PRINCIPLES OF

CONSTRUCTION
MANAGEMENT
Chapter three
By Biruktawit A.
 Project and Project Management
1.WHAT IS PROJECT?
Project is a temporary endeavor undertaken to
create a unique product, service or result.
Unique process consisting of a set of coordinated
and controlled activities with start and nish dates,
undertaken to achieve an objective conforming to
specic requirements, including constraints of time,
cost, quality and resources
A Project is a planned set of activities
A Project has a scope
A project ends when its objectives have been
reached, or the project has been terminated.
Projects can be large or small and take a short or
long time to complete.
project has following main
characteristics:
1. Unique product- implies the deliverables of an individual
project are unique in nature.
2. Temporary- for it has a denite ending constrained by
time, nance & other borrowed resources.
3. A component of a certain business, implies projects are not
an end to a goal by themselves; rather, they are a means to
a goal.
4. Progressive elaboration implies that projects are developed
in steps and continue to be elaborated and expanded as
the work on the projects progresses.
Accompanied with this, project works are usually repetitive in
processes where various feedback loops reinforce the
previous processes and enhance the elaboration processes.
2. PROJECT MANAGEMENT
The application of knowledge, skills, tools and
techniques to be applied in an integrated manner
throughout the life cycle of the projects to meet
project requirements.
The art of organizing, leading, reporting and
completing a project through people .
Project management is also a systematic way of
applying ranges of sets of knowledge, skills, etc.
to achieve project objectives in a best possible
way.
It is a methodical approach to planning and
guiding project processes from start to nish.
 THE DEVELOPMENT OF PROJECT MANAGEMENT
Modern day project management traces its root to Henry
Gantts development of the bar chart, otherwise known
as the Gantt chart, in the early 1900s.
However, project management as a management
discipline or recognisable body of knowledge only
emerged during the 1960s when companies in the
construction, defence and aerospace industries started
to use tools and techniques- such as the critical path
method (CPM)- requiring new sets of skills, knowledge
and expertise to be developed in their application.
Even at this stage of development of PM, it was the use
of specic tools and techniques such as CPM that was
the focus of attention rather than the use of a holistic
strategic approach of management of projects
More recently, beginning in the late 1980s and early
1990s, companies from different sectors (which were
originally not known for a project-based production)
such as manufacturing, the IT, the leisure, nuclear,
health and pharmaceutical, mining, oil and gas, have
started to embrace management by projects way of
conducting business as a potential source of
competitive advantage.
There are a variety of reasons put forward as to why
this shift occurred including:
Rapidly changing environments, erce competitive
markets, powerful environmental lobbies etc. all
encouraged companies to look for a more agile and
adaptable models of management.
The tasks that organizations were facing had become
more complex and cross-disciplinary demanding more
sophisticated and flexible organizational approaches.
 The size and scope of projects (in different industries)
had required the development of more effective
management systems for planning and controlling
project performance,
schedules, and cost/budget, etc.
The Traditional Project Management Approach
It is worth to credit the traditional project management
system that helped to achieve enhancement in the
development of the world in this aspect.
However, the changing environment internally and
externally to organizations gives rise to complex and an
uncertain situations that cause to see into the pros and
cons of the traditional project management system.
This can easily be conceived in viewing through its
failures to adapt to the new situations.
The problems in the traditional project management
system fall into three distinct items (Davidsen Frame, J.,
1994):
1. Its inattention to the importance of customer
satisfaction:
In the traditional approach customer
satisfaction is often treated as an after thought.
It is directed towards satisfying the famous
triple constraints:
Time,
Budget, and
Specication or Performance.
Hence, success and failure are typically
assessed against these three constraints.
There is a general trend and acceptance in the
traditional approach that customer satisfaction
can be fullled through the third constraint
Specication.
However, practical experience showed that it failed
to take adequate account of customer needs and
wants. This is largely because specications are
created by experts who:
lack the skills and training to work with
customers,
dont understand the customers business,
design and build products that are personal
interest to themselves, and
often drive to establish specication that will gain
them the admiration of their fellow experts.
2. Its single minded focus on a xed set of tools for
dealing with scheduling, budgeting, and resource
allocation:
Traditional approach being single-minded in these
xed sets of tools makes mastery of these tools are
likely to be a good project management approach.
 There is nothing inherently wrong with tools
mastery, but the problem lies in their excessive
concern leading to change of attention from
other matters such as :
motivating employees,
acquiring political skills and
managing and satisfying customer needs.
The reality is that projects seldom fail due to
failure in using these tools, but frequently for
non-technical reasons:
lack of commitment on the part of the staff,
political gaffes, and
the inability to communicate ideas effectively
 3. Its narrow denition what it should be concerned with:
a) Traditional project management often limits the
project life cycle to four phases: concept, planning,
execution and close out.
With this life cycle, the project team members can
wash their hands of the deliverables after it is handed
over to the customer; Which is the most practical
problem for construction activities in customer
satisfaction.
For customer satisfaction, the life cycle shall be
extended to include one more phase: Operation and
Maintenance.
This way, the project team members are made to
realize that their job is not only to build but also to
assure that it works in a satisfactory way after it is
delivered.
b) Traditional project management holds a
constricted view that primarily sees project
managers as implementers.
Often, project managers do not involve in the
decision making process at the beginning
phase of the project rather it is handed over to
him, whose charge is to do the job within the
pre-determined scope.
Such a limited view to project managers
creates an environment that is difcult to serve
the customer effectively.
If an important goal of project management,
the project managers role shall be redened to
allow it to be achieved
 The Modern Project Management Approach
The new project management recognizes most of the traditional
approaches are still relevant to todays changing environment.
Therefore the new approaches rather than establishing its own
total frame of assumptions, it aims to enhance the traditional
approach by aligning it with the new business in the world.
These alignments fall into three basic and central issues of the
new project management system (Davidsen Frames, J., 1994).
These are: project management shall:
1. Become more customer focused,
2. Explore the use of new management tools,
3. Redene the role of the project manager.
1. Become more customer focused:
Practice proved that the worst kind of failure in project
management is carrying out projects that do not satisfy the
beneciaries
If projects are carried out in accordance with the needs and wants
of the customer, it is then be called that the project management
becomes more customer basis.
The main reason behind this is that it is the customers who nally
evaluate the deliverables while in operation or before on the basis
of the following compelling criteria:
 satisfying customers need towards receiving expected products
and services,
when customers made success out of the deliverables, there
increases the likelihood of repeat business,
when customers look for similar projects for repeat business,
they usually chose to contract with those reputable contractors
with strong customer focus, and
customer satisfaction is for ideal closure or completion of
projects rapidly.
Here one can notice two basic key words customer and
customer satisfaction.
Who are the customers?, and
what are the factors that most influence the customer
satisfaction?
2. Explore the use of new management tools:
Besides the primary tools that are used by the traditional
management tools scheduling, budgeting, and allocating
resources -, there comes a need to acquire nontraditional project
management skills.
These tools fall into two major groups: Hard skills and Soft skills.
3. Redene the role of the project manager:
Neither stable nor free from competition, todays
business environment could not fulll its intended
purpose successfully with the traditional approach
thinking of project managers as pure implementers.
Therefore, there arises the need to redene the role
of the project managers.
This is literally:
project managers input in project identication,
preparation,
appraisal and negotiation and
approval stages of the inception phase of the
project cycle is very necessary.
Besides project managers shall become more
customer focused, and be empowered with the
necessary authority to operate effectively.
 PROJECT LIFE CYCLES AND THE KEY PLAYERS IN EACH PHASE

During the execution time, projects pass through various phases. These phases
are:
1. Conceptual (Denition) phase,
2. design and planning (development) phase ,
3. implementation phase ,
4. commissioning and closing phase.
1. Project Denition Phase:
Initiate the project
Identify the Project Manager
Develop the Project Charter
Conduct a Feasibility Study
Dene Planning Phase
Sign off on the Project Charter

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 PROJECT LIFE CYCLES AND THE KEY PLAYERS IN EACH
PHASE

2. PROJECT PLANNING PHASE

Organize and staff the project

Develop a Project Plan

Sign off on the Project Plan

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 PROJECT LIFE CYCLES AND THE KEY PLAYERS IN EACH
PHASE

3. PROJECT EXECUTION PHASE

Execute the Project Plan
Manage the Project Plan
Implement the projects results
Sign off on projects completion

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 PROJECT LIFE CYCLES AND THE KEY PLAYERS IN EACH
PHASE
4. PROJECT CLOSE-OUT PHASE

Document the lessons learned

during the project

After-implementation review

Provide performance feedback

Close-out contracts

Complete administrative close-out

Deliver project completion report

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Concept Development Implementation Commission
Input

Problem or opportunity, Approval to go ahead with Approval to implement Commissioning plan,

project brief, design and development project notication of completion
project charter
Process
Feasibility study Design product, Solicit tender and award Start-up and test the product.
develop detailed program : contracts, administer produce as built drawings,
WBS, CPM, budget contracts, compile knowledge learnt
make the product/solve
problem
Major Players
Client, Client, Client, Client,
Economic advisor, Project Manager, Project Manager, Project Manager,
Project Manager Designer, Consultant, Consultant
regulatory bodies Contractor,
Suppliers
Output
Feasibility study, Baseline plan, Completed project output Project closeout report
Project proposal, design drawings and
Execution strategy specications
Approval
Go/no go decision To implement project Ready to commission Deliverable accepted
PROJECT MANAGEMENT PROCESSES
Processes are sets of interrelated actions and activities that are
performed to achieve objectives.
Thus, construction processes are all processes which guide towards
completion and are a presupposition for the planned construction
works. In project environments, such processes usually fall in two
categories:
1. The project management processes:
Are processes which are common to most project most of the time
and are associated with each other by their performance for an
integrated purpose of:
initiating,
planning,
executing,
monitoring & controlling and closure of projects.
These processes interact to each other in a complex way that can
only be modeled partially.

22
 Thus the onus lies on the project management team to properly
identify and execute the processes needed for an efcient
performance.
2. Product oriented processes:
Are processes that specify and create the projects product.
Such processes are typically dened by the project life cycle and vary
by application area.
For example, the processes that need to be executed to implement a
certain hydropower project may be quite unique to that specic
project, even though most of the project management processes
could be common.
Such processes that involve setting out, excavation, concerting,
asphalt laying etc. are typical product oriented processes in a
construction work. 23
 MAJOR SKILLS NEEDED TO MANAGE PROJECTS
Project management body of knowledge
The appropriate application of above process and the various aspects
of knowledge areas such as :
resource management
scope management,
time management,
cost management,
quality management,
communications and stakeholders management,
procurement management,
risk management, etc.
Moreover, the project management team should have the capability
and competency to integrate these various competencies needed to
get the best out of the whole system. 24
 3.3. Resource Management
3.3.1 Resources: Denition
The most important resources that project
managers have to plan and manage on day-to-day
basis are manpower, machines, materials, and
money. Obviously, if these resources are available
in abundance then the project could be
accelerated to achieve shorter project duration.
On the other hand, if these resources are severely
limited, then the result most likely will be a delay in
the project completion time.
In general, from a scheduling perspective, projects
can be classied as either time constrained or
resource constrained.
 3. 3. Resource Management
3.3.2 Resource Allocation
Resource allocation, also called resource loading,
is concerned with assigning the required number
of resources identied for each activity in the plan.
3.3.3. Resource Aggregation
Resource aggregation is simply the summation, on
a period-by-period basis, of the resources required
to complete all activities based on the resource
allocation carried out previously.
3.3.4. Resource Leveling
resource leveling or smoothing is the process to
improve resource utilization. This is called
resource leveling or smoothing.
 3.3. Resource Management
A. Materials Management
Materials management is an important element in
project planning and control.
Materials represent a major expense in
construction, so minimizing procurement or
purchase costs presents important opportunities
for reducing costs.
First, if materials are purchased early, capital may
be tied up and interest charges incurred on the
excess inventory of materials. Even worse,
materials may deteriorate during storage or be
stolen unless special care is taken.
Second, delays and extra expenses may be
incurred if materials required for particular
activities are not available.
 B. Human Resource Management
A qualied workforce is essential to successful
construction management.
To achieve this it is vital to understand and practice the
human resources function both at organization and project
level.

HRM Functions
Human resources functions can broadly classied into
managerial and operative function.
The managerial functions include planning, organizing,
directing and controlling the human resources.
Operative functions on the other hand include operational/
routine activities in which the human resources department
will be doing as day today activities such as human
resources planning, job analysis, employee motivation,
performance management and training and development
etc.