Another Project Hit the Wall: Handling the Construction Industry Challenges through the Financial Crisis by eng. Hisham Zeinoun

1. Another Project Hit the Wall:
Handling the Construction Industry
Challenges & Crisis
Eng. Hisham Zeinoun, PMP
Dec. 27th, 2018

2. Session Outline
• The Construction Project Life Cycle Overview
• PMBOK concept & processes implemented in the
construction industry
• Impact of financial crisis on project delivery &
completion
• Handling the crisis & challenges through best
practices
• Lessons Learned
• Q/A

3. My Story
Why did I get into Project Management after
24 years operating in Construction Industry?
Input – Project management Course
Output –PMP Certified in 2015 and ?????

4. The Construction Project
Lifecycle Overview

5. Product Life Cycle – Three Phases
Product
INITI
AL
INTERMEDIATE
Ongoing Operations
Business
Case
Idea
Retirement
Upgrade
?
BusinessNeed
Project Life-cycle
Deep Dive

6. Construction Life Cycle – 4 phases
Phase Name (s) Major Deliverables
Decision @ end of
phase
1 Feasibility
Phase
Project Formulation
Feasibility Studies
Strategy Design & Approval
Project “GO” Decision
2 Planning and
Design
Base Design - Permit
Cost and schedule
Contract Terms and conditions
Detailed Planning
Major Contracts
3 Construction Excavation
Civil Works
Electrical
Mechanical
Testing
Installation
Substantially Complete
4 Turnover and
Startup
Final Testing
Maintenance
Full Operations
6

7. Influencing Factors on Project Lifecycle
High
Low
Influence of Stakeholders
Cost of changes
Project Time
HighLow
Staffing
Risks

8. Types of Project Life Cycles
PREDICTIVE (Waterfall) ADAPTIVE (Agile)

9. What type of Project Lifecycle
these construction projects follow?

10. Project Example 1
Existing Design Delivered

11. Project Example 2
Existing
Design Delivered

12. Project Example 3
Existing
Design Delivered

13. PMBOK Concepts & Processes
implemented in the construction industry

14. PMBOK Knowledge Areas

15. Large vs Small Projects
Large Scale Projects:
• Commercial Centers
• Multi Residential Buildings
• Hotels
• Beach Resorts
• Governmental Buildings
• Schools and universities
• Hospitals
Small Scale Projects:
• Private Property
• Villa
• Single Residential Building
•
Project Manager, Owner, Client, Sponsor,
Investor, Consultant, Contractor,
Owner, Architect (Consultant) and Sometimes
Project Manager
STAKEHOLDERS
INVOLVED

16. Project Management Process Groups
Knowledge
Areas
Best Practices Challenge
Project
Integration
Management
• Developing Project Charter- Initiation
(includes Business Case as Market Need,
Conceptual Design, Budget, Tentative
Schedules (Design, Permit Execution)
• Direct, Monitor and Control Project
Work – for small projects is implemented
on structure and for large scale project
on the existence of quality control officer
• Develop Project Management Plan – Planning is Not
implemented in most small scale Construction
projects. Documentation is not implemented except
for some large scale projects for Control offices
• Perform Integrated Change Control – if the project
managers are not fully empowered including cost
management this process is not implemented by the
book
• Close Project or Phase – Mainly challenges are
related with Sub-contracting model and Close
procurement phase which is a predecessor for this
process
Project Scope
Management
• Scope Management (Define, Validate,
Control) and Collect Requirements mainly
covers products used and architectural
design and work
Create WBS- Not implemented in small scale projects
Product Scope is not well defined especially with
maintenance procedure and Guarantees
Example: Project Scope - Basement Concrete Wall

17. Scope Management Example

18. Project Management Process Groups
Knowledge Areas Best Practices Challenge
Project
Time
Management
• Define, develop and Sequence Activities
is very diligently implemented since it has
impact on funding, schedule, cost and
resources availability and procurement
schedule
• Estimation of efforts is done mainly
based on benchmarks except special
products not implemented and not
familiar to the market
• Expert Judgements is implemented
• small scale projects have no proper
scheduling and control
• Identifying and estimating some key
activities in the later stage of the project
are overlooked which are impacting the
project schedule (in the absence of
project manager)
• Example: Floor Tiling Polishing
Project Cost
Management
• Estimate Costs are done based on
benchmarks
• Determine Budget is well managed in
projects where the project manager has
full responsibility
When the project manager doesn’t have full
authority and control, the costs are not
managed and controlled effectively.

19. Project Management Process Groups
Knowledge Areas Best Practices Challenge
Project
Quality
Management
• Mandatory by syndicate of
engineers for large scale projects
and for concrete work only in small
scale projects
• Organization delivering large scale
projects already have their Quality
Assurance and Control Quality
• Due to the lack of quality control processes
mandated by the syndicate (only
recommended) in small projects is creating
conflicts between buyer and owner
concerning the quality of the product
Project Human
Resources
Management
Large organizations have HR
departments where all the processes of
hiring, developing, assigning resources
with the right capabilities is taken care
off unlike small organizations where
the PM is the owner and the HR
manager and the PM at the same time
Managing the skilled Syrian labor was a
challenge before the law reinforcement of
Sponsorship “Kafale” of internal security forces
“Amen Al Aam”

20. Project Management Process Groups
Knowledge Areas Best Practices Challenge
Project
Communication
Management
In Large scale projects planning,
managing and controlling
communication is well defined and
implemented with the project team and
stakeholders
Lack of properly defined and managed
communication is leading to conflicts and
misunderstanding between the client and owner
Example: the parking places allocated to 2
clients and not documented
Project Risk
Management
• Site and worker safety measures to
mitigate any risks of accidents
• Bad weather conditions
• Buffers in time schedule for unknown
and unforeseen risks supported by
contingency funds
Risk Registers are not generally implemented in
both large and small scale projects and
organization which results no documented
mitigation plans and risk responses hence no
formal Qualitative and Quantitative analysis is
conducted. No preventive actions or proactive
risk controls processes are defined.
Since Risks are NOT managed well , most of the
projects are ending up in serious issues: above
budget and behind schedule and/or incomplete

21. Project Management Process Groups
Knowledge Areas Best Practices Challenge
Project
Procurement
Management
All procurement contracts are
benchmarked based industry standards
(example: Aluminum, Concrete,
Sanitary, electrical, etc…)
• Procurement scheduling challenge
Example: Stone Cladding Ordering
Project
Stakeholder
Management
• Identify, Plan, Manage and Control
Stakeholders Engagements are done
well defined and implemented
properly unfortunately the
“Lebanese way”
Stakeholders are identified and Managing the
stakeholder the “Lebanese way” for Project
success

22. Identify and list ALL the key stakeholders
of a Construction project

23. Stakeholders in Construction
Project

24. Handling the Lebanese Real Estate Crisis
& Challenges through best practices

25. Players Ecosystem in Financial
Community
EXTERNAL CLIENT OWNER
• Land
• Cash Lump Sum
• Down payment
• Monthly payment
• Bank Loan for
Owner
• Housing for Client
• Investors
The Problem Statement: Housing for Clients has been frozen!
The impact is the client is not able to pay the amount and the owner is not able to
close the contract with the client

26. Situation: You are in the middle of a Construction project and the ISKAN
(The Housing Loan) has stopped funding. The Client has paid already
almost 30% of the apartment amount and is not able to pay more unless
he gets a housing loan approval.
What would you do as a project manager?
a) Nothing. You wait for the Housing loan to be approved and released
b) Stretch the schedule by slowing down the project until the housing
loan issue is resolved
c) Complete the project with internal funding and try to find a resolution
with each tenant on case by case basis
d) Stop the project and return the money back to the Client

27. Lessons Learned

28. Lessons Learned
 Consider “when to procure” or procurement schedule carefully while planning
procurement management
 Avoid scheduling some activities (external waterproofing, cladding …) during high
rain probability months to avoid scheduling delays
 Identify all stakeholders and keep key stakeholders closely engaged and involved
 Take several samples and perform multiple pre-installation tests to activities that
have no benchmarking
 Consider many resources to each activity in a work package to reduce risks
 Verify B.O.Q according to signed execution plans before signing any contract or
subcontract
 Documentation of approved and rejected change requests

29. My True Story:
How did PMP Certification Changed my work life and
Organizational performance from 2015 onwards after
implementing Project Management principles and processes
Improved Quality of deliverables
Effective stakeholder management
Better Management & Control
Improved Cost control by 30%
Improved Revenue by 300% times
NET PROFIT BY 200%
Customer Satisfaction & Loyalty 100%

30. Thank You!