Our Approach
The client is a large utility in the U.S. providing electric services to multiple states.
PFES was asked to perform an independent assessment of the utility’s project development, project execution, and project management processes. Areas included project justification, project planning, alternative evaluation and selection, project estimating, schedule development, project execution, and closeout.
Distribution project management and Transmission project management were different organizations within the utility and had recently been combined under a new Project Management Office (PMO).
PFES proposed a two-phased approach:
PHASE I – Assessment of Current State then Findings then Recommendations
PHASE II – Assistance in Implementing Recommended Opportunities for Improvement
Phase I
PFES assembled a team of experienced project management professionals with senior utility management expertise, and then proposed and implemented the following step-by-step assessment process, which was reviewed and accepted by the utility.
1.) Kick-Off
- The PFES team needed the utility to assign a senior manager or director as our interface into the utility organization to help identify Subject Matter Experts (SMEs), facilitate access to processes and procedures, and facilitate interviews.
- PFES needed access to existing processes and procedures. Either with direct electronic access (such as a seconded employee) or through the assigned utility interface.
- The PFES team reviewed all current related documents, processes, and procedures.
2.) Finding Common Truths
- Due to the document and process reviews, PFES developed a series of clarification questions.
- The PFES team then conducted a series of in-depth interviews with a wide range of the utility’s employees directly involved in the planning, execution, and management of both Distribution and Transmission projects. Projects ranged from $50K to $400M. The objective of these interviews was to uncover how projects are “really” planned and managed. In other words, whether there was fidelity between the written processes / procedures and what really occurred as a project was developed and managed.
- Based on the interviews, a list of “differences” was created and needed to be verified. As an example, if we heard “We don’t really do x, we do y instead,” that difference needed to be validated by other employees before it was accepted as the norm.
- Validated differences were then assessed as to their impact (positively or negatively) to the overall PMO process.
3.) Findings, Recommendations, and Results
Findings
The utility's PMO has a detailed and industry best-In-class Stage / Gate Project Delivery System (PDS) procedure and process. Projects went through 7 review gates and 6 different planning stages.
All projects regardless of size were required to follow the PDS 7 gate process.
Projects were segmented by dollar amounts into 4 different segments:
- Segment 1: $0 to $5M
- Segment 2: $5M to $30M
- Segment 3: $30M to $100M
- Segment 4: greater than $100M
Both Distribution and Transmission had developed “work-around” Stage / Gate Light procedures with significant differences to reduce the planning hours and documentation required by the full PDS process for Segment 1 and 2 projects. However, both “work-around” processes still require significant documentation, revisions, review meetings, etc.
Segment 3 and 4 level projects followed the full PDS process. There was common agreement that projects of that size required the planning, detail, documentation, and reviews required by the PDS.
There was common agreement that for Segment 1 and 2 level projects, the full PDS process was overly burdensome and, in most cases, was time consuming and added little value to the execution of low complexity projects. A good example that was provided: “Replacing a $2 million transformer in a large switchyard does not need 6 planning stages and 7 gate review meetings.”
We found a wide range of project management experience / expertise within the Distribution and Transmission groups who had a common concern about a lack of professional development.
A significant finding dealt with the quality of project estimates and lack of standardization. Estimates were initially developed by the utility's Planning department, then updated by project managers using a set of Excel spreadsheets developed in-house. There was no formal estimating process or department with qualified / experienced estimators. We found common agreement throughout the organization that the estimating process should be an area for improvement.
The last significant finding dealt with data collection, storage, and reporting. Distribution and Storage each handled and stored information in diverse ways, and there was a significant gap in Key Performance Indicators (KPI) data in both areas.
Recommendations & Opportunities
Professional Development: PFES recommended a strategic approach to defining job families / competencies and then assessing the existing workforce against those standards along with a needs assessment process tailored to individuals.
Estimating and Scheduling Standardization: PFES identified opportunities to standardize tools and processes in estimating to advance effectiveness and efficiency. PFES also recommended the utility transition to a commercially available estimating tool (e.g., WinEst) to replace the varied internally developed methods currently employed.
Stage Gate Light Standardization: PFES reviewed the different approaches to tailor the Project Delivery System procedure for Segment 1 and 2 projects previously implemented separately by Transmission and Distribution. PFES recommended that similar, but different, approaches be combined and standardized to provide one reduced implementation guide for less complex projects.
Data & Reporting Standardization: PFES identified the functions of data collection and report generation as an ongoing administrative burden on project management resources. PFES recommended that the utility build upon existing SharePoint and PowerBI resources to consolidate and standardize data collection and report generation, including better performance metric reporting.
Results: Utility Review & Reaction
PFES’ review process, findings and recommendation were presented in a detailed 44-page report along with a face-to-face presentation to senior management. Both the report and the presentation outlined next steps and what could be accomplished in Phase II if the utility decided to move forward and address our findings and recommendations.
It only took a few days for the utility's senior management to inform PFES that they wished to move forward and have PFES assist with several of our recommendations in Phase II.
Phase II
The utility extended our consulting agreement to have PFES provide solutions for the professional development, estimating, and Stage Gate Light recommendations. They decided to keep scheduling and the data and reporting standardization improvements in house and formed utility-staffed teams to address those areas.
The original PFES Assessment team was then chartered with the development of a detailed set of deliverables for each of the three remaining recommendations:
1.) Professional Development
Working with the utility's PMO and HR department, PFES developed four new professional development tools which were implemented by the utility:
- A completely new set of job family position descriptions were created for the Project Manager (PM) family of jobs, from PM I to Director of Project Management and an additional job family for the Project Controls (PC) family of jobs from PC Analysist I to Project Controls Director. Key improvements included progression in experience, education, responsibility, project complexity, etc.
- Detailed position profiles were then developed for each PM and PC position for the utility’s HR department to use in future recruitment.
- Qualification cards were developed for each PM and PC position that list all the expected experience and qualification for a particular position which is then filled out as part of an employee’s performance review. Identified gaps are then used to target specific professional development activities for that individual.
- A new detailed onboarding process was outlined for new employees coming into the PMO organization which provided detailed step-by-step expectations for hiring managers and supervisors along with confirmation by HR that the process is both used and useful.
2.) Estimating Standardization
PFES outlined what would be needed for a best-in-class estimating process:
- A new estimating department as part of Project Controls.
- Experienced professional estimators with utility Transmission and Distribution (T&D) estimating experience.
- Detailed end-to-end estimating procedures and processes as part of the Stage Gate review process.
- Required estimating deliverables for each estimate, including bases of estimate, quantity takeoff sheets, standard work breakdown structures, well maintained material costs and labor rates, etc.
- A commercially available estimating tool, (e.g., WinEst) that is used for all T&D estimating.
3.) Stage Gate Light Standardization
The utility agreed with PFES that a single Stage Gate Light process for both Transmission and Distribution was the desired deliverable. Common agreement also included eliminating duplication and items that provided little or no value added to the planning and approval process.
PFES then embarked on the development of the following deliverables specifically related to Segment 1 and 2 level projects (ranging from $0 to $30M):
- Segment 1 and 2 Stage Gate Light implementation guide is the detailed procedure for Transmission and Distribution.
- A Stage Gate Light reference card that details the step-by-step requirements and deliverables for projects that fall within Segment 1 or 2.
- A Stage Gate Light checklist for gate reviews to ensure required deliverables are included in the planning and execution process of a project.
- An SGP-L (Stage Gate Process Lite) project complexity worksheet to help determine risk and complexity of a project, which in turn determines the project segment.
- A simplified risk register specific to Segment 1 and 2 projects.
- A simplified RACI (Responsible, Accountable, Consulted, Informed) matrix template.
- A project execution plan template that can be customized for Distribution or Transmission projects.
- An implementation guide that includes reduced requirements for low complexity / low risk projects that are less than $3M. All that is required is an initial scope, initial estimate, initial schedule, and a Gate 2 management review and approval. That work then becomes a work order and is issued to the field for completion.
Outcome
Professional Development
- The utility's PMO and HR department have reassessed all project managers and project control employees against the new criteria in the PFES developed job families.
- Reassessments determined where a current employee should be placed in the new job family based on real experience, education, and complexity of projects managed.
- The assessments found that some employees were correctly placed and compensated, some were in higher positions than they were qualified for, and some were in lower positions than their education and experience should have placed them.
- Based on the reassessments, currently all project management and project controls personnel have been correctly placed and compensated per the new job families.
- The new onboarding procedure and process are in place and being used to bring new employees into the PMO organization.
- The utility is filling out position-specific qualification cards for all employees in the PMO organization with the goal of having individual professional development plans for each employee by the end of Q2 2024.
Estimating Standardization
- PFES has provided the utility with a detailed end-to-end, step-by-step estimating implementation guide along with the tools required to document and support any level of estimate.
- The utility's PMO and Project Controls department are currently evaluating different commercially available estimating tools.
- The utility's senior management is currently working on a proposal to establish a full-time estimating department within the Project Controls department with a target startup sometime in 2024.
- As a stop gap measure, PFES currently has a full-time Senior Estimator working with the utility's PMO and providing independent “cold eye” reviews of estimates.
Stage Gate Light Standardization
- The new Segment 1 and 2 Stage Gate Light implementation guide for “all” T & D projects is complete along with all the support tools.
- PFES is conducting face-to-face training of this streamlined planning and review process of Segment 1 and 2 level projects.
- Go live target for the new implementation guide was the end of Q4 2023 or Q1 2024.
- The utility and PFES have estimated that more than 60% of Distribution projects will fall into the less than $3M off ramp process and increase the number of Distribution projects that can be completed in any given year.
The Perfect PMO Consulting Partner
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