man620 lecture 1 notes

University of Western CapeSchool of Business and FinanceMAN620/ADM720 Project Management

1MAN620/ADM720 – Project Management Lecture 1 Notes 26th January 2010

Lecture Session 1 : 26th January 2010

An introduction into project management with some history ofproject management and some contextual information.

How project management has permeated almost all aspects ofworking life.

The evolution of the project management context. Why and under what circumstances project management is

used. What characterizes projects and differentiates them from other

forms of management. Examples of projects – large medium and small.

Chapter 1 - An Introduction to Project Management

The Project Management Book of Knowledge (PMBoK) defines Projecy Management as “theapplication of knowledge, skills, tools and techniques to project activities to meet projectrequirements”.

In the course outline we make the following statements with regard to what this coursepromises you engineering students.

In the engineering environment, Project Management can be practiced either a stand-aloneprofessional discipline or as an integral part of the delivery mechanism for engineeringservices. Either way, all engineers need a thorough understanding of Project Managementtheory, principles, practices, tools and techniques. This course has been structured tostimulate the interest of student engineers in the discipline of Project Management and toequip them with sufficient knowledge of the discipline to meaningfully participate in projectwork at an early stage.

Many organisations do not employ full time Project Managers and it is common to pulltogether a project team to address a specific need. While most people are not formallyskilled in project methodology, taking a role in a project team can be an excellent learningopportunity and can enhance a person's career profile.

Historically, Project Managers found themselves in the position, where they wereunprepared and underprepared to manage projects that happened to cross their desks.Despite the fact that Project Management is now a recognised “profession” many of theappointed Project Managers are not dedicated Project Managers, but were rather appointedto protect some or other interest and are often unprepared for the challenges of continuallyshaping internal and external context, and frequently lacking the creativity, awareness andsensitivity such a role demands.



Chapter 2 - Project Management History

Pre 19th Century

Project management has existed in some form for thousands of years. After all anything thatrequires an approach where humans organize effectively to a plan and achieve specificobjectives can be loosely defined as a project. How else would have humans achieved someof stunning wonders and achievements.

For example, the Great Pyramid of Giza (2,550 B.C.) or the Great Wall of China (221 B.C. -206 B.C.). These projects were made possible with the development of simple tools likewheels and levers, and wedges, around 3000 BC. The pace of development continued inand around the Mediterranean, the Middle East and Asia Minor, and the harnessing ofanimal labor in carrying materials. This led to projects like those that created the RomanColiseum, 80 A.D.

Renaissance Engineers or Pseudo Project Manager

The forerunners of engineers, practical artists and craftsmen, proceeded mainly by trial anderror. Yet tinkering combined with imagination produced many marvellous devices. Manyancient monuments cannot fail to incite admiration. The admiration is embodied in the name“engineer” itself. It originated in the eleventh century from the Latin ingeniator, meaning onewith ingenium, the ingenious one.

The name, used for builders of ingenious fortifications or makers of ingenious devices, wasclosely related to the notion of ingenuity, which was captured in the old meaning of “engine”until the word was taken over by steam engines and it’s like. Leonardo da Vinci bore theofficial title of Ingegnere Generale. His notebooks reveal that some Renaissance engineersbegan to ask systematically what works and why." 1

"The first engineers were irrigators, architects, and military engineers. The same man wasusually expected to be an expert at all three kinds of work. This was still the case thousandsof years later, in the Renaissance, when Leonardo, Michelangelo, and Da Vinci were notonly all-around engineers but outstanding artists as well. Specialization within theengineering profession has developed only in the last two or three centuries."2

The first project managers were technicians or engineers, generally multi-skilled generaliststhat could deal with many situations.

Beyond construction, typically in civil engineering, other types of projects drove the greattechnological advances and scientific discoveries. Also the great journeys across oceans

1Source: History of engineering; http://www.creatingtechnology.org/history.htm#1

2Source: Paul Allen history of PM; http://members.aol.com/AllenWeb/history.html


MAN620/ADM720

and the world, or explorations to the far corners oproject.

The 16th Century and Modern Age of Engineering

This marked the beginning of modern engineering with the formation of professionalsocieties, printing of treatise on engineering subjects in quantity, enginspecialization within the profession, and engineers began to take advantage of the brilliantscientific discoveries of the time.

The Scientific Revolution

"The first phase of modern engineering emerged in the Scientific Revolution. GaNew Sciences, which seeks systematic explanations and adopts a scientific approach topractical problems, is a landmark regarded by many engineer historians as the beginning ofstructural analysis, the mathematical representation and design of

The 18th and 19th Century and the Industrial Revolutions

The end of the 18th and 19th century witnessed colossal changes in the Western World withindustrial revolutions and with this the birth of management principles in the busineto become the backbone of project management.

The First Industrial Revolution and Steam

The monumentous changes brought about by the first industrial revolution and itsrepercussions required new thinking and solutions at a more macro level. Fnew industrialized world with mass production required a system to supply large quantities ofraw materials, resources, man power, equipment and organization.

It needed more sophisticated systems of transportation, storage, manufacturing,and distribution. Further a rapidly expanding workforce of thousands needed to be takencare of in terms of housing, health, welfare, and education. All this brought in newinstitutions, establishments, and organizations. It also brought a moreto business and management based on scientific research and principles.

3Source: History of engineering; http://www.creatingtechnology.org/hist

720 Project Management

720 – Project Management Lecture 1 Notes 26th January 2010

and the world, or explorations to the far corners of the earth were all different forms of a

The 16th Century and Modern Age of Engineering

This marked the beginning of modern engineering with the formation of professionalsocieties, printing of treatise on engineering subjects in quantity, engineering schools, andspecialization within the profession, and engineers began to take advantage of the brilliantscientific discoveries of the time.

The Scientific Revolution

"The first phase of modern engineering emerged in the Scientific Revolution. GaNew Sciences, which seeks systematic explanations and adopts a scientific approach topractical problems, is a landmark regarded by many engineer historians as the beginning ofstructural analysis, the mathematical representation and design of building structures.

The 18th and 19th Century and the Industrial Revolutions

The end of the 18th and 19th century witnessed colossal changes in the Western World withindustrial revolutions and with this the birth of management principles in the busineto become the backbone of project management.

The First Industrial Revolution and Steam

The monumentous changes brought about by the first industrial revolution and itsrepercussions required new thinking and solutions at a more macro level. Fnew industrialized world with mass production required a system to supply large quantities ofraw materials, resources, man power, equipment and organization.

It needed more sophisticated systems of transportation, storage, manufacturing,and distribution. Further a rapidly expanding workforce of thousands needed to be takencare of in terms of housing, health, welfare, and education. All this brought in newinstitutions, establishments, and organizations. It also brought a more disciplined approachto business and management based on scientific research and principles.

Source: History of engineering; http://www.creatingtechnology.org/history.htm#1

3January 2010

f the earth were all different forms of a

This marked the beginning of modern engineering with the formation of professionaleering schools, and

specialization within the profession, and engineers began to take advantage of the brilliant

"The first phase of modern engineering emerged in the Scientific Revolution. Galileo’s TwoNew Sciences, which seeks systematic explanations and adopts a scientific approach topractical problems, is a landmark regarded by many engineer historians as the beginning of

building structures."3

The end of the 18th and 19th century witnessed colossal changes in the Western World withindustrial revolutions and with this the birth of management principles in the business world,

The monumentous changes brought about by the first industrial revolution and itsrepercussions required new thinking and solutions at a more macro level. For example, thisnew industrialized world with mass production required a system to supply large quantities of

It needed more sophisticated systems of transportation, storage, manufacturing, assembly,and distribution. Further a rapidly expanding workforce of thousands needed to be takencare of in terms of housing, health, welfare, and education. All this brought in new

disciplined approach



The Factory System

This was a system of manufacturing introduced by the Industrial Revolution in the 18th and19th centuries. Goods were made by workers gathered in a factory rather than handcraftedby craftsmen in their homes. The principals of the system lay in breaking the overall processinto smaller activities and creating cells were tasks would be repeated.

The first factories manufactured products like pulleys for sailing ship rigs, and firearms likemuskets, and later textiles in mills.

Transportation Networks

The industrial revolution required an advanced system for transportation and distribution.This was first brought about by canal networks, 18th century, and then the railway systems,19th century. As trade expanded globally so did the development of ocean going steamshipliners. From all this evolved some of the largest projects ever sponsored by governmentsnamely, the transcontinental railroads of the US (1869), Canada (1870), Russia (1917), andthe super-liner (Titanic) and dreadnought races of the early 20th century .

The 20th Century

The 20th century witnessed colossal changes across the world with two industrial revolutionswhich required a far more structured approach to business and management as the scale ofobjectives changed.

The Second Industrial Revolution Electricity and Combustion Engines

The very late part of the 19th century saw the second industrial revolution emerge with ahost of new emerging technologies. The second, dominated by electricity and chemicals,lasted 1890-1930, and brought telephones, electrical devices, the internal combustionengine, and transportation by land (automobiles), sea (ocean going liners), and air.

Epitomized by mass production of consumer goods and the mechanization of manufacture,the second industrial revolution served the needs of an increasing population.

Near the turn of the century, Frederick Taylor (1856 to 1915) began his detailed studies ofwork. He applied scientific reasoning to work by showing that labor can be analyzed andimproved by focusing on its elementary parts. He applied his thinking to tasks found in steelmills, such as shoveling sand and lifting and moving parts. Before then, the only way toimprove productivity was to demand harder and longer hours from workers.

Taylor's associate, Henry Gantt (1861 to 1919), carried on the work and produced the nowfamous Gantt charts, complete with task bars and milestone markers that are core to project



management and are indispensible in the outlining of sequence and duration of all tasks in aprocess. Gantt chart diagrams proved to be such powerful analytical tools for managers thatthey remained virtually unchanged for nearly a hundred years. In the early 1990s link lineswere added to depict precise dependencies between tasks.

The First World War

The world war mobilized continents with huge armies and resources into a global conflict. Itmanifested the industrialization of war and leveraged mass production, mass transportation,and mobilization of vast armies. By 1918 the logistical operation supplying the BritishExpeditionary Force was the largest the world had ever seen. This further accelerated workin planning and supplying.

Between the World Wars and Business Management

Between the two wars new disciplines were added to the study of business managementnotably, human relationships (between employer and employee), an evolution in marketing(and its importance) and industrial human relations school of management arose to deal withthe practical problems caused by Taylorism and the grinding repetition of tasks.

Project engineers developed or adapted coordination techniques that gave the managerscontrol over the progress of the project but did not attempt to dictate to specialized expertshow to do their work. MIT professor Erwin Schell articulated this philosophy, telling studentsin the 1930's, "The work of the engineers in most departments is not sufficiently routinized toallow process control. The most satisfactory policy appears to be that of employingcompetent men and then holding them [responsible] for results in terms of the erectionschedule, leaving ways and means largely to their individual discretion."

The Third Industrial Revolution and Computers

The third, from 1930 to today, has been dominated by computers both electro-mechanicaland electronic, information, and the Internet and its impact of the institutionalization ofmanagement practices into business.

The Second World War

World War II reflected the manifestation of the second industrial revolution through themechanization of warfare or "Blitzkrieg." It was dependent on advanced machinery swiftlymoving huge armies and resources, whether by land or air. The shrinking war-time laboursupply demanded new organizational structures.

The conflict also brought massive projects to the fore front. For example, the adaptive system created for the Battle of Britain (1940), the Collossus computers at Bletchley Park (1943) , the Normandy Invasion (1944), the Manhatten project (1945).

The latter was the first evidence of modern project management, displaying principlesof organization and planning. It separated the project manager (General Groves) and thetechnical leader (Robert Oppenheimer).


MAN620/ADM720

The Cold War

This war reflected the manifestation of the third industrial revolution and the advancesin the use of information and intelligence in the Second World Wdevelopment of a large number of planes and rockets projects by the US Airbased on experiments and prototypes in the Second World W

The 1950s

The development of both CPMand Review Techniques) gave project managers much greater control over massivelyengineered and extremely complex projects. This was vital for the military weapon systemsevolving and the space race which began in 1957, one of the most complex and difficultprojects undertaken by humans.

The 1960s

US Defense introduced some core project toolstructures. An intellectual interest in project management emerges. The constructionindustry begins to widely use modern project management tools and methods.

The 1970s

Project-based firms use project management asManagement Institute (PMI) and the Internet (IPMA) are established to focus on projecttechniques. Project Management starts to incorporate Time, Cost and Quality (TCQ), andtriangulating the relationship between these witfrom the project output. There is also a focus on the growth in the importance of externalfactors.

The 1980s

The discipline matures and broadens to include risk management, Total QualityManagement (TQM), partnering, and dedevelopment and publication of the PM Book of Kto adopt the approach of “Management by Projects.”

The 1990s

The discipline pays more attention to business benefitsproduction of outputs, standardization of project methodologies, and the introduction ofcertification. It also focuses on enterprise project management, the need to managenetworks of projects, and improving projectmodel.

720 Project Management

720 – Project Management Lecture 1 Notes 26th January 2010

This war reflected the manifestation of the third industrial revolution and the advancesinformation and intelligence in the Second World War. It also saw the

development of a large number of planes and rockets projects by the US Airriments and prototypes in the Second World War.

The development of both CPM (Critical Path Method) and PERT (Programme Evaluationgave project managers much greater control over massively

red and extremely complex projects. This was vital for the military weapon systemsevolving and the space race which began in 1957, one of the most complex and difficultprojects undertaken by humans.

US Defense introduced some core project tools like earned value, and work breakdownstructures. An intellectual interest in project management emerges. The constructionindustry begins to widely use modern project management tools and methods.

based firms use project management as a permanent function. The ProjectManagement Institute (PMI) and the Internet (IPMA) are established to focus on projecttechniques. Project Management starts to incorporate Time, Cost and Quality (TCQ), andtriangulating the relationship between these with regard to the expected value to be receivedfrom the project output. There is also a focus on the growth in the importance of external

The discipline matures and broadens to include risk management, Total Qualitytnering, and defining project success. PMI sponsors the

development and publication of the PM Book of Knowledge (PMBOK) and business beginsto adopt the approach of “Management by Projects.”

The discipline pays more attention to business benefits (business case) of projects, not justproduction of outputs, standardization of project methodologies, and the introduction ofcertification. It also focuses on enterprise project management, the need to managenetworks of projects, and improving project management in organizations through a maturity

6January 2010

This war reflected the manifestation of the third industrial revolution and the advances madear. It also saw the

development of a large number of planes and rockets projects by the US Air Force and Navy

(Programme Evaluationgave project managers much greater control over massively

red and extremely complex projects. This was vital for the military weapon systemsevolving and the space race which began in 1957, one of the most complex and difficult

s like earned value, and work breakdownstructures. An intellectual interest in project management emerges. The constructionindustry begins to widely use modern project management tools and methods.

a permanent function. The ProjectManagement Institute (PMI) and the Internet (IPMA) are established to focus on projecttechniques. Project Management starts to incorporate Time, Cost and Quality (TCQ), and

h regard to the expected value to be receivedfrom the project output. There is also a focus on the growth in the importance of external

The discipline matures and broadens to include risk management, Total Qualityfining project success. PMI sponsors the

and business begins

(business case) of projects, not justproduction of outputs, standardization of project methodologies, and the introduction ofcertification. It also focuses on enterprise project management, the need to manage

management in organizations through a maturity



Chapter 3 - Project Management in South Africa

In 1969, the Project Management Institute (PMI) was formed in the United States of Americato serve the interest of the project management industry. The premise of PMI is that the toolsand techniques of project management are common even among the widespread applicationof projects from the software industry to the construction industry. In 1981, the PMI Board ofDirectors authorized the development of what has become A Guide to the ProjectManagement Body of Knowledge (PMBOK Guide), containing the standards and guidelinesof practice that are widely used throughout the profession.

The South African Chapter of the PMI was established in 1982 but was replaced in 1992 byProject Management South Africa.

In 2000 the Council for the Built Environment was promulgated by an act of parliament andthis brought into existence the South African Council for Construction and Project Managers,a statutory body that any professional who intends acting as project manager, needs toregister with. There are also several voluntary organisations in South Africa which representthe interests of the various project management disciplines.

Examples of Early Projects in South Africa

The Early Years: Late 19th Century

Projects in those days were extremely labour intensive as a consequence of the lack ofmechanisation and the abundance of cheap labour.

Projects undertaken in South Africa in the mid to late 19th Century include; Major railroad, road & harbour projects (1860 railway line Durban to Point, 1860 V&A

Waterfront came into operation 1860, Railway line Johannesburg & Bloem - 1892) Hospitals, schools, prisons and other government buildings (House of Parliament first

built in 1885; Johannesburg Fort (Prison) in 1893) Mining projects in the Witwatersrand and Kimberly Steel industry (ISCOR was formed in 1882) Vereeniging Brickworks - 1882

Early 20th Century Efforts

Taylor, Gantt, and others helped evolve management into a distinct business function thatrequires study and discipline. In the decades leading up to WWII, marketing approaches,industrial psychology, and human relations began to take hold as integral parts of businessmanagement.

Major projects undertaken in South Africa between 1900 and 1945 are; Dam projects – Hartebeespoort Dam 1926 The 10MW President Street Power Station in Johannesburg Iscor (Van Der Bijl) Steel works started in 1943



What is a Project?

A project is a temporary and one-time exercise which varies in duration. It is undertaken toaddress a specific need, problem or opportunity in an organisation, which may be to create aproduct or service or to change a business process. This is in direct contrast to how anorganisation generally works on a permanent basis to produce their goods or services. Forexample the work of an organisation may be to manufacture trucks on a continual basis,therefore the work is considered functional as the organisation creates the same products orservices over-and-over again and people hold their roles on a semi permanent basis.

What is Project Management?

A project is generally initiated by a perceived need, problem or opportunity in anorganisation. Being a one off undertaking, it will have a start and an end, constraints ofbudgets, time and resources and involves a purpose built team. Project teams are made upof many different team members, for example, end users/customers (of a product orservice), representatives from Information Technology (IT), a project leader, businessanalysts, trainers, the project sponsor and other stakeholders.

Project management is the discipline of managing all the different resources and aspects ofthe project in such a way that the resources will deliver all the output that is required tocomplete the project within the defined scope, time, and cost constraints. These are agreedupon in the project initiation stage and by the time the project begins all stakeholders andteam members will have a clear understanding and acceptance of the process, methodologyand expected outcomes. A good project manager utilises a formal process that can beaudited and used as a blue print for the project, and this is achieved by employing a projectmanagement methodology.

The Project Management Context

Projects and project management are carried out in an environment broader than that of theproject itself. The project management team must understand this broader context so it canselect the life cycle phases, processes, and tools and techniques that appropriately fit theproject.

The context is the combination of the environmental, political, social-economic andcommercial factors which exist and which specifically influence the manner in which theproject is executed or on the outcome of the project.

Programme Management as a Project Management Context

Project management, is as we described earlier, a discipline which, in its traditional form,focuses on the definition, planning and execution of specific objectives.

Project management exists in a broader context that includes program management,portfolio management and project management office. A program is a group of relatedprojects managed in a coordinated way to obtain benefits and control not available frommanaging them individually. Frequently, there is a hierarchy of strategic plan, portfolio,program, project and subproject, in which a program consisting of several associatedprojects will contribute to the achievement of a strategic plan.



The growing use of projects to effect significant organisational change has led to awidespread interest in programme management. Programmes by grouping, directing andinitiating new projects set the context for projects, yet they too are subject to externalinfluences and developments.

Emergent thinking on programme management best practice has focused on the internalcontext, namely the marshalling of projects and resources to achieve the desired strategicand/or synergy benefits. Relatively neglected, though crucially important, is the need toshape, embed and align the programme to the evolving needs of the organisation.

Programmes provide a bridge between projects and the organisation's strategy, programmemanagement takes on many of the characteristics and competencies of strategic changemanagement and organisational development. Programme directors and managers havefundamental roles as mediators' moderators and manipulators of the external context andpressures. They must embrace and deal with the ambiguity, tensions and interplay betweenthe need for concrete action and the strategic imperative of openness, options and speedyresponse.

Programs may include elements of related work outside of the scope of the discrete projectsin the program. For example:

A new car model program can be broken up into projects for the design andupgrades of each major component (for example, transmission, engine, interior,exterior) while the ongoing manufacturing occurs on the assembly line;

Many electronics firms have program managers who are responsible for bothindividual product releases (projects) and the coordination of multiple releases over aperiod of time (an ongoing operation).

Programs also involve a series of repetitive or cyclical undertakings. For example:

Utilities such as Eskom or Transnet often speak of an annual “construction program,”a series of projects built on previous efforts, but designed to achieve a long term goalor strategic objective;

Many non-profit organizations have a “fundraising program,” to obtain financialsupport involving a series of discrete projects, such as a membership drive or anauction. This happens over time and is linked in with the organisations strategicobjectives.

Publishing a newspaper or magazine is also a program with each individual issuemanaged as a project. This is an example of where general operations can become“management by projects”.

In contrast with project management, program management is the centralized, coordinatedmanagement of a group of projects to achieve the program's strategic objectives andbenefits.

Bringing Project Management Home

A quick review of yesterday’s Sunday Times Career Time sections 1 and 2 yields thefollowing statistics. We only consider the “big adverts”.

Number of adverts polled = 929Number adverts place by Government = 518 (56%)



Number of adverts placed by Education Institutions = 49.Number of Adverts for Project Management = 57Number of International PM Adverts = 7

These statistics provide us with the following insights The Project Management profession in South Africa is healthy and in great demand. South African Project Managers are in demand on the international market. Project Management is a good career option for the aggressive, confident engineer.

Some Pros and Cons of Project Management

Proso Project Management is a great stepping stone to promotion.o Project Managers are better paid than their technical discipline colleagues.o Completing a project gives one a strong sense of achievement.o Work associated with Project Management has considerable variety – no 2

days are the same.o As a Project Manager you are normally given significant freedom of choice.o Project Management provides an opportunity to make significant changes to

the organisation and/or environment.o A Project Managers role cuts across several technical disciplines.

Conso As a Project Manager, you will need to be tolerant to the politics around the

project and the people who participate in it. Your sole focus is to move theproject forward.

o Project Managers need to deal with significant ambiguity and uncertainty.There is always someone threatening to halt the project. By definition projectsare transformational and not all people like change.

o Project Managers are given a lot of responsibility but little authority.o Project Managers are drawn from the ranks of the technocrats. The process

of executing projects disconnects Project Managers from their roots.Sometimes this is an alienating experience.

o There is social stigma in that the technocrats often perceive ProjectManagement as not a real job.

What does it take to be a Good Project Manager?

Aside from understanding the methodology, there are other characteristics to keep in mindfor a successful Project Manager. Some texts suggest that project management is both ascience and an art. The art is in the ability to lead people through a projects and the scienceis in the defining and coordination of the efforts of lots of different people.

Given that any project is involved with a project team as well as the stakeholders, a goodProject Manager needs to have not only excellent time management skills but also goodpeople skills such as:

Excellent communication skills The ability to be a team player Excellent interpersonal skills The ability to negotiate

Experienced Project Managers believe there are two key factors in determining the successof a project:



1. Recruitment and selection of suitably qualified project members to relevant projectpositions is essential. Recruiting of project team members should be handled with thesame discipline and rigour as the recruitment of new employees to fulfil the ongoingpositions in the business.

2. A well documented methodology that is kept simple and easily adaptable todifferent sizes of projects is a critical foundation for ensuring project success. Thisdocumented methodology needs to be communicated to project team members aspart of the initiation stage. This will ensure such things as everyone having a clearunderstanding of how to progress and what is expected at each stage and that themethodology is adapted to the specific needs of the project being undertaken. Theproject life cycle chart is considered as the essential start of the project managementdocumentation process.

Project Managers cannot however succeed on the basis of their project managementknowledge or the talent of their people alone. Project Managers need to know and have adeep understanding of all the processes that goes into producing the product.

For example: one cannot project manage the delivery of a housing project withoutunderstanding how a house is built. So the Project Manager will need to understand thewhole process of building a house as well as the process of obtaining the authorisationsfrom local authorities, as well as the process of obtaining environmental clearance, as wellas the process of getting bulk services to the site etc.

This Project Manager may, on completion of this housing project, be required to projectmanage the upgrade of the N1 between Beaufort West and Laingsburg. Thereafter, he willbe the Project Manager on the Materials Handling System Upgrade at Saldanha Steel andthereafter the Project Manager for the Balance of Plant Project as part of the Pebble BedModular Reactor Programme. This places the experienced Project Manager in the veryunique position of knowing (in combination) a lot of stuff about a lot of stuff that in alllikelihood very few other people know as well.

Project Management in the EPCM Environment.

At this point I will introduce my own experience. I started in Project Management by accident18 years ago. I was a young(ish) electrical engineer with little ambition other than to becomea damn good Senior Electrical Engineer one day.

My experience has taught me that Project Management need not only be about being theProject Manager. In large organisations where project management is the vehicle fordelivering their engineering product the project team is large and diverse. My story is atypical story of how people get sucked into project management.

Take for instance the organisation that I worked for then – a company called EngineeringManagement Services (EMS - now called Murray and Roberts Engineering Solutions). Thiswas a company with more than 400 engineers. EMS (or MRES) has a significant trackrecord of projects including:

The Pelindaba Uranium Enrichment Plant; All South African and Mozambique Aluminium Smelters; Various Petrochemical Plants including SapRef and GenRef in Durban, Caltex in

Cape Town, Plants at Sasol I, II and III in Sasolburg and Secunda etc;



Various Power Station around South Africa; Various Mining and Beneficiation Plants mainly in the Gold and Platinum sector in

sub Saharan Africa; 45% of the beer drunk by students is likely to have been produced at a brewery plant

delivered by EMS. The initial viability and constructability studies (Detailed Feasibility Report - DFR) for

the Pebble Bed Modular Reactor and the Fuel Plant. Saldanha Steel Project – Iron Making Plant Indian Ocean Fertilizers project - Durban

EMS uses the EPCM (Engineering, Procurement and Construction Management) method forproject delivery. This is a turnkey variant and the company delivers a cradle to grave service.

The EPCM Contractor develops sufficient basic engineering detail to define what technologyis required to support the industrial facility the client requires to meet his strategic objective.He may use his own (licensed) processes or procure the process licence on behalf of theclient or he will contract with the appropriate technology provider to secure the process ortechnology package on behalf of the client.

He will develop all engineering interfaces with the technology package and fit it into theoverall process to realise the proper fit and integration with upstream and downstreamfunctions and overall process control. He will specify the equipment, material andconstruction requirements and procure and contract with the appropriate providers. In SouthAfrica, the project context is adjusted to account for the historical social imbalances and hewill accommodate the context.

He will oversee the project execution by testing all equipment and systems before they aredespatched from their places of manufacture (Factory Acceptance Testing or FAT). He willmonitor installation progress and quality, all the while checking that all legislative and worldbest practices are being adhered to. He will progressively test and certify completed workand produce documentation to that effect.

He will expedite completion and once this has been achieved he will cause the client to betrained in the operation and maintenance of the facility before handing the facility over.

A typical EPCM project structure is shown below.



Project Management in the Built Environment.

In 1999, I left the Murray and Roberts Group (and specifically EMS) after 20 tears serviceand took over as CEO of a small fledgling Cape Town based project management companycalled Proman Project Management Services. Proman was (as you will recall the projectcontext discussion earlier) the EMS empowerment partner on the Saldanha Steel Project.

It was clear to me within 2 days that I had made a mistake. There were no EPCMopportunities in the Western Cape for big well established ECPM organisations much lessfor small wannabee project enterprises with no experience or track record. Time to re-strategise and Casino’s came to our rescue.

Legislation had recently been passed regulating the gambling industry and providing for thedevelopment of 40 casinos in the 9 provinces – 5 in the Western Cape. The Cape TownMetropolitan Casino Licence tender process had begun and Proman nailed its colours to theSun International mast. We worked hard and tirelessly (and without income) to make thetender a success and in December 1999, became a partner in the project management teamof the GrandWest Casino project team.

Project management in the built environment is significantly different to project managementin the industrial environment. To an extent the words of MIT professor Erwin Schell in 1930still applies to the Built Environment. He said "The work of the engineers in mostdepartments is not sufficiently routinized to allow process control. The most satisfactorypolicy appears to be that of employing competent men (consultants) and then holding them[responsible] for results in terms of the erection schedule, leaving ways and means largely totheir individual discretion."

Whereas EPCM provide a single point responsibility, the Built Environment model tends tolean towards a more diffused model for dealing with risk.

In my career I participated in projects as

Project Director (Cape Town International Convention Centre, Vodacom Phase III) Project Manager (GrandWest,, RKTP) Engineering Manager (Saldanha Steel Project) Lead Electrical Engineer (Various Petrochemical Projects) Lead Control Systems Engineer (Saldanha Steel Project) Senior Planner (Venetia Diamond Mine, Matimba Power Station) Construction Manager (Henkel Adhesives Factory, SAPPI Ngodwana rebuild) Senior Section Leader (Iron Making Plant – Saldanha Steel Project)\ Site Engineer (SAPREF Fox, SASAOL III O2 Plant Train 7) Heavy Lift Strategist (PBMR Demonstration Plant Study)

Each of these projects required that I fully understand Project Management and each caseand under both project management paradigms the following diagram helped me keep myfeet firmly planted and my eyes focused.



Project Management Overview



Project Management vs Ongoing Management

Is Project Management an art or a science? If it is a science is it not fair to say that that it isthe science of common sense. So what is this Project Management fuss all about? If it’sabout common sense then why can’t we just extend the management discipline we alreadyapply in the day to day management of the businesses and enterprises and use them in thedelivery of our projects?

The answer lies in understanding the difference between managing an ongoing enterpriseand managing a project.

Ongoing Management

The ongoing general management of an enterprise is characterized by the repetitive cyclesof planning, executing and controlling the fundamental business processes. Incrementalimprovements are introduced in the cycles to improve efficiencies, to reduce costs, toimprove product build quality etc.

General (ongoing) management is a broad subject dealing with every aspect of themanagement including

Finance and accounting, sales and marketing, research and development,manufacturing and distribution

Strategic planning, tactical planning and operational planning Organisational structures, organisational behaviour, human resources

development, personnel administration, payroll management etc Managing work relationships through motivation, delegation, supervision, conflict

management, team building

The Japanese philosophy of Kaizan best describes this type of management with its sloganof “there is no best – only better, and strives for continuous improvement in the repetitiveprocesses.

Examples of ongoing general management are

Managing a supermarket, hospital or hotel Manufacturing shoes, cars or making wine Managing an international airport or convention centre Running an engineering consultancy or a provincial government department Managing an airline or a taxi fleet or a restaurant

Each area of the business and every process that supports the business is continuouslyreviewed and improved with the ultimate goal of improving profitability and increasingshareholder returns.

While this course does not address any of the business processes and practices associatedwith general management, an understanding of general management principles is a pre-requisite to a good understanding of project management.

man620 lecture 1 notes

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