6: Project Management Evaluation: Learning Outcomes From This Unit

6: Project Management Evaluation
Learning outcomes from this unit

At the end of this unit you should be able to fully appreciate the
development of the project management discipline and understand better
why it has evolved the way that it has.
You should understand that project management is a mature discipline and

that it is one that has been applied successfully in many industries across a
wide range of project types, however, you should understand that in the case
of UK construction and construction generally, the discipline is failing to
deliver the outcomes that can be reasonably accepted of it by clients.
At the end of this unit you will not be able to answer categorically why PM
appears to fail in this context, however, you should be able to formulate
justifiable hypotheses for why PM may not be delivering in construction as
successfully as it ought and you should be aware of what may be missing
from the practice of PM in the field that may be contributing towards this
failure.
At the end of this unit you should be fully able to debate these issues.
Recommended reading for Unit 6

Morris, P W G. The Management of Projects, Thomas Telford Ltd. 1994,
ISBN: 0 7277 1693 X
Heriot-Watt University Unit 6 - 1

6.1 Summary
Project management as a discipline can now be considered mature. Its
origins lie with the Manhatten project in the 1940’s which had the aim of
delivering an atomic weapon. It was recognised that the conventional
management organisation structures could not be expected to deliver this
project and the defined ‘performance’ outcomes successfully within the
available time. From these beginnings the project management profession
and the tools and techniques embodied therein have taken hold in a wide
range of industries from biotechnology to aviation and an extensive body of
knowledge has developed to support the theoretical advancement of the
subject and its practical implementation.
The first use of project management practices in construction came by way

of Du Pont Engineering in the USA in the mid- 1950’s. While other US
organisations, most notably the US Navy were continuing the development
of early project management tools, Du Pont were looking to find a method
to predict the optimum time in which construction projects could be
delivered. This led to the development of an early form of the Critical Path
Method (CPM). At roughly the same time the Project Evaluation and
Review Technique (PERT) was developed by the US Navy within the
Polaris Missile programme.
Project management thus has two main intentions. First to address the need
for new management structures to organise individuals and contractors
towards the delivery of a specific project rather than towards the
conventional achievement of an organisations profit.. This is the origin of
the matrix organisational structure. Second, project management addresses
the need for operational tools to quantify, control and deliver various
specific project tasks. You have studied a number of these tools and
systems in some detail in the previous two project management modules.
These components, strategic organisational design and systems management
tools form the two key foundation stones of contemporary project
management. To be effective, project management must incorporate both
organisational design (strategic management) and systems management
(operational project management) techniques.
Despite project management’s emergence as a major discipline, both in

construction and as a whole, and despite all the tools and systems developed
within it to allow successful project delivery, the record of project
management performance is actually dismal.
Morris undertook a study in the early 1980’s in which he examined 1449

projects. Of these, only 12 were completed below or within budget. He
repeated this study some time later with 3000 projects and obtained similar
results (Morris 1994). More recently a study undertaken by the World Bank
demonstrated that 90% of all construction projects on a world-wide basis
encountered significant time or cost overruns (World Bank 1987).

This is not encouraging for a discipline that makes extensive use of systems
and tools that are designed to permit the successful delivery of project
outcomes with specific emphasis upon time and cost delivery.
6.2 Introduction
For the large, knowledgeable construction client, the ability of the
construction industry, and in particular, the ability of the consultant project
manager to deliver capital building projects in accordance with defined
objectives specified in relation to time, cost and quality, is viewed with
increasing uncertainty.
Mounting evidence tends to suggest that the client frequently acquires an

asset that is compromised in terms of its ability to contribute to their core
business function either because its capital cost is greater than planned or it
is delivered behind schedule or because it fails to fully meet the
performance criteria which were specified at project initiation.
Clearly, the procurement phase of a new capital building asset represents

only a relatively small proportion of the total life cycle of that asset,
however, the ability of that asset to fully and successfully realise a clients
core business activities over its complete life cycle can be significantly
influenced by the success or failure of that relatively short procurement
process. Since project management, whether internal or external, attaches
additional costs to projects there is a need, given the perception that project
delivery remains highly problematic, to understand what value is added to
the building procurement process by the application of the project
management techniques that have been presented in the previous modules.
This is a complex area of study because a plethora of variables are known to

significantly influence the propensity for successful construction project
outcomes, not least the clients own subjectivity. Project management
techniques have the capability of influencing a large number of these
variables if the techniques are properly implemented, however, many
variables have little or nothing to do with the project management
techniques regardless of whether these are implemented extremely well or
extremely badly. Therefore, to achieve our aim to understand whether or
not project management techniques as presently implemented in
construction are effective, we must cover much ground.
We begin by investigating the origins of the project management profession

and the various performance attributes that can be appraised in deciding
whether or not a project has been delivered successfully. This is necessary
to gain an understanding the reasonable expectations that we (and clients)
can make of project management. Frequently clients may deem something
to have no added value despite the fact that the item in question could not be
reasonably be expected to deliver what was asked. Therefore, the material

presented in this unit will be a useful starting point to establish evaluation
parameters and it is prerequisite to our study of project management
effectiveness.
6.3 What is PM?

The contemporary building project presents a complex set of highly
differentiated skills, tasks and technologies which are both specialised and
interdependent. These skills, tasks and technologies must be co-ordinated,
controlled and integrated in such a way as to realise what is typically an
uncertain product successfully in an environment which rarely remains
stable throughout the duration of the project. Realising a building project
successfully, from a management perspective, is generally accepted to relate
to ensuring that the project is delivered in accordance with its agreed
objectives, typically those which concern time, cost and quality [Morris, P
W; 1994]. There are other important criteria against which project success
can be measured [Thomas, R H; 1988].
For immediate discussion we will assume that time, cost and quality are the
most important project attributes that project management must deliver (we
will consider the validity of this assumption shortly). If this is the case then
the primary responsibility of management in the modern building project
must be to ensure that the mobilisation, integration and utilisation of the
resources required to execute the project are organised in the most
appropriate manner such that the project fully satisfies the specified and
agreed objectives with respect to time, cost and quality. In the simplest
analysis this is all project management is concerned with.
Therefore, modern building project management has two main functions.

First, it is concerned with the establishment of an appropriate organisational
structure which allows a project to be managed by its objectives with
respect to its technology, its contributors and the environment in which it
takes place [Walker, A; 1988][Bennett, J; 1991][Morris, P W; 1994]. This
organisational structure must allow for the integration of a large number of
highly differentiated contributors. Moreover, it must allow contributors the
ability to meet their own individual needs but must also emphasise that the
delivery of the project’s objectives is their common purpose. Once the
project organisation is established project management can address its
second main function. This is concerned with the identification of the most
appropriate project objectives having taken due cognisance of the project’s
intended purpose, its client and its environment [Bennett, J; 1991]. Within
this second function lies the need for planning tools and systems to control
and monitor these objectives in order that they are successfully delivered.
These functions lie at the heart of the project management profession. They
are its raison d’etre. All of the material that has previously been presented
to you in past project management modules relates directly to these
functions at some level.

6.4 Organisational design
Much has been published within general management literature which
addresses issues surrounding the development of appropriate organisational
structures with respect to products, their technology and their environments.
Considered significant in the management of building projects [Bennett, J;

1992][Morris, P W; 1994] are the contingency theories developed by
Woodward [Woodward, J; 1965] and Lawrence and Lorsch [Lawrence and
Lorsch; 1967]. Woodward deals with organisational structure in relation to
technical complexity whereas Lawrence and Lorsch investigate
organisational structure in relation to differing degrees of differentiation and
integration. Also relevant is the work of Burns and Stalker [Burns and
Stalker; 1961] who examine mechanistic and organic organisational
structures with respect to the nature of the product and its environment.
Pugh, Hickson et al [Pugh, Hickson et al (‘Aston Group’); 1968] consider
technical complexity and company size in relation to the adopted
organisational approach. Additionally, Drucker’s work on ‘Management by
Objectives’ (MbO) [Drucker, P; 1950] is of relevance to building project
management.
Whilst of substantial importance to the management of building projects and

mentioned in much project management literature, the principal emphasis of
the work cited above relates to achieving the most appropriate
organisational structure within the firm, business or private company, with
the intention of realising the commercial objectives of that business. The
usefulness of these theories is clear when a project is itself is viewed as a
business, however, there are added complexities in building project
management.
6.5 Project organisation and project management

The specialised and differentiated nature of the modern building project is
such that there are few individual businesses which possess all of the skills
necessary to complete it. As the degree of specialisation and differentiation
increases within the building project, so the number of separate independent
businesses contributing in order to complete it increases, ceteris paribus.
Each of these contributing businesses has its own organisational structure.
Each individual contributor’s organisational structure is designed to achieve
their own business’ commercial objectives as opposed to the overall
objectives of the project to which it is contributing.
Clearly as all of the contributors will be organised towards profit

maximisation, the commercial objectives of the contributing businesses will
conflict with the objectives of the project.

Since this is the case, there is a need for the organisational structure that is
applied to a building project to secure the priority of the project’s objectives
over and above those of the individual, independent businesses which are
contributing to it. This is traditionally achieved by way of various
contractual mechanisms, many of which you will be familiar with through
the study of other modules in the course. However, by themselves,
contractual mechanisms will not organise project contributors towards
optimum project outcomes. Indeed, a controversial argument suggests that if
project managers get the project organisation right, contracts do not require
to be used at any point by any party. They can be forgotten and become
largely redundant, only needed when something goes wrong as a result of a
failure in the project organisation at some level.
Beyond the contractual devices, there is the need to integrate, control and
co-ordinate the activities of the separate independent businesses with the
intention of motivating them to work together in order that the project’s
objectives will be realised whilst simultaneously allowing each individual
contributing business to organise itself towards realising its own commercial
objectives through participating in the project. This can only be
accomplished by successful project organisational design.
The organisational and integration aspect that has been described is a very
strong antecedent to the modern building project management discipline,
although this was first formally recognised in project based industries other
than construction.
The Manhattan project to develop the first atomic bomb (1942- 1945) is
now generally accepted as the first project to successfully implement the
organisational and integration techniques which are presently typified in
modern project management thinking. The approach taken to the
management of this project was necessitated by the level of integration
required as a result of the inherent technical complexity and the uncertainty
surrounding ‘product’ development. Also important was the urgency of
achieving completion and the perceived importance of success. A traditional
approach to the provision of management to this project was considered
inappropriate [Meredith & Mantel; 1988]. The secrecy surrounding this
project meant that the methods used to manage it were not widely publicised
at that time [Morris, P W; 1994].
Morris argues that later uses of project management practices by the US Air
Force Joint Project Offices and the US Navy Special Projects Office (1953-
1954) had as their precursor a paper by Gulick on matrix organisation
[Gulick, L; 1937]. Therefore, it is clear that project management’s initial
intention was to address the integration and organisational aspects of
complex projects which involved a large number of contributors such that
the project attained the maximum chance of realising successful outcomes in
relation to its objectives.

This was attempted by the appointment of a single person or a team of
people who carried full responsibility for the overall organisation and
integration of the contributors to the project and who were furnished with
the appropriate authority to disregard the conventional vertical management
structures of that time in favour of a matrix style of organisation.
Why are we labouring this point? It is because organisational design is

absolute within the project management concept. Without this, project
management becomes simply nothing more than a planning and monitoring
activity. If project management is to be a worthwhile activity, organisational
design is perhaps more important than any of the systems or planning tools
that are readily recognised to be key components of the discipline.
We will return to the organisational design theme later in the module when
we examine the implementation of project management in practice.
6.6 Systems, planning, and control tools

The initial concentration of project management practice upon organisation
and integration was followed by an interest in systems management
practices which addressed the second principal intention of the modern
project management discipline, namely, the need to identify the most
appropriate project objectives and subsequently to monitor and control the
delivery of those objectives.
Morris defines the early attitude towards systems management thinking in

the management of projects as follows:
“specify performance requirements; carefully preplan to prevent

future changes; appoint a prime contractor to be responsible for
development and delivery”
Morris, P W; 1994 pg. 213
Consequently, the late 1950’s saw those involved in the early project
management discipline focus upon the development of specialist tools and
techniques designed to control specific project processes. The particular
processes examined were those inextricably linked to the identification of
appropriate project objectives and those linked to ensuring that those
objectives were realised. Initially processes which were related to the
objectives of time and cost assumed principal importance. Quality
objectives were tackled later.
Over the period 1957- 1958 specialised risk analysis and scheduling tools
were developed. The Project Evaluation and Review Technique (PERT)
[Raborn; 1959] and Critical Path Management (CPM) [Kelley, J C and
Walker, M R; 1959] methods were developed before 1960. Systems
management approaches within project management were formally

endorsed by the Anderson Committee in 1959; additionally the first
academic paper specifically on the subject of project management was
published [Gaddis, P. O;1959]. The 1960’s produced a continued emphasis
upon the development of tools and procedures which were intended to
ensure that projects could be delivered in accordance with their stated
objectives. These tools and procedures included the introduction of Work
Breakdown Structures (WBS) [1962]; the Planning, Programming,
Budgeting System (PPBS) [1963]; Earned Value Analysis (EVA) [1964];
Quality Assurance (QA); Value Engineering (VE); Technical Data
Management (TDM); systems analysis; resource allocation; Integrated
Logistic Support (ILS); Graphical Evaluation and Review Technique
(GERT). You will be familiar with many (though not all) of these systems
and the mechanics of their operation from PM1 and PM2.
The organisation and integration aspect of project management was not

completely neglected during this period and this was strengthened by the
work of Lawrence and Lorsch (cited earlier) and Galbraith [Galbraith, J, R;
1968]. The late 1960’s and the early 1970’s witnessed practices of project
management and academic investigation of the subject increase
dramatically, in part driven by the Organisation of Petroleum Exporting
Countries (OPEC) crisis of 1973. It is clear that during this time the
emphasis of project management was placed upon the utilisation of the tools
and techniques of the 1960’s. The importance of the integration and
organisational aspects of project management’s implementation was under-
estimated during this period [Morris, P W; 1994]. The 1980’s produced a
resurgence of interest in the integration and organisational issues whilst the
use of practices such as simultaneous engineering, fast build, lean
production and Just- in- Time (JIT) became accepted components of project
management practice. This theme continued in the 1990’s with attention
being focussed on Total Quality Management (TQM), configuration
management, concurrent Engineering, scope creep control while risk
management and analysis techniques became core project management
responsibilities. Figure 1.1 illustrates the development of the project
management discipline.
The evolution of the project management discipline, as very briefly related

above, reveals that it is a discipline which requires to be implemented at
both the strategic level and the operational level.
At the strategic level project management is concerned with the provision of

the organisational and integration structures which are appropriate to
projects and with the provision of appropriate mechanisms for the overall
control of project contributors such that project objectives can be attained.
At the operational level, project management is concerned with the

application of a clearly defined body of knowledge which relates
specifically to how particular processes common to all projects should be
executed and controlled in order to appropriately define the project
objectives and subsequently deliver those objectives successfully.

1930’s Integration & Systems and Tools Use in Construction
Organisational aspects
US Air Corps & Exxon’s Project

Engineering and
Function
Coordinating
Gulick paper on Ma trix

Organisation
1940’s Manhatten P roject (1942-
45)
1950’s US Air Force Joint Project Critical Path
Office Management
Weapons systems project Programme Evaluation Review
offices Technique
Navy Special Projects
1960’s Office
Lawrence and Work Breakdown Structure
Lorsch
Galbraith Planning Programming Tishman Company project
Budgetin g System manage World Trade Centre
in New York
Woodward Earned Value
Analysis
Burns & Stalker
Quality Assurance
Value
Engineering
Technical Data
Management
Configuration
Management
Systems Analysis
Resource Allocation
Integ rated Logistic

Support
1970’s Graphical Evaluatio n Review
Technique Wood Report fo rmally
endorses the use of
management in
project
construction
New procurement path s such
as manage ment contracting
are devised but d o
improve pe rformance
not
Widespread eme rgence of

1980’s construction consultant
the
Simultaneou s manager
project
Engineering
Fast Build CIOB Endorsement
Techniques
Lean RICS Endorsement
Production
Ibbs Report
Just in Time
Use of co nsultant p roject
Total Quality Management managers mandatory on all
1990’s public sector capital building
Configuration projects valued in excess of
£1 million
Management
Risk Managem ent
Concurrent
Engineering
Figure 6.1: The evolution of the modern project management

discipline

6.7 The application of project management in the UK
construction industry
In the UK construction industry, project management practices were
implemented unsuccessfully during the 1970’s [Hughes, W P:1990][Morris,
P W: 1994]. It now seems clear that the tools and systems developed to
implement project management at the operational level were applied
without a corresponding implementation of practices at the strategic level
concerning the integration and organisational aspects of projects. This
situation produced a confusion surrounding the use of the term ‘project
management’ in UK construction which remains [Rougvie, A; 1988]. It is
possible to implement project management practices at the operational level
without necessarily implementing them at the strategic level. The confusion
is centred upon whether or not a project can be ‘project managed’ purely by
the application of the tools and procedures developed at the operational
level. In consequence, the early to mid 1980’s saw contractors and various
professional practitioners market ‘project management’ as an approach to
win contracts, however, it is now reasonably clear that whilst certain of the
operational project management tools and processes were implemented,
project management at the strategic level could not be properly implemented
due to the restrictive nature of the established professional roles already
present within the UK construction industry, reflected by the traditional
procurement methods adopted [Hughes, W P: 1990].
6.8 The private sector

The UK property boom in the late 1980’s coupled with the increasing
recognition of poor performance and inefficiency within the UK
construction industry caused major UK client institutions to attempt to
implement building project management at the strategic level thereby
adding the organisational dimension to the tools and systems at the
operational level which were already applied. This was done primarily in an
attempt to reduce the time and cost overruns which had become
stereotypical of the projects at that time [HMSO: 1993].
As a result the professional project manager emerged as a recognised UK

building discipline and was added to an already large team of consultants
employed to deliver building projects. In 1988 the Chartered Institute of
Building (CIOB) published its interpretation of the building project
management function which was described as:-
“The overall planning and coordination of a project from inception

to completion aimed at meeting a clients requirements and ensuring
completion on time, within cost and to required quality standards.”
[CIOB: 1988: Page 3]

The Royal Institute of Chartered Surveyors (RICS) published their standard
conditions for the engagement of project managers some time later in 1992
[RICS, 1992] These also emphasise the duties and responsibilities of the
consultant project manager in relation to the coordination of contributors
and the delivery of a project’s objectives with respect to time, cost and
quality.
6.9 The public sector

In 1985 an investigation was carried out into the efficiency of the UK
Government’s capital building project expenditure programme by a central
government efficiency unit. This investigation, which was led by Sir Robin
Ibbs, concluded that the management of public sector capital building
projects should be decentralised and placed within the direct control of
individual public sector client organisations and departments [Ibbs, R,
19852]. In practice many of the public sector client organisations in
question possessed little or no building project procurement expertise. As a
result it was recommended that consultant project managers should be
appointed to control all public sector capital building projects which were
valued in excess of £1 million. This recommendation was implemented,
having the effect that the use of professional project management on all
public sector capital building projects valued in excess of £1 million became
mandatory as part of HM Treasury policy. This policy had as its primary
objective the minimisation of the time and cost overruns frequently
encountered on public sector capital building projects, however,
expectations were also held with regard to the delivery of quality [SOBD;
1993]. Antecedent to this policy were projects such as the Thames Barrier
which was started in 1971 and eventually delivered in 1982 some 3.5 to 4
years late and an estimated £329.3 million over budget [Morris, P W: 1994].
6.10 The present situation

Construction project management can now be considered a mature
discipline. The project management discipline in a wider context is
internationally recognised across numerous project based industries and it
used successfully to manage project delivery in the sectors of its original
development such as the military, space exploration, aviation, oil, and the
built environment and it is now used by sectors conceived since its original
development, most notably in information technology fields.
The complete body of knowledge which relates to project management,

which has in part been referred to in the preceding discussion; ie. the
planning, scheduling and control tools, the systems theories and the
organisational theories (many of which you have studied in detail in the first
two project management modules), when applied by professional project
managers to the modern complex and differentiated construction project,

should, on an a priori basis, result in the delivery of a completed building
which fully meets its defined schedule, budgetary and technical objectives.
However, in practice, the true situation is somewhat uncertain. The value

added by project management in the specific context of the UK construction
sector is considered dubious and is often viewed with suspicion by the
private clients that pay for the services offered (whether the costs are
incurred internally for in- house project managers or externally for external
consultant project managers).
Moreover, continuous failures in public sector projects have produced

almost continuous change. In September 1994 John Major ordered a full
enquiry into the management of public sector capital building projects
which were then either “seriously late” or “seriously over budget”. Notable
examples included the Faslane Trident complex which was reported as
being £800 million (72%) over budget and the British Library project in St.
Pancras which, 12 years after its initiation, remained without an estimate of
its likely final cost [Scotsman; Sept. 1994]. Since that time, Latham and
Egan have reported their conclusions on the state of the construction
industry in the UK and building procurement and the public sector have
once again altered their approach to the provision of the management of
project delivery with emphasis upon prime contractors and facilities or
investment managers. This is coupled with a sustained move towards
shifting the procurement of public facilities to the private sector via Public
Private Partnerships (PPP) in an attempt to shift project risks away from
public sector organisations where public accountability must remain
foremost. This trend, in part, can be attributed to the past performance of
project management in this sector. The scenery changes but the key
‘players’ remain unchanged.
The titles and the mechanisms which allow for the implementation of
project management change, however, the project management concepts
themselves (ie. organisational design and systems control) remain in tact,
but questionable in terms of efficacy. We can look to other industries, such
as aerospace, and see that project management seems to enjoy success, yet
there is a general perception that project management in construction stands
out as much for its singular failure to consistently deliver as it does for any
benefit.
The construction industry in the UK is presently in the midst of fundamental

change in relation to its management processes as a result of 50 years of
under-performance. Although it is generally considered that Latham and
Egan sparked the current change (Latham, 1994, Egan, 1998), these authors,
in many respects, simply reiterated what had previously been said by
Emmerson and Banwell (Emmerson, 1962, Banwell, 1963). Latham and
Egan’s recommendations have taken hold not because what they said was
new or or radical or fundamental, but rather because they represent the
Industries leading clientele, because globalisation means that the UK’s
relative under- performance can no longer be tolerated and because there

has finally been recognition that construction projects consists of a series of
common, repeatable processes; the old argument that construction projects
were each individual and unique, from a management perspective, is (at
last) quiet. The present situation in UK construction is vastly altered from
that when project management processes were first introduced.
Management thinking, practices and processes are evolving rapidly. The
position of the ‘traditional’ project manager is constantly challenged, project
management practices are fast changing and other professional consultants
compete to provide project management services. Terminology such as
critical path management, contract management, concurrent engineering,
value engineering and their counterparts have been replaced by business
process mapping, partnering the supply chain, logistics control, prime
contracting, public private partnerships amongst others. We will address
these new ideas and practices in Unit 5, however, in the meantime we will
focus on understanding the effectiveness of project management as applied
in the conventional models.
Given the above scenario, we must ask; how effective is project

management in construction?, Does it offer any of the benefits we may
expect and which are suggested in PM 1 and 2?, What, in fact, should we
expect? Can project management deliver in the future or do we need to look
to a new method for the management of projects?
The general record of projects in meeting their defined schedule, budgetary

and technical objectives suggests generally poor performance over a wide
range of building types which have utilised a variety of procurement
systems and management strategies [Morris, P W: 1994].
This is the case despite the extensive body of knowledge which exists on the
subject of project management referred to in earlier in this unit and in PM1
and PM2.
Clearly, with respect to performance difficulties such as these and the poor
record of projects generally in relation to realising, an objective and
quantitative evaluation project management’s effectiveness will be of much
value. The results of such an evaluation would give us a clear indication of
how successful project management is together with a clear indication of the
actions that should be followed to allow continuous performance
enhancement for those engaged in the techniques of construction and project
management. Undertaking such an evaluation and interpreting the results
towards improving the future implementation of project management in
construction are our aims in this module.

6.11 Does PM work? How do we assess PM
performance?
Before reading further, how do think the effectiveness of project

management should be measured?
As mentioned at the start of the unit, up until now we have assumed that
time, cost and quality are the key performance attributes that we should use
to measure project management’s success or failure. However, there are a
number of recognised alternative criteria in appraising building project
performance, and there is much debate as to which of these are most
appropriate in the evaluation of contemporary building projects [Morris, P
W: 1994][Walker, A: 1989]. Therefore, we will now spend time examining
the available criteria and establish whether or not time, cost and quality data
are the sole attributes that we can use to reasonably judge project
management effectiveness.
It is worthwhile noting that the building project performance analysis

method adopted significantly effects the scope, limitation, and usefulness of
an evaluation that intends to test the relationship between variables such as
project management, and building project performance.
The principal difficulty in evaluating the effectiveness of professional

project management is that the success or the failure of the approach can
only be measured in relation to the success or failure of the delivered project
[Walker, A: 1989]. In order to be reliable, objective or quantitative
measurements of the success or failure of a building project ie. its
performance, must be obtained.
However, the intrinsic nature of building activity, together with the range of
characteristics which can be presented by, or expected from a building
project, make the quantification of building project performance an
intractable task.
Bennett argues that the input: output ratio represents the only practical
comprehensive measure of the success or failure of a building project. He
suggests that the only practical common measure for all of the outputs and
inputs in building projects is money. Therefore, the success or failure of
projects is most comprehensively measured in terms of the Value: Cost ratio
[Bennett, J: 1992: pg 48]. However, it is also argued that a comprehensive
evaluation of building project performance must examine both quantitative
and qualitative data which are obtained by analyses of both the building
process and the building product; an argument supported by the work of
Meredith and Mantel [Meredith and Mantel; 1988].

The exclusive analysis of either wholly quantitative or wholly qualitative
data obtained from only the building process, or from only the building
product, is unlikely to yield a ubiquitous or true assessment of the overall
performance of a building project. This is a view supported by the Building
Investigation Centre (BIC) [BIC: 1992], Nahapiet [Nahapiet, 1988], and
Walker [Walker, A; 1989].
The BIC argue that a project having realised all of its predicted time and
cost estimates (ie. having satisfied the principal expectations which relate to
the building process) cannot be viewed to have performed satisfactorily if a
high number of user complaints were evident upon occupation of the
completed building by its Client organisation. In other words it is argued
that it is possible to perform successfully in terms of the building process
whilst simultaneously failing in terms of the product.
Therefore if a true evaluation of performance is to be obtained it is

necessary, in theory, to combine the quantitative measures of the building
process with those of the product, and furthermore to combine these with
the qualitative measures of both the process and the product (examples of
qualitative performance measures which relate to the process and the
product are ‘Quality of work life’ and ‘Aesthetic Quality’ respectively.
There is a strong theoretical argument, therefore, which suggests that, in

order to be meaningful, any evaluation of building project performance,
having as its purpose the comparison of differing organisational or
managerial strategies, must attempt to arrive at a single measure of the
project performance outcomes. This measure should incorporate an
appraisal of all of the qualitative and quantitative performance criteria which
are readily appreciable within the concept of building project performance.
However, despite having acknowledged this theoretical prerequisite, the

BIC fail to propose a framework or method which provides for the true
measurement of building project performance which they argue is required.
Similarly Nahapiet acknowledges that the evaluation of building project

performance must include an examination of qualitative data in addition to
the analysis of quantitative data in order to gain a true picture of building
project performance. However, again, no attempt is made to arrive at a
single measure of performance which embraces both qualitative and
quantitative data which relate to both the building process and the building
product [Nahapiet, 1988]. Brensen [Brensen, M J. et al, 1987] considers
that the evaluation of building project performance requires the input of
what he terms soft data (ie. qualitative data) to supplement the traditionally
accepted hard building performance data (Brensen applies the term hard
data to the quantitative criteria relating to time and cost).
Again, he does not propose a method such that a single measurement of

building project performance, which embraces all of the qualitative and
quantitative criteria within the performance concept is obtained. Instead, the
framework he proposes comprises two separate and wholly independent

evaluations, one based upon quantitative data and the other based upon
qualitative data. In Brensen’s rationale, overall or true performance must
therefore be assessed via the evaluator’s judgement upon how the two
separate evaluation results should be combined.
The difficulty surrounding the combination of qualitative and quantitative

data from both process and product in building project performance
evaluation and the range of performance criteria which may be included
within such an evaluation is extended in studies by Sink [Sink, 1983],
[Thomas, R H. et al, 1988] and Maloney [Maloney. et al., 1990].
Sink argues that there are seven building performance criteria, each of
which is crucial if an assessment of the overall performance of a building
project is to be obtained. Sink’s seven criteria are as follows:-
Criteria Type
Product/Process
ο Effectiveness Quantitative Process

ο Efficiency Quantitative Process
ο Productivity Quantitative Process
ο Profitability Quantitative Process
ο Innovation Qualitative
Process/Product
ο Quality of Work Life Qualitative Process
ο Quality of Product Qualitative/ Quantitative Product
Thomas and Maloney agree with Sink’s analysis. In the discussion

forwarded by Sink, Effectiveness is considered to be the degree to which a
project succeeds in realising its initial agreed objectives. In this performance
dimension quantitative performance data, such as time and cost information,
are analysed; the effectiveness being quantified through the expression of
the expected result and the actual result as a ratio. Efficiency concerns the
measurement of the productive utilisation of machines, equipment and
materials. This is expressed as a percentage of total available time and is
therefore, again, interested in only the building process. Labour utilisation is
excluded from the efficiency criteria as Sink considers that the labour
intensive nature of building activity requires that the productive efficiency
of labour be examined within the productivity criteria, which is likewise a
quantitative, process orientated building performance measure. Profitability
represents the expected return or value and the achieved return on the
project as a ratio, thus adding a further quantitative, process based measure
to the performance evaluation method. However, Sink also recognises the
need for qualitative measures related to the building product as well as to
the process.
These are reflected in the criteria: Innovation, Quality of Work Life and
Quality of Product. Innovation is a qualitative measure which can be used to
examine data from both the building process and the building product;

Quality of Work Life addresses the perceptions of those involved in the
delivery of the project and is therefore entirely qualitative and process
orientated.
Finally, Sink considers the Quality of the Product. Here he analyses the
qualitative aspects of product quality, however, it should be noted that
certain aspects of the product quality may be evaluated quantitatively (as in
the case of the number of user complaints proposed as a measure of product
quality by the BIC); this feature of product quality will be discussed and
developed further in Unit 2.
Significantly, despite having extensively discussed the individual variables

which contribute towards building project performance, neither Sink,
Maloney or Thomas propose a method which facilitates the synthesis of the
seven partial performance criteria such that a single measure of true project
performance is obtained. In Sink’s method a project is appraised discretely
in terms of each of the seven partial criteria. Therefore, seven separate
performance measurements are made for each project. The
interdependencies between these partial measures are not appraised and the
overall evaluation of performance remains a value judgement based upon
the separate information provided by each of the seven measures.
Oglesby considers that there are four principal performance criteria which
require to be measured in order to evaluate ‘on- site’ building project
performance [Oglesby, 1989]. These are:-
Criteria Type
Process/Product
ο Productivity Quantitative Process

ο Safety Qualitative/ Quantitative Process
ο Timeliness Quantitative Process
ο Quality Qualitative/ Quantitative Product
Again, this proposition recognises that the analyses of both quantitative and
qualitative data which are acquired from both the building process and the
product are necessary to appraise building project performance at the site
level. However, Oglesby (like BIC, Nahapiet, Brensen, Sink, Thomas and
Maloney) does not forward a framework to combine his partial performance
criteria such that a single overall assessment of building project performance
is obtained.
Examining building project performance from the Clients perspective

Penderson [Penderson,1975] and Walker [Walker, A., 1988] consider that
evaluations may be appraised upon investigation of the following partial
measures:-
Criteria Type Process/

Product

ο Quality:-
(a) Technical Standards Quantitative Product

(b) Aesthetic Standards Qualitative Product
(c) Functional Standards Quantitative/ Qualitative Product
ο Price:-
(a) Capital Cost Quantitative Product/

Process
(b) Running Costs Quantitative Product
ο Time Quantitative Process
Walker suggests that measurements of these may be obtained and

subsequently weighted in accordance with the relative importance attached
to each by the Client organisation. In this way it is possible to arrive at a
single measure of building performance. However, this attaches a subjective
dimension to the evaluation which presents validity problems should such
an approach be used as a basis to compare alternative building policies or
systems as we are trying to do in measuring project management
effectiveness.
Alercon Gardenes proposed a predictive building project performance

measurement methodology [Alercon Gardenes, F., 1992]. His methodology
had as its aim the comparison of differing managerial strategies in terms of
the predicted effect that each have upon a combined performance measure.
In Gardenes’ approach the combined performance measure is based upon
the partial performance measures of schedule, budget, value and
productivity. The combined performance measurement is produced by a
statistical analysis which requires the client to weight the importance of
each partial performance measure and which requires that a set of baseline
values for each partial measure be arbitrarily specified. The combined
performance measurement is then made by analysis of the sum of the
deviations between the models predicted value for each partial measure and
the corresponding pre-specified baseline value for the partial measure. Each
of the partial measures produces a weighted deviation from a baseline
predetermined value for combined performance.
Thus, it is argued, the influence of alternative managerial strategies may be

assessed on the basis of the observed variance in the combined performance
measure for each strategy (Gardenes assessment of the influence of each
strategy is based upon probabilistic inference). It should be noted that the
combined performance measure used in this approach is a mathematical
prediction which is dependent upon the arbitrary selection of weights and
baseline values for each of the partial measures and is therefore open to the
same criticisms made of Penderson and Walkers approaches described
earlier. Gardenes stresses that the combined performance measure
developed in his approach can only act as an aid and does not, by itself,
represent an adequate basis for decision making or evaluation.

There is an apparent general recognition, in theory at least, of the need for a
comprehensive building project performance evaluation method which
appraises both quantitative and qualitative data relevant to the many aspects
of building project performance. However, it is evident that (with the
exception of Alercon- Gardenes) contemporary building project
performance evaluation literature focuses upon the almost exclusive
examination of partial, single attribute performance criteria in order to
evaluate discrete aspects of building project performance as opposed to
evaluating true or complete building project performance.
It is apparent, within project performance evaluation literature, that a

pragmatic approach to the evaluation of building project performance is
generally acceptable. The theoretical argument concerning the need to
conduct a multi- attribute evaluation of building project performance is
generally undisputed. Moreover, it is acknowledged that the isolated
analysis of partial performance criteria will not produce a true picture of
building project performance.
However, the logistical and practical difficulties we encounter in attempting

to produce a single measure for building project performance, that embraces
all of the quantitative and qualitative aspects within building projects,
clearly dictate that a realistic, perhaps severely limited approach to building
project performance evaluation should be taken in most cases. Bennett
expresses the view that:-
“...there are often good reasons for adopting a less than

comprehensive measure [of performance]”
[Bennett, J; 1992; pg 48]
Similarly, Walker clearly indicates his belief that the attempt to arrive at a
single multi- attribute measure of building project performance
incorporating all of the attributes inherent within building may be
inappropriate [Walker, A; 1989; pg 231].
This acknowledgement, whilst greatly simplifying the performance

measurement problems expounded above, means that performance
evaluations which have as their purpose the objective comparison of
differing project execution strategies must be approached diligently. The
literature indicates that building project performance evaluations making use
of single- attribute performance criteria must be carefully planned and
designed in order to ensure that the single attribute criteria which are
examined relate specifically to the purpose of the evaluation (Walker, A;
1989, pg 231; Price Waterhouse, 1992).
A thorough examination of the available literature on performance

evaluation reveals that by far the most common performance criteria used in
the evaluation of building project performance are those which may be
classified within Sink’s definitions of the criteria relating to Productivity

and Efficiency (although the clear distinction that Sink identified between
them is not always observed). A large number of studies have been
published that focus upon these performance criteria in order to conduct
evaluations of the influence of particular variables, approaches or strategies
upon building project performance per se.
Therefore, it is clear that the practical measurement of building project

performance requires a pragmatic and constrained approach. This is the case
despite a clear recognition that, in theory, evaluations of building project
performance should examine all of the quantitative and qualitative data
which is presented by all of the various aspects of building projects if a true
picture of performance is to be obtained. It is apparent that a general method
to achieve such a ‘true’ evaluation has not yet been established.
The literature suggests that provided the performance criteria selected are
pertinent to the objective of the evaluation, and that the limitations of the
use of partial performance measures are clearly stated, then an appraisal of
the influence of a particular technique or approach (for example project
management) upon building project performance through the examination of
partial, single- attribute performance measures, is valid. Therefore, the tasks
to be addressed in deciding how to evaluate the influence of a particular
technique upon building project performance are; First to determine the
perspective of the evaluation together with the intended purpose of the
evaluations output, and; second, to identify the particular performance
criteria that the particular policy or system has the capacity to influence
[Walker, 1989][Price Waterhouse 1992].
Question
Based on what you have read, have you changed your

opinion on what should be measured in order to quantify
project management effectiveness. If so, what do feel
should now be included in an evaluation and do you
believe you could determine practical ways of measuring
them?
6.12 What are we going to determine PM success

against?
Given the range of criteria available as discussed above, how do we decide
which performance criteria we should use to measure success. We must
consider this problem from three perspectives as follows:
(a) What does the construction client expect by appointing a project

manager.

Project Management can be considered in terms of the utility which it offers
the client organisation. Therefore the performance criteria included within
the a performance evaluation method must be those which are meaningful to
public sector clients. This immediately limits the performance criteria which
require to be investigated. Criteria such as safety [Oglesby; 1988] and
quality of work life [Sink; 1983][Maloney; 1988][Thomas, R H; 1988] may
be disregarded. In contrast, criteria such as time, cost and quality [Walker,
A; 1988][Penderson; 1975] (also advocated by BIC, Brensen, Nahapiet,
Sink, Maloney, Thomas, Bennett, Morris; refer to earlier citations) assume
principal importance. These performance criteria are collectively referred to
by the colloquialism ‘the deliverables’ and are cited by Meredith and
Mantel to be the prime objectives of project management. The use of time,
cost and quality as principal building project performance criteria or
indicators, and the importance of their delivery in the modern project
management discipline is confirmed by much contemporary literature.
In addition to the deliverables (and directly dependent upon them), since

project management services whether internal or external are always
transaction costs we must be concerned with the concept of value (the
principal performance criteria cited by Bennett; refer back to 1.11) and
perhaps more importantly value for money (VFM).
The criteria time, cost and value, broadly speaking, all fall into Sink’s
definition of the criteria labelled effectiveness, whilst quality fits into his
definition of the Quality of the Product.
More difficulty is encountered in determining whether or not the analysis of

Sink’s criteria Efficiency and Productivity is meaningful whilst conducting a
building project performance analysis from the clients perspective. These
criteria do not in themselves represent project deliverables, in other words
they are aspects of building projects which are not usually specified by
clients.
Provided that a project is delivered in accordance with its specified time,

cost and quality objectives a client will not normally require information
pertaining to the efficiency and productivity of the project. However, the
project deliverables; time, cost, quality, value and value for money are of
course reciprocally interdependent upon efficiency and productivity.
Inefficient and unproductive projects do not represent value for money.

Therefore, efficiency and productivity despite not being classed as
deliverables, are of importance and meaning to client organisations in the
evaluation of building project performance. This is verified by the work of
private sector clients such as the British Airports Authority (BAA) Plc
[BAA Plc; 1993] and Lynton Plc [Lynton Plc; 1993]. Therefore, to use
Sink’s terminology, the literature reviewed reveals that the performance
criteria effectiveness, quality of product, efficiency and productivity are
those which are of principal importance to client organisations when
conducting evaluations of building project performance.

There is increasing demand from building clients for improved project
performance specifically in relation to the delivery of time, cost and quality
objectives. Forums such as the Construction Productivity Network, set up in
1996 by the Building Research Establishment (BRE), The Business
Roundtable and the Construction Industry Research and Information
Association (CIRIA), have allowed large clients to express demands
concerning what they require from the construction industry. In the case of
leading clients, the demand is for building project delivery to be 100%
predictable (Matthews, 1997). Their aim is to procure a high quality product
at a low cost which will be reliable and which will be delivered on the date
that it is required. Clearly, time, cost and quality assume principal
importance.
(b) What is the project management discipline equipped to deliver.
Having established the principal performance criteria from the Clients

perspective, it is necessary, following the recommendations of Walker
[Walker, A; 1989] and Price Waterhouse [1992], to identify which criteria
project management has the scope to influence. Thus it is necessary to
conduct a review of project management literature in order to determine the
duties and responsibilities which the consultant project manager may be
expected to discharge.
To a large extent it is clear that the tools, systems and organisational

theories which have been developed specifically for the execution of the
project management function accurately reflect the duties, responsibilities
and expectations which are made of the contemporary building project
manager.
Having conducted a thorough review of the available literature, it is clear

that, as Meredith and Mantel put it, the prime objectives of project
management are to deliver a project on time, within budget and in
accordance with its required technical specifications (quality). The
requirement to achieve these three goals represents a principal feature of
most of the principal publications in the discipline (refer to Walker [Walker;
1989], Morris [Morris, P W; 1994], Lock [Lock, D; 1988], Bennett
[Bennett, J; 1988 & 1992] Meredith & Mantel [Meredith and Mantel; 1988],
Kerzner [Kerzner, P; 1957], Chartered Institute of Building [CIOB, 1988]
and the Royal Institute of Chartered Surveyors [RICS, 1992] amongst
others).
The literature repeatedly states that the project managers prime

responsibilities, beginning at project inception and continuing until project
handover, are to ensure that the project is delivered on time, on cost and in
accordance with the specification (for example, refer to the Chartered
Institute of Building [CIOB; 1988] and the Royal Institute of Chartered
Surveyors’ Standard conditions for the appointment of project managers
[RICS; 1992]. It is also clear that these duties and responsibilities have

remained constant and essentially unaltered from the early uses of the
project management discipline to the present day.
The processes, tools, systems and organisational designs which are specific
to the contemporary project management discipline amply demonstrate the
concentration of project management effort upon the realisation of these
three criteria. An investigation of these processes, tools, systems and
organisational designs clarifies the expectations which may be reasonably
held in relation to the influence that project management has when applied
within the context of building projects.
Tools used for options appraisal, such as the comparative benefit model,
payback analysis, average rate of return, discounted cash flow, internal rate
of return, profitability indices, scoring models (including the unweighted 0-
1 factor model, the unweighted factor scoring model, the constrained factor
model, Dean and Nishry’s model and goal programming with multiple
objectives), risk analyses and general simulation analysis techniques are
designed to ensure that a pursued project represents the best available value
and value for money to the client organisation and to ensure that it will be a
profitable investment.
Budgeting tools and systems such as the work breakdown structure (WBS),
the planning and programming budgeting system (PPBS), Resource based
cost estimating tools, activity/ task based estimating tools, Gozinto charts,
learning curve analyses and risk analysis all have their application in
ensuring that costs are properly estimated, planned and subsequently
controlled.
Tools and systems designed to schedule tasks and thus to plan and control
time include work study analysis, Gozinto charts, Gnatt Charts, the
programme evaluation and review technique (PERT), the critical path
method (CPM), the graphical evaluation and review technique (GERT) and
computer analysis packages such as ‘Microsoft Project’, ‘Microplanner
Expert’, ‘Pertmaster’, ‘Primavera’ and ‘SuperProject’ amongst others.
Processes such as interface management (eg. TREND analysis and Linear

Responsibility Analysis (LRA)) and knowledge management techniques are
designed to ensure that processes, tasks, information and personnel are
coordinated and controlled such that the schedule and budget plans are
realised. Advanced PERT and CPM procedures facilitate resource levelling
and resource optimisation which enable time and cost tradeoffs such that a
clients objectives may be realised efficiently and productively.
Finally, processes and concepts such as total quality management (TQM),

quality assurance (QA), value engineering (VE), zero defects and
configuration management have as their intention the guarantee that product
quality will be adequately delivered to the client organisation.
Thus, upon examining the principal contemporary project management

tools, systems and processes it is clear that the discipline’s is equipped to

realise value for money projects which are delivered on time, within budget
and in accordance with the required product quality.
The resource allocation and analyses features provided by PERT, CPM and
the contemporary project management software packages demonstrate
project management’s concern in ensuring that resources (including time
and money) are utilised in the most efficient and productive manner,
however, it is apparent that project management’s concern for these issues is
developed from the prime objective that a clients objectives in terms of
time, cost and quality should be delivered.
You should note that there is almost perfect correlation between the
performance criteria which are important to client and the performance
criteria which the project management discipline has the tools, knowledge
and thus the scope to influence and control. This correlation is, of course,
expected since the contemporary project management discipline was
originally developed and utilised by leading client organisations.
Therefore, combining the performance criteria relevant to clients in building

project performance evaluation and the performance criteria which project
management may be expected to, and has the scope to influence, the
evaluation of the influence of project management upon building project
performance must focus upon the criteria: time delivery, cost delivery,
quality delivery, value for money, efficiency and productivity.
(c) Specific contractual requirements and obligations demanded of

professional project managers.
Having determined the relevant performance criteria from both the clients
perspective and from the point of view of the performance criteria project
management may be expected to influence, it is necessary to consider the
contractual conditions that we would normally expect to find between
clients and project managers, although we must acknowledge that this only
properly applies in the case of external project management arrangements.
The situation in the case of internal project managers in terms of what the
client (ie. their employer) may expect could be somewhat altered. Normally,
the contractual requirements are based upon the standard conditions of
engagement issued by the RICS and the Project Manager Diploma
Association of the RICS (RICS, 1992).
In short, these conditions broadly stipulate that project managers are

responsible for the administration, management and coordination of a
project. The project manager should not issue any instruction which would
act to materially alter the projects agreed objectives in relation to either time
or cost. In addition the project manager has a duty to notify the client of any
reason why the agreed objectives in terms of time, cost and quality may not
be achieved.

A full disclosure of the contract of engagement for consultant project
managers can be obtained from the Royal Institution of Chartered Surveyors
(RICS) and further recommendations are evident from BS6079.
Clearly, once again, these requirements emphasise the project managers

duties with respect to the delivery of time, cost and quality. Therefore, an
evaluation of the project management effectiveness must be focussed upon
building project performance in terms of the delivery of time, cost and
quality.
Question
By focussing on time, cost and quality we neglect many

other performance attributes that we have discussed,
many of which may be considerably influenced by project
management. Do you think we are correct to disregard
the others in favour of time, cost and quality?
In summary, project management represents a transaction cost for

construction clients. If you pay someone you expect something in return
and in the case of project management, what is expected in return at the
bottom line is 100% predictability in securing the project deliverables and
for most clients and most projects the deliverables are almost always
defined in terms of time, cost and quality.
So, we have covered much ground in determining what project management

is, how performance and project management success could be measured
and we have considered what the typical project manager can be expected to
accomplish. But we still don’t have an answer to whether or not it actually
makes a difference.
6.13 Does project management deliver or not?

Sadly, when we consider the criteria, time, cost and quality, and ask this
question, the answer is an emphatic NO!
The evidence against the value of project management in construction

projects is almost overwhelming!
In 1987 a study carried out by the World Bank determined that 90% of
construction projects were delivered late; In 2000 a survey by the National
Audit Office reported that 70% of public construction projects in the UK
were running seriously late or seriously over budget; In the early 1980’s
Morris undertook a study of 1449 separate construction projects and found
that only 12 were delivered within budget. These studies are not

encouraging for a discipline that we have determined can be measured
against its ability to deliver these criteria with 100% predictability. All of
the PM tools and processes have the delivery of these goals as their primary
aim. The evidence does not stop there! Further studies by Kalantjakos
(2001), Schlinchter (2001), Crawford and Pennypacker (2001), Clarke
(1999) and Pinto & Mantel (1990) amongst many others, seriously question
the ability of PM to successfully deliver project targets in the case of
construction projects.
6.14 What if?

What if all of these studies have just looked at the performance of the
projects from afar instead of looking at the performance of PM in detail-
perhaps the projects had unique circumstances and would have been very
much more late or over budget if it had not been for the involvement of the
PM. If this were the case then the picture would be positive since the PM
process could be seen to be working from the perspective of mitigation.
This is a valid question. In order to get a better handle on the detail, we

need to find out how a PM managed project compares with a non-PM
managed (traditional) project. Such a study has been undertaken by the
author using a causal path model.
The causal path model, shown below, compared PM projects with non PM
projects. The numbers on the arrows represent the influences between the
variables.

E1
0.859 0.830 E3
RK E2 0.743 E6
0.899
TC VA QE
+0.899 -0.372
-0.500
0.816 E4
+0.478
PM PR TE
+0.648 +0.691
RK Risk PR Procurement
TC Technical Complexity TE Time Effectiveness 0.865 E7
PM Project Management QE Quality Effectiveness
VA Variations to Contract
Note that there is no cost variable shown on the model. This is because no
statistically significant influence could be found between PM and delivered
cost. This in itself is a somewhat damning finding as it seems to suggest
that the final delivered cost of a construction project is entirely uninfluenced
by the management techniques implemented and instead depends on factors
entirely outwith the control of management.
In terms of the rest of the results shown in this model, it is apparent that
project managers have no direct influence upon any of the performance
variables.
However, project management does seem to reduce the level of risk

encountered within building projects. It also appears to be influencing the
level of technical complexity within projects (this was measured in relation
to programmed activity, specification and repetition). Project management
appears to produce a tendency to adopt less traditional contractual forms.
Thus, through the variables, TC and PR, project management appears to
influence building project performance in an indirect manner despite the
lack of evidence for any direct influence.
The increased technical complexity which is associated with project

managed projects results in a greater number of variations made to contracts
which in turn seems to reduce the effectiveness of quality delivery.

On the other hand, the more advanced contract forms associated with project
managed projects act to improve the time performance of projects.
Project management can, therefore, be seen to have indirect influences

upon building project performance which are beneficial to the time delivery
of projects but which are detrimental to the effective delivery of quality.
No influence, either direct or indirect, is evident between project
management and cost.
This is particularly important. It is essential that the use of project

management can be shown to demonstrate net additionality (or added value)
in either or all of the time, cost, quality criteria. Remember project
management represents a pure transaction cost. If net additionality cannot be
demonstrated then the case for clients using project management services
for the management of future projects is severely weakened. This is
because value for money cannot be demonstrated.
ο Interpretation of the indirect effect
We see that project management is not observed to have any direct effect
upon building project performance and has only an indirect effect upon the
performance variables of time and quality, time benefiting at the expense of
quality. An assessment of the overall effect of project management upon
these variables may be computed as follows:-
ο Effect of PM on TE @ 95% = (PPR,PM x PTE,PR)

= +0.648 x +0.691
= +0.448
This means that the use of project management improves time performance
by +0.448 standard units (remember the data had to be standardised to allow
the model to work.
ο Effect of PM on QE @ 95% = (PTC,PM x PVA,TC x PQE,VA)

= +0.478 x +0.899 x (-0.372)
= -0.1599
This means that the use of project management reduces quality performance
by 0.159 standard units.
When the results are converted back from the standardised values to the
original scales of measurement, the results indicate that the use of project
management improves time delivery by 0.171 or 17.1%.
On the other hand, this improvement in time is balanced by a reduction in

quality delivery of 0.122 or 12.2%.

6.15 Where does this leave us?
The analysis undertaken above indicates that project management does not
act upon the delivered time, cost and quality outputs in the manner we can
reasonably expect nor in the manner that construction clients expect.
The results of the path analysis suggest that project management, in fact, has
no direct influence project performance! Instead, the results obtained
provide evidence for an indirect relationship between project management
and construction project performance. This finding, in itself, is considered
significant, however, it is important to note that the indirect relationships
identified exist only between project management and the performance
criteria of time and quality. No evidence substantiates even an indirect link
between project management and performance in terms of cost delivery.
Moreover, returning to the indirect relationships, the results obtained from
the path analysis suggest that projects managed by project managers realise
their time objectives at the expense of quality implying that project
managers place greater emphasis upon the successful delivery of time than
is the case for the delivery of quality (This perhaps indicates the success of
the project management planning and scheduling tools you have studied in
PM1 and PM2, but indicates that less value is attached in practice to the
strategic tools available to project managers).
The same project has neither a better or worse chance of being delivered in
accordance with its agreed budget regardless of the use of PM! Therefore it
is clear that project management in practice does not provide or guarantee
the benefits which may be expected as a result of its application to
construction projects.
It follows that a similar improvement in the time performanceprojects may

be realised at a lesser cost to the client by removing fees paid to project
managers.
The assessment of whether or not project management adds value must

depend to a large extent upon where the priorities in relation to performance
are placed by the particular client organisation in question.
In the case of a project which has timeous delivery critical to its success, the
expenditure of money on project management does, in fact, add value.
Therefore we can see that ‘net additionality’ with respect to the time
component does appear to be present, albeit indirectly. However, we cannot
identify any net additionality, direct or indirect, in relation to the cost and
quality components.
This must of concern to us as project managers. The cost component is

perhaps of most critical importance to the majority of construction
clients. The same problem is inevitably demonstrable when considering

a project which has the successful delivery of quality principal amongst
its performance objectives.
The path model tells us that there is a problem with project management
application in construction projects not simply that there are huge problems
with construction which PM is helping to mitigate as we had earlier
supposed!!
What is going wrong? From your studies in PM1 and PM2 we know how
project management should perform and what it should influence. Yet all of
the evidence indicates that project management in practice does not deliver.
Before you question the value of project management at a more fundamental
level, let us address a crucial point.
None of these studies have identified any evidence that suggests project
management theory, in terms of the tools developed or in terms of the
recommended working practices you have studied in PM1 and PM2, cannot
deliver in practice that which is expected of it. In the absence of evidence
that there is a fundamental problem with project management knowledge we
must conclude that the problem lies not with project management per se. but
with project management implementation in construction. Alternatively, it is
possible that the systems and processes which are currently employed by
clients in order to integrate project managers within the organisational
structures of their projects in some way restricts the ability of the project
manager to perform in a manner which approaches ‘Best Practice’.
6.16 Explanation
There are only a limited number of possible explanations for the results
obtained:-
(i) The contemporary project management discipline does not possess

the knowledge or the capability to successfully deliver modern
complex construction projects, or;
(ii) The tools and systems designed to underpin project management,

many of which you have studied in PM1 and PM2, are not equal to
the task of managing projects, or;
(iii) There is a general failing to implement project management properly

in relation to the recognised requirements that are fundamental
within the discipline.
We must consider which of these is most likely to be valid.

6.17 The probable cause of failure
Clearly, the project management profession in the UK construction industry
does not consistently deliver the results demanded by contemporary clients.
We need to carefully consider what this means for both the practice of
project management and for the management of projects generally. Do the
results mean that project management is a flawed concept, do they mean
that project management techniques are not sufficient to cope with the
demands of managing modern construction projects or, finally, do they
mean that there is something seriously wrong in the manner with which they
are presently applied in the UK construction industry.
The first question we must address is whether or not project management

has some fundamental problem that prevents it from being successful. If
this is true we can expect project management to consistently fail when
applied to a wide range of projects in a wide range of industries.
We can be reasonably confident that this is not the case. When the track
record of project management is examined across a wide range of project
based industries, ranging from Aerospace, Computing and Manufacturing
we see that the general record of project management has been reasonably
good. This was not the case in the late 1960’s to the early 1980’s where
project management in general seemed to perform very poorly in relation to
its ability to deliver complex projects, however, lessons concerning project
management implementation were learned and the present situation is
generally good. Sadly, the construction industry has a tendency to lag
behind other industries in terms of performance improvements and the
lessons learned in other industries are only coming to fruition in
construction now. The Latham and Egan reports testify to this.
With these facts in mind we can be reasonably confident in asserting that

project management per se is not fundamentally flawed.
The second question we must consider is whether the tools and systems
used to underpin project management are not equal to the task.
A couple of points arise here. First, the nature of technological advance

means that the tools and systems we have available to us today will not be
perfect and that we can expect to see improvements in future, particularly in
the way of project management information technology systems which are
developing at a considerable rate.
Therefore, we can expect that in future, the tools and systems available to us
as project managers will be better and will therefore better enable project
managers to manage projects towards successful outcomes. However, the
fact that we know tools and systems will improve does not mean that the
tools and systems available at present are not equal to the task if properly
used.

Once again we can answer this question by considering other project based
industries that use the same tools and systems. Because the recent track
record of project management in aerospace, computing and manufacturing is
relatively good and because these industries use tools and systems that are
equally applicable in construction, we can confidently say that the problem
does not lie with the tools and systems themselves.
Therefore, we are left with implementation.
If the tools and systems developed to implement project management at the

operational level are applied without a corresponding implementation of
practices at the strategic level concerning the integration and organisational
aspects of projects then, purely from a theoretical perspective, problems are
inevitable.
We can argue that this is the basic problem with project management in the
UK construction industry at the present time insofar as the project
management function can be and sometimes is viewed as a non- strategic
activity whose purpose is to control the delivery of projects. Viewing
project management in a non- organisational way means that the project
management function is subsumed within the procurement or pre- delivery
phase of the total project lifecycle. This is, of course, far removed from the
intended nature of the project management discipline with regard to the
overall management of projects.
The application of project management at only the operational level would

indicate a misunderstanding and consequently a misapplication of project
management practice in the context of UK construction.
In other words, the failure described does not condemn the project
management discipline in terms of the body of knowledge and tools that
have developed therein over a period of some 60 years. Rather, the results
question the ability of the UK construction industry to appropriately
comprehend and apply the pure project management function in relation to
sufficiently empowering one individual or group with an appropriate level
of authority to implement that function efficiently. This is of much
importance to us if we are to be successful in project delivery in the future.
The ability of project managers to successfully deliver time, cost and

technical performance objectives in industries where the product can be
argued to be very much more complex than a typical contemporary building
give credence to such an assertion (an example would be the aircraft
industry). It is apparent that the project manager, in the context of the UK
construction industry, is rarely permitted (as a result of institutionalised
professional prejudices) to effectively discharge the project management
function as this was conceived.
The project management function has become confused in the case of UK

construction and the term ‘project manager’ is too frequently associated

with a consultant who is used to monitor the progress of projects using
sophisticated packages and tools. We must recognise that no matter how
good or sophisticated they may be, project management tools cannot
manage projects by themselves. The project managers leadership role is of
absolute importance if project management is to be successfully
implemented.
Recent thinking suggests that the characteristics of the individual or the

team that act as the project manager, particularly, in respect of leadership
and political skills is of much greater importance in successful project
management than any other single factor. We will investigate this later in
this module.
Clearly, if project management is only implemented at an operational level,

or if restrictive established professional roles, such as those of the Architect,
Quantity Surveyor, or Contractor, interfere with the ability of project
managers to take strategic decisions, this single factor may not have the
chance to have any bearing on project success.
The integration and organisational responsibilities of the project

management function have been neglected in the context of the UK
construction industry and too much emphasis has been placed upon the
achievement of time and cost targets which are frequently poorly defined
and which in some instances the project manager has not been involved in
specifying. This has been at the expense of ensuring that the product
performs in- use once delivered. Hopefully, the inadequacies of such
situations are obvious and it should be equally obvious that project success
is unlikely in such scenario’s.
It is suggested, therefore, that the results presented earlier are indicative of a

general failure of the UK construction industry rather than a failure of the
project management discipline per se.
6.18 Self Assessment Questions

(i) The purpose of contemporary project management (PM) is to deliver
projects on time, within budget and to the required quality standards.
Discuss this statement making particular reference to the record of

PM in delivering successful projects and giving consideration to the
present need for strategic project management practices.
(ii) Evaluate the role that systems management and project

implementation tools have played in the development of the UK
construction project management discipline and appraise the
usefulness of the same in delivering successful project outputs.


6: Project Management Evaluation: Learning Outcomes From This Unit

Transféré par

Informations du document

Description originale:

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

6: Project Management Evaluation: Learning Outcomes From This Unit

Transféré par

Droits d'auteur :

Formats disponibles

6: Project Management Evaluation

Learning outcomes from this unit

You should understand that project management is a mature discipline and

Recommended reading for Unit 6

Heriot-Watt University Unit 6 - 1

The first use of project management practices in construction came by way

Despite project management’s emergence as a major discipline, both in

Morris undertook a study in the early 1980’s in which he examined 1449

Heriot-Watt University Unit 6 - 2

Mounting evidence tends to suggest that the client frequently acquires an

Clearly, the procurement phase of a new capital building asset represents

This is a complex area of study because a plethora of variables are known to

We begin by investigating the origins of the project management profession

Heriot-Watt University Unit 6 - 3

6.3 What is PM?

Therefore, modern building project management has two main functions.

Heriot-Watt University Unit 6 - 4

Considered significant in the management of building projects [Bennett, J;

Whilst of substantial importance to the management of building projects and

6.5 Project organisation and project management

Clearly as all of the contributors will be organised towards profit

Heriot-Watt University Unit 6 - 5

Heriot-Watt University Unit 6 - 6

Why are we labouring this point? It is because organisational design is

6.6 Systems, planning, and control tools

Morris defines the early attitude towards systems management thinking in

“specify performance requirements; carefully preplan to prevent

Morris, P W; 1994 pg. 213

Heriot-Watt University Unit 6 - 7

The organisation and integration aspect of project management was not

The evolution of the project management discipline, as very briefly related

At the strategic level project management is concerned with the provision of

At the operational level, project management is concerned with the

Heriot-Watt University Unit 6 - 8

US Air Corps & Exxon’s Project

Gulick paper on Ma trix

Integ rated Logistic

Widespread eme rgence of

Figure 6.1: The evolution of the modern project management

Heriot-Watt University Unit 6 - 9

6.8 The private sector

As a result the professional project manager emerged as a recognised UK

“The overall planning and coordination of a project from inception

[CIOB: 1988: Page 3]

Heriot-Watt University Unit 6 - 10

6.9 The public sector

6.10 The present situation

The complete body of knowledge which relates to project management,

Heriot-Watt University Unit 6 - 11

However, in practice, the true situation is somewhat uncertain. The value

Moreover, continuous failures in public sector projects have produced

The construction industry in the UK is presently in the midst of fundamental

Heriot-Watt University Unit 6 - 12

Given the above scenario, we must ask; how effective is project

The general record of projects in meeting their defined schedule, budgetary

Heriot-Watt University Unit 6 - 13

Before reading further, how do think the effectiveness of project

It is worthwhile noting that the building project performance analysis

The principal difficulty in evaluating the effectiveness of professional

Heriot-Watt University Unit 6 - 14

Therefore if a true evaluation of performance is to be obtained it is

There is a strong theoretical argument, therefore, which suggests that, in