Webinar Series

Managing Capital Projects

What YOU Need to Know

Speaker

Bill Bacon DpIT, CET, PMP

Senior Project Manager, Technical Services DepartmentHousing Services Corporation

Sept 14,2016

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Speaker: Bill Bacon

Senior Technical Project Manager

About this Webinar

� Intended to equip you with the fundamentals of

managing capital projects and how you can get the

most value from your capital budget efficiently and

effectively.

� Provide insight and practical tips on how to

maximize the chances of capital project success by

anticipating common pitfalls, early on, and taking

appropriate actions to avoid them or deal with

them should they present themselves.

Webinar will cover:

� How to avoid or manage common pitfalls

� Practical tips on how to maximize the changes of

capital project success

� Understanding project constraints and taking

action early on

� Managing and avoiding risk

� Value of professional project management

Capital Projects

Capital projects can be for new construction,

expansion, renovation, or a replacement project for

an existing facility or major components within a

facility

Because capital projects involve

many different processes and

stakeholders, there is always a

chance that the project will be

hindered by unknown risks,

and/or unexpected problems.

How to avoid or manage common pitfalls

Caution – Pitfalls Ahead!

Why does it matter:

Common pitfalls, if not avoided or properly managed, will cause a project to take longer and cost more than expected.

Why are we

are running

out of time

and money?

Anticipating common pitfalls and understandinghow to avoid or manage them is one of the most important steps towards ensuring a project’s objectives can be successfully achieved.

So what can you do

While not all pitfalls can be avoided, having an experienced project manager guide you through the process will help minimize or mitigate the many risks related with capital projects.

A Project Manager can help!

The pitfall monster

... I want more, faster and cheaper!

How could we

avoid or manage

this potential

risk?

Where the pitfall monster hides

1. Site investigation and feasibility studies

2. Stakeholder alignment

3. Scope, schedule and budget definition

4. Acceptance criteria for deliverables

5. Risk management

6. Performance monitoring & control

7. Reporting and Communications

8. Change control

9. Project close out

10. Project Management

#1 Site Investigations & Feasibility Studies

� By conducting appropriate site investigations and

feasibility studies while your project is still in its

concept stage you determine what you can afford

and how to get what you want.

� It can also identify things in your project that will

likely increase the cost of construction.

#2 – Stakeholder Alignment

� Sufficient time must be spent in the planning phase

to make sure that all stakeholders are on the same

page.

� Stakeholder alignment (buy-in and support) is KEY to

the success of any project!

Create a Stakeholder Map

Identify your

stakeholders

Create a RACI Chart

A RACI Chart is a tool that can be used to help

identify the roles and responsibilities of those

involved in the project and help avoid confusion

of those roles and responsibilities.

What’s RACI?

RACI - Definition

RACI – Example

# 3 – Scope, Schedule & Budget Definition

Capital projects completed “within budget” and

“on schedule” are an exception, not the rule!

Understanding the Triple Constraints

Clearly Define Constraints!

Ensure scope, budget available, and time is

clearly defined during initial project plan and

again at project initiation.

Ensure stakeholders are aware of what the

ramifications might be for any requested or

mandated changes.

Develop Comprehensive Schedule

Ensure ALL project activities are in the schedule

Breakdown, breakdown, breakdown work!

Review schedule and get input from stakeholders

Consider “history” – other similar projects

Once project is implemented, monitor scheduled activities

#4 – Acceptance criteria for deliverables

“Acceptance criteria represents specific and defined list

of conditions that must be met before a project has

been considered completed and the project

deliverables can and will be accepted by the client.”

Poorly defined acceptance criteria for deliverables is

another of the major causes of project failures.

Do NOT assume a listed deliverable (requirement) =

“acceptance criteria”

Define SMART Acceptance Criteria

S – Specific

M – Measurable

A - Achievable

R – Realistic

T – Time Bound

#5 Risk Management

• Failing to be pro-active and openly consider risks

and issues is a major pitfall you will want to

avoid.

• Recognize risks and issues will be part of the

project and take time “early on” to identify them

and make plans to avoid or management them

Managing Risk

For negative project risks ...

• some we can AVOID ☺

• some we can CONTROL ☺

• some we can TRANSFER ☺

• some we must ASSUME �

Avoiding Risk

Example:

Choosing a vendor/ design/product-

with a proven track record at a higher

price over a new vendor that is

providing a significant price incentives

to avoid the risks related with working

with a new system.ie: exterior stucco cladding

Controlling Risk

Some practical steps you could take include:

�experienced project management

�trying a less risky option

�ensuring an up-to-date DSS is in place and made available to the Constructor

�understanding legislation related to Constructor /Owner duties

• preventing access to the hazards

• ensuring work by the constructor is set up to reduce exposure to the hazard(s)

Transferring Risk

BondingBid bonding or deposit

Labour and material bonds

Performance bond

InsuranceLiability

Un-owned vehicle

Builder’s risk or umbrella coverage

Assuming Risk

�Accepting risk occurs when the cost of

managing a certain type of risk is accepted,

because the risk involved is not adequate

enough to warrant the added cost it will take

to avoid that risk.

� i.e., landscape covering when repairing exterior walls.

Develop a Contingency Plan

Contingency funds are funds set aside by the

project to address unforeseen events that cause

the project costs to increase

� Project with “high risks” will typically require a large

contingency budget.

� After risks are identified and evaluated, develop a risk

mitigation plan – what you will do to minimize the impact of

the unexpected event.

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#6 – Performance Monitoring & Control

� Your project should have clearly defined

“milestones” so that all stakeholders

understand what “successfully

completed” means. (SMART Acceptance Criteria)

� Performance should be measures against

these clearly defined milestones.

� Take corrective actions as soon as issues

emerge.

#7 – Reporting and Communications

• Create a reporting and communication plan based on your

stakeholder needs (refer to your Stakeholder Map and RACI Chart).

Stakeholder(s) Information Method Frequency Who is

responsible?

Board members Project status E-mail report Monthly Project Manager

Building Owner Detailed project

reporting

Meeting,

report

Every other

week

Project Manager

Financial Funder Project status Meeting Monthly Project Manager

Vendors Project initiation Meeting 1 month prior

to Project

Project Manager

Develop a Communication Plan

Communications & Reporting

� clearly defining where the project is relative to

Budget, Schedule and Scope.

� status reporting- include details on any

contingency expenditures and change orders

(requests, approvals, completed, or rejected).

� performance is based on clearly defined and

understood measurements (milestones).

� planned versus actual – be comprehensive.

Your reporting should include:

#8 – Change Control• Failing to define and execute an integrated change

control process will surely reap ‘disaster’

• Create a well-defined change control process that provides a mechanism for evaluating, approving or rejecting changes

• Ensure changes are assessed for their impact on constraints of the project before making decisions and enacting change

• Engage all stakeholders in change control

(RACI chart)

#9 – Project close out

Critical steps often overlooked: � Deficiency review

� Final inspection / close out of permits / record drawings

� System start up, verification, demonstration

� Testing and verification reports

� Warranties / Guarantees / Certifications

� Construction lien requirements and release

� Payment certifications (final)

� Insurers notifications (handover)

� Occupancy permits, surveys, title registrations

� End of warranty period review

It’s better to be looked over than overlooked!

#10 Project Management

Consider: Who is managing your project?

• Ensure all team members follow value-added

project management processes; these

processes will help you effectively execute,

monitor, and control your project

HSC Technical Services Can Help with Your

Capital Projects To-Do List

Ontario & across Canada

Procurement Management

Full Project Management

Services

Multi-Year Project

Management

Preventive Maintenance

Planning

Building Inspection

Reports

Data Verification

for Asset Planner

Thank you

If you need Project Management assistance:

Bill Bacon, DplT, CET, PMP

Senior Technical Project Manager

Telephone: 705-618-0512

E-mail: bbacon@hscorp.ca

Questions?

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