View source for Managing Small CAPEX Projects

by Emil Randa-Boldt


'''Summary'''

The classic project management methods can be scale up and down dependent of a project size and complexity. However, it is often seen that when dealing with smaller projects, that may not differentiate much for daily operation, it can be hard for the project manager (PM) to apply the standard tools for ensuring the quality of a project. That is due to the time and resources allocated to run a project are limited. The PM has to navigate in the project management jungle and chose to focus the available resources on key elements. What those key elements are in the small CAPEX projects will be highlighted in this article.

To further emphasis the coming recommendations, the smaller CAPEX projects in question are in regards to classic engineering scopes, which engineering PMs encounter often all over the industry, e.g. Upgrade of machinery on a products line, retrofitting a crane on a cargo ship or develop/implementation of small IT systems. These projects contain same elements as in larger project, but in a very different scale and a focus in the project management process has to be adapted. The lack of standardization and methodology in smaller projects lower the probability to deliver projects on time and budget. By investigating where small projects fails it can help a PM to identify which project management tools to include in a project and which that may be skipped.


== Introduction ==
When you are working in a technical organization in the industry or public sector do projects come in different scale and form. Not all projects come in a classic scale such as building a bridge or develop a space rocket, where it is intuitive given - from all involved stakeholders - that this is a project and therefore you adapt a project management setup to solve the project. In technical organization different tasks are processes on a daily basis. What often happens is that some of these tasks actually are projects. A key challenge for organizations worldwide is to balancing between; daily operation (“business as usual”-tasks) and transforming operation into projects that can develop their business in the right direction <ref> AXELOS (2017). ''Managing Successful Projects with PRINCE2 2017 Edition'' The Stationery Office Ltd. Retrieved from: https://www.axelos.com/store/book/managing-successful-projects-with-prince2-2017.

The statements in this article are based on reflections from experiences working in the gap between solving business as usual tasks and projects in a technical organization, and further substantiated by different sources. The purpose of this article is to help you distinguish between a task and a project. And give a suggestion on what key elements you should focus on when dealing with a small project, where the resources for applying project management are limited.


== What makes "small" projects ==
When a need occurs in an organization it will in most cases land on the upper management table. If the scope of the need has a substantial size and/or risk profile it will be send through the organization project system and a project organization will be establish to manage it. But in the daily operation around in companies it is often seen that management just want to get many of the smaller needs “fixed” and as quick as possible. Then job lands on someone desk as a day-to-day task. The problem then arises if this task is not recognized as a project – if that is the case. 

But how can these tasks be evaluated and be determined to have the potential of being a project. In PRINCE2 they define a project as “''A '''temporary organization''' that is created for the purpose of delivering one or more business product according to an agreed business case''” [1] (Chapter 2.1). From this definition none of the described tasks have the potential of being a project, due to the lack of a project organization. The PMI defines project as “''…a '''temporary endeavor''' undertaken to create a '''unique product, service or result'''''”. [2] (Chapter 1.2). By evaluating a task if it complies with the characteristics “temporary endeavor” and “unique product, service or result” you will see that many tasks do.
In addition to the PMI definition, are here some criteria that should be considered to evaluate if a job scope shall be treated as a project [3]:

* Is it a temporary endeavor.
* Is it a unique product, service or result.
* Do the scope include unfamiliar elements.
* Will it implement some sort of change.
* Will several organizations/departments/stakeholders be involved in the process.

If the conclusion of the evaluation consists elements from the above criteria than you need to put on your Project Manager hat on.

When a project has been identified as a project – what makes it a “small” project. The more traditional tools to estimate the size of a project is by looking at estimated cost and time consumption, but is relatively from branch to branch and is difficult to make some generalizing rules. Also, risk profile is a crucial factor regarding larger projects, but when dealing with small projects the risks are often very limited [3]. To summarize the conceptualization of a small project in this article:

''A small project starts out in the gap between day-to-day tasks and the organizational determined projects. And the applied project management practice is determined by the responsible caseworker.''


== The challenges working with small projects ==
Many experiences the same challenges when working with small projects. To help the project manager what to be cautions for are here a list with the main concerns[3]:


A. Due to the fact that many small projects erupt from an urgent need creates a lack of time to assess and plan. That means that often the deadlines are very narrow and the PM has to process the initial phase of the project hasty.

B. Because the project is elevated by the project manager and not the organization the project, it may not be clear who owns the project or the owner is not fully engaged in the project. The owner is the one who shall deliver the needed decision-making to develop the project and without the engagement the project will stop.

C. The initial business case or job description is often not completely adequate and the root cause have not properly been identified.

D. Often is the overview of involved stakeholder not complete, which create an uncertainty about whose needs shall be taking into account and who shall the final solution target.

E. Small projects due also often lack of visibility in an organization, which in some cases can create conflicts or a risk of missing a synergy effect with other projects.


The sum of all these challenges contributes to the risk of not solving a CAPEX project on budget and time. Due to the small scale of the concerned projects are the economical limited, but by adding the potential loses from each project it will generate a significant waste. In some cases, it is not necessary the waste of costs and time of a failed project that is the main concern. But the derivate effects of e.g. break downs, frustration in the organization, a stressful work environment, etc. Therefore, it is important to bring as much quality as possible into any project.

Beside the challenges listed in this section is important to have general knowledge of project management and an awareness of potential hazards.

== Recommended Focus and Tools ==
The available project management methods and tools are endless. When working with larger project they are a necessity to structure the project, assign roles, etc [1] Chapter 2.1. But when working with smaller projects you do not have the time to go through all the steps and you have to adapt the methods to your and specific project needs. That do always apply no matter the size of the project, but is a more challenging task when you are further limited on resources and time as is the case with small projects [1] Chapter 4.

It is difficult to make guidance that covers all types of projects in different organization. By looking at the challenges described in Section 4, it is clear to see that most of them can be mitigated in the initial phases of a projects; limited time (planning), involve project owner, locate stakeholders and define scope. All those elements shall be engaged in the initial phases to be successful. Therefore, shall project manager focus and have disciplinary approach to analysis and document the finding of in the initial phase.

=== Project owner and stakeholder engagement ===
…The project owner must approve the projects deliverables…
…Stakeholder analysis and identification…


=== Scope Definition ===
…the purpose is to fulfill clients need…
…align expectations with stakeholders…
…develop a business case – many sources for how to put together a solid business case…


=== Communication ===
…to create visibility of the project, communicate with project owner and stakeholders…
…Clear and short reports only showing essential information to maintain partners focus…


=== What can be skipped ===
...risk analysis...
...formal reporting...
...cost analysis...


== Limitations ==
The recommendations highlighted in this article are primarily based on selected parts from the two project management methods - PRINCE2 and PMI. The selected practices are simplified and adapted to concern the challenges which a presented regarding small projects. There are many more aspect to conduct project management which are not presented in this article, and some of those aspect may be relevant to some small projects.
Also, important to understand that the complexity of organizations and projects variates, and the recommendations presented here may not be applicable in all organizations.


== Annotated Bibliography ==
Laron, Richard: PMI Conference Paper (2004): '''The critical steps to managing small projects'''. This paper provides another interpretation of how to recognize a small project. Other than that those it provide a series of steps of how the manage small projects. [https://www.pmi.org/learning/library/unique-challenges-managing-small-project-8439]

Rowe, Sandra F: PMI Conference paper (2007): '''Managing and leading small projects'''. This paper look into how to define a small project and reflects on the roles and required leading capacities of the project manager. [https://www.pmi.org/learning/library/managing-leading-small-projects-7245]




'''Project Management Canvas''' a widely used tool to create a simple overview of a project. [http://www.projectcanvas.dk/]

2. Guide to the Project Management Body of Knowledge (PMBOK® Guide) (6th Edition) [https://www.pmi.org/pmbok-guide-standards/foundational/pmbok]

3. The critical steps to managing small projects by Laron, Richard: PMI Conference Paper (2004).



== References ==
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