Sunday, 28 September 2014

Scientific Project Management in Real Estate and Construction industry in India – Part 1

On 13th Sept 2014 I gave a presentation on the topic ‘Importance of Scientific Project Management in Real Estate and Construction’ at a conference in Radisson Blue Hotel Goa, organized by CREDAI Maharashtra – a powerful organization of builders. The event was attended by almost 400 Real Estate developers across Maharashtra, India. Post this presentation I received many queries from different people across segments. This prompted me to present articles on the subject through a series of blogs.

We use word project in our every day life for e.g. my kids carry out projects in their school, even film stars call their ongoing movies as project. Some time we loosely make statement like ‘Filling this form is like a project for me’. The question here is - are we right in calling it a project?

As per definition a ‘project is a temporary endeavor undertaken to create a unique product or service or result’ or, in other words, a project is time bound journey to achieve any unique target. The important words here are “time bound” and “unique.” For e.g. producing products like cars or mobile handset in a factory set-up is also time bound process but the output from this is expected to be a series of uniform products and not unique products. So producing products such as car falls under the category of ‘operation’ and not project. So to answer the earlier question, ‘yes giving exams or doing a movie is a project’.

In Real Estate and Construction industry every building or plant is unique and hence it falls under the category of ‘project’.

But then what is project management?

As a part of Project Management in construction we have seen many century old, amazing and beautiful structures such Taj Mahal, Great Wall of China, Pyramids of Egypt etc. Similarly we have been observing many modern, beautiful structures such as Rashtrapati Bhavan, Parliament House, etc. We also see many ordinary looking structures all over metros and small towns. Most of these have been produced using traditional project management techniques.  When we say traditional, this means that more thrust was given on product itself but there was less or no focus on project management techniques. So in many cases these projects either get delayed while also crossing the budget many times over or there is no concept of budget at all.

The concept of project management as a discipline grew during the Second World War in USA when the US armed forces undertook massive projects in Defense and Infrastructure with very short time lines.

During the massive reconstruction of Europe in the post war era and the dominance of the American EPC companies in that period, the discipline of Project Management developed rapidly and became a necessary skill for execution of large projects with control on time, cost and quality.

Projects usually begin by setting the scope and creating boundaries in the form of timeline and budget. This is also called as “Triple constraints” i.e. for any project first scope is decided and then time and budget is estimated to complete this scope. However a project manager is not allowed to cross time and budget even if there is a change in scope. Hence, a project manager is constrained by these boundaries.

Slowly, project managers realized that there are many more constraints than just triple constraints. The other 6 constraints recognized are quality, human resources, communication, stakeholders, contracts and uncertainties. These 6 are also called as expanded triple constraints.

Project Management guidelines have been developed to manage such constraints effectively so as to deliver projects within agreed timeline, budget, quality and also keep the various stakeholders satisfied.

In the next series of articles we will see how to manage projects by managing the above mentioned 9 constraints.

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