Bussiness planning process
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Dr f Dejahang (BSc CEng, BSc (Hons) Construction Mgmt, MSc, MCIOB, PhD)
027027PROJECT PROJECT
MANAGEMENT &MANAGEMENT &BUSINESS BUSINESS PLANNING PLANNING PROCESSPROCESS
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PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
• Building and civil engineering projects carry uncertainty and risk.• Organisations under take RISK when
they need to achieve their business objectives more effectively.• Expand ONLY when the potential
benefits out weight the risk involved.
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
• All projects should therefore arise from a need to fulfil two main factors such as:
1. Specific Strategic Objectives
2. Achieve competitive advantages
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
The business planning process
has four essential steps:
Remember ‘MOST’
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
DEFINE THEBUSINESSMISSION
SET LONG TERMOBJECTIVES 5-10YEARS TO ACHIEVETHE MISSION
DEVELOP STRATEGIESTO ACHIEVE THEOBJECTIVES-INTERMIDIATE GOALS,BUDGETS,STRATEGIC PLANS
SHORT TERMGOALS, INDIVIDUALPLANS FORPROJECTS/OPERATIONS
MMMISSION LLLLLLL
OOBJECTIVES
SSTRATEGIES
STACTICS
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
The business planning process hasfour essential steps: Mission Statement• States the reason for the organisations
existence; • Initiates the business planning
process;
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
Objectives are:• The position; • In quantities terms;• In qualitative terms;• that the organisation wishes to
reach;• Must be in a stated period of time.
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
Strategies to consider:Design to achieve the objectives such
as: • A set of budgets • Clear goals • Achievable targets • Statement for needs.
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
Covering all aspects of the businesssuch as:• People • Premises • Organisations • Capital • Cash.
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
Tactical plansIndividual plans to achieve items such as:• Defined goal • Operations and Projects
The plan describes how the organisation will achieve each element of the strategic plan.
PROJECT MANAGEMENT BUSINESS PLANNING PROCESS
Another way to look at Business plan
Remember ‘COST’• C Commitment by all concerned to the project• O Objectives being clear to all-Scope and
Mission • S Strategy to meet the objectives-Milestone Plan• T Tactical-activities found necessary to achieve
to each milestone and solve Problems
Project conception process
POLITICAL LEGAL INSTITUTIONAL
SOCIOLOGICAL TECHNOLOGICAL ECONOMIC
INFORMATION, ENERGY,MATERIAL
MOTIVATION STARTPOINT
INFORMATION, ENERGY,MATERIAL
Disposal of assets
Adaptation to external influence
Exam
ples
of in
itial
Feas
ible
Decis
ions
Project inception process
POLITICAL LEGAL INSTITUTIONAL
SOCIOLOGICAL TECHNOLOGICAL ECONOMIC
INFORMATION, ENERGY, MATERIAL
INFORMATION, ENERGY, MATERIAL
Construct a new building
Exam
ples
of i
nitia
l Fea
sible
Dec
ision
s
Goal Time
SatisfactionofObjectiveRequired TheAcquisitionofRealProperty
A contribution to the client's objective through the acquisition of real property
P7Project inception process
POLITICAL LEGAL INSTITUTIONAL
SOCIOLOGICAL TECHNOLOGICAL ECONOMIC
INFORMATION, ENERGY, MATERIAL
INFORMATION, ENERGY, MATERIAL
Final Finish Point
Fini
sh sp
ectru
m
Goal Time
The realisation of a new building
The project realisation process
ConstructA NewBuilding
FUNCTION OF PROJECT MANAGEMENT
FUNCTION OF PROJECT MANAGEMENT
• The basic Management Principles described by Henri Fayol are:
• To plan• To organise• To co-ordinate• To control• To lead
FUNCTION OF PROJECT MANAGEMENT The function of ProjectManagement in more detail are:
• To establish the clients objectives and priorities issues such as:–brief formulation;–client organisation;–approval powers.
FUNCTION OF PROJECT MANAGEMENT
Design Project Organisation Such as:• organisation chart;• decision point;• Relationships;• feed back.
FUNCTION OF PROJECT MANAGEMENT
Integrate Client into theproject• client organisation integrated
into project organisation;• people responsibilities;• decision processes.
FUNCTION OF PROJECT MANAGEMENT
Selection and appointment ofContributors• identify contributors;• identify input required;• identify when input required and
duration;• record types of appointment.
FUNCTION OF PROJECT MANAGEMENT
Full brief formulation process• Establish need, budget, cost
plan, cost limit, procurement route.
• Start value engineering• Programme formulation• The overall project programme
Initial ConstructionCost
Additional Cost throughunnecessary
sketch design andspecification
features
Additional Cost throughinefficient Constructionmethods and techniques
Contractors Overheadthrough labour andmachinery lying idle
TotalConstruction
Cost
costofBuildingEntity
VEapplication
ManagementReviewTechniques
PlanningControlProcedures
Typical Spectrum of a cost ReductionProgramme in the Building Industry Timing of V.E. study during the design stages
SketchDesign
Design Development
Approval
DocumentationDevelopment
Approval
Approval
ConstructionProcess
Yes
Yes
Yes
No
No
No
PreliminaryDefinition
RefinementofDesign
Workingdrawings
V.EAPPLICATION 1
V.EAPPLICATION 2
FUNCTION OF PROJECT MANAGEMENT
The phase or stage programme• The design programme.• The procurement programme. • The construction programme.• The commissioning
programme.
FUNCTION OF PROJECT MANAGEMENT
Activation of the relationships between contributors
• Ensure contributors are brought in and integrated into the project organisation.
• Ensure contributors can perform as required.
FUNCTION OF PROJECT MANAGEMENT
Establish appropriate informationand communication structure by: establishing a full project
procedures
manual containing;• description of formal
communication cannel;
FUNCTION OF PROJECT MANAGEMENT
• change requests and instructions;• drawings framework;
• co-ordination project information system;• Address index of all
contributors.
FUNCTION OF PROJECT MANAGEMENT
Convening and chairing meetingsof contributors at all stages suchas:• Judging the need and frequency;• Who needs to attend;• Agenda setting;• Minutes and action.
FUNCTION OF PROJECT MANAGEMENT
Monitoring and controlling• Pro-active role;• Obtaining feedback and under taking
analysis;• Testing outcomes to objectives and
taking corrective action;• Forecasting;• Integrating and controlling contributors.
FUNCTION OF PROJECT MANAGEMENT
Managing completion• Commissioning programme;• Training of user;• As built drawings-user maintenance
manuals;• Strategy for occupation or disposal.Evaluation of outcomes• Success in achieving objectives;• The final feedback loop;
FUNCTION OF PROJECT MANAGEMENT
SYSTEMATIC APPROACH TO ANYPROJECT • Royal Institute of British Architects
(RIBA PLAN OF WORK)
TACTICAL PLANS
M is s io n 5y e a rs
o b j e c tiv e s
S tra te g ie s
T a c tica lp la n s
T a c tica lle v e l( a c tiv itie s )
S tra te g ic le v e l( m ile s to n e s )
I n te g ra tiv ele v e l
( p u rp o s e a n do b j e c tiv e s
R E L A T I O N S H I P B E T W E E N C O R P O R A T E P L A N A N D P R O J E C T P L A N
P ro j e c t M is s io n , S co p e , O rg a n iz a tio n
M ile s to n e sE v e n t o r ie n ta te d
A c tiv ity o r ien ta te d
RIBA PLAN OF WORKAppraisal 1 Carry out studies to determine the
feasibility of the Client's requirement.
2 2A Review with client alternative design and construction approaches and the cost Implications.
3 2B Provide information for report on cost implications.
RIBA PLAN OF WORKB Strategic Brief 1 Receive strategic brief prepared by the client.
C Outline Proposals 1 Commence development of Strategic Brief into
Project Brief
2 Prepare Outline Proposal
3A Provide an approximation of construction costs. OR
3B Provide information for cost planning.
RIBA PLAN OF WORK
• 4 Obtain Client approval to Outline Proposals and approximate construction cost.
• 5 Co-operate with Planning Supervisor where applicable.
RIBA PLAN OF WORK
D Detailed Proposals 1 Complete developments of Project Brief.
2 Develop the Detailed Proposal from
approved Outline Proposals.
3A Prepare a cost estimate. OR
3B Provide information for preparation of
cost estimate.
4 Consult statutory authorities.
RIBA PLAN OF WORK• 5 Obtain Client approval to the
Detailed Proposal showing spatial arrangements, material and appearance, and a cost estimate. • 6 Prepare and submit application
for full planning permission.
RIBA PLAN OF WORKE Final Proposals• 1 Design Final Proposals from approved
Detailed Proposals. • 2A Revise cost estimate. • 2B Provide information for revision of cost
estimate. • 3 Consult statutory authorities on
developed design proposals.
RIBA PLAN OF WORK• 4 Obtain Client approval to type of
construction, quality of materials, standard of workmanship and revised cost estimate. • 5 Advise on consequences of any
subsequent changes on cost and programme.
RIBA PLAN OF WORK
F Production Information 1 Prepare production information for tender
purposes.
2A Prepare schedules of rates and/or quantities and/or schedules of works for tendering purposes and revise cost estimate. OR
RIBA PLAN OF WORK• 2B Provide information for preparation of
tender pricing documents and revision of cost estimate.
• 3A Prepare and make submissions under building acts and/or regulations for other statutory requirements. OR
• 3B Prepare and give building notice under building acts and/or regulations (not applicable in Scotland).
RIBA PLAN OF WORK• 4 Prepare further production information
for construction purposes.
G Tender documents 1 Prepare and collate tender documents in
sufficient detail to enable a tender or tenders to be obtained.
2 Where applicable pass final information to Planning Supervisor for pre-tender Health and Safety Plan.
RIBA PLAN OF WORK• 3A Prepare pre-tender costs. OR• 3B Provide information for preparation of
pre-tender cost estimate
H Tender Action 1 Contribute to appraisal and report on
tenders negotiations.
2 If instructed revise production information to meet adjustments in the tender sum.
RIBA PLAN OF WORKJ Mobilisation 1 Provide production information as
requested for the building contract and for construction.
K Construction to Practical Completion 1 Make visits to the works in connection with
the Architect's design.
RIBA PLAN OF WORK
• 2 Provide further information reasonable required for construction.
• 3 Review design information from contractors or specialists.
• 4 Provide drawings showing the building and main lines of drainage and other I information for the Health and Safety File.