ARCAN Project Management Services (ARCAN) is one of the UAE successful Project Management Consulting (PMC) firms with operations that spread across different countries in the Gulf Cooperate Council (GCC) countries made the important decision to stop wasting the massive effort in managing everyday projects’ communications and the lack of real-time projects’ performance reporting by selecting the PMWeb project management information system (PMIS) solution. For them, having a solution like PMWeb will not only improve their current project management consulting services but will also bring their adoption of digital transformation to the level that leading international project management consulting firms have started to adopt on projects that they manage.
ARCAN decision to select PMWeb was driven by a number of factors including the need to have an on-premise solution that is catered to manage unlimited number of projects where not only the data for those projects can be stored for years after the project completion but to also make this data available for enable them to analyze projects’ management processes trends, documenting lessons learned and set performance benchmarks for future projects as well as internal processes. They also needed a PMIS that supports the Arabic language in terms of data capturing as well as an interface to meet the project communication requirements in the GCC. Their selection also included the need to have a system that can be easily configured to manage all project management processes without any limitations on what processes it can manage. They also wanted a solution that enables adding more users as adoption for the PMIS grows as well as new projects get awarded. ARCAN also wanted a solution that is locally supported and was already in use by other organizations in the UAE and GCC in managing the delivery of engineering and construction projects.
Nevertheless, what has mattered most for ARCAN is that they wanted to have a PMIS solution that could be implemented and launched in no more than 10 weeks and with an initial investment not to exceed US$ 132,000 inclusive of software licenses, two years of technical support and software updates, implementation, training as well as web-hosting the solution. For ARCAN, a US$ 5,500 per month investment over two years was justifiable for the anticipated benefits that they strongly believe a PMIS solution will bring for their projects delivery. For ARCAN, this cost is less than the cost they already spend in preparing the monthly progress report for a single project. The cost of ownership for the PMWeb PMIS will drop by 80% as the initial cost of licenses, implementation and training will be covered in those two years.
The two constraints, PMIS budget and time to launch were very critical to ARCAN as the decision to implement the PMIS was related to a high-profile project that have just started. Therefore, delaying the use of the PMIS will create massive backlog of everyday project communication data that needs to be migrated as well as delaying the anticipated benefits from having a PMIS. In addition, the investment amount was the amount that ARCAN senior management were able to approve and spend at this stage. Growing the number of licenses, which will entail additional cost, will be justified by the need to use the PMIS on the additional projects that ARCAN could win soon and in the coming years.
The Sprint Implementation Strategy
The PMWeb implementation was done in four back to back stages with a total duration of 10 weeks. Those were the Kick-Off, Everyday Communication, Reports, Dashboards and Cost Management and Executive Training and Handover stages. The duration for those stages varied between one week for the first and last stages and four weeks for the second and third stages.
Stage One – The Kick Off
The first stage was the PMWeb PMIS kick-off stage which took one week to complete. During this stage, CMCS provided on-site training for ARCAN team to better understand PMWeb functions and features. In addition, it was used to determine how to map ARCAN existing project management processes into PMWeb which was a must to define the scope of work for the next two stages. The on-site training covered the PMWeb modules for portfolio, engineering forms, cost management, custom form builder, workflow, document management repository and administrator training. In addition, ARCAN selected to subscribe to PMWeb University to provide unlimited training videos, workshops and exams for their project management team as well as the consultants, contractors and some of their project owners. This enabled ARCAN and their partners to better understand the capabilities that PMWeb can bring to better manage their projects.
Stage one also included identifying ARCAN’s PMWeb Project Champion as well as the PMWeb System Administrator, who is the current ARCAN’s IT administrator and who will become responsible for adding new users, granting access rights, data backup among others. The PMWeb Project Champion, who is currently responsible for providing project controls, will take the responsibility for providing PMWeb training for ARCAN team members, consultants, contractors and project owners when the 10 weeks implementation is completed.
Stage Two – The Everyday Communication
The second four-weeks stage was to automate ARCAN’s 26 key project management processes that are needed to manage everyday project communications. Those included Contractor RFI, Consultant RFI, Confirmation of Verbal Instruction, Accident Report, Material Inspection Request, Non Conformance Report, Notification of an Early Advise, Notes for Coordination Meeting, Starting New Activity, Site Memo, Contractor Daily Report, Daily Consultant Extra Time Request, Request for Night Work, Handing Over Site to Subcontractor, Job Site Instruction, Job Site Notice, Taking Over Certificate, Day Work Request, Inspection Request, Material Inspection Request, Non-Conformance Corrective Action Report, Risk Form, Issue Form, Request for Change, Material/ Document Submittal and Shopdrawing Form. In total, 19 new custom forms were created and 7 forms were used from PMWeb default out of the box modules.
For each input form, an output form was created in the exact layout and branding that ARCAN has been using for years and are part of their project management procedures manual. Having hard copy output forms that will be formally signed is not only a must requirement to comply with the laws of the UAE but also provides the information in a format that project stakeholders are used to have. Stage two also included creating the workflow for submitting, reviewing and approving each form as well as the document management repository filing structure. The workflow steps will be used to provide the content for the signature boxes on each form. This stage also included testing these processes to ensure that the created workflows match those provided by ARCAN.
Stage two scope of work also included developing six tabular reports that are used to provide real-time status of the project management processes. Those tabular reports included Document Log, Material Submittal Log, Supplier Prequalification Log, Procurement Tracking Log, RFI Log and Material Submittal Log. Before implementing PMWeb, those six reports where managed using MS XLS where the project control manager was responsible to ensure that those logs are always kept current and correct. Using PMWeb enabled ARCAN to have more meaningful and actionable reports. For example, the RFI log will automatically display the question and answer fields for which in the past this was not possible as retyping the content took a lot of time plus the high possibility of data entry mistakes. During stage two, training was also done for the consultant and contractor who will be using those communication forms on the current project.
Stage Three – Dashboards and Cost Management
Stage three which was also for four weeks included developing the project’s monthly progress report and the projects’ performance dashboard. The project monthly report is of great importance as this what ARCAN uses to communicate project performance status with the project owner. For project owners who have more than one project managed by ARCAN, access will be also given to the projects’ performance dashboard.
Stage three also included the implementation of the cost management processes for which it was decided to be implemented at high level with the option to have a detailed implementation at a later stage after finalizing and agreeing on the scope of work. For stage three, it was decided that the cost breakdown structure for each project to be set at as a single cost account level until a detailed cost breakdown structure is approved. ARCAN selected PMWeb out of the box processes for cost management including project budget, budget adjustments, commitments, potential change orders, change orders, progress invoices and cost worksheet. It was also decided to use PMWeb out of the box output forms and reports for the cost management module. For all those forms and reports, the PMWeb logo was replaced by ARCAN logo and the color branding was changed to match those of ARCAN.
Stage Four – Executive Training and Handover
The fourth and final stage was to do the final executive training and handover of the PMWeb PMIS solution. This stage also included the final acceptance by ARCAN for the implementation deliverables. The fourth stage also included a workshop with ARCAN to determine what additional project management processes that need to be implemented to improve the adoption of project management best practices. Those processes could include design management, value engineering, cost estimating, prequalification of consultants and contractors, bid management including online bidding, resource management including staff appraisal, snag list, permits among others. In addition, separate workshop was held to address improvements to the quality control processes which would include inspection checklists for each project specification section. This will enable ARCAN to enforce the items that need to be checked and verified by the supervision consultant for completed works by the contractor.
Another area that will be also considered as part 2 of the PMWeb adoption is the use of the big data that will be generated from the everyday project communications and cost management across the complete projects portfolio of ARCAN. Using business intelligence applications like MS Power BI, Qlik, Tableau among others will provide ARCAN with better insight on how to improve their current project management processes and practices as well as how to provide their clients with better visualization of their project investments’ performance. Those business intelligence applications allow extracting, associating, blending and presenting data from PMWeb as well as ERP, CRM and other applications to provide a comprehensive real-time visualization of how the overall business is performing.
Justifying the Investment
The current slowdown in awarding new projects and the increased competition from other project management consulting firms made the decision to make any type of new investments for ARCAN not an easy one to approve. ARCAN senior management wanted to have a return of investment (ROI) analysis to be done if PMWeb will be used on one of their current projects and without including other projects or even assuming that new projects will be awarded soon. The senior management wanted to quantify the anticipated benefits that PMWeb will bring from automating their current project management processes, knowledge management, reporting project performance, stakeholder engagement, project handover and claims management. The estimated benefits below were more on the conservative side and they could be higher, nevertheless, those benefits were easy to agree on and made sense for all those involved in the approval process.
Automating Project Management Processes
One of the key benefits of automating project management processes is the increased efficiency in submitting, reviewing, approving and sharing the contents of those processes. By replacing the manual or semi-manual processes of completing the project management forms, distributing those forms for actions and then getting the updated status with an automated process that PMWeb will bring, one could assume that this will bring at least 30% efficiency improvement. In addition, there is the additional benefit of enforcing governance, transparency and accountability while improving the efficiency in executing those processes. ARCAN team assumed that there will be US$ 1,000 saving for the wasted effort per month per project. This brings the total anticipated savings to US$ 24,000 for the project two years duration.
The benefits of stopping the knowledge wasted by capturing and analyzing the everyday projects data and lessons learned is massive taking into consideration the massive talent drain facing the engineering and construction in general and the GCC region in particular. Knowledge could be related to what material to use and what not to use, contractors and suppliers’ performance, risks and how best to respond to them, cost estimates, dealing with contract agreements, among many others.
The organization will not only have access to all of the above data from the project management processes captured in PMWeb but can enforce a formal Lesson Learnt process to ensure that knowledge gained and best practices are formally captured, analyzed and shared. For this benefit, ARCAN team assumed that the value of this captured knowledge is US$ 20 per day per project or US$ 14,600 for the project two years duration.
Reporting Projects Performance
It is estimated that organizations who continue to use MS XLS as their platform for monitoring and evaluating the performance of the projects, waste 65% of their senior project management team members in consolidating, analyzing and reporting the projects’ performance data. In addition, the period between the cutoff date of the captured and when the performance reports and dashboards are available to be presented varies between 3 to 6 weeks. In other words, the presented information is not valid anymore.
On the other hand, PMWeb provides all those reports and dashboard in real-time single version of the truth form and format that can be accessed by authorized users anytime, anywhere using any device. Accordingly, ARCAN team assumed that this could bring at least US$ 2,000 savings per month when it comes to reporting project’s real-time performance. This totals to US$ 48,000 for the project two years duration.
The benefits of improved stakeholder engagement by sharing trust-worthy projects performance and status reports and dashboards could be massive. Not only it helps in building trust and confidence with those stakeholders, but also helps in keeping them engaged in the project delivery by keeping them aware of the progress and status in the form and format that matters to them most. This will drastically reduce the conflicts that usually occur on projects when stakeholders feel that they are left out or being the last to know.
Quantifying the benefits of having more engaged stakeholders and with less conflicts is not that easy to determine. Nevertheless, we will assume that the organization has five key stakeholders that they need to manage. Having trust worthy dashboards designed to their own needs that they can access on their own when they desire regardless where they are, could save the projects department at least one day of effort to resolve conflicts and respond to stakeholder queries and needs, the saved effort will be estimated at US$ 1,000 per month per stakeholder which will be the project owner. This totals to US$ 24,000 for the project two years duration.
One of the key challenges in handing over a project is the snag list of items that need to be rectified by the contractor before the project can be considered complete. One of the recommended practices is to use the Snag List as an Observation Report where the assigned supervision consultant capture and share defects during the project execution as soon as they are identified rather than delaying this process toward the completion of the project. This will not only help the contractor in rectifying those defects as soon as they are identified but also reduce the list of pending snag items when it comes to handing over the project.
ARCAN team assumed that implementing such best practice using PMWeb Snag List will save 5 days from the duration given to the contractor to rectify the snag list items. Assuming that for the project owner each day saved in handing over the project for operations can generate a revenue of US$ 10,000, then the estimated total benefits could reach US$ 50,000 per project.
No one can deny that construction claims in the GCC in particular and globally in general are on the rise. The decline of new project awards, projects at low profit margins, liquidated damages claims for late completion are rising in frequency and amount, and tough pressure on margins among other issues are compelling owners and contractors to become more contentious and adversarial thus resulting in growing volume of claims and disputes.
The benefits of having online access to all project’s documents and records that can be searched to identify documents and reports needed to either support the submission of a claim or support the response of a counter-claim are massive. Actually, they can be the deciding factor of who will have better chances to win or lose the claim. It is anticipated that this will bring a saving of US$ 2,000 per month per project for the time-consuming effort spent in searching and locating the requested documents. This is a total saving of US$ 48,000 per project.
Calculating the PMWeb Adoption Return on Investment (ROI)
Automating Project Management Processes US$ 24,000
Knowledge Management US$ 15,600
Reporting Projects Performance US$ 48,000
Stakeholder Engagement US$ 24,000
Project Handover US$ 50,000
Construction Claims US$ 48,000
Total Benefits US$ 209,600
The US$ 209,600 benefits represent 159% return on the US$ 132,000 investment even if the benefits are limited to a single project. Since the day that ARCAN has selected the PMWeb solution, two new projects were awarded. In addition, some of PMWeb modules where used on their other on-going projects. Should the ROI analysis be adjusted to reflect the expected benefits of those projects as well as adjusting those benefits for the additional cost of adding more PMWeb licenses needed to manage those projects along with the additional cost of hosting those licenses, the ROI could easily jump to more than 365%. Of course, there are many other intangible benefits that ARCAN can gain like improving ARCAN’s industry reputation as one of the few PMC firms that uses technology to improve the delivery of their services as well as to better protect and defend their clients’ interests.