Managing Small CAPEX Projects

Revision as of 17:37, 28 February 2021

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. What makes a project small can be defined in many ways. The conceptualizing of the 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. To further clarify the context are the focus set on CAPEX projects.

The challenges working with small projects are found to be present in the initial phases of a project and to gain internal support/visibility in the organization. Recommendation of how deal with these challenges are divided in to three focus areas: Project owner and stakeholder engagement, Scope Definition and Communication. The content of the recommendations is based on the project management methods of PRINCE2 and PMI, where relevant points useful in context of small projects have been selected from a personal experience perspective. Also, the experiences from other project management knowledgeable persons are included in the finizaling of the recommendations.

This article is primarily addressing tht certified project manager within e.g. PRINCE2 or PMI, that looks for guidance of where to focus in the project management practice in absence of an organization generated project structure.

Introduction

When working in the industry or public sector do all projects not 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 an organization are different tasks 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 ^[1] (p.9). No matter the size of a project, it is desired to always apply a certain level of project management to control the aspects of the project. Doing this will significantly increase the chances of delivering the wished outcome successful.

If the organizations succeed in identifying the small project hidden the day-to-day work, 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 such a project are limited. The PM has to navigate in the project management jungle and chose to focus the available resources on key elements. This article offers some reflections and recommendation of how to handle this situation. By develop a set of bullets to evaluate if a given task is actually a small project, get an overview of the possible challenges connected to a small project and lastly some recommendation of how to deal with the small project. All this shall in total help the PM to understand the potential situation and provide a guidance of where to get started.

OBS! 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. OBS!

To further clarify when and where this articles can be applied has the focus been set on the organizational CAPEX projects (CAPital EXpenditure). What characterize a CAPEX project is that the project owner and most stakeholders are internal in the organization. Exeampel of CAPEX projects could be to upgrade of machinery on a production line, retrofitting a crane on a cargo ship or develop a small internal IT systems.

The problem with small projects is that they go "under the radar", and not much research have been done on the subject. Therefore, the available sources on the field is mainly based on experiences from people working with small projects. The statements in this article are based on reflections from authors personal experiences working in the gap between solving business as usual tasks and projects in a technical organization, and further substantiated by different sources also with experience from small projects. The guidances are primarily based on the acknowledge standards: PRINCE2 and PMI. Where the content have been shaped to better fit the challenges of small projects.

What makes "small" projects

When a need occurs in an organization it will in most cases land on some managers 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 it often happens that management just want to get many of the smaller needs “fixed” and as quick as possible. Then the 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] (p.8). 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] (p.13). 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 task 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.

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 that 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 --> project manager.

The challenges working with small projects

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

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.^[3]

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.^[4]

C. The initial business case or job description is often not completely adequate and the root cause have not properly been identified.^[4]

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.

F. Informal work flow. When there isn't a formal project group there is none requirement to what documentation and processes the project shall have. Due to this informal work flow it is easy to forget creating essential documentation.^[3]

The sum of all these challenges contributes to the risk of not solving a 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 derived 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.

Now the focus in on CAPEX projects, therefore are the main challenges directed internally in a organization. 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.. 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^[1] (p.31-37). That do always apply no matter the size of the project, but it is a more challenging task when you are further limited on resources and time - as is the case with small projects .

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 project; limited time (planning), involve project owner/stakeholders, define scope and communication strategy. All those elements shall be engaged in the initial phases to be successful.

In the following tree sections are presented some concrete recommendations to adresse the challenges. It is not a step-by-step but tree focus areas that needs to be addressed.

Project owner and Stakeholder engagement

• Identify project customers: The customers are the most important stakeholder in CAPEX project, because the scope is often to deliver a specific solution they shall benefit from. And they are often them to deliver the feedback to define the project scope. To identify stakeholder is a key element in project management ^[2] (p.503-505). In a small project that is easy to forget because the scope seems so narrow the PM tends to forget to look out in the organization and spot other potential stakeholders. Also, due to the low visibility in the organization the project is overlooked by potential stakeholders. An idea would be interview the main stakeholder in search for other stakeholders so the final solution targets as wide as possible (be careful the projects to lose track).

• Project Owner engagement: The project owner is often a busy person handling multipel projects and the small projects have the least attention. The PM requires acceptance from the project owner to proceed with certain elements in a project. Develop a strategy of how to handle the specific project owner. That strategy should include means of communication. Especially the format and content of documentation that shall be presented to the project owner. To gain the "go-ahead" requires to present a clear case (see Scope Definition - Mini Business Case). Do never present half result or solutions for the project owner. Or be searching for what the project owner think - only present documentation from which the project owner can make a decision.

Scope definition

• Mini Business Case: Due to the informality in small projects a proper documentation of the scope or business case of a project is often forgotten. The PM should in the initial face from inputs from relevant stakeholders make a mini business case. That shall contain as minimum: Description of the issue, project goals, list of deliverables, simple cost/budget estimate (often based on experience), time schedule containing important milestone ^{[3] [4]}. This document does not have to be very formal and contain a lot of information. Keep it to one or two pages and primarily describe content in bullets. The business case shall be the foundation of dialog with stakeholders and through repeating mitigation shall the case be more and more precise and solid. Before any more detailed planning and execution can start shall all important stakeholder agree to the final business case and the project owner shall approve to it. This document can be the only formal document which shall be shared between all involved stakeholders. Note: If there is time for it and it seems relevant for the project can potential risks also be mentioned in the mini business case.

• Time estimation: The often narrow time frame for a small project is also one of the issues that needs extra attention. The time issues can be divided into two. The first, is delivery time of essential items (e.g. machinery/spare parts) that can not be acquired before a given date. The second, is that implementation of a solution is fixed on specific time period (e.g. pause in production). It is important to as fast as possible to gain a overview of it is even possible to deliver a solution at the required time. In most cases is it possible to obtain some estimates from subcontractors. From estimates shall a high-level plan to made. This plan will be review and edited through the project ^[1] (p.95).

Communication

• Overall communication strategy: Stakeholder engagement and scope definition are the two main objectives in the initial phase, but to success with those is a general communication strategy vital ^[2] (p.360-363). It is important the PM finds a balance in deliver documentation to inform involve stakeholders and not drown in delivering formal project management paperwork.

• Visibility: Most organizations keeps track of current and future project in a systematic way. Small projects are often forgot to be included in this overview. If possible do what you can to get a small project included in organizational plans. It is not possible than create the visibility in the most banal way - inform colleague what you are working on, use your network in the organization, etc. In search for finding aid and possible synergi will also increase the possibility of success.

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. It is important to remember that dealing with projects there is no right or wrong, and it is impossible make a "one-size-fits-all" approach. Also, important to understand that the complexity of organizations and projects variates, and the recommendations presented here may not be applicable in all organizations. What could be interesting is to have a dialog in communication of how to deal small project. Maybe develop a structured approach that better fit your specific organization. This is not included in this article but is a very relevant subject to create better management of small projects.

Annotated Bibliography

• Rowe, Sandra F: PMI Conference paper (2007): Managing and leading small projects. This paper do also 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. This could be a concrete supplement to create a structure in the informal work flow and be way to communicate the different aspect of a project to the organization/stakeholders. http://www.projectcanvas.dk/

• Jennifer Bridges, PMP (2015). Youtube video: How To Manage Small Projects - Project Management Training. This video presents a quick overview of some of the same themes given in this article, but do also provide some idea that can be introduced in the organization to better handle small project. The video could be the the set off to a dialog in an organization of how to develop some concrete templates or tools the project managers could use when starting up projects. https://www.youtube.com/watch?v=Ofws8Tl0UXg

References

1. ↑ ^{1.0 1.1 1.2 1.3} AXELOS. (2017). Managing Successful Projects with PRINCE2 2017 Edition. The Stationery Office Ltd. https://www.axelos.com/store/book/managing-successful-projects-with-prince2-2017
2. ↑ ^{2.0 2.1 2.2} Project Management Institute, Inc. (2017). Guide to the Project Management Body of Knowledge (PMBOK® Guide) (6th Edition). https://app-knovel-com.proxy.findit.dtu.dk/web/toc.v/cid:kpGPMBKP02/viewerType:toc/root_slug:viewerType%3Atoc/url_slug:root_slug%3Aguide-project-management?kpromoter=federation
3. ↑ ^{3.0 3.1 3.2 3.3 3.4} Laron, Richard: PMI Conference Paper (2004): The critical steps to managing small projects. https://www.pmi.org/learning/library/managing-leading-small-projects-7245
4. ↑ ^{4.0 4.1 4.2} Dr. Claude Diderich (2012). SUCCESSFULLY MANAGING SMALL PROJECTS. https://www.innovate-d.com/insight-009/