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Group 1Advisor ：吳思佩

How construction industry to survive the current turbulence in the economic atmosphere?

One of the option:

Programme Management

Major challenges:All the challenges can be faced during the implementation or at practice stage.

Problems:The lack of clarity surrounding programme management in the construction industry.

This paper will provide you: A broad view on the major challenges. How to effectively implement and practice

construction programmes.

The overview of the term “programme management”.

The common definition of programme management: The management of large capital projects.

The selection, planning and overall management of a portfolio of projects to achieve a set of business objectives.

Some of the definitions also indicate the efficient execution of the portfolio of projects within a controlled environment.

Lycett et al. :The integration and management of a group of related projects with the intent of achieving benefits that would not have been realised had the projects been managed independently.

Program: a group of related projects managed together to obtain specific benefits and controls that would likely not occur if these projects were managed individually.

Portfolio:a collection of projects or programs grouped together to facilitate effective management of efforts to meet strategic business objectives. These projects or programs are not necessarily interdependent or directly related.

An integrated, structured-framework to co-ordinate, align, and allocate resources, as well as plan, execute and manage a portfolio of construction projects simultaneously

to achieve optimum benefits that would not have been realised had the projects been managed separately.

Despite the changes and pressure – global economic instability, major shifts in the context of the market

place,

the UK construction industry is ranked among the strongest in the world.

(The following research was conducted in the UK construction industry.)

Now we will discuss some major challenges during the implementation and practice stages of construction programmes.

1. Lack of commitment from business leaders.

2. Late delivery of projects, lack of cross-functional working, lack of coordination between projects and lack of alignment of projects to strategy.

3. Lack of knowledge of portfolio management techniques, risk management and financial skills.

4. Lack of cross-functional communication.

5. Lack of appropriate way to measure project benefits, lack of resources (human/financial) to analyze project data and people constraints.

6. Financial constraints and lack of relevant training.

Define commitment: Willingness on the part of

individuals to contribute much more to the organization than their formal contractual obligation.

Why commitment from the business leader is important? Lack of interest of amount the business leaders can let other activities take a priority attention that is not favorable to the programme.

To be efficient and successful companies:

The ability to plan and execute projects in time within an established budget and meeting required quality consideration.

To maximize the synergy: The alignment, planning, coordination and

execution of the functional projects in a programme are carried out with a high level of precision.

As a problem from one project is likely to affect the other projects, which in turn can affect the entire programme.

To retain sustainable competitive advantage:

As Knowledge is created and disseminated throughout the firm, it has the potential to contribute to the firm’s value by enhancing its respond to new and unusual situation.

The Office of Government

Commerce(OGC) states that communication is central to any change process.

The greater the change, the greater the need for clear communication about the reasons and rationale behind it.

To achieve communication effectively:

It is aimed at exchanging timely and useful information with the stakeholders or team.

It is a challenge that will face an organization

newly engaged in programme management.

A task of providing a sufficient amount of human and financial resources to analyze the programme data in view of making decision.

Reiss highlight that putting together and operating a programme management is not a cheap affair.

The organization which is operating programme management may encountered financial constraints.

Programme is very complex so that relevant trainings are needed.

Industrial questionnaire survey 119/1380 9%recovery Too much research projects makes

difficulties in collecting data Be targeted with many requests for data Poor respenses

Semi-structured interviews Use NVivo Respondents Learn from other sectors Knowledge share

Use: The qualitative data analysis The quantitative data analysis

Semi-structured interviews revealed the possible major challenges Lack of awareness of program

management and its benefits. Convincing directors to implement program

management. Organizational challenges. Other challenges.

Lack of awareness is the highest challenge to the implementation of program management.

To overcome lack of awareness and understanding : Detailed information on program

management. Benefits.

The lowest challenge appeared to be getting the directors to accept the validity of program management.

To be supported by the board of directors : Continuous communication (talks)

(awareness) Follow ups Feedbacks Clarifying the interfaces and the benefits

The data for this was collected from the UK construction industry using a questionnaire survey.

The total of 119 usable responses received were analysed to make inferences.

The data for the major challenges was analysed using : Criticality index T-test

Prior to proceeding with the analysis, a Cronbach α reliability analysis was conducted.

In this case, α = 0.924 ( >= 0.7 ).

The relative criticality index is computed using the formula below:

where C is the criticality index. i responses category index = 1, 2, 3, 4, 5.Wi is the weight assigned to ith response = 0, 0.25, 0.5, 0.75 , 1. Xi is the frequency of the ith response given as percentage of the total responses.Range : Low 0.0 ~ 1.0

High

Example :

Very Low

0.0

Low

0.25

Moderate

0.5

High

0.75

Very High

1.0

Chanllenge A

0% 10% 10% 30% 50%

Chanllenge B

20% 20% 20% 30% 10%

0.00.0 0.10.25 0.10.5 0.30.75 0.51.00.0 0.1 0.1 0.3 0.5

0.8

0.20.0 0.20.25 0.20.5 0.30.75 0.11.00.2 0.2 0.2 0.3 0.1

0.475

Challenge A :

Challenge B :

Mean indexing has been repeatedly and widely used

in presenting exploratory and descriptive data analysis and can provide support to the criticality index in this research.

Discuss the severity diagnosis of productivity problems and analyze reliability.

Evaluate the factors and procedures used in matching project managers to construction projects.

Analyze the “leadership styles in information technology projects”.

Analyze “use and benefits of tools for risk management”.

Risk analysis and management in construction.

the major challenge to the practice of program management is ‘lack of commitment from business leaders’ with criticality index of 0.789

“presenting a detailed description of the intended roles of a program management office (PMO) in the organization” is the lowest challenge to practicing program management in the UK construction industry with 0.544 criticality index.

Goal: Factor analysis is a multi-variate statistical process that relates a multitude of variables to common basic dimensions based on their mutual correlative relationships.

Function: - To explain why two tests are correlated (structural exploration) - To explain how the entire scale is organization (factorial validity of scale)

In statistics, Bartlett‘s test is used to test if k samples are from populations with equal variances. Equal variances across samples is called homoscedasticity or homogeneity of variances. Some statistical tests, for example the analysis of variance, assume that variances are equal across groups or samples. The Bartlett test can be used to verify that assumption.

Measured by the Kaiser-Meyer-Olkin (KMO) statistics, sampling adequacy predicts if data are likely to factor well, based on correlation and partial correlation.

There is a KMO statistic for each individual variable, and their sum is the KMO overall statistic. KMO varies from 0 to 1.0 and KMO overall should be .60 or higher to proceed with factor analysis. If it is not, drop the indicator variables with the lowest individual KMO statistic values, until KMO overall rises above .60.

※The result of this paper after using KMO & Bartlett test.

Kaiser-Meyer-Olkin sampling

Bartlett’s sphericity Chisquare

degrees of freedom

significance level

.863

2449.822561

.000

※The purpose of the rotational axis ： The factors will be taken after mathematical  transformation. By doing so the factors or components have clear segmentation and it can reflect the specific meaning. Purpose is to clarify the relationship between factors and factors to establish the factors among the most simple structure.

※Kaiser’s criterion and Scree test Using one or more of the methods below, the researcher determines an appropriate range of solutions to investigate. Methods may not

agree. For instance, the Kaiser criterion may suggest

five factors and the scree test may suggest two, so the researcher may request 3-, 4-, and 5-factor solutions discuss each in terms of their relation to external data and theory.

A mathematical procedure that uses an orthogonal transformation to convert a set of observations of possibly correlated variables into a set of values of uncorrelated variables.

The number of principal components is less than or equal to the number of original variables. This transformation is defined in such a way that

the first principal component has as high a variance as

possible,and each succeeding component in turn has the

highest variance possible under the constraint that it be orthogonal to the preceding components.

Principal components are guaranteed to be independent only if the data set is jointly normally distributed.

1.Strategy focus2.Human factor and communication3.Financial factors4.Leadership and commitment5.Strategy and awareness6.Benefits understanding

• Contains seven sub-factors:1. Lack of cross-functional working2. Lack of alignment of projects to strategy3. Lack of coordination between projects4. Conflicting project objectives5. Defining clear mission for the programme6. Lack of programme delivery infrastructure7. Lack of relevant training

Lack of cross-functional working

Lack of alignment of projects to strategyFailure to align them can cause difficulty in realising the programme’s benefits.

Lack of programme delivery infrastructure(Loading = 0.578)

Lack of relevant training (Loading = 0.424).

delivery infrastructure supply chain management, procurement systems, communication systems, etc.

Difficult for the stakeholders and programme team to interact and play their part to ensure the successful delivery of the programme.

Training is essential, but on-the-job experience can replace any other form of training.

• Contains five sub-factors:1. A perception among the project community that

the programme will serve as an obstacle to the timely accomplishment of project management

2. Resistance to organisational change3. People constraints4. Lack of knowledge of portfolio management

techniques 5. Lack of resources (human/financial) to analyse

project data

A perception among the project community that the programme will serve as an obstacle to the timely accomplishment of project management. (Sig. 0.667)

Resistance to organisational change. (Sig. 0.648)

View programme management as additional bureaucracy to curtail project mangers’ power to make decisions and get on with their jobs.

People resist changes for fear of losing their power and relevance in the organisation if new systems are implemented.

Lack of knowledge of portfolio management techniques (Loading = 0.601)

Lack of resources (human/financial) to analyse projects data (Loading = 0.471)Programmes generate huge amount of data which require analysis to understand whether the programme has achieved its objectives.

Consists of five financial aspect challenges ：

1. Initial funding and ongoing operational costs to the organisation

2. Lack of financial skills of project/other staff3. Financial constraints4. Lack of clear company strategy5. Lack of appropriate way to measure projects

benefits

Initial funding and ongoing operational costs to the organisation (Loading = 0.774).

Lack of financial skills of staff’ (Loading = 0.722).

Lack of clear company strategy’ (Loading = 0.560) Lack of appropriate way to measure

projects benefits (Loading = 0.342)

As a result, organisations may have to devise an in-house method of assessing and

measuringtheir programme benefits.

Component 3

Consists of five leadership and commitment ：

1. lack of knowledge to evaluate risks2. frequent projects scope changes3. lack of commitment from business

leaders4. late delivery of projects 5. lack of cross-functional communication’.

‘Lack of knowledge to evaluate risks ’ (Loading = 0.692).

‘Frequent projects scope changes ’(Loading = 0.664).

‘late delivery of projects in the programmes’ (Loading = 0.556)

‘lack of cross-functional communication’ (Loading = 0.545).

The two lower loadings are by ‘late delivery of projects inthe programmes’ (Loading = 0.556) and ‘lack of cross-functionalcommunication’ (Loading = 0.545). Abraham states that,the traditional approach to success in the constructionindustry, places great emphasis on the ability to plan andexecute projects on time.

Component 4

Consists of four sub factor challenges : 1. Too many unrelated projects.2. Disappointment with final programme

benefits.3. Presenting a detailed description of the

intended roles of a PMO in the organisation.4. Lack of understanding of the value

proposition that programme management provides’.

1. Too many unrelated projects.(Loading = 0.752)

2. Disappointment with final programme benefits. (Loading = 0.686)

OGC (Office of Government Commerce) warned about lumping projects together in the name of a programme.

This research recommends that caution must be exercised in selecting the

right projects. not bring projects that are not compatible

to the programme.

The lower loading is on ‘lack of understanding of the value proposition that programme management provides’.

OGC maintains it is essential for an organisation to set out

the aim of operating programme management.

a lack of clear value proposition is detrimental to the success of any programme.

Consists of two sub factors : 1. Lack of understanding of the role of programme

management in the organisation.

2. Lack of awareness of associated benefits.

There is a strong need for understanding

what programme management stands for.

what it will contribute to the organisation.

An IT programme managers stated that:Programme management is a means of delivering long-term benefits

to the organisation.

If a company has a long-term vision but they do not know how to deliver that long-term vision, then programme management would offer a solution to them.”

Reiss(Benefits management expert) emphasised :

the importance of establishing efficient ways to understand and measure the financial and nonfinancial benefits realised in programmes.

Organisations increasingly recognise that achievement of their

strategic objectives which are dependent on both tangible and intangible assets.

including maintaining and improving their competitive advantages.

Shehu Z. ‘s framework for effective adoption and implementation of programme management as shown in Figure.

Implemented programme management in an evolutionary manner

This research views challenges at two different levels.

1. implementation stage lack of awareness

2. after the successful implementation and during the practice stage lack of commitment from business leaders

Factor analysis:Reduce the major challenges to benefit the planners.

Major challenges1. programme control2. human aspects3. political aspects

Support and training their managers to ensure the effective delivery of programmes.