Ali Jaafari

Management of risks, uncertainties and opportunities on projects: time for a fundamental shift

Abstract This paper makes a case for a shift to strategy-based project management, a component of which is real time management of risks, uncertainties and opportunities using a life cycle project management approach. Risk analysis and management should not be viewed as a separate planning and response operation. Risk and opportunity management is a way of thinking and a philosophy that should permeate the entire spectrum of project activities. Shifting to business objectives and focusing on the whole of life risks/rewards are of paramount importance. Evaluation of risks must be based not only on delivering projects on time and within budget but also on crafting, developing and operating a long term business entity which can deliver the business objectives of the parties concerned while meeting or exceeding community expectations.

Project Management in the Age of Complexity and Change

This paper presents a study of complex society and its relationship to project management. The complex society is characterised by open systems, chaos, self organisation and interdependence. Accelerated change drives instability and chaos following an autocatalytic process. The conventional project management approach assumes a world of order and a predictable environment in which one can set and deliver a clear set of goals in a defined manner. The traditional approach is open to challenge. The author argues that a paradigm shift in project management is essential for it to be relevant and effective in a complex society of this century. Research is needed to further define a fresh understanding of project management and how it that can respond to the challenges of the complex society. This necessitates working globally to advance the field.

Toward a Dynamic Simulation Model for Strategic Decision-Making in Life-Cycle Project Management

This paper argues that process simulation technology is an added facility in the quest for optimizing project decisions based on market and external uncertainties associated with the projects environment. The authors put forward a dynamic simulation modeling system (DSMS) as a tool for proactive and optimal decision-making in the project life cycle. DSMS is geared toward representing generic processes with a hierarchical and modular model structure. DSMS facilitates the optimization of technical and operational functionality during development and operation phases of projects. Project life-cycle objective functions are the basis for decision-making throughout the projects life. The paper reviews the limitations of the current systems’ ranges and capabilities. A review of the existing simulation techniques leads to a discussion on the need for setting up an integrated model to encompass the entire project life cycle. Details of the system are described, and a case study is used to demonstrate its capabilities.

Time and priority allocation scheduling technique for projects

Abstract This paper presents an advanced scheduling technique known as TAPAS. It has been developed over the past 3 years as a direct response to the needs of project managers working in a complex and uncertain environment, in which continuous risk management has become a necessity of life. The work on TAPAS has always had the objective of integrated risk management of projects as its main focus. Thus, TAPAS, which occupies only one module of an integrated software known as project management information system (PMIS), is fully compatible with the earned value technique, can schedule project activities without a network, can generate a risk profile and works well for probabilistic forecasting of project duration.

The need for life‐cycle integration of project processes

The focus of this paper is on life‐cycle objective‐based project management systems in general, and SPMIS in particular. SPMIS (short for Smart Project Management Information System), has been designed: (a) to facilitate the employment of life‐cycle objective‐based project management approaches; and (b) to support concurrent engineering and construction, thus promoting greater integration of the processes under which projects are proposed and implemented. In order to validate the functions designed for SPMIS the authors undertook a detailed case study of a large capital project. The actual project management functions employed by the project team on the case project were researched and charted using the best current PM practices as the guide. While this field research shed light on the actual needs and requirements, the design of the SPMIS functions was approached from first principles in order to incorporate the basic shift from the traditional objectives of cost, time, and quality to life‐cycle objectiv...

Life-Cycle Project Management: A Proposed Theoretical Model for Development and Implementation of Capital Projects

Facility delivery has been traditionally the focus of project management in capital projects. The current body of knowledge, project administrative systems, and the associated model contracts support the delivery of physical facilities with limited focus on original business objectives, or market dynamics. There is an increasing realization that the main focus should be on the creation of a viable business entity of which the facility forms only one part. When focus is shifted from the delivery of the physical facility to the creation of a business to service project objectives, it becomes clear that the traditional project delivery approaches will have to give way to a new system in which project life-cycle objectives will be the basis for decision-making throughout the projects life. Under this method, the project participants assume partial responsibility for the viability of the project over its operational life. A simplified form of sharing risks/rewards, known as a project alliance, is already popular. Capital projects are technology based, and few projects can be competitive without significant innovation in their conceptualization, implementation, and operation. This also provides the additional argument that project life-cycle objectives should be the basis for project development and management.

Combining Real Options and Decision Tree: An Integrative Approach for Project Investment Decisions and Risk Management

Projects are inherently risky ventures because of their exposure to both market risks and project complexities. Project decisions need to be optimum not only at the time of decision making but also in respect of future stages and available project options. Because of the growth in project complexity coupled with market volatility, the traditional methods of project appraisal are no longer adequate; they fail to respond to the dynamic situations that often prevail in the development of risky and complex projects. The authors present an approach that combines real options theory with decision tree analysis to properly evaluate a project facing uncertainties. This technique is based on mapping all the available options on a given project and incorporating market uncertainties. For a given project, a real options value, adjusted by the implementation uncertainties at a time during its progress or at its initial stage, is estimated and added to the net present value of the project—the latter computed under uncertain conditions. The adjusted net present value can account properly for the risks a project may face, while counting in the value that proactive management may bring about. A simple numerical example is included to demonstrate the application of this technique.

Conceptual simulation model for strategic decision evaluation in project management

This paper focuses on a conceptual methodology for an integrated simulation model dubbed as dynamic simulation modelling system (DSMS) for proactive and optimal decision making within a project management framework. Due to the uncertainties in project environment, the technical and operational functionality of a facility needs to be assessed during development and operation phases of the project. The simulation model is used for optimising the investment decisions vis‐a‐vis evaluation of functionalities on project facilities in early stages of the project. Project life cycle objective functions (LCOFs) are employed as a set of decision criteria throughout the project’s life. The discussion is being extended on the need for setting up an integrated and user‐friendly model to encompass the processes in the entire life cycle of the project. Details of the system are described and a hypothetical case study is used to demonstrate its capabilities. Possible extensions are then outlined. The C++ programming language in association with the object‐oriented database management system is used to achieve the aforementioned objectives.

A SIMULATION MODEL FOR LIFE CYCLE PROJECT MANAGEMENT

This paper describes the methodology for developing a discrete event simulation model, called the dynamic simulation modeling system (DSMS), designed for holistic decision making focusing on the business objectives in a life cycle project management framework. The DSMS is designed for modeling service and manufacturing processes with hierarchical and modular modeling methodology but the underlying philosophy can be adopted for modeling any generic system. The key contributions of this work are the enhanced modeling features and logical division of large systems into small process components and their linkage. The aim of this development is to apply the simulation technique in order to evaluate the overall project functionalities from the dynamic business perspective. A set of business objectives, or life cycle objectives, functions has been employed as a basis for decision making throughout the projects life. Object-oriented programming language with the object-oriented database technology facilitates the necessary model capability. A case study is used to demonstrate the model capabilities. More case studies have been undertaken to verify and validate the model, focusing on manufacturing, service and construction processes.

Management know-how for project feasibility studies

Abstract This paper addresses the project owners handling of the formal feasibility study phase of revenue-generating projects. Critical aspects of undertaking such activities have been reviewed. The question of return per dollar invested in the feasibility studies has been considered. An optimal form of organization for management of this phase has been suggested. This is followed by considerations of the perceived merits and drawbacks of undertaking the work internally or hiring consultants and specialist firms for the same. Owing to the need for flexibility in scope and extent of investigation as well as the dynamic nature of the management task in shaping and directing the required feasibility studies, it is suggested that a strong management task force headed by a competent project manager within the owner organization is necessary. The documentation and information needs of the project participants down the line must also be identified and taken into consideration at the outset.