Raj Kalady, MD, PMI India, says the need of the hour is to make project management certification compulsory while inviting bids for infra projects, similar to most other countries.
What is the importance of planning in project management?
Planning is key and one of the main pillars of project management. The other way to define project management is basically, plan the work and work the plan. Typically, in India, while some projects are impacted due to external factors beyond the control of the implementing agencies (land acquisition, regulatory approval), majority of the projects are delayed by factors that can be controlled through proper planning and project management.
As per the PMI KPMG Study on Project schedule and cost overruns - Expedite infrastructure projects, there are many external and internal reasons for time overruns across a project-¦s life-cycle. If you look at these reasons (table below), they are interrelated. If we hire project managers with adequate planning skills, they can appropriately factor in delays caused by regulatory approvals, land acquisitions and other factors. One of the reasons for inefficient project delivery is the paucity of skilled project managers in the infrastructure sector. This decline in the inflow of talent in the sector has emerged as the embryonic cause for time and cost overruns in the project life cycle. Unfortunately, resources are seen migrating from the infrastructure sector towards alternative, more lucrative and cushier job options in IT/ITeS industries, etc.
Sure, but how do you take an unknown factor into consideration? Right of way, for instance..
It depends on the situation. The fact of the matter is you are aware that this is the way the route has to go, and there are these blocks that may possibly come. It could need a political intervention, bureaucratic intervention or something else. However, you are aware that some intervention will be required to get RoW. Depending on the intervention required, you can accordingly plan for what kind of contingency you may need. That way, you can plan the project around that hurdle or you can do other sections earlier, do something else that doesn´t block up your resources.
What kinds of assumptions does one make in contingency planning?
There are known risks and there are unknown risks. For unknown, you always have to assume some aspects. You need to figure out what could go wrong. There is a whole chapter on Risk Management in PMI´s A Guide to the Project Management Body of Knowledge (PMBOK-½ Guide) - Fifth Edition on the ways to identify risks; planning for risk mitigation and what to do when there are unknown unknowns.
Can you pick out a couple of instances?
First and foremost, it is important to understand risk is not always negative. It is also positive. Risk is positive when things go in your favour. If you are building something today in Mumbai and the monsoon is delayed, that is a positive risk as the work can go on. An advanced monsoon is a negative risk. The first and foremost thing is to sit down and using the Blue Ocean thinking, bring out all the possibilities which can come into play and conduct a no-holds-barred discussion on what can go wrong. Then you list them down; what is the probability of it happening and the possible resulting impact. Therefore, there is a method in which you can quantify the risk. If the probability is only 5 per cent but the impact a higher number, multiplying the two gives you the risk factor. While starting the project, one can then take a decision saying the project needs a plan B or C to mitigate risks which have a magnitude of X and above.
So there are ways of arriving at such things..
There are ways of arriving at these numbers. Let the project management team decide if they are not going to have any backup plans or mitigation plans for risks such as tidal waves, because the score of that is very low.
Also, the industry has started accepting the Project Management Office (PMO) concept for independent reporting and ensuring project management excellence. Having a PMO could be an effective way of monitoring projects. Project teams that have adopted PMO feel that it helps in ensuring successful implementation of projects through deployment of project management best practices. PMO also helps in proactive risk identification and provides adequate guidance and information for timely decision-making.
So, not making a plan for such a thing is a conscious decision one takes!
Exactly. Importantly, one is aware and accordingly, one has either built in those risk mitigation plans upfront or not. The other way to work it out is also to figure what happens if an unplanned risk does occur, and what can be done about it? If one factors in the fact that steel prices will not change but in fact, they do change over the course of the project, how does one mitigate that? Has something else become cheaper? Does it make sense to do some hedging? These are various aspects which one needs to bring into proper project planning.
Do you think planning is underrated?
It is much underrated in India.
In India only, or worldwide also?
In India it is underrated a lot more. We want to jump into execution and in almost all cases, without spending adequate time on long-term planning.
As we are aware, the planning phase of projects appears to be largely affected by the factors generating from land acquisition and regulatory approvals. However, these external factors leading to lapses in project delivery are primarily due to insufficient mitigation adopted to overcome them. The project teams must take these activities into account while considering the time cycle for the project completion.
Given the trend of growing size and complexity of projects, the increase in number of stakeholders and affected sections is inevitable. Also, the growing concern and stronger measures for protection and restoration of environment have added to the efforts required by project management organisations. These external factors can be mitigated by timely action given that the strong and periodic information system is established to provide the necessary information.
Although the factors affecting project time-lines primarily appear to be associated with external factors, the underlying reason behind them remains the delayed or non-identification of pre-requisites to overcome these factors. In the absence of adequate identification of these dependencies, the projects usually land in trouble at the start, which in turn manifests into delayed project delivery or higher cost at completion.
Why do you think this is so? Is it changing now?
I am not too sure to what I would attribute this lack of planning in India but I think it has got to do with cultural aspects of India. I-¦ll give you an example. Till the multinational players came to India, we never had a concept of workers wearing helmets. Why was that? Did we not fear for our lives? Did we not have safety on our minds? It-¦s only when we had these companies coming in and insisting that people wear helmets that it has now become a culture. However, even today when you go to tier II or tier III cities, it is still not as prevalent as much as it should be.
Even a basic thing like this?
Yes; you see the kind of reflective gear on-site workers are supposed to wear, and this, too, was not common earlier. To answer your question, yes, I think that with more exposure, there is going to be more time spent in all aspects of project management including safety, health and environment. However, we really need to move much faster. There must be a drive from within to be able to provide improved quality. It is a cliché that the devil is in the detail but one does really need to go in deep to figure out the issues that may impact the project. One of the best examples I give of good planning is the Central Delhi area. The Central Delhi area was envisaged 100 years back. Even today, you will never get traffic jams. There are lovely, wide roads and footpaths and the whole area was beautifully planned during the colonial era.
What is the work you are doing to help better practices?
We work with various groups for capacity building. There are two things that need to be done. One is to build capacity, which means get people trained and make them aware of good project practices. The second is to ensure that the system has a process to support the trained project managers. If the system does not insist on a project charter, planning process, stakeholder management or a risk register, then people are not going to do it. So, training is needed as well as ensuring that the system supports the project managers.
A lot of this will happen through industry-academia interaction..
Yes and a change in policy of the government. For example, today when the Government or the financial institute, either of them place a RFP, do they insist or evaluate the project management capabilities and expertise of the organisation? They definitely evaluate the financials and they look at the fact that the company may have done projects in the past. But, what about the project management skills? Do they check if the organization has a Project Management Office? Do they check if the organization has project management processes in place?
The PMI KPMG survey suggests that there is a dearth of manpower across categories; however, non-availability of highly-skilled professionals can have an adverse impact on the project delivery and cost. By 2022, Indian infrastructure sector is expected to have a shortage of around three million project professionals including project managers, civil engineers, planners, surveyors, safety professionals, etc.
Hence, it is imperative to increase investment in training and mentoring to develop the requisite skill set in the professionals, deployed across various departments. Also, it is important for more and more universities and colleges to include project management degree/programs as part of their curriculum.
Do they check this in other countries?
Yes. It is a part of the bid process. It needs to be put in the RFP with clear indicators of whether the organisation has the requisite project management skills and processes in place. One of the simplest things to start off with is does the organisation have certified project managers? It´s as simple as that. If you look at IT organisations, the first thing they ask in RFP is for certified project managers.
And do they have certified managers?
Yes; and they get orders across the globe. This is the first thing criteria organizations insist on, in those markets. Today, in infrastructure, when companies go to do work in Middle East, why do L&T and HCC and EIL get their engineers certified? They work in those countries where project management certification is required. The government here should also insist that organisations certify their project professionals. If you look at Middle East, the government does insist and it is clearly part of their RFP. That-¦s one of the major steps the government here must take and if they don´t take it, then the financial institutions should definitely do it. They are putting money into the projects and it is their money at stake. It is most important for them that projects get completed on schedule.
Multinational agencies like JICA and WB must be insisting?
They must insist. Not all of them do it at the moment. I believe WB is working on this but it hasn-¦t come to a stage where it has become a policy yet. These are fine elements which will help in the long run. In India, even SBI can insist. Look at the number of projects and NPAs here. They have to insist on these aspects otherwise we are not going in the right direction. Shortage of skilled project managers emerges is the root cause for time and cost overruns in a project lifecycle. The severe skill shortage and the growing demand-supply gap for qualified construction professionals are affecting the infrastructure sector in India. Project owners understand that this is a long-term issue which not only makes the projects more expensive and risky, but also results in compromise on quality as well as timelines. Hence, there is a transcendental need for improvements in the quality of project management training being offered both externally and internally. Structured and improved training programs are a long term solution for building professional capabilities and enhancing skill sets.
Internal training programs such as developing in-house Project Academy /´Center of Project Management Excellence´ for training and certifying project managers also is a pertinent step to enhance the quality of talent available in the near future.