properly without the other. Especially when it comes to AEC industry projects.

Read now

Read part 3 of this series:

Project management for built environment businesses — Project setup requirements

In the third instalment of our series on the key challenges AEC businesses face when managing projects for the built environment, Greg Hill, covers all things project setup. He’ll show you the importance of doing it properly for the successful management of both your projects and your business as a whole.

Read now

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